SECOND READING.

HC Deb 09 March 1857 vol 144 cc2055-95

Order for Second Reading read.

THE CHANCELLOR OF THE EXCHEQUER moved that the Income Tax Bill be now read a Second Time.

MR. DISRAELI

It was my intention, Sir, to have offered to the House a proposal with respect to the income tax. But it appears from what I have read in the accredited organs of the day that we really are at war with China—at least I do not suppose that any one will now pretend that we are not at war, when we are told that 7000 troops are about to leave our shores for the scene of action. I think, therefore, we had better at once face our position and not indulge in those dreams which I had hoped might have been realised this year—dreams of economy and of administrative improvement. These, I am afraid, are passed; and I do not therefore feel myself justified in offering any opposition to the measure now before the House, because I consider it is absolutely necessary that the Ministers of the Crown, whatever party may form the Administration, should have sufficient supplies to carry on the struggle in which we are now actually embarked. There is, however, another reason why I feel some difficulty in pressing upon the House that modification in the income tax which I felt it my duty to announce. The House, I think unfortunately, agreed the other night to an increase in the indirect taxation of the country, and in the face of that I should be sorry to urge a diminution of our direct taxation. That, however, is a consideration of very secondary importance when connected with the position in which we are now placed with respect to our external relations. The policy pursued with respect to China, has, as I feared it would, involved this country in a war which may be of some length, and which must be necessarily attended with considerable expense. Now, I wish that our constituents, who are always pressing upon us the reduction of taxation, would carefully consider how the amount of our taxation must depend on the system which we adopt with reference to our external affairs. We have been at war with Persia without the knowledge of Parliament, and we have now the satisfaction of hearing that peace has been concluded. So far as we can attain information on the subject these are the facts. First, that the war with Persia was occasioned by a cause really too contemptible and too shameful to be mentioned. Now, either that cause was the real cause or it was not. If it was the genuine cause the House can at once draw the inevitable inference. But if it was merely a pretext, then I say this war is part of that general system which appears in every quarter of the globe, and which shows a general determination to distract the attention of the country from its domestic arrangements by a turbulent and aggressive diplomacy. Well, admitting it was a mere pretext, and that this shameful incident was not the absolute reason of our hostilities—what then has occurred? In consequence of our going to war with Persia, negotiations have taken place between the British and Persian Ambassadors at Constantinople, and certain terms were offered for our acceptance, which we refused. This refusal having put an end to the negotiations, these transactions in good time, Parliament being assembled, are brought under our notice, and the feeling of Parliament with respect to the Persian war, commenced without our knowledge, being evinced in a manner not to be mistaken, fresh negotiations then occur. These negotiations are successful. But by what means, and in what manner? As I am informed by our accepting at Paris the terms which we had rejected at Constanti- nople. What I want the country to consider is how much the rejection of these reasonable terms at Constantinople has cost us,—how much this quarrel with Persia has cost us in all. If we take this quarrel with Persia at £500,000—and from what I have heard we can scarcely take it at less—and if we have half-a-dozen of these difficulties every year and average them at £500,000 each, how is the remaining 7d. of the income tax ever to be taken off? Four difficulties at half-a-million each make up 2d. in the pound of the income tax, and not only will the tax remain at 7d., but we shall probably have the popular 9d. reintroduced to our notice in a very short time. After the Persian difficulty we have now the China difficulty, which may cost us no one knows how much—no one supposes it can be settled for 1d. in the pound of the income tax; indeed, if we get out of it for a million we may think ourselves very lucky. As we are going to the hustings, where we shall be asked to review expenditure and to reduce the burdens of taxation—when we find our constituents complaining of the increased duties upon tea and sugar, and desire to explain how it happens that the income tax, which was to have expired in 1860, appears likely to affect them for a longer period—let us ask them quietly to consider, before they complain of these burdens, whether they have sanctioned the turbulent and aggressive system of diplomacy which has drawn us into these quarrels, and which really is the cause of our not being able to reduce the income tax in the first instance to that more moderate assessment which the country expects. But, however we may disapprove of the policy, however we may lament the expenditure which it entails, we have a clear duty to perform. We have to support the Government, of whatever elements it may be formed, which has plunged the country into a difficulty of this kind. We are now at war with China, and, however we may lament the policy which has occasioned that war, we must pursue it until an opening is afforded of bringing these calamitous proceedings to a close more consonant with those principles which we have endeavoured to vindicate in the course of the late debate. Under these circumstances I no longer feel justified in opposing this Bill, nor, indeed, in supporting any Motion which can have the effect of reducing the resources which are at the disposal of the Government. I lament the necessity of the course which I have to pursue, and I indulge in the hope that the feeling of the country will at last force the Government to pursue a policy more conciliatory to foreign countries than that which it appears to me to adopt on every occasion—a policy which, while it maintains the honour, the dignity, and the true interests of the country, at the same time is not calculated to outrage the feelings of every foreign State which is brought into connexion with us. Then we may look for economy, for reduction of expenditure, and for reduction of taxation; but until a policy of that kind is adopted and sanctioned by this House and the country I am convinced that the expenditure of the country will increase, and its burdens also will increase in proportion.

MR. BAILLIE COCHRANE

said, the right hon. Gentleman having made allusion to the foreign policy of Her Majesty's Government, he must take the liberty of expressing his deep regret that they should go to the country without receiving an assurance that that policy should in some degree at least be changed. However, he principally rose now to put a question to the noble Lord relative to our policy towards Naples. When he put a question, to the noble Lord the other day relative to the same subject, the noble Lord answered him in a manner which he must say was not very courteous. Now he would put it to the House whether or not it would not be leaving our relations with Naples in a most dangerous condition if things were allowed to rest as at present. At that moment there was no British legation at Naples, and if any difficulties were to arise there this country might in consequence become seriously involved. In putting that question, let him explain that he had no sympathy or feeling whatever for the King of Naples, such as was implied by the noble Lord the other evening. He was influenced solely by a feeling that the policy which the noble Lord pursued towards Naples was attended with an aggravation of the sufferings of those poor prisoners instead of an alleviation of them. He hoped, therefore, that the noble Lord would take an opportunity before the present Parliament was dissolved of assuring the House that there was some chance of the renewal of diplomatic relations between Her Majesty and the King of the Two Sicilies.

MR. W. WILLIAMS

regretted that the income tax was still to be levied upon incomes between £100 and £150 a year. The proposal was regarded as odious by every class of the community, and when they got into Committee he should endeavour to obtain its rejection.

SIR HENRY WILLOUGHBY

wished to direct the attention of the Chancellor of the Exchequer to two evils connected with the income tax well deserving of consideration. The first was that in the case of a defaulting collector every person in his district had to pay the tax over again, those who could show receipts as well as those who could not. Several cases involving great hardship had come to his knowledge. Now, he thought that a clause ought to be introduced into the Bill, providing against the recurrence of so glaring an injustice. Another point to which his attention had been particularly directed was the very improper manner in which the income-tax returns were allowed to get abroad. He remembered Lord Brougham proposing, on the cessation of the great income tax in 1816, that all the papers connected with the income-tax returns should be burned. He (Mr. Cochrane) thought that at least more stringent instructions ought to be given to the Income Tax Commissioners, respecting the disposal of the assessment, and other papers connected with the tax. He himself had in his possession a lot of those papers which had got into public circulation through the shops; so that in various towns of the kingdom most respectable inhabitants had the pleasure of receiving their butter wrapped up in paper recording the details of their private affairs. He wished also to call the Chancellor of the Exchequer's attention to the great injustice inflicted on a particular class of fundholders who at the present moment paid at least 30 per cent income tax. He alluded to persons who held what were formerly Long Annuities, but were now short annuities. Those Annuities would expire in 1860; but the public creditors holding such securities were taxed on incomes only worth three years' purchase equally with the possessors of perpetual annuities, worth thirty years' purchase. He thought the Government had done all they could with regard to the reduction of the war income tax, and that they were entitled on that ground to fair consideration on the part of the House and of the country.

MAJOR REED

said, he had intended to submit a Motion to the House with reference to the more equitable assessment of the income tax, but under existing circum- stances he thought it would not be advisable to do so. He must say, however, as the chairman of an association which had taken up the question, that he considered it most unjust to levy the same rate of taxation upon incomes derived from fixed and funded property and upon those derived from such precarious sources as trades and professions—the value of the one kind being from twenty-eight to thirty years' purchase, and of the other from only two and a half to three. Again, the mode of assessment was grossly unjust. A man who had paid a tax on £500 one year was compelled to return himself at the same rate the next year, although he might in reality have earned only half that amount, otherwise he would be compelled to disclose the state of his affairs to his neighbours. The next year this man might become insolvent, and then, when the Court of Bankruptcy ascertained the fact, it would brand him as a swindler. Again, if a tradesman showed his books, and it should appear from them that he was making large profits from any particular branch of his business, the result might be that he would immediately see rivals springing up around him. The result was that tradesmen were compelled to submit to any injustice rather than appeal. He hoped that if the continuance of this iniquitous impost should be proposed to a new Parliament measures would be taken to relieve persons deriving incomes from trades and professions from the injustice to which they were at present subjected.

