Commons Sitting of 19 April 1858

MINUTES.
NEW MEMBER SWORN—for Dublin University, Anthony Lefroy, esq.
3° Loan Societies.

REAL PROPERTY COMMISSIONERS.

  QUESTION.
  MR. HEADLAMsaid, he would beg to ask the Secretary for the Home Department whether it is the intention of the Government during this Session to introduce a Bill to carry into effect the recommendations of the Real Property Commissioners?
  MR. WALPOLEsaid, the Report of the Commissioners was now actually under the consideration of the Ministry. As a Bill was coming down from the House of Lords which was certainly not so satisfactory as the plan of the Commissioners, he proposed, when that Bill came before the House, to state upon the second reading the views of Her Majesty's Government upon the subject.

  ARMY COMMISSIONS.—QUESTION.
  MR. LAURIEsaid, he would beg to ask the Secretary for War whether the Officers of the Army ought to be subjected to payment of a tax upon their commissions granted by Her Majesty?
  GENERAL PEELsaid, he must inform the hon. Member that there was no tax upon an officer's commission, and that all such taxes and fees had been taken off for some time. There was a stamp upon a commission, just as upon all others, but the remission of that stamp was of course a matter for the consideration of the Chancellor of the Exchequer.

  GALWAY ELECTION.—QUESTION.
  MR. KINNAIRDsaid, he wished to ask the Attorney General for Ireland whether he has had any communication with the Chairman of the late Commission of Inquiry into Corrupt Practices at Elections for Galvan concerning the Bill before the House, and any proposed amendment thereof; and, if so, whether he will lay the correspondence upon the table, or state the purport of it to the House?
  MR. WHITESIDEsaid, he had had no correspondence with the learned gentleman. who was the Chairman of the late Commission, but had seen him on the first day of

  1265
  term, and the learned gentleman was good enough to give him a copy of the Report laid before that House, and to draw his attention to certain portions of the evidence which would assist him in separating the guilty from the innocent voters, with a view to perform the pledge already given to the House by his hon. find learned Friend on this subject.

  REGISTRATION OF COUNTY VOTERS (SCOTLAND).— QUESTION.
  SIR EDWARD COLEBROOKEsaid, he wished to ask the Lord Advocate whether he intends to bring in a Bill this Session for the amendment of the Law regarding the Registration of Voters in Counties in Scotland?
  THE LORD ADVOCATEsaid, it was not at present the intention of the Government to introduce any such Bill.

  DISEMBODIED MILITIA.— QUESTION.
  COLONEL FORDEsaid, he would beg to ask the Secretary for War what the intentions of the Government are relative to any allowance to be given to the men of the Regiments of Militia which they intend to disembody?
  GENERAL PEELsaid, the volunteers, on being disembodied, would of course receive the unissued portion of their annual bounty. They would also receive fourteen days' pay, without beer money. This would be paid to them at once, and not by instalments as usual. They would also be allowed to take away their tunics, trousers, and boots, issued during 1857 and 1858, and their fatigue clothing, together with their shirts and socks.

  RELATIONS WITH CHINA.—QUESTION.
  MR. WHITEsaid, he wished to ask the Under Secretary for Foreign Affairs if any and what instructions have been transmitted to Her Majesty's Plenipotentiary in China, with the view to obtain indemnification for the losses of British merchants arising out of recent events at Canton, and also to secure our future mercantile relations with China on a more satisfactory basis?
  MR. SEYMOUR FITZGERALD(who spoke in a low tone of voice) was understood to say, in reference to the latter portion of the hon. Gentleman's question, that Lord Elgin's instructions were to endeavour to gain access to ports in other parts of China as well as to those which our ships were now allowed to enter. What-
  1266
  ever advantages were obtained, however, would be for the benefit not only of British commerce, but of that of the world at large.

  THE MARBLE ARCH.—QUESTION,
  LORD ELCHOsaid, he wished to put a question to the First Commissioner of Works, on a subject to which his attention had been called since the last meeting of the House. It had reference to the erection of a clock on the Marble Arch at Cumberland Gate. He had ascertained, by actual inspection, yesterday, that there was on the side of the Arch a paper dial of a clock, with figures duly painted thereon. He wished, therefore, to ask his noble Friend (Lord J. Manners) whether it is his intention to erect a clock on that Arch; whether this is an original idea of his own, or a legacy bequeathed to him by his right hon. Friend opposite (Sir B. Hall); whether his noble Friend knew of any similar instance of a nation thus combining the useful and the beautiful, by putting a clock upon a triumphal arch; and whether the Government considers that it will be desirable to erect a similar clock in the cocked hat of the Duke of Wellington's statue?
  LORD J. MANNERSwas understood to say that his noble Friend had asked such a multiplicity of questions, that it was to be regretted he had not placed them on the paper. The right hon. Gentleman by whom he had been preceded in his office had left him no such legacy as that to which his noble Friend had referred. But certain persons, residing in the neighbourhood of Cumberland Gate, had been afraid that an unfavourable effect would be produced by raising a superstructure for a clock on one of the ledges at the side of the Marble Arch. His attention had been directed to that subject; and, in order to ascertain whether the objection which had thus been raised could be met, he had ordered that a paper dial should be put up on that building, leaving the public at largo to decide upon its effect. Of course, in all matters connected with the arts, a great diversity of tastes must prevail; but he could assure his noble Friend that he was not so wedded to his plan that he would not be prepared to accept a better one, if it should be proposed. With respect to any addition to the statue erected in honour of the Duke of Wellington, he could only state that he would never consent to the adoption of any step which would alter

  1267
  the appearance of a monument intended to commemorate the services of that great man.

  WAYS AND MEANS.—THE BUDGET.
  Order for Committee read.
  House in Committee of Ways and Means, Mr. FITZROY in the Chair.
  THE CHANCELLOR OF THE EXCHEQUER: Sir, since the right hon. Gentleman, the Member for Radnor (Sir George Lewis), explained in Committee the Ways and Means he intended to provide for the service of the year just terminated, a very great change has taken place in the condition of this country, and I am sorry to say also in the well-being of the people. At the commencement of the year 1857, and indeed during all the preceding year, our exports had continually and considerably increased; the returns of our imports were favourable—I might say highly favourable —and, although a high rate of discount prevailed generally throughout that period, it did not appear to offer any obstacle to the commercial enterprise of the country. But towards the end of the year 1857 this prospect of continued prosperity was clouded and disturbed. The American panic acted very distressingly upon the commercial condition of our own country. and at that time there arose a monetary crisis, which, whether we look at the number of the houses which failed or the amount for which they failed, has not in severity been exceeded even in our mercantile history. The minimum rate of discount in the month of November was 10 percent. That rate prevailed almost throughout December. At the very close of the year the rate was 8 per cent; at the end of January, 4 per cent. When I acceded to office the rate was that which now prevails—3 per cent. The effect of this commercial disturbance and distress was very great upon the revenue. It is a very significant circumstance, that at the end of the first three-quarters of the financial year —namely, the 31st of December last—the judicious and temperate estimate of my right hon. Predecessor was not even fulfilled; but, strange to say, during the last quarter of the financial year—from the 3lst of December to the end of March— in the great items of Customs, Excise, and Stamps, it was not only fulfilled, but exceeded by (speaking in round numbers) £1,500,000. I am extremely unwilling, on occasions of this kind, to trouble the Committee unnecessarily with statistical
  1268
  details; but I have here a slight memorandum of the effect of the monetary crisis upon the income of the country, which they will perhaps permit me to read. The quarter, ending the 31st of December, 1857, compared with the similar quarter of the preceding year, shows a total decrease in Customs, Excise, and Stamps of £766,000; but the quarter ending the 31st of March, 1858, shows a very different result, compared with the corresponding quarter of the preceding year,—namely, an increase of £1,400,000 in those items.
  As I am upon this topic, of the condition of our trade and of the effects of the monetary crisis generally upon our commerce, the Committee will, perhaps, think this the best opportunity for me to lay before them the effect of that state of things upon our export trade. The Exports in almost all articles, fell off, in the last quarter of 1857, the quarter of extreme trial, to the following extent. In the nine months, ending the 30th of September, 1857, the increase in the declared value of our Exports, compared with the corresponding period of the preceding year, was 12½ per cent; in the 10 months ending the 31st of October that increase was only 11½ per cent. In the eleven months ending the 30th of November, when the crisis was at its height, our Exports had increased only 8 per cent; and in the twelve months ending the 31st of December, this increase, compared with the preceding year, had sunk to 5½ per cent—that is to say, that was the amount of the increase as compared with the same period of the preceding year.
  Sir, although, as I have already observed, upon these occasions it is not advisable to load financial statements with too much statistical details, the Committee will, I think, expect and deem it convenient that I should place before them the general result of our Exports and Imports on Trade and Navigation. I will, in doing so, avail myself of a brief, but important statement, which has been drawn up, and which will clearly show the result. It is, I believe, the only document of the kind with which I shall have occasion to trouble the Committee. It is a statement of the Exports and Imports of the United Kingdom, and of the tonnage of British and foreign vessels in different years. I will take the year 1853—the year before the war—and the years 1855, 1856, and 1857. The total declared value of the Exports and ma-