MR. HEADLAM

said, that any person who had hitherto listened to the discussion would have thought that the Chancellor of the Exchequer was increasing or renewing the former rate of the income tax, whereas the question before the House was really one for its reduction. He believed that if the House was sincerely desirous of getting rid of the income tax the best plan would be to endeavour to reduce it whenever the opportunity occurred, and, in order to do that, Parliament should keep the tax continually under their control by only granting it for a year at a time. He had intended to propose the limitation of the tax to a year, but as by the present Bill the tax would only be continued for that period it was unnecessary to press his Motion.

MR. MUNTZ

wished to caution the Government not to expect that the people would be satisfied simply with a reduction in the amount of this tax, which was op- posed rather on account of its inquisitorial nature than of its mere amount. In many instances the tax was accompanied with great injustice and discomfort, and in some cases it was levied in a mode which almost amounted to robbery. If the tax was imposed upon tolerably just principles it would be less objectionable. Nobody expected to be able to make it perfect; but an attempt might at least be made to approach perfection. An extraordinary case had occurred recently before the magistrates of a midland county, in which a man who had been assessor of income tax, and who had been surcharging right and left, had been called to account, and coolly alleged that he had burnt his books. The surveyor said it was usual to burn the books after the lapse of two years; but ought such laxity to be permitted in the administration of a law which worked so much injustice? Some time ago, when he brought forward a Motion on this subject, a leading article referring to it appeared in the leading journal. He had no right to find fault with that article, which intimated that if he had let the matter alone it was probable the tax would have been got rid of in three years. When the tax was imposed in 1842 it was on the understanding that it was to cease at the end of three years, but they had it now in prospect for three years, and he did not doubt it would be continued for three years more. If no attempt was made to render the operation of the tax more just and equitable they would always be told, "We can't get rid of this tax, and we must continue it as it is." He did not object to the tax per se, but he objected to the manner in which it was imposed and collected.

SIR GEORGE STRICKLAND

asked how the income tax was to be levied so as to render it just and equitable as proposed by the hon. Member for Birmingham. The tax was an odious one in itself, and its unequal and inquisitorial character could never be got rid of. All great financiers, from Pitt down to Peel, had argued that it was impossible to make such a tax perfectly equitable. It was a tax suitable only for a state of war and a period of great emergency, when the people would pay it without reference to its inequalities; but it was not adapted for a time of peace.

MR. MICHELL

said that as he might not have the honour of a seat in the new Parliament, he should wish to make a few observations upon the subject of the income tax. To an income tax per se he had no objection—that is, to an income tax placed upon a fair footing, such as that of 1816. He objected, however, very much to the mode in which the present tax was sometimes assessed. As, for example, in the case of mines; there the proprietor paid not only upon income but upon capital; and, supposing that he had two mines, one a paying, the other a losing concern, he was not permitted to set off the losses upon one against the gains of the other, and thus reduce the balance. No; he was assessed upon each separately, and made to pay accordingly. On the other hand, bankers and large companies were comparatively relieved under the tax. The hon. Baronet the Member for Evesham (Sir H. Willoughby) had complained of the want of secrecy with reference to details connected with the tax; that undoubtedly was a very serious grievance. He himself knew of a case where a young man having appealed against his assessment, on the ground that he was actually an insolvent, in proof, pulled out seven writs from his pocket, with which he had been served, and showed them to the commissioner; well, next morning it was known all over the town, not only that this young man had been served with seven writs, but likewise the names of those who had served him. The only tax which he should prefer to an income tax was a stamp tax upon all receipts. A stamp tax of 4d. in the pound upon all receipts would enable them to do away with all the other taxes, and thus get rid of the charge of £4,000,000 or £5,000,000, which we paid as the cost of collection. It certainly had been his intention to have opposed the imposition of the income tax unless its anomalies had been made to disappear; but under the circumstances he would not oppose the vote.

VISCOUNT PALMERSTON

Sir, I cannot avoid saying a few words in reply to the observations made by the right hon. Gentleman the Member for Buckinghamshire at the beginning of this discussion. I thank him for the vote he is about to give us on this occasion, though I cannot say that I thank him much for the reasons he gave in support of that vote; for he said he should vote for a continuous income tax, because the turbulent and aggressive foreign policy of the Government might render such a description of tax necessary. What he has said reminds one of what we have been told of a gentleman who was appointed Chief Justice of Canada, and who was not very learned in the law. He asked a friend what he should do, and the answer was, "Give your decisions; you are a man of good sense, and they will probably be right; but take care not to give your reasons, for they will probably be wrong." I shall be glad if the right hon. Gentleman will tell us what he means exactly by the "turbulent and aggressive" foreign policy of the Government? Does he mean that the war in which we were lately engaged, with many allies, against Russia, and which was sanctioned and borne out by the deliberate opinion of the whole nation, was an instance of "turbulent and aggressive" policy on the part of the Government? Does he mean that the peace which was concluded at the termination of that war was an instance of "turbulent and aggressive" policy? Does he mean that the present state of our relations, by which we are on a friendly footing with France, with Austria, with Sardinia, and with the United States, are a proof of the "turbulent and aggressive" policy of the Government? Does he mean that the treaty which we have concluded with the United States, and which I trust will settle all points of difference between the two countries, is a proof of our "turbulent and aggressive" policy? The right hon. Gentleman referred to the war with Persia, and declared that it arose from what he called contemptible and shameful causes. Why, Sir, that war arose from the "turbulent and aggressive" policy of Persia, which invaded and seized upon Herat in violation of a distinct and solemn engagement which had been made with England at a former period; and every one who knows anything of our Indian Empire and its interests must be aware that it was a matter of great importance to us to prevent Persia from acquiring dominion over Herat and the surrounding country. Am I to suppose, then, that the "turbulent and aggressive" policy of Her Majesty's Government rests entirely upon what has been passing in China? Is it the "turbulent and aggressive" policy of Her Majesty's Government which has been exemplified by the burnings, the poisonings, the assassinations, and all those crimes that have been committed by the Chinese against British residents? In fact, as the right hon. Gentleman told us, we are about to meet our constituents, and no doubt his reference to the "turbulent and aggressive" policy of Her Majesty's Government was made with a view to the hustings. But I beg to warn the right hon. Gentleman that the "turbulent and aggressive" policy of Her Majesty's Government will not be a convenient or successful electionery for him or his friends. The people of England are too clear-sighted and too straightforward to be led away by any such declamation as that. They know what are the grounds upon which it will be their duty to exercise their franchise, and I have no doubt in my own mind that they will give an answer to the questions put to them which will not be altogether agreeable to the right hon. Gentleman and his Friends.

MR. GLADSTONE

I was not aware, Sir, that the discussion on the second reading of the Income Tax Bill was likely to embrace so wide a range. Many subjects of great importance have been introduced into it; and the noble Viscount at the head of the Government, while replying to the right hon. Gentleman the Member for Buckinghamshire, has addressed something like a general challenge to the House, I do not think it is the wish of any portion of the House that we should now enter upon the consideration of the foreign policy of Her Majesty's Government, nor do I desire to lead to a renewal of those warm and keen debates in which we have been recently engaged. At the same time, as a challenge has been thrown out to the House, I cannot refrain from stating that—while allowing to everybody else the right of expressing his opinions freely—my own opinion is that there is a very material connection between the foreign policy of Her Majesty's Government and tin excessive taxation and high expenditure of the country. The noble Viscount has put this question on the basis of the different branches of his foreign policy, and has triumphantly anticipated the reply to tin appeal that he is about to make to the country. He told us that the speech of the right hon. Gentleman opposite (Mr. Disraeli) had evidently been made with reference to the hustings, and I suppose it would not be a cruel, or an unwarrantable charge, to say that the reply of the noble Viscount had a similar object in view. It is not well to discuss these questions now With regard to Persia, I must say, I am sorry for the sake of all the parties con cerned—for the sake of fairness to Her Majesty's Government, and for the sake of the interests of the country—that Ministers have not shown a greater disposition for the thorough sifting and ventilation of that question in this House upon a proper opportunity. The noble Viscount, it is true, assures us that the war has arisen from the "turbulent and aggressive" policy of Persia; but he is aware that a very different opinion prevails among a great portion, if not a large majority, of this House; and my firm belief is that a very different sentiment as to the Persian war prevails among a large majority of the people of England. I think, then, it is to be regretted, for the sake of justice, that the question has not been discussed in the House of Commons. I am bound, also, to say that the course which has been pursued by Her Majesty's Government, especially the withholding the estimates for the charge of the Persian war, involves a very great derogation from the rights and privileges of this House. To pass to another point, the hon. Member for Lanarkshire (Mr. B. Cochrane) has expressed a great anxiety that there should be a speedy renewal of diplomatic relations with Naples. Considering the state of ignorance in which we remain after the production of what are called "Neapolitan papers,"—ignorance not much less than that which existed before the papers were produced,—I do not undertake to make any recommendation, or to join in any recommendation, upon that subject. For all the proceedings with respect to Naples Her Majesty's Government are responsible. I have not the smallest doubt of the humanity of the motives which have prompted their course, and regret very much the miscarriage of their measures. I am afraid they were founded upon an inadequate consideration of the difficulties with which they had to deal, and I have the deepest conviction, springing from authentic and most painful evidence, that those measures have led to no mitigation of the severest evils endured by sufferers in the kingdom of Naples. Perhaps there never was a moment when we had more cause to deplore, in the interests alike of humanity, of liberty, and of order, the undue and miserable afflictions that are endured by innocent persons in the dungeons of Naples. I deeply regret the failure of the efforts which have been made to lighten those afflictions. I think, acknowledging the goodness of the motives which prompted them, that they were undertaken with inadequate means and upon an ill-defined basis. There was apparently a want of adequate knowledge, on the part of those who interfered, of their own intentions, and of the length to which they were prepared to carry their interference; so that, in point of fact, as was stated by the noble Lord the Member for the City, either too much was done, or too little;—too little to make success in the particular instance certain; too much if we desired to guard against the great danger that attends all such acts of intervention: and that consequently affords the strongest of reasons against attempting them unless when the end is evident and its attainment can reasonably be expected. It is not my intention, Sir, to refer to China—I think that that and other questions had much better be avoided at the present moment. But when the noble Viscount makes an ironical reference to the treaty recently concluded with America, as if its wisdom and moderation vindicated the conduct of Her Majesty's Government in its American policy, I am bound respectfully to demur to the conclusion which he draws. I read that treaty when it appeared in the newspapers with the greatest satisfaction. I learnt that it had been rejected in America—or, at least, that assent had been withheld from it—with the deepest regret. At the same time I cannot say that the previous proceedings of Her Majesty's Government with respect to the Central American question were such as might be supposed by those who derived from the treaty their whole acquaintance with the subject. In my opinion, nothing could be more unwise than the manner in which the whole controversy with regard to Ruatan, and several other points, was conducted. The treaty I heartily approve, because it gives up the matter in dispute by making over the island of Ruatan to Honduras; but the treaty and the previous policy of Her Majesty's Government are inconsistent with each other. Having thus referred to the points upon which the noble Viscount challenged the approbation of the House, I refrain from introducing aggressive matter into this discussion. We shall soon have opportunities of defending the part we have taken in the deliberations of this House, and I trust that we shall be prepared to perform that duty without shrinking from responsibility either for our words or for our acts. Let me now, Sir, make a few observations upon the Bill before the House. It was with satisfaction that I heard the right hon. Gentleman the Member for Buckinghamshire say that he did not intend to make any Motion for the purpose of obstructing the progress of this Bill. My own view is that which was stated on a former evening by the hon. and learned Member for Wallingford (Mr. Malins). The hon. and learned Gentleman, addressing the Government, said, "All we protest against is your standing upon your legal advantage; do not levy a 16d. income tax because the Act happens to be so worded; surrender that advantage gracefully and at once, tell us what the necessities of the public service are, and then we shall vote whatever taxes you may require." I think the hon. and learned Gentleman put the question upon the only true, solid, and substantial ground. I am sorry to say that neither Her Majesty's Government nor the House have taken his advice. We have not considered the wants of the country. They have been stated to us, no doubt, by the Government, but we have given no judgment upon them; and we are now—I know not for what reason or with what view of public convenience—certainly in opposition to all those rules and usages of Parliament upon which you, Sir, in your address from the chair this evening, have justly laid so much stress—about to vote the Ways and Means for the year before we have taken into our consideration any portion of the public expenditure. My own ideas on the course of financial proceedings in this House are entirely at variance with the present mode of conducting the affairs of that department; in truth, a system of contradictory arrangements upon almost every point seems now to be in vogue. I have no wish, however, to run counter to the views or decisions of the House, but merely desire to record the sentiments I entertain, and to protest, if I may use that term in an informal sense, on behalf of what I regard as sound, straightforward, and, if I may venture the expression without offence, honest modes of dealing with taxation and expenditure. The hon. and learned Member for Newcastle (Mr. Headlam) says that the only way to keep the income tax under our control is to vote it from year to year. Now I beg leave to differ in opinion altogether from the hon. and learned Member. I believe that the transition from voting it for a term of years to that of voting it from year to year is the sign of another transition which we should endeavour by all means to shun—namely, a transition from a solid and steady system of finance to a vacillating and merely provisional system of finance. When did we take to this? In 1852, because we felt that we were justified by the circumstances, for it was eminently unsatisfactory to the country; and so far from finding that the control of the House of Commons was increased by the method of voting the income tax from year to year, on the contrary, that control was diminished; and the result was this—when you voted the income tax in 1842 for three years, and again in 1845 for three years, you voted it for three years in order that it might be made the instrument of great, wise, and beneficial changes. When you took to voting the income tax for one year you entirely dissociated it from any such public improvements, and you treated it merely as one of the ordinary means of meeting the regular and standing necessities of the country. On both these grounds—because the annual voting of the income tax tends to take away the solidity and stability of our finance, and because it cripples and maims the income tax with reference to those most useful temporary purposes for which it was originally proposed—I deeply regret that it should be proposed for one single year only. I make no objection to the arrangement at the present moment; I speak only in reference to what has been said by the hon. and learned Member for Newcastle, who appears to see a positive merit in this mode of treating the income tax. The Bill which we have before us I regard as a Bill proposed entirely and exclusively upon the responsibility of Her Majesty's Government. It is quite true that the right hon. Gentleman the Member for Buckinghamshire gave notice at the commencement of the Session that he would move the repeal of the war income tax; but that notice, of course, does not remove the responsibility of Her Majesty's Government. And this Bill is not in point of fact a repeal of the war income tax. We are going to repeal, from the 5th of April onwards, a sum of 9d. out of 16d.; but the war income tax from the 5th of April onwards is 11d., and not 9d. I am not finding fault with the Government for not repealing more than 9d. On the contrary, when I remember that they have made inadequate provision for the public service, I hold myself free to arraign Her Majesty's Government, hereafter for having dispensed with so much money from the public revenue. We are now voting Ways and Means before the House has given judgment upon the subject of Supply, and it is perfectly impossible for independent Members of Parliament to say what amount they ought to vote, because they have not at- tained a knowledge of the standard by which that amount ought to be adjusted. The hon. Member for Birmingham (Mr. Muntz) has adverted to a matter in which I know he takes a deep interest—namely, the reconstruction of the income tax. Ever since he has been in Parliament I think he has held the same doctrines. Ever since he has been in Parliament those doctrines have been most popular. The people, if I may say so, have been tickled and amused with the notion that some day or other the income tax would be reconstructed. Now, what I want to submit to the hon. Gentleman is this, that those speeches made in popular assemblages in favour of a reconstruction of the income tax, and of varying the rate according to the nature of the source from which the income proceeds, and made as I believe by him as well as by many others with perfectly honest intentions, have practically operated as a delusion upon the country; because we go on voting the income tax from year to year, or from three years to three years, on precisely the same principle and arrangement. No Government can be found that will propose its reconstruction; nor is there any Member of Parliament sufficiently confident in any plan that he may have to submit it to Parliament and bring the question to a positive issue; or, if there has been any such Member possessed of that extraordinary degree of confidence in his own plan, he has not received adequate encouragement from the House of Commons, because the House has always declined to entertain that question and has given an unfavourable reception to the proposal. I confess I think it would be well if, instead of following this will-o'-the wisp proposition for a reconstruction of the income tax, the people of this country would take another question into their hands. I do not want them to give up its reconstruction if it can be effected, though I believe it cannot; but I wish them to consider whether they wish to have a perpetual uniform income tax or not, whether reconstructed or pressing alike upon all incomes. I must confess that is the consummation to which, as it appears to me, we are rapidly approaching. In 1853 it appeared to be perfectly practicable to bring the income tax to a close. In 1857, although the circumstances have altered and are more unfavourable than in 1853, yet I, in my place in Parliament, declare that I am convinced that it is still practicable to bring the income tax to a close. But if we are really to bring the income tax to a close—which I presume is the wish of many on general grounds, and of many others who presume that it cannot be reconstructed—if we are to contemplate the attainment of that end at all, it is necessary undoubtedly that we should adopt new rules of proceeding. Yet I should scarcely say new rules of proceeding; but we should entertain the whole question of our public expenditure in a stricter temper of mind than we have evinced for some years past. I will not, however, enter upon a consideration of that subject now, but I venture to say that—with the state of the Estimates that are before the House, and above all with the tendencies of those Estimates and of the House, the Government, and the country with respect to expenditure, although it still remains possible—the moment at which the bringing of the income tax to a termination may be regarded as practicable is very rapidly passing away, and that, unless we bethink and bestir ourselves, in the course of two or three years it will be much too late and a sheer waste of time to entertain that question, because the relation between the demands of the public service and every provision for meeting them, independently of the income tax, will leave no room for maintaining the public credit and satisfying the wants of the country except through the means which that tax provides.