  1269
  nufactures of the United Kingdom in the year 1853 was, in round numbers, £99,000,000. In 1855 the declared value had sunk to £95,500,000; in 1856 it had risen to £116,000,000; and in 1857 it had still further risen to £122,000,000. In 1853 the exports of textile fabriesamounted to £52,000,000; in 1855 to £51,000.000; in 1856 to £59,000,000; and in 1857 to £61,000,000. The exportation of metal fabrics in 1853, the year before the war, amounted in value to £19,500,000; in 1855 it sank to about £18,000,000; in 1856 it rose to £23,500,000; and in 1857 it reached £20,000,000. The real value of the total imports into the United Kingdom in 1855 was £143,000,000; in 1856 £172,000,000; and in 1857 £187,000,000. The imports of raw cotton for consumption amounted in the year before the war, 1853, to 746,000,000 lbs.; in 1855, to 707,000,000 lbs.; in 1856, to 877,000,000 lbs.; and in 1857, to 837,000,000 lbs. In 1853 British tonnage amounted to 9,000,000 tons; and foreign to 6,000,000 tons. In 1855 British tonnage was still 9,000,000 tons, and foreign remained about 6,000,000. In 1856 British tonnage reached 11,000,000 tons, and foreign about 7,000,000. In 1857 British tonnage had risen to 11,600,000 tons, and foreign to 7,400,000. The total amount of tonnage before the war was 15,380,000 tons, and in the last year 19,072,000 tons.
  Sir, having placed before the Committee this general view of the condition of the Trade and Navigation of the country, I will, with their permission, proceed to what is the real business before us to-night— namely, to consider our financial position, and to ascertain clearly the charges upon the revenue of the country, and the means at our command to meet them. Since the commercial crisis raged with a fury which alarmed the whole kingdom, I need scarcely remind the Committee that there has been a considerable restoration of confidence; and there are at this moment many circumstances which must conduce to the increased prosperity of the country. The rate of interest is very low; capital is abundant, money is cheap; and the price of the principal necessaries of life and of the chief articles of consumption is much lower than it was during last year or the preceding year. I should not, however, be doing my duty to the Committee if I concealed from them my own conviction, founded upon information which has been at my command, that
  1270
  although the general condition of the country is at this moment sound, and although there has been a restoration of confidence and there are numerous indications of improvement, that we are not justified in indulging the belief that there will be a rapid recurrence of that spirit of speculative enterprise which has prevailed of late years, and which has undoubtedly furnished very beneficial contributions to the Exchequer.
  I will now proceed to state the estimated expenditure for the year 1858–9. The charge, for the Funded and Unfunded Debts, I place at £28,400,000. The Committee will observe that there is an decrease upon that charge to the extent of £150,000. This has been occasioned by the liquidation of the £2,000,000 of Exchequer bonds last year, by some diminution of the rate of interest upon Exchequer bills, and by some operation of the Sinking Fund upon the public debt. The next item of expenditure is that for the permanent charge on the Consolidated Fund. That is an item which, I am sorry to say, I have felt it my duty to increase. Last year the charge was, I think, £1,770,000; but I have not felt justified this year in placing the amount at less than £1,900,000. I have felt it my duty to make an increase in this item in consequence of the compensation which the House awarded, I think, in a moment of almost reckless liberality, to proctors and other officials who deemed themselves injured by the passing of a measure of reform of the Ecclesiastical Courts. The charge for the Army, including the disembodied militia, and reduced by the amount stated the other night by my right hon. Friend the Secretary for War, will be £ 11,750,000. The charge for the Navy, including the packet service, which has been reduced by my right hon. Friend the First Lord of the Admiralty by some £300,000, will be £9,860,000. The Civil Service Estimates, which last year amounted to £7,400,000, are not at this moment entirely settled. There has been considerable difficulty in getting in these Estimates, and in examining and revising them; but I have no hesitation in saying that I do not estimate this item at more than £7,000,000 for the present year; and there will therefore be a reduction under this head, as compared with the charge last year, of £400,000. The Committee will allow me to make a few remarks upon these Estimates. There is at all times a very great desire to

  1271
  reduce the amount of the Civil Service Estimates—what used to be called in old days the Miscellaneous Estimates. We very often find that hon. Gentlemen, who are perfectly ready to support a considerable expenditure for what are called the great services, loudly demand that economy should be practised in the Miscellaneous Estimates. If, in the vindication of their Estimates, the Government appeal to the State necessity, which requires the maintenance of a large establishment, they are always told, "There are the Miscellaneous Estimates; that is the item upon which you ought to economize. If an army must be maintained upon a great scale, and if the navy—the national and favourite service—must be kept up, at all events, the Miscellaneous Estimates contain some extravagant items, which require excision by the financial knife, and that is the means by which economy must be practised." Now, although the Civil Service Estimates are not yet upon the table, I wish the House to consider the nature of those Estimates. No. 3 is the Estimate for Law and Justice, and the amount has increased considerably every year. No. 4 relates to the subject of Education, a question which always excites the deepest interest in this House. That item has advanced in amount, year by year, with a giant's pace. I do not mean, on an occasion like the present, to express an opinion, one way or the other, as to the policy of this expenditure—my business to-night is to give the Committee clear and complete information as to the financial position of the country; but it is necessary for me, in illustrating the system of our expenditure, to call attention to the nature of these Civil Service Estimates. I will take this item for Education. I believe that, when the first Vote for that object was passed by the House, about twenty years ago, its amount was not more than £30,000. In ten years the Vote had reached the sum of £248,000. Ten years more have passed; and the expenditure under this head, for England and Ireland, including the schools of art, will, for the present year, be not less than £1,000,000 sterling. Now, I do not say we have not been perfectly right in pursuing the course which the Mouse has hitherto taken in this respect; all I wish is, that the Committee should clearly understand what they are doing. And do not let it be supposed that the Civil Ser-
  1272
  vice Estimates, which have been thus constantly increasing, can be reduced in an off-hand manner. Under this particular head, for instance, there has been a vast system gradually developing itself, which, in a very short time, will amount to the outlay of a great department. When I saw the amount which this year would be incurred under the head of Education—when I remembered that regularly, every year, there had been a large augmentation in the Votes for that object—I felt it my duty to form some opinion of what would be the future of this growing branch of our outgoings, and of what means we have of controlling this expenditure, or of ascertaining generally the relation in which that department was placed to the Exchequer of this country. Now, Sir, after having examined the subject — and giving no opinion, I beg the Committee to observe, upon the policy or the impolicy of this establishment, but only anxious that hon. Gentlemen should clearly understand the responsible position they occupy in reference to this matter—it is my deliberate conviction that a system is now rapidly developing itself in this department of our expenditure, which, in a very few years, will arrive at an amount of at least £3,000,000 or £4,000,000 sterling. And I think the time has come when the House should calmly review the course they are pursuing in this respect, and, at all events, comprehend the liability they are incurring. Sir, the item for the Revenue collection is £4,700,000. The total expenditure for the various departments is £63,610,000. There is a liability for the War Sinking Fund of £1,500,000, besides £2,000,000 of Exchequer bonds, which must be liquidated in the early part of next month. Thus the total charge for the year 1858–9 is £67,110,000.
  I now proceed, Sir, to estimate the resources from which we are to meet those i liabilities. I will, therefore, give our estimate of the revenue for the year 1858–59. The Estimate of my right hon. Predecessor for the Customs was £22,350,000, and the actual sum paid into the Exchequer was £23,109,000. Now, in forming an estimate of the probable amount to be received from the Customs for this year, we must, in the first place, observe that, although the amount paid under this head into the Exchequer was £23,109,000, the not receipt of this department for the year was £23,289,000, or, not to perplex the Committee with odd numbers, £23,300,000.

  1273
  That difference between the net receipt of the Customs and the sum paid into the Exchequer was occasioned by certain advances made to the departments of the Customs, which were mainly owing to the changes rendered necessary in consequence of the great revolution decided upon by this House of paying the gross revenue into the Exchequer. Therefore, in calculating what the Customs may produce this year, we must really take as our basis the actual net receipts, not the amount paid into the Exchequer, which was lessened in its passage thither by the sum of £200,000, to which that department will not be liable in another year. In considering the probable result of the Customs duties this year, we must also remember that, since the late commercial panic and disaster, they have exhibited great buoyancy. We must remember that all the circumstances of the country are now favourable to consumption. Capital is abundant, money cheap, bread between 40 and 50 per cent lower in price than it was last year, and of sugar, which was very high and scarce last year, we have the prospect of ample supplies, while its cost has fallen considerably—so much, indeed, as l0 s. per cut., and thereby has become much more accessible to the working classes. In fact, there is a combination of causes at work which, under ordinary circumstances, would all stimulate consumption. We must further remember that there is one great influence calculated to be most advantageous to the Exchequer—namely, that the country is now beginning to feel the benefit of that great remission of taxation which the House determined upon last year. No doubt, when the revenue rallied at the end of the last quarter of the past your, that result was to be attributed in some degree to the restoration of confidence which had taken place, and to the gradual, even rapid, decline in the value of money. But it is impossible to shut our eyes to the conclusion that what has mainly sustained our revenue—what has supported and even stimulated consumption, at a time when there were great commercial disturbance and depression — has been the action of that £9,000,000 of remitted taxation which was brought into the pockets of the people, but which was brought into their pockets only towards the end of the year. Because the Committee will recollect that, although the Government, influenced by the feelings of the country and the determination of that House, re-
  1274
  mitted the £9,000,000 produced by the war income tax at the commencement of the year, six months elapsed before the relief could be felt by the public, owing to the manner in which the income tax is collected. For the first six months the country paid the war 9d.; and it was only at the latter end of the year, at the period when all this distress existed, and when so much commercial disturbance and depression were experienced, that suddenly the consuming power of the nation was supported by the public having at their command this great remission of taxation. And I think I may say, in passing, that this fact is a sufficient vindication of those who counselled at that time the expediency of reducing the burdens of the country to that amount. Now, we shall reap the great benefit of that measure in our Customs' duties this year. I should not be acting fairly to the Committee if I did not state that, though the Customs last year produced £23,289,000, that amount was swollen by a large sum i>aid for tea duties in April, 1857, which property belonged to the preceding year, in consequence of the alteration of those duties. It would not he right to omit from our calculation that £400,000 paid for tea duties ought really to have been included in the returns for 1856–7. But, taking all these circumstances into consideration —taking the amount last year realized upon Customs, notwithstanding the commercial crisis, at £23,300,000 in round numbers—allowing in my estimate for the present year a loss, or rather a diminution in the tea duties of about £200,000 for the present year—calculating the produce of those duties upon the amount which probably will be consumed by the public in the present year—deducting from that amount 3,500,000 lb. to meet the extraordinary accession to the Exchequer to which I have referred—and remembering also that, so far as this article is concerned, the prospects of the tea trade are extremely favourable, there having scarcely been any period at which the supplies were more promising — I think I am justified in placing the amount of the Customs at £23,400,000, or £100,000 more than they yielded last year.
  I now come, Sir, to the next great source of supply to our revenue—the Excise. The right hon. Gentleman the Member for Radnor, estimated the amount to be realised from that source at £17,000,000, and, notwithstanding all the distress of last

  1275
  year, it actually produced £ 17,825,000. This item I have ventured, after the greatest consideration, and guided by what I believe to be the best information, to put at £18,100,000; the Excise being subject to all those beneficial influences which act upon the Customs, and which, like the Customs, have, since the great remission of taxation and the reduction of the price of money and all other commodities, exhibited the same elastic and buoyant character. The next article is Stamps, which were estimated last year at £7,450,000, and realised £7,416,000. The Stamps are a branch of our revenue, which is acted upon by all the circumstances which also influence those departments which depend upon the consumption of the country. The state of the mercantile world acts very quickly upon the revenue arising from Stamps. The Stamps suffered much during the commercial crisis, and the period immediately subsequent to it, and they have since shown the same elasticity as the Customs and the Excise. It is also to be remembered that the succession duty will, in the year which has now commenced, contribute much more to the revenue than it has hitherto done, and therefore I have taken the Stamps at £7,550,000, which is exactly the amount fixed by my predecessor in his statement of last year, when he favoured the House with a prospective Estimate of the year in which we now are. The next item is Land and Assessed Taxes. The estimated revenue from this source was £3,150,000—the actual produce is £3,152,000; and considering the great number of new houses which have been built, and are now building, I have put it for the year 1858–9 at £3,200,000. We now come to the Property and Income Tax, which falls this year to 5d. in the pound. For the first half of the year it is at 7d., and the second half at 5d.; and the produce of the tax I have, therefore, put at £6,100,000, which is the rate at which it has always been put. The next item is the Post Office. The Estimate for the Post Office was £3,000,000, but it has only paid into the Exchequer £2,920,000, That reduced production of the Post Office, however, was occasioned by similar circumstances to those which I have mentioned as having an influence upon the Customs' revenue. The Post Office had to advance considerable sums to its departments, which advances it will not have to make again— they are permanent though fluctuating balances. The revenue of the Post Office,
  1276
  therefore, is not to be measured by its present produce, £2,920,000; but I am assured by the highest authority that I safely place it for the present year at £3,200,000. The next item, the Crown Lands, were estimated last year at £265,000; they produced £277,000; I place them for 1858–9 at £270,000. The last article of estimated revenue is the Miscellaneous. This was estimated last year at £1,200,000; the produce obtained was £1,600,000, and I have placed it at £1,300,000. I know this is an item which is often viewed with suspicion when the financial statement is made. It would be in my power to explain in detail all the items of which this head of revenue is made up; I only refrain from doing so lest I should weary the Committee. There are twelve sources of supply from whence this item is drawn; and having gone through them all carefully, I think I may, without the slightest apprehension, place them at that sum.
  Sir, I have now shown that the expenditure and liabilities of the year amount to £67,110,000, and I have estimated our revenue at £63,120,000; there awaits us, therefore, a deficiency to be made up to the amount of £3,990,000. I have no information as to what nifty have been the expectation of the Committee on this point, though I know from many quarters and by many means what is the expectation of the country; but whether the Committee thinks this an overwhelming or only a vast deficit—it is, at all events, a deficit which should make us pause and steadily consider the mode in which to encounter it. But I may, perhaps, be permitted, before entering on this consideration, to make a single observation upon the deficit; and it is one which ought to be consolatory to the country. This deficit, however vast it may be, has not been occasioned by any falling off in our resources. I do not know how I could place that more clearly before the Committee than by assuming for a moment that there was not that reduction from our revenue which has been occasioned by the income tax falling from 7d. to 5d. The consequence would be that our revenue would be £1,000,000 more in amount. The deficit, then, would be about £3,000,000; and if we deduct from that the amount of our engagements to pay off debt, namely, £3,500,000, it follows that, if we had no engagements to meet, and if we had no cessation of taxation, instead of a deficit we should have a surplus of £500,000. Therefore, in dealing with this very grave and

  1277
  serious subject, it is a source of consolation to us that this is a deficit which, notwithstanding the sharp fortunes experienced by the country during the year, has not been occasioned by any diminution in our resources.
  I propose to consider this deficit under two heads. I will consider first, the amount of deficit which has been occasioned by our undertaking to pay off debt; and, in the second place, the amount which has been caused by a cessation of taxation. It appears to me that this will be the simplest and the most intelligible manner of treating the subject. First, then, with regard to that amount of the deficit, £3,500,000, which is occasioned by our engagement to pay off debt. The first item to which I wish to call the attention of the Committee is the War Sinking Fund, the amount of which is £1,500,000. The Committee is perfectly aware that, irrespective of the War Sinking Fund, there is a General Sinking Fund, which is in operation. Thirty years ago, the system of a sinking fund that prevailed in this country was, to allot a certain fixed sum, without any reference to the state of the revenue, to the payment of debt. In the heat of the great war, the House of Commons passed a Resolution, that every year £5,000,000, "without fail"—those were the words, I believe— should be apportioned to the redemption of debt; and that system, the amount reserved being more or less in amount, but the principle being the same, prevailed until the year 1829. That system utterly broke down over and over again. It was false in principle and most injurious in practice. In 1829 a Committee was appointed to consider the whole question. The Committee investigated the subject with acumen and depth, and it recommended the adoption of the only sound principle on which a sinking fund ought to be based—namely, the application of the surplus revenue of the country to the liquidation of its debt. That surplus was to be ascertained by, every quarter, taking the surplus of the year, and—popularly describing the principle of the Act—devoting the natural surplus of the revenue to the liquidation of the debt. Well, in the course of the last year, when loans were incurred, the House thought fit to recur to the old system upon which sinking funds were established—namely, allotting a fixed sum, without any reference to the state of the revenue, to the liquidation of debt; and, while they thus recurred to the old
  1278
  system, with strange inconsistency, I think, they did not supersede the new one which, in 1829, had been established in its stead, and which was founded on a totally different principle. When that proposition was made, it did not pass without discussion in this House. Objections were raised to it by persons of great authority. There was a debate of some length, and there was a division. At the moment it appeared to me that the Government were not very much enamoured of their own plan, or confident in the policy which they were recommending; but the House thought fit— mainly influenced, I think, by one who upon such subjects, if indeed not upon all subjects, addresses the House with authority—my hon. Friend the Member for Huntingdon (Mr. T. Baring)—to agree to this revival of the old principle of the sinking fund. But my hon. Friend the Member for Huntingdon, when he recommended that course, recommended it for special reasons. He said:—
  "We are now, or soon shall be, in a time of perfect peace; and it is not until we are at perfect peace that this sinking fund is to come into operation. Therefore, on the whole, I think it wisest to secure the liquidation of debt, incurred in war, during a time of profound peace."
  I shall not go into the question whether we are now in a time of profound peace, lest I should introduce into this discussion, which should of all discussions be calm and temperate, elements of angry controversy. It is very likely that my noble Friend the Secretary of State for Foreign Affairs might, if I applied to him, express himself to be of the same opinion as the noble Lord the Member for Tiverton, and diplomatically assure me that we are not at war with China. I am not a diplomatist; I have only the charge of the finances of the country; but when I want to reduce the Estimates, and look to those of the Navy, for instance, I cannot help feeling that, although we are at peace with China, that peace has a most warlike influence upon our expenditure. Therefore, the ground on which my hon. Friend the Member for Huntingdon supported the establishment of that Sinking Fund— namely, that we were entirely at peace, or should be so when it came into operation, has not arisen; and knowing that on these subjects my hon. Friend very much agrees with me, taking the plain view of these affairs in China, I am convinced that, even with his view of the case, he never contemplated that the Sinking Fund should be brought into action at a

  1279
  time when—whether we are at peace or war—we are fitting out armaments and have a great naval force in the Chinese waters. But, Sir, besides the Sinking Fund of 1829, that is the General Sinking Fund, and the War Sinking Fund, which this year comes into complete operation, we have also—to which I shall afterwards refer —the engagement to pay off £2,000,000, of Exchequer bonds. Now, I ask the Committee calmly to consider in what position we are placing the finances of the country and its commerce—which is now in a state of some depression, and not able or inclined to bear an increase of taxation—I ask the House to consider in what position we are placing the finances of the country by the principle of paying off the debt which we have sanctioned. Last year you had the General Sinking Fund, you had the Special Sinking Fund, you had engagements in the shape of Exchequer bonds, all acting upon your finances. There absolutely was a sum of the national debt redeemed by the operation of the General Sinking Fund. That you will find in the accounts upon the table. It was not a very large amount; but positively there was a sum of the national debt redeemed by the action of the General Sinking Fund. Then you had the Special Sinking Fund coming partially into operation to the extent of £250,000; then you had £2,000,000, of Exchequer Bonds. Now, let me show what is the practical result of these artificial attempts to pay debt, when you have not a revenue which affords you a natural surplus of the income of the year for the operation. Here is the account of the public income and expenditure of the year just concluded, from which I will read only one item. Our expenditure amounted to £70,000,000 and our income also to a very great amount; but although we are dealing with these immense sums, you will find that there is an excess of expenditure over income. Our income amounted last year to £68,000,000, and yet our expenditure exceeded that amount by, in round numbers, £2,500,000; but when I go to the other side of the balance-sheet and look at the expenditure, I find there a sum absorbed by the Sinking Fund, by the redemption of Exchequer bonds, and by the liquidation of public debt, amounting to £2,250,000, or only £250,000 less than the excess of expenditure. Well, what follows? It follows that you certainly have paid off debt, but you have not paid off debt out of your revenue, You must
  1280
  have paid it out of the balances of the Exchequer. The Committee must feel that that is a system which, though upon one occasion it might answer, cannot be continued. The Committee, therefore, must now consider this—what is the consequence of bringing past and present burdens to act simultaneously upon the revenue of the year? The only consequence can be war-taxation in time of peace; and can you have this war-taxation in time of peace consistently with that commercial prosperity on which you depend, and of which you so often talk? I must, therefore, ask the Committee to consider whether the time has not come at which, not merely with reference to this year, but with reference to future years, and with regard to those results as to taxation which we wish and are almost pledged to accomplish, we must consider the policy of maintaining this system of artificial sinking funds. In principle I think it highly fallacious and erroneous; and in its application there has been a greater mistake, because, independently of the circumstance that you are maintaining two sinking funds at the present moment on contrary principles—independently of the consideration that the old Sinking Fund is in my mind built upon a sure foundation and upon sound principles—admitting for a moment that the War Sinking Fund is right in principle, still I think it wrong in its application, because it never ought to have been brought into operation until you had paid off your Exchequer Bonds. This triple action upon your revenue to pay off debt can only end cither in increased taxation or in loans, which for such an object would be absurd, or in financial embarrassment, which all of us would desire to avoid.
  Now, Sir, I ask the Committee calmly to consider this question. You have a deficit, of which £3,500,000 are occasioned by engagements to pay off debt. You have no surplus; you have no means of meeting these debts in the present year. How, then, will you meet them? Will you raise a loan? Will you raise a loan to fulfil engagements to pay debt—part of which consists of an artificial sinking fund? Could there be a more blundering means of setting your House in order and squaring your accounts than negotiating a loan to meet engagements of this kind? Is it not the last resource of individuals in distress, to raise money in order to pay debts, and to get deeper in debt in conse-