MR. MALINS

The right hon. Member for the University of Oxford having correctly stated what he (Mr. Malins) had said on a former occasion upon this subject, and having stated what he conceived to be the duty of the Government in respect to the war income tax, he (Mr. Malins) thought he might be allowed to make a few observations. He thought it a fair matter for congratulation that the Government had not availed themselves of the accidental wording of the Act to continue the whole of that tax for another year, but had, on the contrary, freely abandoned all attempts to levy the additional portion of that tax. The right hon. Gentleman, while concurring in the views he (Mr. Malins) expressed in respect to this tax, said he was not always able to agree with him upon questions of finance. He was happy that he and the right hon. Gentleman could agree, at all events, in the anxious desire to get rid of this disagreeable and improper impost as soon as it was practicable; and consequently it would have been a gratifying circumstance to him if the Government had been able to carry out the repeal of the whole of the war tax, thereby reducing it not to 7d. but to 5d. He was glad to hear the right hon. Gentleman the Member for Buckinghamshire say it was not his intention to offer any opposition to the Bill; because, however anxious he might be to repeal the tax and to reduce the burdens of the country, there were duties imposed upon this House which they were bound, under all circumstances, faithfully to fulfil—namely, to keep the Government in a position that would enable them to meet all demands that might be made upon them in a manner consistent with the honour and greatness of the country. He therefore intended to give his vote in favour of the Bill as it now stood. He thought that during the present year they could scarcely consider themselves free from the war expenditure; but in supporting the proposition before them he wished it to be understood that he adhered to the opinion he had before expressed, that the tax should be at as early a period as possible brought to a termination, because he believed it to be a most burdensome tax to the people. It was of course not very burdensome to the rich, or to any man who could at once draw a cheque for the payment of the tax, and if it were confined to such a class of persons he believed it would be the best tax that could be imposed. But as society was composed mostly of a poorer class of persons, he did not think that they could impose anything more odious, more inconvenient, or more detrimental to the best interests of the country than any increase of direct taxation. An hon. Gentleman expressed his preference for direct taxation, over indirect taxation. He (Mr. Malins) confessed he had no great desire for either. But there was very little doubt that the admirers of both direct and indirect taxation would have their respective tastes fully gratified for many years to come. While the world was constituted as it was, taxes must be paid; so that the peculiar taste of each person in respect to the form of taxation would be perfectly gratified. He was determinedly opposed to any increase of direct taxation, and thought it wise that there should be such an adjustment made between direct and indirect taxation as would lighten the burdens of the country. As he might or might not have a seat in that House in the new Parliament he wished to say a word as to the inequalities of the income tax. He believed it to be impossible to provide against the inequalities and the injustice of this tax. They might argue in favour of a distinction being made between precarious and fixed property. Well, the great bulk of his income was of a precarious character, being derived from his profession. Now, an income derived from a profession was much more precarious than that arising from business, because in the latter the owner might employ a deputy, and even in the case of his death it might still be carried on; but a professional man's income was dependent on his ability to perform his daily personal duties, and no deputy could discharge them for him. He was, therefore, entitled to speak in respect to the taxation of precarious incomes. Now, he could not say it would be fair that he should be taxed only say 3d. in the pound, when another man whose income was derivable from real property, but which was not, perhaps, one-fourth as much in amount, was to be burdened with a rate of 7d. in the pound. The income tax was about one-tenth of the whole revenue, taking the excise duties and the house tax. Now, if they were to recognize the principle of a distinction between precarious and other incomes in regard to the income tax, being the one-tenth of the revenue, why should not the principle be extended to the other ninetenths? For example, why should those with precarious incomes pay as much as other incomes in the shape of house duties or tea duties? It was his opinion that no human sagacity could meet those cases of difficulty. They never could adapt a scale that would meet the justice of the case of every man who paid taxes. He had had numerous communications with parties desirous of remedying the injustice of the income tax, and he had come to the conclusion that it was absolutely impossible to remedy that injustice by any human sagacity. In the autumn of last year he was honoured by an interview with a body of gentlemen forming a deputation from a society of which the hon. Member for Abingdon (Major Reed) was president. They requested his co-operation to remedy the injustice of the income tax. He told that deputation that as far as the removal of the war 9d. was concerned he was heart and soul with them; but as to their efforts to remedy the in- equalities of the tax, they were utterly useless. He must do those gentlemen the justice of saying that they discussed the question most reasonably with him; but the arguments which he advanced as to the impracticability of finding such a remedy, he believed, had due effect, inasmuch as they were not competent to answer them. He concurred with the hon. Member for Preston (Sir J. Strickland), as to the inquisitorial nature of the tax. He ventured to say that no one man out of ten could tell the profits of his trade. So distasteful was this tax in principle, so inconvenient and so burdensome was it to the people generally, that he believed a greater boon could scarcely be conferred upon the middle classes of England than its removal altogether. The right hon. Member for the University of Oxford had pressed strongly upon the attention of the House the necessity of the Government fulfilling the compact which was entered into in 1853. He (Mr. Malins) could never forget the discussion that took place in that House in 1853 on the Budget. He had agreed with the right hon. Gentleman, who was at that period Chancellor of the Exchequer, in respect to some of his propositions—but he dissented from others. The right hon. Gentleman in 1853 held out great expectations as to the result of his succession duty, which had since been disappointed. He quite agreed with him in thinking that if there had not been an absolute compact between the Parliament and the nation, there were at all events expectations held out that the income tax should cease in 1860, and that Parliament was, therefore, bound to make every effort to bring about that result. He would not, however, be a party to any measures that would tend to impair the efficiency of the public service, and he should be sorry, if the country again became engaged in war, if this House should be unprepared to meet the emergency with energy and spirit. In reference to the proposition of the hon. Member for Lambeth (Mr. Williams) to spare all incomes under £150. it should be recollected that the present Bill was only for one year; but after the present year, he should be very reluctant to assent to the continuance of the tax upon incomes below £150. In respect to the question of Naples, which had been touched upon in the course of this debate, he must say he was much struck by a speech made on a former occasion by the right hon. Gentleman the Member for Bucking- hamshire in regard to the affairs of that country. The right hon. Gentleman in the course of that speech impressed upon the House the impropriety of interfering with Naples, or the Italian States generally, unless they interfered effectually; and remarked, "if you hold out expectations which you cannot realize, instead of benefiting the Italians you will be doing them positive injury." Well, it so happened that by an accidental circumstance he (Mr. Malins) was able to give personal testimony to the soundness of the opinion then expressed by the right hon. Gentleman. He happened to be one of the very few Englishmen who were in Naples, in the month of October last. He was stopping for a few days at Sorrento in the Bay of Naples, when he read in Galignani the announcement that there would shortly arrive in the Bay of Naples an English and French squadron. He returned to Naples immediately after this announcement was made, and witnessed the effects which it had produced there. It would be impossible for him to describe the feelings of hope and expectation which were raised by the anticipated arrival of the squadron. The people were upon the tiptoe of expectation, and joy gladdened every countenance. He remained in Naples about eight days, during which time it transpired that those expectations were not likely to be realized. He witnessed the extraordinary revulsion of feeling that took place and the great injury that had been done to the people by the raising of expectations which were not to be realized. He was perfectly satisfied from his own personal observation, that his right hon. Friend the Member for Buckinghamshire had laid down a sound principle while making the speech to which he had referred. He did hope, whatever Government might be in power, that they would pursue a policy of complete non-interference, or if they did interfere that it would be in a manner to give effect to their interference.