  1281
  quence? I cannot suppose that any one in this House would seriously sanction the idea that we ought to raise a loan to fulfil engagements to pay off debts. Well, then, is the Committee prepared to meet those engagements by taxation? It is very difficult to say how you could raise a sure of £3,500,000 by taxes. It is rather a perplexing question. But suppose you were resolved to do it, that would not get you out of the difficulty. If you were to raise by taxes a sum of £3,500,000 to pay these debts, you would still have a deficit of £500,000. You would have to make provision for that, and also to provide some surplus. Therefore, if you come to taxes, it is a question of raising a sum exceeding £4,000,000. Well, Sir, under these circumstances, and analyzing these claims upon us, I think that the time has arrived, not merely with reference to the convenience of the moment, hut in order to put our finances for future years in a secure position, when we ought to come to some determination respecting this War Sinking Fund. I would humbly recommend the Committee to terminate that arrangement, either by repealing the Act, which is, I think, false in principle and injurious in practice, or, at least, by suspending its operation until the other engagements into which we have entered—namely, these Exchequer bonds, are provided for. I feel certain that it will be utterly impossible, with public advantage, to maintain the system which now exists by law, to which the wisest men of all times have expressed an adverse opinion; which the labours of a learned and distinguished Committee of this House, in devising a general sinking fund, have really superseded; and which is not needed to maintain the credit, while, if preserved, it will impair the finances of the country. Therefore, I shall recommend to the Committee, so far as that £1,500,000 a year is concerned, a course which for the present certainly shall prevent its embarrassing the finances of the country.
  We have now to deal with £2,500,000 of deficit if the Committee sanction the course which I have just proposed, and I must say that I view the engagement which we have entered into with regard to the Exchequer bonds in a very different light and spirit from that in which I view the War Sinking Fund. I have been told that there is the easiest possible way of meeting that portion of the deficit, and that is, to fund it; hut if I were to take that course, it would be one which, in my mind,
  1282
  would he quite unjustifiable; unless, indeed, the country were in an emergency in which all the principles of finance must give way to political considerations. But in times like these in which we find ourselves, I think that it would be highly undesirable and improper to contemplate such a course, seeing that it would be totally contrary to the conditions into which the Parliament and the Government of the country entered, when they agreed to issue these terminable securities. It would be to me, I confess, a source of the greatest satisfaction to meet, and to meet to the hour, those engagements; but there is a great deal to be considered before we arrive at that conclusion. With regard to a loan, I imagine there is but one feeling on both sides of the House—namely, that whatever may be the deficit, that is the last expedient to which we must have recourse. To those Exchequer bonds, however, applies the same difficulty which applies to the War Sinking Fund. If they are to be met by a now tax, it must be an excessive tax to produce upwards of £2,000,000; and when it has produced that amount, where are you? Still in deficit. But if we cannot meet them immediately, I think, at all events, that the Committee will agree that the spirit of the engagements should be fulfilled—that they should be engagements which we are resolved to meet out of the revenue of the country, and that we should guard as much as possible against their ever becoming a permanent addition to the public debt. Still, seeing the deficiency that awaits me even if those engagements are provided for, and anxious as I should be at once to provide for them, I feel it my duty, in order to place the finances of the country, not merely for this year, but for future years, in a position which I think will be advantageous to the country, to recommend to the Committee to postpone for some period the payment of those Exchequer bonds; but to consent to arrangements which, so far as I can form an opinion, will secure their being paid out of the revenue of the country, and which will place our general finances in such a position that they will form no obstacle to those arrangements which I think it would be for the interest of the country to adopt. I will postpone describing, however, to a future portion of my remarks—when the time will naturally arrive that I should touch upon this portion of the subject more particularly—the mode in which I propose

  1283
  that the arrangements should be accomplished.
  Now, Sir, I have considered that part of the deficit which is occasioned by engagements to pay debts, and which is no doubt much the most considerable portion of it. There is next a part of the deficit to be considered which, though not so large in proportion, is of a character which must be regarded in a severer light than the other; because we cannot reconcile ourselves to arrangements which in the other case may be justifiable or necessary, when the deficit is occasioned—no matter what may have been the original cause—by an absolute falling off in the revenue. An absolute falling off in the revenue must be met by means which will not only supply the deficiency, but will also place the general condition of the revenue in a sound and satisfactory state. This portion of the deficit has been occasioned by the cessation of a tax—and that tax one of a memorable character—one to which we cannot bring our minds free from considerations beyond those of a merely fiscal and financial character; and it certainly appears to me that upon the decision of the Committee, with respect to that source of deficit, the future satisfactory management of the finances of the country will very much depend. Sir, the Property and Income Tax has long and frequently occupied the consideration of this House. I think I may say that it has never ceased to occupy the thoughts and to interest the feelings of the country. It is a tax the importance of which is not to be measured simply by its financial results. Those who pay it do not consider merely the sums which they yield to the Exchequer, but the mode in which it is assessed, and the manner in which it is levied; so that, from the earliest time that it has occupied the consideration of Parliament to the present, social and political principles have been involved in its character and consideration. It is not necessary for me to remind the Committee of the manner in which this tax has habitually and traditionally been described in Parliament. The epithets which were applied to it, and in which the greatest men have been used to characterize it, are in the memory, as they have often been upon the lips, of Gentlemen on both sides of this House; that it is "unjust, unequal, and inquisitorial" all of us have felt, and most of us have acknowledged. There are, I think, two great classes of reasons why the Income Tax should not form a permanent feature
  1284
  of our finance. The first class I may call domestic; the second springs rather from considerations of an external character. The feeling of the community generally of the inequality, of the injustice, and of the odious nature of this tax, has unfortunately been sanctioned and concurred in by all those statesmen who have felt the necessity of levying it; and it has been impossible to maintain it for any considerable time, or to adopt it as a permanent feature of our financial system, without great acerbity of feeling and much violent controversy being excited as to its character and its incidence. If you wish to establish it, you have an endless crowd of controversies of the most angry character upon these among other points:—Whether there shall be recognized a difference between property and income in its assessment; whether, if that difference be not acknowledged, a difference shall be admitted between precarious and permanent incomes; whether there shall be a difference between incomes derived from trade and incomes derived from professions; whether the poor man shall be exempted, and what a poor man really is; what is income and what are wages; who shall be exempted, where ought the line of exemption to be drawn, and the convenience of an exemption which shall exclude all but those who are called rich. These arc some of the subjects of controversy which have always been raised in this country when an attempt has been made to establish the income tax for any lengthened period. These agitations have not of late prevailed. But why, let ma ask, has that been the case? It is because in 1853, after a great deal of agitation throughout the country upon this subject had taken place, after a Committee had sat for two years to investigate it, and after all sorts of plans and expedients devised by every manner of man had been considered in reference to it, an eminent Member of this House (Mr. Gladstone) brought for-ward a great financial scheme in which, acknowledging the impossibility of reconstructing this tax upon principles of justice —upon principles which could satisfy the fair demands and expectations of society, he submitted to the notice of the House a proposition, the effect of which would be to secure its diminution and final extinction at the end of a certain term of years. That scheme was brought forward with consummate ability; and, having been supported in the House of Commons by an overwhelming majority, created the conviction

  1285
  in the public mind that in its spirit the arrangement would be carried into effect, and that the financial policy which was in 1853 propounded, was one which both Parliament and the country had cordially embraced and sanctioned. I do not wish to overstate the case. To do so would not be my interest, as it certainly is not my inclination. I shall not say that a solemn compact was entered into at the time to which I allude between Parliament and the country upon this subject, which should he regarded as independent of all circumstances and events. That is a position which it would be wild and idle to assume, and absurd to attempt to uphold. There were, however, arrangements cordially entered into, and in the same spirit understood, and which the country expected would be religiously fulfilled if the interposition of extraordinary circumstances did not render their fulfilment impossible. Well, circumstances of that character did take place. A great national emergency occurred. And what, let me ask, in that hour did that people do who had previously murmured at the injustice of the principle upon which the income tax was established? When the safety of the country was endangered—when her honour and her best interests were at stake—what did they do who, before the arrangement of the right hon. Gentleman the Member for the University of Oxford was brought forward —an arrangement which they had cordially accepted—had complained of the unequal mode in which this tax was levied upon the various classes of the community—what, I repeat, did they do when the scheme which that right hon. Gentleman devised was not only arrested in its progress, but the tax itself made the increased source from which the power of England flowed forth to support the honour and interests of the country? Did they murmur? Not for an instant. On the contrary, everybody did his utmost to prove to England and to the world that there was no burden to which our people would hesitate to contribute at a moment of national emergency; the income tax was raised to a very large amount, and during the period to which I refer, when the country clearly understood that it was absolutely necessary this increased income tax should continue to be levied, not a voice was raised against its imposition. It was not until peace had been secured that the nation called for a remission of the war taxation in this particular. When that great object
  1286
  was happily attained, we heard again the expression of its expectation that the arrangement of 1853 would be carried into effect. There can be no doubt that the breaking out of the war caused a considerable difference in our position as compared with that in which we stood at the period at which the arrangement was originally introduced. The permanent charge on our debt had become in consequence largely increased. We became liable to encumbrances, such, for instance, as these Exchequer bonds, which must be met, and which constitute impediments in the way of adhering to the arrangement of 1853, which could not well be foreseen. These, however, are circumstances which a sensible people would not fail to accept as furnishing good grounds for delay in the diminution or extinction of the income tax. They do not, however, constitute sufficiently strong reasons why the country should be prepared to regard the arrangement of 1853, as visionary and fantastic. I cannot help feeling then, that if on these grounds the arrangement was to he wholly abandoned, there would be a very natural sentiment of disappointment among the people. Such a disappointment would be calculated to irritate them, and, therefore, looking to those domestic considerations which undoubtedly prevail — namely, that the very principle of the tax is one which creates public discontent, and is calculated to irritate the public mind—it is highly inexpedient that it should form a permanent feature of our financial system. I may now be permitted to advert to other grounds which, although they may not so generally influence public opinion as those which I have just mentioned, vet are, I think, well deserving of our consideration in dealing with this important question. They embrace considerations arising out of the occurrence of some extraordinary emergency, and are of a political nature. Is it not of the highest importance, I would ask, that the Sovereign of this country should, notwithstanding the immense revenue which is annually raised to support the vast establishments of this country, be able with the concurrence of Her Parliament, to touch at any moment, as it were by a spring, a source of revenue which in an hour of great emergency would yield £20,000,000 or £25,000,000 sterling — a sum equal to those largo loans which foreign potentates raise at a ruinous rate of interest, and one of which almost exhausts the resources of

  1287
  their subjects—that year after year, notwithstanding the large sums raised for the purposes of general revenue, the Sovereign of this country should be able to raise during a war an enormous sum, without a murmur on the lips of a single person in her dominions? That is ft reason drawn from political considerations—and I know that the right hon. Gentleman the Member for the University of Oxford has advocated the proposition in language more unequivocal than any other statesman in this House —that the income tax should not be allowed to constitute a permanent feature of our financial system. But, Sir, although that may be ray opinion, and although I cannot but think it is the opinion of the great majority of the House of Commons,— although there are grounds of the highest political expediency which render it desirable that the arrangement of 1853 should be carried out in spirit, if not in the letter, it is still undoubtedly possible that the country, anxious as it may be to witness the realization of its expectations in that respect, and having the utmost confidence that Parliament is really and in all sincerity disposed to meet its wishes upon the point, still may not be unprepared, knowing that a deficiency in the revenue exists, to submit to the burden of the income tax which it bore last year. The people of England may say —"A very great deficit lies before us. It is not, after all, so great as we thought it would be some time ago. If we submit to an income tax at the same rate as that of last year, we shall get rid of this deficit, and we must trust to the future." Now, that is a view of the case which it it is my duty to place before the House. We have a deficit in our revenue, not occasioned by our engagements to pay a debt, but by a cessation of taxes, which deficit must be made good by taxation, and which would be converted into a surplus, if the Committee should think proper to continue the income tax for another year at the same rate as last year. The Committee may take that course, and take it, too, with the sincere intention of carrying the scheme of the right hon. Gentleman the Member for the University of Oxford into effect. But there are other considerations which ought to influence our decisions with respect to this question. The country has behaved extremely well during the last five years in matters of taxation. At no period of English history has so much public spirit been exhibited upon the part
  1288
  of the community in that particular, and I think that that spirit is worthy of all respect. There is no doubt that this country generally has this question of the income tax greatly at heart. It has for a long time clung to the belief that, notwithstanding the adverse circumstances which have interposed, there has existed upon the part of Parliament a sincere intention to diminish and eventually to extinguish this tax; and I cannot but feel that if I were to ask you to take a course which would look like breaking your promise with the nation in that respect, and to seek to got out of our difficulty, by again passing a law which would prevent the remission I should be calling upon you to adopt a policy which would be but too well calculated to sour the public mind. The result of such a policy would be that, when a great emergency again rose, you would not then be in a position to appeal to the country with the same success, or to expect to have your appeal met with the same cordial response which upon a recent occasion awaited the Minister who had the direction of the national finances. I feel, therefore, bound to announce it as the deliberate opinion of Her Majesty's Ministers, that the deficit in the revenue which I have brought under your notice, ought not to be supplied by proposing an increase in the income tax.
  But, Sir, if the income tax is not to be disturbed;—if the income tax for this year is only to give us the reduced rate of 5d. —and we propose that course—the House must feel that it is absolutely necessary to support the revenue of the country by the imposition of new taxes. I know that I may be told by some gentlemen that you can obtain the relief you want by a reduction of expenditure. Allow me to say that reduction of expenditure is not a task that can he undertaken in haste and heat. It requires time — deep, protracted, and minute investigation — and although it might be very easy to effect certain reductions, which might be very popular in the House for the moment, yet unless they are well considered and founded on, mature investigation and ample knowledge, they would only lead to a swift and fatal reaction and to increased expenditure. Now, we have made some reductions in expenditure. We have made reductions which could be made with safety, and in amount not contemptible. Allow me to say that in meeting the difficult financial position we have had to encounter, a reduction in expenditure of £800,000, which we have

  1289
  made this year, is an item not to be despised. But let me impress on the Committee that, which I have presumed to say on previous occasions — Reduction depends on Policy. It is quite a wild idea to suppose that a body of men, though they may be Ministers, can meet in a room and suddenly alter the establishments of the country. The establishments of the country are adapted to the policy which the country pursues; and if you sanction a policy, which leads to invasion, to armaments, and consequently to expenditure, you cannot expect because there is a change of Ministers that you can deal with that expenditure, unless you deal with that policy. Really sound reduction is the effect of time and thoughtful management, and is not in a few hasty weeks to be concocted in order to obtain popular applause. I say, therefore, that it was utterly impossible for us to deal with the expenditure of the country during the period in which we have held the responsible position of Ministers. We have succeeded to arrangements—difficult arrangements—which we must manage as best we can; and, therefore, now that there is a deficit in the revenue, you must not unmindful of the not inconsiderable retrenchment, safely and honourably effected by us—say that we ought to meet it by reductions. What we have to deal with is, the difficulty which is immediately before us. When we have opportunity and time, we can submit the establishments of this country to such severe revision as they may require, and, with favourable circumstances, effect considerable retrenchments in those establishments; but it would be worse than mockery to pretend that we are able to do so all of a moment.
  In the ungracious office of selecting a new tax, I am at least somewhat upheld by the consolatory conviction that every person who may be called on to pay it, will cither directly or indirectly feel the benefit of the considerable remission of taxation which occurs this year by the fall in the rate of the income-tax. When we remember what the country expected, I hope the Committee will not forget, in the consideration which they may give to my proposition, that we start with the fact that, by the operation of the law, the community are already entitled to, and soon will enjoy a considerable diminution of that tax so peculiarly odious to the people; and that benefit the country will not measure simply by the amount of the remission, but will
  1290
  also accept as an earnest that the policy of 1853 will be carried out. The mode in which I would attempt mainly to supply the deficiency is, by asking the House to agree to a proposition, which appears to me as reasonable and wise. I would ask them to agree to equalize the duties on spirits. The Committee will recollect that we have been legislating on this subject now for several years. We have, consequently, great experience to guide us as to the course we should adopt, and the results we may obtain. I think it was in 1853 that the duties on English, Scotch, and Irish spirits, were raised. They were raised considerably, with great benefit to the Exchequer, with increased consumption, and without the slightest appearance of illicit distillation. They were, I believe, in the following years increased with the same result. In 1855, the right hon. Gentleman the Member for Radnor (Sir George Lewis) equalized the duties on English and Scotch spirits. Well, that was a step taken with some apprehension; but what was the consequence? Great advantage to the revenue, increased consumption, no appearance of illicit distillation; and, stranger than all, the greatest benefit was experienced by the Scotch, whose duties were raised. That may appear a paradox; but it is a dry fact, and is accounted for in a moment, because, by the raising of the duty, they were freed from embarrassing and ruinous restrictions, and had the full enjoyment of the markets of England. We have much experience, I say again, to guide us. Since 1855, the duties on spirits have been raised, having been equalized between England and Scotland, while a differential duty still remains in favour of Ireland. The duties have again been raised, and the results have been equally satisfactory. I have taken some pains to obtain the best information on the subject, and from what I hear, there is not the slightest appearance of illicit distillation. Look at the position of Ireland. At this moment, the only differential duty that remains between Ireland and Great Britain, is the differential duty on spirits. I am sure that my Irish friends, who are always demanding justice for Ireland, and who define that justice to consist in an identity of institutions, of rights, and of duties, cannot on reflection consider the position in which they are placed by this differential duty on spirits with any other but feelings of indignant humiliation. I remember once,

  1291
  when I was at Bristol, a ship came in from Ireland, and, to my great surprise, I saw it boarded instantly by Custom House officers, and the crew treated just the same as a parcel of foreigners. All this was to see if there were any Irish spirits in the hold, which, if they had come in undetected, would have paid a duty of 6s. 2d. instead of 8s. Was that a position for high-spirited Irishmen to be placed in? How much better will it be for the Irish to have the command of the English market, and not only of the English, but of the British market: — how much better for them to enter into active competition with English and with Scotch spirits, and, instead of confining themselves to the supply of a mere provincial demand, to be entitled to pour in their admirable products—which I am told the French now prefer even to their own brandy—how much better for them to pour their spirits into this country, and through this country into the Continent, and thus give a great stimulus to trade. Sir, I cannot help feeling that, this is a tax of which the Committee generally will approve; and I trust that I shall experience no opposition on the part of my Irish friends, and that not a single murmur will be called forth by my proposal. If, however, there is a murmur among any of them, I would ask them to consider, first, the position of the Chancellor of the Exchequer; and, next, to bear in mind with what pride and satisfaction they will return to their native country, when they are able to tell their constituents that that income tax with which they were visited—not by me, I may observe (they will remember that) but which, somehow or other, by means I never could penetrate, was unexpectedly fastened upon their necks—has been shaken to its centre; that that real badge of their yoke has been nearly got rid of; that they have given a fatal Wow to it. In the recollection of that cheerful circumstance, they will, I hope, find ample compensation for any annoyance which they might otherwise experience from this change in the spirit duties. The Committee will, therefore, I trust, sanction my proposition for the equalization of the spirit duties throughout the three kingdoms. That measure will give [to the Exchequer the sum of at least £500,000, which is the amount of the deficit.
  I am much obliged to the Committee for bearing with me, while I have submitted to them this somewhat lengthened state-
  1292
  ment; but I am sure they will remember that my position is not one of ordinary difficulty, because I have been obliged by process of analysis to operate upon a large deficit, and, of course, to touch upon many circumstances. The Committee will now consider that if the course which I humbly recommend be adopted, the deficit has disappeared. We have put an end to the War Sinking Fund, or postponed its operation to the happy day when the Exchequer bonds shall be paid out of our revenue; we have agreed to an arrangement, to which I shall hereafter revert, with reference to our Exchequer bonds, and prevented them from forming any obstacle in the way of placing our financial system fairly in order; and, lastly, by the proposal to equalise the duties on spirits, we have entirely got rid of the deficit. But I deem it advisable besides that, we should add something to the revenue in the shape of a surplus. I shall not press much upon the resources of the country or the patience, of the Committee in this respect, because the state of our balance is very satisfactory, and because a very large and unusual amount will be added to them in the course of this year. Nay, if I had chosen to avail myself of it, a sum of £400,000 might fairly be brought into the revenue of the year. I have thought it best, however, not to bolster up the finances, and I have felt that on the whole, the Committee would rather see the case under, than over stated. But the East India Company, who owed to the State £1,500,000, have already paid £1,100,000 of that sum towards the reduction of the war expenditure of this year. This amount was lent out of revenue, and it was agreed that it should be paid in to revenue. There is yet £400,000, therefore, which strictly speaking I might fairly take credit for in the Budget; but I thought it best on the whole, to make an unvarnished statement to the Committee. Nevertheless, that £400,000 will at all events be paid into the Exchequer. Then there is a balance upon repayments over advances this year of probably not less than £600,000. There are also monies to be paid, both on account of the interest and the sinking-fund of the Sardinian loan. There are, too, other items:—so that a very large sum will be paid in the course of the year to the account of our balances, which, as the Committee will have observed from the balance-sheet, were themselves at the end of the year in a satisfactory position. This, therefore, being the state of the