MR. VERNON SMITH

said, he agreed with the right hon. Gentleman the Member for the University of Oxford, that it was very inconvenient that such subjects as the foreign policy of the Government should be unexpectedly introduced, and particularly into such a discussion as that upon the second reading of an income tax Bill; more especially at a time when some hon. Members made speeches in the hope that they might be sent back to that House, and others who did not expect to return made speeches in the nature of valedictory addresses. But he rose to reply to the statement made by the right hon. Gentleman (Mr. Gladstone) with regard to the Persian war. That right hon. Gentleman had rather unfairly attacked his noble Friend at the head of the Government for throwing out what he called a general challenge to the House to discuss his foreign policy, for the right hon. Gentleman, must have known that his noble Friend was but answering a challenge which had been given by the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli), who had spoken of the foreign policy of the Government as being "turbulent and aggressive." Were those epithets which it would become a Prime Minister to listen to without repudiating them? The right hon. Gentleman (Mr. Disraeli) also said that the Persian war had been undertaken for a shameful cause. Was not the noble Lord justified in getting up and asserting that this "shameful" cause was the "turbulent and aggressive" march of the Persians upon Herat? A juster cause of war he (Mr. Vernon Smith) believed had never existed; and he should not scruple to submit to any Oriental authority who might be named the question whether we could with safety or propriety have permitted the Persians to march upon and occupy Herat in defiance of a specific treaty by which they engaged to abstain from any such proceedings. The right hon. Gentleman (Mr. Gladstone) had also asserted or insinuated that the Government had in some manner shrunk from the discussion of this question. This was not the case. On the contrary, so far as he (Mr. Vernon Smith) was concerned, he was most anxious and most desirous that the question should be discussed. When Parliament met it was intended that the Persian papers should be presented, and they were mentioned in the Queen's Speech. The papers were being prepared when negotiations commenced at Paris, and there being some probability of a settlement Her Majesty's Government then wisely and prudently, as had been shown by the sanction which that course had received from the House, abstained from their production lest it should interfere with those negotiations. When the hon. Member for Aylesbury (Mr. Layard) had last asked a question upon this subject, he (Mr. Vernon Smith) had informed him that, acting upon the ordinary, usual, and, he believed, constant practice of Parliament, the papers would not be produced until the treaty had been ratified. It was clear that it would be impossible to discuss this subject without going into details which might lead to charges and criminations against Persia, the result of which might be to irritate the Persian Government and prevent the ratification of the treaty; and it would, therefore, be most unwise to raise such a discussion so long as there was any possibility of the negotiations being broken off. Therefore in refusing to produce these papers the Government had followed a precedent which was a most proper one, as they thereby avoided further misunderstandings with the States with which we were in negotiation. The right hon. Gentleman (Mr. Gladstone) had also repeated, what had frequently been asserted, that in the declaration of this war the Government had not shown due deference to Parliament. He did not know at what moment the right hon. Gentleman would have had Parliament consulted, but he (Mr. Vernon Smith) had already stated that the orders for the Persian expedition were not sent out until the 26th of September, at which time Parliament was not sitting; and that the declaration of war was not published in India until the 1st of October, and was not received in this country until the middle of December, at which time Parliament had already been summoned for a particular day in February. To have called it together earlier would have been most inexpedient, because such a course would have not only produced great inconvenience to Members—a consideration which he would put aside—but also would have produced great alarm in the country. The funds would probably have fallen, and there would have been much more excitement in the country than could have been justified by such an event as a war with Persia. Neither did he believe that there was on record any instance in which, in the case of a war undertaken by armies sent exclusively from India, Parliament had been called together for the purpose of its declaration. The adoption of such a course would be most prejudicial to the public service. Had it been adopted in this instance, the Persians would have obtained telegraphic information of the declaration of war long before we could send any expedition against them. He, therefore, considered that it would be prejudicial to the public service to take such a course except in very aggravated or alarming cases; and surely the case of the Persian war could not be said to belong to that category. The other evening the hon. and learned Member for Enniskillen (Mr. Whiteside), after he (Mr. Vernon Smith) had replied to a question, and therefore could not speak again, said that he was surprised at his answer, because in the course of the debate upon the capture of Kars he had said that Persia was not in a state of commotion, and that there was no idea of an attack upon Herat. He (Mr. Vernon Smith) shook his head in denial; but, to his surprise, the hon. and learned Gentleman said that it was in vain to deny it, because it was recorded in the pages of Hansard. He (Mr. Vernon Smith) was at first dumbfounded by this assertion; but he had since referred to Hansard and had found that he had stated no such thing. He had stated, and to that he was prepared to adhere, that he did not believe the Russians could be successful in an expedition against Asia, and that India had nothing to fear from Russian aggressions. At the same time he added, with a caution with which he had since had reason to be well satisfied, that they should be watched with the greatest vigilance. That was anything but what had been stated by the hon. and learned Member for Enniskillen. As regarded the discussion of this question of the Persian war, he for one should have been most glad that it should have taken place. He did not believe that a majority of that House would have declared that it had arisen from a "shameful" cause, or that a majority of the people of England would have considered it an unjust, a turbulent, and an aggressive war. On the contrary, he believed that when the circumstances were known, it would be seen that it was as just and as defensible a war as was ever undertaken by this country. He rejoiced at the conclusion of peace, but at the same time he was not sorry that this demonstration had been made, because it had shown to Persia how rapidly such an expedition as this to the Persian Gulf could be undertaken, planned, and executed by our authorities in India; and the energy they had displayed had, he believed, added very much to our prestige in the East. He, therefore, denied the statement of the right hon. Gentleman as regarded the production of papers, as though Government were unwilling to submit the subject to Parliament; and he would moreover say, that so far had the Government been from shirking the discussion of this question that they had gone further than any former Government, and had volunteered to ask Parliament to pay a portion of the expenses—the manner in which one could most certainly invite the attention of Parliament to any subject. The production of papers was by no means sure to lead to a discussion, for, although the papers relating to our difference with Naples had been laid upon the table, no hon. Member had taken up the subject, and there had been no debate upon it.

LORD JOHN RUSSELL

Sir, I certainly do not know that it is the most convenient course to discuss the state of foreign politics upon the second reading of the Income Tax Bill; but the House has now entered far into that discussion, and I shall therefore not refrain from making some observations on some of the topics that have been adverted to. In the first place, Sir, as to the proposal to vote the Ways and Means of the year before Supply. I quite agree that, as a general rule, it is contrary to practice and to what ought to be our mode of proceeding; but I think that in the present year there was such uneasiness in the public mind in regard of the income tax, that I think my right hon. Friend the Chancellor of the Exchequer has only done what was unavoidable in bringing forward his proposals. I believe we shall have an opportunity in another Parliament of discussing the financial arrangements for the next three years, and therefore I think it quite unnecessary to follow the hon. and learned Member for Wallingford (Mr. Malins) through the statements which he has made upon that subject.

With regard to foreign politics, I would first say a few words upon the question of Naples. We have heard from the hon. and learned Gentleman another testimony as to the inconvenience of the course which has been pursued. I think it is certainly more and more proved that it is not desirable, in dealing with a people who are suffering, who are impatient, and who look to foreign assistance, to raise hopes and then not to fulfil them; and I therefore regret that those two great ships, the Wellington and the Cressy, names which are redolent of ancient and modern glory, should have been sent to the Mediterranean merely to go to Malta and then back to Lisbon, without doing anything more. But to the proposal of an hon. Gentleman that we should now resume our diplomatic relations with Naples, I think there is this obvious objection, that the interruption of those communications is the only measure which has been taken by the Government, and it is understood as at least a moral protest against the conduct of the King of Naples with regard to his own subjects. The only reason for renewing diplomatic relations ought to be, that the King of Naples has changed his system of administration, and that, either by granting an amnesty, or by an exercise of clemency, he has indicated that there is an alteration in his course of proceeding. Now, there has been no such indication. The King of Naples has by no amnesty or acts of clemency shown a desire to improve his mode of Government. The Act for transporting a certain number of his political prisoners to Buenos Ayres is anything but an act of mercy. It is an act evincing, as I think, a determination to continue in the same policy. Therefore I should be very sorry to see a Minister sent to Naples, so as to give the colour or semblance of sanction on the part of Her Majesty's Government to the course which has been pursued there. I do not say whether or not you were right in withdrawing your Minister in the first instance; but, having so withdrawn him, it is quite a different thing to send your Minister there again when the special ground of his withdrawal has not yet been removed by a change in the policy of the King. As to the other subjects of foreign policy which have been touched upon, what happened last year and in the present one has confirmed me in the belief that no advantage to the public is to be derived from the discussion of matters which are still the subject of negotiation between our Government and the Governments of other countries. Last year there was something to be said both as to the proceedings of our Minister in America under the Foreign Enlistment Act, and with regard to the island of Ruatan, and I took the liberty of advising this House, if Mr. Dallas were not sent away from London when Mr. Crampton was sent away from Washington, not to express any opinion on that subject. The House entirely refrained from any expression of its opinion, the irritation consequent on angry discussion was avoided, and we have seen a treaty signed which we shall no doubt be ready to ratify, and which I think will be mutually advantageous to the two countries. This year, again, I ventured to recommend that we should ab- stain from discussing our relations with Persia while negotiations were going on on that question; and we have seen that, without any interruption on our part, those negotiations have resulted in the conclusion of a treaty between Her Majesty and the Shah. We have here another instance of the wisdom of this House in refraining from discussions on matters still the subject of negotiation. With respect to the merits of that war—while I do not implicitly subscribe to the opinion of the right hon. Member for Buckinghamshire, I beg equally to withhold my assent from the assertions made from the Treasury Bench. I do not think it sufficient to say that Herat was attacked; because to justify the conduct of our authorities it would also be necessary to prove that the rulers of Herat did not give the Persian Government provocation which it was impossible to overlook; that those rulers did not without excuse assassinate the Persian Envoy; and, likewise, that no means short of hostilities—short of sending an expedition to the Persian Gulf—would have induced the Shah to agree to terms, so far as the city of Herat was concerned, which would have been, or ought to have been, satisfactory to our Government. Whenever the papers are produced, these two points should be borne in mind; because, I repeat, it is not enough to say that the city of Herat was assailed by the Persians. I am happy to find that one article given out by a periodical, supposed sometimes to speak with authority (the Edinburgh Review), as necessary for the restoration of peaceful relations with Persia—namely, the dismissal of the Shah's Prime Minister—has not been insisted upon. I trust that, on the contrary, the treaty which has obtained the signature of our Minister is in terms which, while they secure the chief objects which we sought, at the same time tend to satisfy the Persian Government that we have no wish to interfere with their internal affairs.