  1293
  balances of the Exchequer; remembering (which is really the fact) that in the estimate of revenue which I have placed before the Committee, I have most scrupulously refrained from indulging in any but moderate expectations; feeling, indeed, that if I had adopted the sanguine views which many persons in authority would have sanctioned, I might have ventured on much more cheerful figures; looking, moreover, at the great efforts which the country has made—I should not have thought it necessary under all these circumstances to trouble the Committee much on the subject of a surplus. But a surplus of some kind ought I believe to be provided, even though it be a small one; and, confident in the resources of the revenue, I think a small one should under the circumstances suffice. Now, so far as I can form an opinion on the subject from conversation with men of business, there is no mode of taxation more popular than the application of stamps to various operations of commerce. No one feels the burden; it is a mode of taxation which, on the whole, occasions less annoyance than any other, and I think in fact it is rather popular. The penny postage system first brought taxation by means of these slight stamps, into fashion. People like to see vast results accomplished by slight means. I therefore pro-pose that whenever we draw a cheque, we should place a penny stamp upon it. I am assured by one who, upon such a subject must be considered of the highest authority, and who has very completely mastered this question, that I may count on a sum of not loss than £6300,000 from this source. Of course, there may be objections to the tax, but every man who draws a cheque must remember that he has now to pay an income tax of only 5d. instead of 7d., and, obtaining as he does a remission of the income tax, and seeing the foundation of its future extinction laid, he must feel that under the circumstances, some sacrifice must be made. I hope, therefore, the Committee will agree with me that this is a mode of taxation, if it can be called such, which they will not refuse to sanction.
  Considering the position of the exchequer at this moment, I am not prepared to ask the Committee to impose any other taxes. I would ask them, however, to permit me for a moment to remind them of what may be the position of this country in the year fallowing the present, for, although we
  1294
  hear many taunts about "prospective finance," I think that any person in the office which I now have the honour to occupy, would be greatly wanting in his duty if he brought forward any proposition without having exercised some foresight in regard to it, and weighed in some manner its influence upon our future prospects. Now let us see, if the arrangements which I have proposed are agreed to by the Committee, what will be our prospects in the year following this. You will have again a loss on the income tax, as compared with your present revenue, of £1,000,000; and assuming that all things remain the same, and that your revenue and expenditure are exactly what they are now, you will have a loss in 1859–60 of £1,000,000 in your income tax, while £2,000,000 of Exchequer bonds will become due. You will have this £3,000,000 reduced by the amount of surplus which I may obtain this year; but say that you have to meet £3,000,000 of deficit. Now, I put it to the Committee—is that a prospect which ought to alarm us? Can we entertain a doubt but that with a fair amount of commercial prosperity, with a fair revival of trade in this country, the resources of our revenue, aided by well-considered and wise retrenchments, will be sufficient under these circumstances to meet our engagement to pay these bonds, and to encounter that diminution of income? Well, if you do that—and I feel confident that you will be able, should no disaster against which human provision is unavailing overtake the country—in what position shall we stand in that famous 1860 which has been the pivot of modern finance? There are certainly £1,000,000 of bonds due in that year; but you will have annuities to the amount of something like £2,150,000 per annum expiring at a time, when I hope and believe you will possess a large, abounding surplus of revenue; and you will be able, if not to the letter, at least in spirit, to accomplish the plan of the right hon. Gentleman, the Member for the University of Oxford. It is for that reason—in order that we may act fairly, candidly, and sincerely towards the country on this question, in order that the wise arrangements of the right hon. Gentleman may be carried out, and that that great policy—for a great policy with regard to the income tax I believe it to be—should be accomplished, that I shall propose not to encumber 1860 or 1861 with the whole of the bonds which at present we cannot meet, but I shall pro-

  1295
  pose that in 1862 and 1863 £1,000,000 should be apportioned to each year. When that is done, I have little doubt the policy of 1853 will be carried into effect.
  Sir, I now submit these propositions to the consideration of the Committee. When they recollect the expectations of the country as to the revenue, and the fact that at the end of last year—and indeed so lately as the period at which I assumed office—the estimated deficiency we should have to encounter was not less than £6,500,000, I hope they will not be dissatisfied that by the rallying of the revenue during the last quarter, by judicious retrenchments; by measures sound in principle and judicious in application, the immense deficit that so long brooded over the spirit and depressed the energy of the country, has been dissipated, and that too with a remission of taxation in respect to the particular impost, most odious to the people, in a manner which guarantees an accomplishment of the policy of the right hon. Gentleman the Member for the University of Oxford. This result will, I think, be satisfactory to the country, as well as to the Committee; and I trust that the propositions I have made will not only receive the candid consideration of the Committee, but obtain, after due thought and discussion, the cordial acceptance of the country.
  THE CHAIRMAN having put the first Resolution,
  MR. GROGANsaid, he thought the Committee could not but admire the ability and clearness of the Chancellor of the Exchequer's statement. His statement as to the deficit, no doubt, was somewhat alarming; but they must feel he had conferred a substantial benefit on the country by his adherence to the arrangement made in 1853, and thus insuring the extinction of the income tax in 1860. The Committee, however, would not feel surprised at an Irish Member's objection to one of the right hon. Gentleman's propositions—that in which he proposed to place an additional impost on one of the chief productions of Ireland—namely, his proposed equalization of the duty on whisky. He felt the more bound to take the earliest opportunity of expressing his objection to this portion of the scheme, inasmuch as he had that very day presented a petition, signed by upwards of 4,000 of the inhabitants of Dublin, complaining of the ruinous effects of the existing war impost on Irish whisky, and praying for its re-
  1296
  duction. What must be the feeling of the petitioners when they learnt that, not only was that impost not to be reduced to its amount before the late war, but further increased? It was all very well for gentlemen in England, and even in Scotland, to approve of propositions for equalizing the duty on spirits; but he thought the people of Ireland could complain, with justice, of the exceptionable manner in which they had been dealt with. He thought that the proposed duty upon cheques would be more than sufficient to compensate for the balance required by the Chancellor of the Exchequer, and it was far more just to impose a tax which would affect the general commerce of the country than to inflict on the Irish alone a fresh impost. The right hon. Gentleman had congratulated the House on the fact that illicit distillation in Ireland had not been increased by that increase of the duty—and, no doubt, it was true; but that was owing to more than usually favourable circumstances, and they might depend upon it, that if any distress became prevalent in Ireland, illicit distillation would revive; and it was a question whether the increase of duty on Irish whisky would not tend to depreciate the revenue, by increasing the incentive to illicit distillation, to say nothing of its injurious effect upon the morals of the country.
  SIR HENRY WILLOUGHBYdoubted whether his right hon. Friend had formed a correct estimate of the expenditure of the country. Excluding the Sinking Fund and Bonds, his right hon. Friend had estimated it at £63,000,000; but he did not understand that any allowance had been made for the charge for the Chinese war. At the beginning of the last year, the late Chancellor of the Exchequer estimated the expenditure at £65,474,000, but the actual expenditure turned out to be more than £70,300,000. In the army and navy alone there was an excess of nearly £3,000,000. Taking these facts into consideration, he doubted whether his right hon. Friend had taken a sufficient margin for the expenditure of the country. No doubt, a debt of some kind was running up with the East India Government. He should like to know whether his right hon. Friend could satisfy the Committee that there would be no charge from that quarter, and whether it was not probable that the charge for the army and naval services might run up three or four millions, as it

  1297
  had clone before. No doubt, it was not possible for any Chancellor of the Exchequer to estimate accurately for contingencies; but that very circumstance made it more necessary that the Committee should not rely too implicitly on the right hon. Gentleman's estimate of the expenditure for the year. He cordially approved of the course he proposed, with regard to the income tax; but, with reference to the fact of certain annuities ceasing in 1860, he wished to call the attention of the Government to the injustice with which that class of the public creditors had been treated up to this moment, for the holder of those annuities was paying seventeen times more taxes than the holder of a perpetual annuity. Whilst one annuity cost £33, a long annuity could be purchased for less than £2, and yet the same amount of duty was actually imposed in both cases. He wished, also, to know whether there were no outstanding debts which would have to be included in the expenditure of the present year.
  MR. DEASYsaid, that it seemed the House was called upon now to decide that a certain branch of Irish trade should be subjected to a considerable increase of taxation. He was under the apprehension that the estimate of the right hon. Gentleman, with respect to the revenue to be derived from such increase, would not be borne out by the result; and, moreover, be very much feared that the proposition in question would lead to increased illicit distillation in that country. He, therefore, hoped the right hon. Gentleman would allow some little time to elapse, that the subject might be fully considered before the Committee came to a decision upon it.
  SIR GEORGE LEWIS— In the lucid statement which the right hon. Gentleman has made to the Committee he has adverted principally to the finances of the current year, commencing in April last, but he also made some partial allusion to the finance of the preceding year. His statements, so far as they related to numerical facts, appeared to me to be strictly correct, and not requiring any remark on my part; but some observations which he made in the nature of comment upon the character of last year's expenditure I cannot allow to pass without observation. In arguing upon the question of a War Sinking Fund the right hon. Gentleman adverted to the expenditure of the last year, as proving that the operation of such a sinking fund was fallacious,—that
  1298
  there was a deficit of £2,000,000 upon the expenditure of last year, and that the payments for the liquidation of Exchequer bonds to the extent of £2,000,000 having been taken out of the balances of the preceding year could not be considered as a redemption of debt out of the revenues of the last year. Now, I wish to call the attention of the Committee to the payments which were made out of the revenue of the last year in the nature of the redemption of debt, beyond the £2,000,000 of Exchequer bonds. Out of the revenue of last year there were redeemed in the nature of debt £2,000,000 of Exchequer bonds; and there were also Exchequer bills paid off in money to the amount of £288,600. I am not able to state whether those bills have been reissued, but, so far as my knowledge extends, they have not; and therefore their payment would be a redemption of debt. There was also the war sinking fund of last year to the amount of £250,000; there was a sinking fund, under the operation of the Act of Parliament, of £77,862; and there was a payment of £1,125,206 for the redemption of Sound Dues, which was in the nature of the payment of debt, inasmuch as if it had not been defrayed from the revenues of the year the amount must have been borrowed. That amount, it must be remembered, was not included in the Estimates laid before the House at on early period of the Session. The total of these sums is £3,741,068, which was paid last year in the nature of the redemption of debt. The Committee will bear these facts in mind before they come to the conclusion that there was anything fallacious or deceptive in the redemption of debt last year. The amounts I have mentioned, however, were not the only sums paid last year out of the revenue, in addition to the estimate which I submitted to the House at the beginning of the Session. We paid, besides, £635,000 for the Persian expedition, £40,000 for the dowry of the Princess Royal; and there was a supplementary Vote of £500,000 for the militia. Now, all these charges, in addition to the Estimates I laid on the table at the commencement of the Session, were discharged from the revenue of the year, with the exception of £2,000,000 taken out of the balance of the preceding year. And I will state why I thought it a perfectly legitimate operation to diminish the balances to that extent. On the 31st of March, 1857, the balances in the Exchequer amounted to £8,668,000, sum which was unnecessarily

  1299
  large. On the 31st of March this year the balances in the Exchequer amounted to £6,657,000, which, as the right hon. Gentleman has said with great truth and candour, must be considered a large sum to be retained in the Exchequer. But out of the revenue of last year many payments were made which were unexpected when the Estimate of Expenditure was submitted by me to the House, and which were rendered necessary by the Indian mutiny, and by the consequent increase of expenditure for the army and navy. When these facts are taken into consideration the Committee will, I think, come to the conclusion that there was nothing fallacious or deceptive in the operations for the redemption of debt last year. I shall not trouble the Committee at any length with regard to the plan of financial arrangements for the current year which has been submitted to them by the Chancellor of the Exchequer. I will merely state that I certainly concur with the right hon. Gentleman in thinking that there is a fundamental distinction between a deficiency of revenue caused by current expenditure, and such a deficiency caused by obligations created in former years for redemption of debt. I reserve my observations with regard to the War Sinking Fund of £1,500,000 until the right hon. Gentleman brings in his measure. I retain the opinion I formerly expressed that some arrangement of this nature is expedient to provide for the regular redemption of debt; for if we trust merely to the operation of the existing Sinking Fund Act where there is no obligation to create a surplus, there is no security for the regular reduction of debt; and if we are to redeem any considerable amount it is necessary to impose a distinct obligation for the redemption of a certain sum. When the Loan Act was passed it was impossible to foresee how long the war would continue, and therefore it was impossible to foresee when the Exchequer bonds would fall due to be paid. I fully admit that when we are called upon by law to redeem £2,000,000 of Exchequer bonds, and there is, at the same time, a heavy expenditure for military and naval purposes, it can scarcely be expected that we should impose fresh taxes to meet the war sinking fund of £1,500,000. The right hon. Gentleman has said, with regard to the Exchequer bonds, that he poposes simply to postpone them; but he must be aware that they do not admit of postponement. They fall due upon a certain day, and there is no provision for the
  1300
  payment of these bonds unless the right hon. Gentleman takes a Vote in Committee of Supply. What the right hon. Gentleman calls postponement is, therefore, in fact the creation of another loan. He can only pay off those Exchequer bonds by borrowing; and therefore, instead of postponement, the proposal of the right hon. Gentleman will lead to the incurring of another unfunded debt to the extent of £2,000,000 for a certain number of years. With respect to the equalization of the spirit duties in Ireland and Great Britain, I can quite confirm the accuracy of what some persons may regard as a paradoxical statement on the part of the Chancellor of the Exchequer,—that great incidental advantages will accrue to the Irish spirit manufacturers from the freedom of intercourse arising from the abolition of all fiscal restrictions between Ireland and Great Britain. Although it may no doubt be inconvenient to the Irish consumers to pay an additional duty upon spirits, the Irish spirit trade will derive great incidental benefit from the equalization of duties. It is a perfectly fair proposition which the right hon. Gentleman has laid before the Committee, and I trust that he will not consent to any application for a postponement of the Resolution, inasmuch as any delay in a matter of this sort would afford an opportunity for taking spirits out of bond, and thereby making a considerable diminution in the revenue which the Exchequer would receive during the present year. Therefore, if the Committee are to come to a conclusion upon the subject, I would strongly advise them to come to that conclusion to-night, without agreeing to defer the question till some future day. I would also take the present opportunity of impressing upon the right hon. Gentleman and the other Members of the Government, particularly those connected with Ireland, the great importance of watching the operation of the increased duty upon spirits, and of observing whether it leads to illicit distillation or not, because illicit distillation not only will defraud them of their revenue and neutralize the object which they have in view, but will be attended with demoralizing effects, creating lawless habits in the population, which I am satisfied Gentlemen acquainted with the state of some counties in the north and west of Ireland in former times will bear witness are far greater evils than could be compensated by a small increase of revenue. However, I am bound to say that, as far as my know-

  1301
  ledge goes, the late increase of duty on spirits in Ireland has not hitherto been attended with an increase of illicit distillation, and I trust no such result will follow the proposition of the right hon. Gentleman. With respect of the penny duty upon cheques, I am not aware that any serious objection can be made to it, and I trust not only that the right hon. Gentleman will derive £300,000 from it, hut that it may not turn out at the end of the year that his estimate of the revenue from Customs and Excise is somewhat higher than present circumstances would justly warrant.
  MR. FAGANsaid, he was afraid that the revenue which would be derived from the increase of duty on Irish spirits would be considerably loss than the Chancellor of the Exchequer seemed to anticipate. He regretted to state that at the present moment illicit distillation was going on in Ireland to a considerable extent. Unless he was misinformed, there was a decreased revenue last year arising from Irish spirits; and in the south of Ireland, particularly in Cork, spirits were now being sold at 3d. per gallon less than the ordinary market price, which was universally attributed to smuggling, on the one hand, and illicit distillation on the other. His opinion was, that instead of an increase of £500,000 arising from the increase of duty proposed by the right hon. Gentleman, the revenue would derive scarcely any advantage whatever. It was not his intention, however, to oppose the passing of the Resolution, although he was afraid that in its present shape it would impose the contemplated increase of duty upon spirits in the hands of dealers. He hoped, therefore, it would be altered so as to allow spirits already taken out of bond to escape. With respect to the penny duty upon cheques, he could not conceive how the Chancellor of the Exchequer, unless in the improbable event of the practice of drawing cheques for small amounts being continued after the imposition of the tax, could hope to derive from it so large a sum as he anticipated.
  MR. WHITE SIDEsaid, he was not aware that illicit distillation was practised to any considerable extent in Ireland; and from the position which he now held in connection with the Government of that country, he would have heard of the facts if it were so. With respect to the propriety of making the change in the duty on Irish spirits proposed by the Chancellor
  1302
  of the Exchequer, be had heard that question discussed over and over again in Belfast, and the dealers there bad always wondered that the Chancellor of the Exchequer had never seen the expediency of equalizing the duty on Irish spirits, appealing to the experience of Scotland in proof of the policy of the measure which they recommended. In a circular drawn up by writers who generally advocated the views of the hon. Member for Cork (Mr. Fagan), it was stated: —
  "The present duty on spirits in England and Scotland is 8s. per gallon, while in Ireland it is 6s. 2d. per gallon. Taking the consumption at only that of last year, the effect of equalizing the rates would be to augment the revenue by £621,000 yearly; an amount more than sufficient to cover any deficiency likely to arise from reducing the tea duty to 1s. 4d. per 1b. It is admitted on all hands that illicit distillation has not increased in Ireland, while the Exchequer has gained upwards of a million annually since 1852 by the change of duties."
  He believed the statements contained in that extract fully justified the proposition of the Chancellor of the Exchequer; and that, so far from being unacceptable, it would be favourably regarded by the trade.
  MR. WILSONsaid, he quite concurred in the observations of the right hon. and learned Gentleman (Mr. Whiteside), that many of the Irish spirit dealers, so far from being adverse to an equalization of the duty, as was now proposed, were rather in favour of it. No further back than last autumn a deputation of spirit dealers and distillers waited upon him at the Treasury, and urged the equalization of the duty upon the Government for the reason already stated — that it would open to them the English market. But his object in rising was to warn the Chancellor of the Exchequer and the Committee against two disappointments which they might probably experience by the close of the present year. In the first place, the right hon. Gentleman had stated the Excise revenue last year at £17,825,000, being £825,000 more than the Estimate. It was right the Committee should know the causes which led to that large and unexpected increase. For three or four years there was a failure in the vine crops of France, which produced a large demand for spirits in Ireland and Scotland, causing a considerable temporary increase in price. The consequence was, that for two years successively the duty-paid stocks in the hands of dealers were much reduced; and last year, when the demand from abroad