In regard to another question which has been adverted to, we are not at all in the same position. I have said that, while negotiations are pending, it is not expedient for this House to interfere. But when those negotiations, such as they may be, have been carried to the point of hostilities, and when the papers giving an account of those hostilities are laid upon the table, I think it is impossible for this House not either to signify by its silence that it approves the course which has been adopted, or, if it disapproves that course, not to express its disapproval. I think this House would have abandoned its functions if, when papers were laid before it showing that hostilities had occurred such as those which lately took place in China, and when it was unfavourable to those hostilities, it had shrunk from declaring that opinion, because Her Majesty's Government had come to a different conclusion. What was proposed, and in very courteous terms, by the hon. Member for the West Riding, and is now adopted as the deliberate judgment of this House, is this—that our authorities at Canton were not justified in the measures to which they had recourse. The decision was not, as it has been attempted to represent it here, that Her Majesty's Government have been wrong in ordering hostilities of which they knew nothing. It was a decision of this House that those hostilities were not justified. The opinion of Her Majesty's Government had been expressed, indeed, in a different sense; but there would be a total end of the independence of this House, an entire end of our right of judgment, if on any measures, especially on measures which had gone the length of hostilities, and involving the lives of thousands of human beings, this House was absolutely and for ever precluded from expressing an opinion, because Her Majesty's Government had already pronounced theirs. I have no wish to discuss the merits of this question now, but I think the House was fully justified in the course it pursued. I certainly understood throughout the late debate that the despatch of the 10th of January, declaring that the proceedings of Sir John Bowring and our other authorities at Hong Kong and Canton were entirely approved contained the final decision of Her Majesty's Government. But when pressed the other day with respect to his intentions, my noble Friend at the head of the Government stated that the intention of the Government was to send out a person—not, indeed, to supersede the authority of Sir John Bowring, but certainly to have superior and, in fact, the chief authority at Canton—having the confidence and instructions of Her Majesty's Government, and intrusted with certain powers for entering into negotiations. Sir, I deem that a declaration of the utmost importance. I understood my noble Friend to state that this person, being, of course, a man of rank, character, and consideration, would have first to determine what orders should be given for the protection of the lives and property of British subjects. Any Government that possessed the confidence of Her Majesty would, no doubt, give such directions. His next business would, no doubt, be to obtain the fulfilment of rights which we have acquired by treaty. On that point I have only to repeat what I said in the former debate—that if it is the opinion of Her Majesty's Government that it is necessary to our relations with China that stipulations to which the Emperor gave his assent should be fulfilled, they have a fair right to pursue that object, and to insist on their being carried out. But they ought to do so in the usual diplomatic manner by communication—not with the Commissioner of Canton, but with the Supreme Government at Pekin. There is, however, a matter that should not be neglected. Treaties, like property, have their duties as well as their rights. If we insist that stipulations likely to be advantageous to us shall be executed, we ought at the same time to be ready to concede that the stipulations favourable to China and conformable with her policy shall be executed with reciprocal fidelity. That seems to me nothing but plain justice I am sorry to refer again to the word prestige, which has been used to-night by my right hon. Friend (Mr. V. Smith); but hold all prestige to be of no account which is not founded on truth and justice. I cannot conceive that it would be right to insist rigorously on treaty stipulations which you think useful and favourable to yourselves, and not to agree to the enforcement of stipulations favourable to others. Then there is the question of the improvement of our commercial relations with China by negotiation. My noble Friend laid great stress upon that, and I was glad to hear it. Nothing can be fairer or more desirable than such a proceeding. I have no doubt that proposals might be made that would be mutually beneficial. I greatly question whether the stipulations with regard to the opium trade are really advantageous to China. We are bound to carry them into effect if they are so; but other advantages might, perhaps, be given to China in lieu of these. It is a very great inconvenience that we should have to carry out a sort of custom house police for other nations; and therefore I should be happy to see attempts made by a person of character—by a dispassionate man, who should arrive out there without having had any part in the ill-blood and dissensions which have unfortu- nately arisen—upon fair and moderate terms to improve our commercial relations with China. That this should be done in concert with the Government of the Emperor of the French and with the Government of the United States would be so much the more advantageous. I have another word to offer to the Committee. If Sir John Bowring's despatch of the 3rd of January had received from Her Majesty's Government a full and fair consideration, and if their answer, instead of saying that everything which had been done was approved, had been this,—"No doubt you have acted with the intention to defend the interests of Great Britain; but the matter is of so grave a nature that we desire you to suspend all further operations, and a person of eminence and character will be sent out immediately with a view to negotiation,"—if that had been done, and a despatch to that effect had been written with the usual ability of the Secretary of State for Foreign Affairs, and had been laid upon the table at the commencement of the Session, I believe there would not have been much difference of opinion in this House. I can only hope, whatever dissensions may have arisen—whatever differences of opinion among parties may have been occasioned—whatever accusations those who gave a conscientious vote in favour of the Motion of the hon. Member for the West Riding may be liable to—that the result of all these proceedings may be that, instead of carrying on a disgraceful and discreditable kind of hostilities in China, using our great power as a civilized State on the one side, and the Chinese resorting to the most barbarous modes of assassination and poisoning on the other, the questions in dispute will be taken up in a different tone and spirit and by different persons; and that thus ultimately the country will have no reason to regret the debates which have occurred, or that the hon. Member for the West Riding was successful in carrying his Resolution.

I am now, Sir, going to refer to a different matter; yet so much of foreign policy has been introduced on the present occasion, that I think the subject to which I am about to allude is a fair matter of observation, more especially as we are going into the Navy Estimates. The House is aware that the naval superiority of this country has rested in a great degree upon a certain power which we made use of, in entire conformity, I believe, with the law of nations, upon which was based what was called in the last century the rule of 1756, and also during our tremendous contest with Napoleon those Orders in Council which, however severe upon neutrals, were absolutely destructive to the commerce of belligerents engaged in hostilities with us. During the late war, when we were acting in connection with France, which had always taken a different view of these subjects, we were naturally obliged to adopt the maxims of France, and the principles upon which we had usually acted were for a time abandoned. Her Majesty's Government, however, thought proper at the Conferences of Paris to enter into a general engagement, by which the views of France and Russia and the neutral Powers sharing in that Conference were confirmed, and the adverse views on which we had always acted were given up. That convention was not the subject of any discussion in this House. If there had been any such discussion I dare say the Government would have been able to show that the state of things was such that they had no other course than to agree to the proposal made to them. But, however that may be, it is to be observed that in all books upon this subject it is stated that the rules—"Free bottoms make free goods," and "The goods of a belligerent are safe in neutral vessels, and the goods of a neutral safe in belligerent vessels," have always been regarded as injurious to the interests of maritime countries, and especially to the maritime power of England. Every one who has looked at the arguments on this subject will see that the rules were laid down as a blow to the maritime supremacy of this country. Since that time the Secretary of State of the United States has proposed to go a step further than this treaty—that Great Britain should agree that all merchant vessels should be free from capture during time of war. It appears to me, I own, that, although this proposal carries with it an air of philanthropy, it is one which would not tend to prevent war, and which, if it did not tend to prevent war, would greatly cripple the energies of this country in time of war. It is obvious, in the first place, that one reason why foreign nations are unwilling to go to war with this country is that they feel that their commerce is sure to be seized, and that all the valuable property which they may have at sea is sure to fall into the hands of our cruisers as soon as war is declared. If, on the contrary, they were sure that all their merchant vessels would be allowed to pass in safety one great reason for remaining at peace would be taken away. But look also at the difference there would be in carrying on a war. Suppose the United States were to go to war with us. There would be no impediment in the way of their marching an army into Canada, but we should have no means of carrying on offensive operations against them by sea. They would have no fleet to send out, they would not attempt to send one out, and there would be no war, therefore, upon the high seas. We should have no means of hurting our enemy. But more than this—the Power which can send out a large commercial navy to sea must always have a great number of men fitted for the purposes of war, and ready to take their places in vessels of war. It is said that we should still retain the power of blockade; but that power of blockade has been much limited and restricted by the Convention of Paris. According to the terms of that treaty it must be an effective blockade,—that is to say it must be such a blockade that no merchant vessels could with safety attempt to pass through to any of the blockaded ports. This is so difficult to attain, that during the late war we were for some months without a blockade in the Black Sea in consequence of the necessity of conforming to the French rule. The effect, therefore, of your maritime law is to blockade one port and to leave other ports unblockaded,—that is to say, you might do great injury to New York or Boston, but all the other ports along the coast would be able to carry on their commercial operations as usual. I have thought it necessary to mention this subject for more reasons than one. I have heard that several persons, some of high authority, and among them, I believe, the hon. Member for the West Riding, were disposed to receive this proposal of the United States Government with favour; and I have also read a report, it may be an erroneous one, of a speech of my noble Friend at the head of the Government, at Liverpool, in which he seemed to lean to these views. I may be wrong, but my impression is, that if we were to agree to that proposal, our being a great naval power would be of no use to us in time of war. A stipulation not to use our naval force against a commercial ves- sel would be a great provocation to war. You would be exposed to more frequent wars; the cause of humanity would not be promoted; and in case of war you would be almost helpless upon the seas: so that the power of Great Britain would be very much weakened. Such being my opinion, Sir, I hope no Minister of Great Britain will set his seal to a treaty containing any stipulations of this kind without the most cautious deliberation, and after consulting with naval officers and others who have had practical experience in these matters.

MR. DRUMMOND rose to state, in confirmation of what had fallen from the noble Lord, that during the debates which took place upon the Orders in Council during the French war, it was expressly stated that they were issued, not merely as measures of retaliation, but because they would have the effect of injuring the enemy's trade; and if they wished for an instance of their effect?, he would remind them of the seizure of the four Spanish frigates with immense treasures by Admiral Cornwallis, which, to a great extent, prevented that country from bringing her power to bear against us. If they were to carry the doctrine of not seizing the commercial ships of belligerents to its legitimate consequences they must not stop the conveyance of supplies into a besieged town, for both cases stood on exactly the same footing.

MR. J. G. PHILLIMORE

said, he could not believe that the noble Lord at the head of the Government, who had always shown such anxiety to protect the honour and the interests of England, could entertain the opinions upon this subject which had been attributed to him by the noble Lord (Lord J. Russell). The abandonment of our maritime rights would be the abandonment of a power which all the Continental States would continue to possess—the power of levying contributions on an enemy's country. Napoleon had advanced the maxim that a war should support itself, and in pursuance of that doctrine he had always levied contributions largely on the enemy. The only way in his (Mr. Phillimore's) opinion that a maritime Power could carry out that maxim and levy contributions, was by intercepting the property of its enemy on the high seas. The same great authority had said, that to deprive England of this power would be to strike the heaviest blow at her maritime supremacy. Humanity lay rather in crippling the resources of the enemy as soon as possible, than in making concessions which would enable the enemy to protract the contest to any extent.

SIR CHARLES NAPIER

expressed his hope that this country would not abandon her maritime rights by allowing other nations to carry on commerce without restriction during a period of war. What would the consequences of such a system be, supposing a war occurred between this country and France? France would be able to trade to any extent she might think proper, for to suppose that it would be possible to blockade all the ports of France or of any other nation, was simply absurd. The last war had proved what all practical seamen would tell them,—that it was impossible to maintain an effective blockade in the winter season. The application of steam to navigation had placed it in the power of an enemy to leave their ports when they pleased. Consequently, whilst we should have to maintain a large navy to blockade his ports, his fleets would lie snugly and safely in harbour, he would convert his men-of-war into merchantmen, and thus carry on his trade at a comparatively small expense, while England would be at a prodigious expense in maintaining an ineffectual blockade. What was it that prevented nations going to war with us but dread and fear of the British navy? Remove that feeling from their minds, and they would soon find that their commerce thrived better in war than in peace. He trusted, therefore, we should never see the day when England surrendered her maritime rights.

MR. COBDEN

thought it would be generally admitted that it was somewhat inconvenient to launch into the discussion of such an important question without previous notice. He had supposed they were about to consider the income tax; but the noble Lord had introduced a very wide question, which would engage the attention of the House on a future occasion. He (Mr. Cobden) altogether differed in opinion from the noble Lord, and he merely rose to say so, that it might not be supposed there was a general acquiescence in the noble Lord's views. He thought the hon. and learned Gentleman (Mr. Phillimore) had treated the question on a ground which was altogether fallacious, because this country had already abandoned its belligerent rights by the treaty of Paris. The question they would hereafter have to discuss was whether, having taken that irrevocable step, it would be advisable to go a step further in the direction indicated by Mr. Marcy, and altogether to exempt private property from capture at sea in time of war. He did not intend to go into the question on that occasion, but he thought he would be able to urge arguments, based upon our present position, that were calculated to change the noble Lord's opinion. The hon. Member for Tynemouth (Mr. W. S. Lyndsay) had given notice of his intention to move for the papers relating to the treaty of Paris, and for Mr. Marcy's letter, and he (Mr. Cobden) hoped that when those papers were laid officially before the House the hon. Gentleman would found a Motion upon them which would afford an opportunity of fairly discussing the question.

MR. NEWDEGATE

Sir, I wish to take this opportunity of expressing my deep regret at the protocol consented to by the Government, and appended to the Treaty of Paris, which purports to debar us from exercising the power which this country has ever exercised in time of war by means of privateering and letters of marque. When the papers relating to the Conferences were laid upon the table of the House, I was induced to examine the returns which had been furnished to Parliament, with regard to the alleged misconduct of those who were in command of vessels to which letters of marque were issued during the last great European war. I have not those documents by me at this moment; but I must be permitted to say that, instead of finding that that power had been misused, there was direct evidence to show that the instances of the abuse of this power were few, that it had generally been used in the most legitimate manner; that it had fully accomplished the ends for which it was designed: that, in short, the service conducted under those letters of marque was in the highest degree creditable to those who had been entrusted with them. We have now, let me remind the House, revived our militia. We have, in fact, reverted to our ancient means of self-defence and internal preparation for great emergencies, which the country had most unwisely abandoned for several years. We have adopted those measures which render unnecessary the maintenance of enormous standing armies; and if we desire to exempt the country from the necessity of keeping up a large and expensive fleet—a fleet totally disproportioned to the requirements of peace—we must not abandon the right which, until recently, we have always hitherto exercised—that of arming our maritime citizens, in their own vessels, for the prosecution of any wars in which we may happen to be engaged. This is a question of expense: and depend upon it if this country may not arm her naval militia, she must continue to maintain naval establishments during peace at a cost altogether in excess of her real requirements. So far as the question of humanity is concerned in sparing the trade of an enemy, I say there is no means of curtailing warfare so legitimate as crippling the resources of your enemy, for it saves bloodshed, and brings those to reason who are insensible to anything but the dictates of self-interest. I am glad the noble Lord the Member for London has afforded me this opportunity of entering my protest against the provisions of the Treaty of Paris which purports to have deprived the country of the power to use those means for the defence of her shores and the protection of her commercial marine; the worst of this protocol is that it involves an agreement which will be broken. I do trust that what has been said to me in private will prove true:—"Let them make what agreement they choose, our descendants on the other side of the Atlantic will never be bound by those fatal provisions. Those provisions will be set aside. This attempt to abandon the great weapon which has ever been at our command will be in vain; rely upon it, when the hour arrives, England will free herself from these unworthy shackles."

MR. MONCKTON MILNES

thought it would be convenient to proceed as soon as possible to the Motion "that this Bill be committed," in order that an opportunity might be afforded to the noble Lord (Viscount Palmerston) of explaining the statements he was alleged to have made at Liverpool. The foreign policy of this country would be brought prominently before the people at the approaching elections, and it was the policy of the opponents of the Government to encourage the idea that the noble Lord was the real disturber of the peace of Europe. Hitherto it had been left to low journals on the Continent and to persons ignorant of the real progress of affairs to attack the motives and principles which animated the noble Lord's continental policy; but it now seemed that hon. Gentlemen opposite thought they could in that policy find a useful weapon against the Government. He (Mr. Monckton Milnes) was sure the good sense of the English people would prevent them from being deluded in such a manner. The country would see that the noble Lord had followed on this occasion the course he had always pursued—that, while maintaining the prescriptive rights of England, he had endeavoured by all just and honourable means to promote the cause of liberty throughout the world. It appeared a somewhat difficult matter to please the right hon. Gentleman (Mr. Gladstone) with regard to the affairs of Italy. The right hon. Gentleman had, in the first instance, by his admirable pamphlet, excited the public interest on that subject, and the good that had been effected was mainly attributable to his exertions. He (Mr. Monckton Milnes) thought, therefore, it was scarcely fair on the part of the right hon. Gentleman to turn upon the Government because, in prosecuting the same policy as he had virtually recommended—in carrying out the same principles of justice and humanity—they had not always been successful. It was no fault to have failed of success in dealing with such a man as the King of Naples; but he believed the people of England were of opinion that the Governments of France and England had been right in declaring that the conduct of that monarch had excluded him from European comity, and that, without proceeding to actual hostilities, they were justified in saying to him, "We will not hold intercourse with you on common grounds, because we regard you as a disturber of the peace of nations." Although the immediate consequences of this step might be to increase the sufferings of the victims of his tyranny, the ultimate result must be to promote the greatest moral advantages.

MR. WHITE SIDE

said, with regard to the foreign policy of the noble Viscount, he would be glad to know how the conduct of his Minister at the Paris Conferences, in, respect to Belgium, could be reconciled with the conduct he had pursued towards Naples. It was his (Mr. Whiteside's) lot to spend a portion of last autumn in Belgium, where he had an opportunity of hearing from persons not incompetent to form an opinion the surprise with which the course taken by the Minister of England at Paris, in reference to the freedom of the press in Belgium, was viewed in that country. He likewise found that a speech which had been delivered by the right hon. Gentleman (Mr. Gladstone) upon that subject had been translated, generally read, and universally admired there. He really must say that the policy which interfered with a free Government because it was free, and with a despotic Government because it was despotic, was altogether beyond his comprehension. He should like to hear the hon. Member for Pontefract (Mr. M. Milnes) reconcile his general observations upon foreign policy with the events that had occurred. If we had a right to interfere with the bad Government of Naples, what was to be done with the Pope of Rome? The King of Naples did not meddle in the affairs of other States; the Pope of Rome did. If, therefore, the Government of Naples were bad, and ought to be condemned, so ought the Government of the Papacy. But no, we did not attempt to do that because it would be somewhat inconvenient. On the same ground that we interfered with Naples, however, we might interfere with the Papal States, with Switzerland, and indeed any other country in Europe. He believed, however, that the noble Lord had no desire to make his policy triumphant in Europe, but that the real object of our interference with Naples was to make political capital. Did any one suppose that if the United States of America were to renew the slave trade we should venture to interfere with them, simply because the traffic was contrary to the principles of humanity and Christianity? No such thing. We should be perfectly civil with them. In order to entitle themselves to the panegyric pronounced upon them by the hon. Gentleman (Mr. Milnes), the Government of the noble Lord should abate the nuisance of despotic government wherever it was found. But, in that event, what would they do with their warm friend the Emperor of Austria, whose government was not the most highly relished in the Italian Peninsula; and what with the Emperor of Russia? He contended that this policy of interfering with foreign States was alike incomprehensible and impracticable, and one which the noble Lord had no intention of carrying out. If they really meant to give assistance to the Italians, why had they not landed an army on their shores, not have instigated the people of Naples to kill a tyrant, and then left the poor fellow who had made the attempt to the mercy of the tyrant? He thought the despotic Govern- ments of the world should be left to the slow operation of events; for much as he objected to arbitrary power, his belief was that the English Minister who attempted to remove it would not only perpetuate the income tax—that was a trifle in comparison—but aggravavate the evil, and make matters worse than before.

SIR FITZROY KELLY

said, he had observed with some alarm that no member of the Government had thought fit to address a word to the House on a subject the most important perhaps that could be brought under its attention. True, the noble Lord at the head of the Government had already spoken in this debate; but he must say he thought some other member of the Government should, without the delay of a single moment, relieve the apprehensions of the House by saying something on the important question to which their attention had been drawn by the noble Lord the Member for London—the question of our maritime supremacy. He (Sir F. Kelly) entertained the opinion which was common to the great majority of the public, that if Ministers were ever induced to enter into a treaty with any state in the world for carrying into effect the views which were indirectly imputed to the noble Lord as having been developed by him in his recent speech at Liverpool, a fatal blow would be given to our naval supremacy and to our power throughout the world. The noble Lord, he hoped, would take the earliest opportunity afforded him of addressing the House on this subject; and, if necessary, he would move the adjournment of the debate to enable him to do so, for he considered it of essential importance that the House should know what were the intentions of the Government on this question before any step was taken that, like the Convention of Paris or the late proceedings in China, would be found to be irrevocable. Before resuming his seat he begged to make an observation with regard to the Bill before the House. To the second reading of that Bill he was not disposed to object, and for this reason chiefly, that if they did not assent to some Bill relating to the income tax, the war tax of 16d. would be continued throughout the ensuing year. Although no man was less inclined than he to impair the resources of the Government, or leave them without ample means in providing for the exigencies of the state under circumstances like the present, he for one should certainly, before the Bill passed, take the sense of the House upon the question whether they were or were not to understand that the arrangement made between the Government and the country by the Act of 1853 was to be deemed a permanent arrangement and compact. He did not mean to say that the word compact was used by the right hon. Gentleman who introduced that Bill, or any other member of the Government; but certainly the general tenor and effect of the debates which took place in 1853 were to satisfy the country that, if they assented to the Bill continuing the income tax for the period of seven years then to come, that arrangement was to be a final one. Now it was among the subjects of complaint which might not be unreasonably addressed to the Government, that no statement had yet been made from which they could judge whether the exigencies of the country were such as to justify the addition of 2d. to the amount which would have been levied under the Act of 1853. If the Government would submit enough at least of the Estimates to enable the House to judge whether or not there really existed a necessity for the increase of the income tax from 5d. to 7d., before the Bill went into Committee, he did not say that he and others would not be satisfied that such an exigency did exist, and that for one year at least they ought to agree to the increased sum of 7d. If, however, Government persisted in going into Committee on the Bill before the Estimates were laid upon the table, or the House had been placed in a situation to judge of the extent of that exigency, he should take the sense of the Committee on the question that the income tax be 5d. in the pound, according to the terms of the Act of 1853.

THE CHANCELLOR OF THE EXCHEQUER

Before referring to what the hon. and learned Gentleman has said on the subject of the income tax, I will answer his question with respect to the point which has been raised by the noble Lord the Member for the City of London. In consequence of the convention that was entered into at Paris with regard to neutral rights, a communication was made to the Government of the United States, asking them to accede to the convention. The answer made by that Government was that, provided a certain ulterior change was added, they would be prepared to become a party to the arrangement. That ulterior change consisted in making the goods of an enemy carried in merchant vessels free from seizure in time of war. No answer has been made to this proposition. It is under the serious consideration of the Government, who are fully aware of its importance, and they will not come to any conclusion on the matter without a full consideration of all the interests involved in it. The hon. and learned Gentleman made some remarks on the subject of the income tax, and said he would take the sense of the Committee as to the fulfilment of a contract which he says was entered into by the Act of 1853. I am not quite sure that I understand what is the nature of the contract that that Act is supposed to have established; but if there was a contract, the first departure from that contract took place in 1854, when the income tax of 7d. in the pound was doubled on the proposition of the right hon. Gentleman the Member for the University of Oxford himself; and, therefore, if any alteration of the original terms of the Act is to be counted as a deviation from the contract, he must be considered as having been the first to pull the keystone from his own arch. But I cannot consider that the right hon. Gentleman in any way violated the contract when in obedience to the necessities of the time we made an alteration which was deemed to be advantageous, and, indeed, necessary for the conduct of public affairs. In the present year the Act, if enforced, would enable the Government to levy an income tax of 1s. 4d. in the pound; and, therefore, by that enactment the Act of Parliament is violated, according to the hon. and learned Gentleman. But, if that be a violation of the Act, it is a violation which will take place by Act of Parliament, for it seems to me that one Act of Parliament can constitute just as valid a contract as a previous one. I cannot distinguish between the validity of the two Acts. All I ask the House to do is to repeal so much of the existing Act as relates to the current year. For the ensuing year I propose no alteration, but leave the matter entirely open to the consideration of another Parliament.

SIR FITZROY KELLY

said, he did not consider it any departure from the contract to increase the income tax for the purposes of a war. It was only now that the war was over that he considered there was a breach of contract.

LORD HARRY VANE

said, he was glad to find that there was very little disposition to offer any serious opposition to that part of the propositions of the Chancellor of the Exchequer, which would reduce the income tax nearly to the level it had stood at before the war. He considered that every augmentation of indirect taxation pressed especially on the poor. Now, it was a principle which, in his opinion, ought always to be carried out, that the extra burden of the war should be borne by every portion of the taxation of the country, and should not be thrown entirely on that part which fell more heavily on the humbler classes of society. The arrangements which had been made for the exigencies of the war had appeared to him to be perfectly fair, but he should have regretted to have been a party to an act which would have pressed more than was originally intended on the working classes. It was too much, however, to expect that the expenditure should return to its former comparatively restricted amount. He trusted that on future occasions means would be found to reduce the expenditure, so that at the end of the year the Government would be able to dispense with the extra 2d. in the pound. It did not appear to him that there had been any violation of the compact referred to; but he trusted that the expenditure of the country would as shortly as was consistent with the public service be so revised and ordered that this tax might be dispensed with in its entirety, and the expenditure be brought within the compass of the ordinary revenue.

Bill read 2° and committed.