  1303
  fell off, the dealers began to replenish their stocks, and consequently the duty yielded a very large amount. But that increase of revenue arose, not from an increase of consumption, but from the renewal of duty-paid stocks, which, of course, was not likely to be repeated in the present year. The stocks, being once made up to their usual amount, would only he replenished according to the consumption of the year; and therefore he was afraid that the Chancellor of the Exchequer, in taking credit, not only for a continuance of the large and exceptional increase of last year, but also for an increase of £500,000 on Irish spirits alone, was proceeding upon calculations which might probably prove fallacious. His own opinion was, that unless some unforeseen events took place, the Excise duties in the present year would not yield more than during the past twelve months. Although, however, the revenue arising from Irish spirits might not show an increase over last year, that would not by any means form a conclusive argument against the equalization which the Chancellor of the Exchequer now proposed, inasmuch as from the circumstances he had stated the increase last year was only an apparent increase; or, at all events, did not arise from an increase of consumption With respect to the penny duty upon cheques, he had opposed that proposition, for a very simple reason. The imposition of the penny stamp on cheques would yield at best but an inconsiderable amount of revenue, while it would have the effect of interfering most materially with that economy of capital which the banking system of this country produced. The practice was almost universal among small farmers and small traders to keep banking accounts and pay trifling sums by means of cheques; and the stock brokers of London and other places, who were remunerated by a small commission, conducted their transactions through the same useful medium. The gain that such a tax would bring to the public finances would be far outweighed by the inconvenience it would occasion to the trading community.
  MR. WARREwas anxious to draw the attention of the Chancellor of the Exchequer to the fact that while he assumed certain augmentations to the revenue from the Succession duty, the Committee had no opportunity of judging for itself upon that point; for since that duty had been imposed, Parliament had had no Return or other information as to what it produced.
  1304
  They had had Returns regarding the Probate duties, and he begged to suggest to the right hon. Gentleman the propriety of laying upon the table similar Returns respecting the Succession duty. He could not help observing that he thought the right hon. Gentleman's anticipations respecting the revenue from the Post Office somewhat over-sanguine.
  MR. M'MAHONsaid, he could not give a silent acquiescence to a proposition for so large an addition to the spirit duties in Ireland. At present the duty was 6s. 2d., and the proposal before the Committee was in effect to raise it to 8s. As at present informed, he believed the Irish dealers generally would think the equalization an advantage; but he hoped the Chancellor of the Exchequer would not press the Resolution to-night. In Scotland, even with the greater duty that they paid, they manufactured 3,000,000 gallons of spirits a year more than was manufactured in Ireland; and Scotland imported to Ireland upwards of 1,000,000 gallons. This was a matter of great importance to his constituents. He thought that the increased duty ought not to be retrospective. He remembered that on the last occasion when the duty was raised, some of his constituents complained very much of their stocks being overhauled.
  MR. MALINSthought the House must have heard with great satisfaction the speech of his right hon. Friend the Chancellor of the Exchequer. On coming down to the House that evening, hon. Members were prepared to hear that there was a deficiency; perhaps they had scarcely expected to hoar that it was so large as £4,000,000; but it now appeared that deficiency was rather formal than real, and that no less than £3,500,000 of it was due to the obligations for paying off debt. He thought his right hon. Friend had exercised the soundest discretion in postponing the payment of those great public debts to which he had referred, till he was in a situation to pay them out of revenue. He (Mr. Malins) was of opinion that that arrangement would be of great benefit to the nation. He thought that the House and the country would concur with his right hon. Friend in the propriety of not continuing the operations of the War Sinking Fund. But, above all, it was with intense satisfaction that he had heard his right hon. Friend announce his adherence to the pledge given by his right hon. Friend the Member for the University of Oxford

  1305
  (Mr. Gladstone), when Chancellor of the Exchequer, and which amounted to a Parliamentary pledge, that, if possible, the income tax should cease in 1860. He (Mr. Malins) believed that every Member of that House had come down prepared to hear his right hon. Friend the Chancellor of the Exchequer announce his intention of continuing the income tax at 7d. in the pound. He (Mr. Malins) should not have been disappointed if he had heard that announcement; but certainly it would have deferred indefinitely the prospect held out to the country that the income tax should conic to an end in 1860. An impost so detestable, both in principle and in practice, might be borne with cheerfulness in times of war and of critical emergency; but in periods of peace it ought not to be maintained as a permanent part of our financial system. As the case now stood, however, there was every prospect of the Parliamentary pledge of his right hon. Friend the Member for the University of Oxford being fulfilled. He (Mr. Malins) should nevertheless observe, that he shared in the apprehensions of the hon. Gentleman the Member for Devonport (Mr. Wilson) with respect to the success of the plan of having a penny stamp put upon cheques. He confessed he was afraid that that tux, small as it was, would have the effect of diminishing the freedom of commercial transactions. The proposal was one that deserved the most serious attention of the Committee. He should be glad to think there were no grounds for his apprehensions on this point, as his right hon. Friend had told them that this tax would bring in £300,000 a year; but, should it turn out inexpedient, he trusted his right hon. Friend would not think it beneath his dignity to yield to the opinions of the mercantile interest. Every other portion of his right hon. Friend's proposals had his cordial concurrence.
  MR. P. O'BRIENsaid, that as an Irish Member he must say he did not thank the Chancellor of the Exchequer—in that season of extreme difficulty, perhaps for himself—for having selected Ireland as the country to make good the existing deficiency in the Imperial treasury. Ireland could not expect much at the hands of the new Ministry if this was the mode in which they meant to inaugurate their policy towards her. He wished to know whether smuggling had not increased in the exact ratio of the increase in the spirit duty? He only rose to speak upon the Irish question, lest the House should be under
  1306
  the impression that the Irish Members were tacitly assenting to a gross financial wrong. He would make one remark on the right hon. Gentleman's statement, that possibly the increase of receipts from stamps in the last year was influenced by the system of bill discounting which led to the autumn panic.
  MR. DODSONsaid, that the Chancellor of the Exchequer had descanted with considerable eloquence upon the evil of perpetuating a war tax in time of peace, but he begged to remind the hon. Gentleman that the Excise duty on hops had been in existence now ever since the Peninsular war, and was felt to be a heavy and an oppressive burden. The duty was levied not on the manufactured article, but on the raw material, and was therefore objectionable on every recognized principle. Moreover, the hop-grower had to pay the duty whether he sold his produce or not, and unless he wore a capitalist and could hold on till better times, was often compelled to sell his produce to raise money to pay the heavy duties. Hops, too, could be used only for one purpose— namely, for the manufacture of beer. In this respect his case was not at all parallel to that of the maltster, because the latter had a certain amount of control over the supply of malt, which might be used for several other purposes besides the manufacture of beer. He (Mr. Dodson) confessed that he felt some disappointment at the right hon. Gentleman not having alluded to this question, especially as in 1852 he proposed a measure which, if it did not fully meet the justice of the case, was at least calculated to remove much of the pressure from the hop-grower. Under the particular circumstances of the revenue at the present moment, perhaps he could scarcely expect the right hon. Gentleman now to deal with the subject; still he could not help thinking that much disappointment would be experienced amongst the hop-growers at the almost contemptuous silence with which the right hon. Gentleman had passed over their case.
  MR. BALLsaid, he believed that both hop-grower and maltster would be happy to receive relief from the heavy taxation which they now had to bear; but that was not the question at present immediately before the House. He thought that few Chancellors of the Exchequer had been privileged to make such an announcement to the House as that which had been made that evening by the right hon. Gentleman

  1307
  —namely, that the principle of a gradually progressive and ultimately an entire abandonment of the property tax was to be observed in these arrangements. This was an announcement which he was sure would be received with the liveliest feelings of gratitude and satisfaction throughout the kingdom. With regard to the right hon. Gentleman's proposal for increasing the revenue by equalizing the spirit duties, he (Mr. Ball) would have been still more happy had the right hon. Gentleman considered it politic and wise to have made a slight addition to the spirit duties generally. By doing so, he believed that he might raise not only £500,000, but even double that amount; and, at the same time, greatly promote an improvement in the morals of the country at large. The increase which had taken place in the consumption of spirits was a monstrous evil, and the source of great crime; in short, he believed there was no one cause which brought so much misery upon the community as that. With regard to the proposed stamp tax, he was bound to say he did not anticipate that it would be very productive of revenue, but rather that it would be felt to be an inconvenience to have to put a stamp upon all cheques, and that the effect would be to neutralize and destroy the multitude of cheques which were now substituted for the circulating medium. The House could hardly be aware of the vast increase in the circulating medium which would be rendered necessary by putting an end to the present system of drawing cheques for small amounts. Throughout the country payments were now made of the smallest sums by this means; and one consequence of imposing a tax upon all cheques would probably be this, that instead of drawing cheques for £100 in perhaps twenty small sums, merchants would draw a single cheque for £100, and this would require an increase in the circulation of £100 in Bank of England notes. The plan would drive persons in the country to use a much greater amount of the circulating medium than was needed at present. Suppose another monetary crisis were to ensue—suppose gold were again to become scarce—how, he wished to know, would the business of the country, under such circumstances, be carried on? He was sure the plan would not be carried out; for as soon as the country was made aware of it there would be such representations made to the Chancellor of the Exchequer that it would be necessarily
  1308
  dropped. He was not at liberty to state what took place before a certain Committee upstairs, but it was no secret in any quarter that the total amount of business transactions done in cheques by certain bankers amounted to 90 per cent of their whole operations. The duty on cheques would have a tendency to destroy that system, and would increase the circulation of notes. He would have been much better pleased if the right hon. Gentleman had elected to raise his whole deficiency by an increased tax on spirits, and allowed the cheques to remain as they are.
  MR. GLYNexpressed the satisfaction with which he had heard the statement of the right hon. Gentleman. With one exception, he had not only exercised a wise discretion in dealing with existing duties, but also in the mode in which he had dealt with the new taxation which he proposed. He (Mr. Glyn) was one of those who supported the late Chancellor of the Exchequer when he proposed his Loan Bill to meet the necessities of the late war, and he also supported his proposition for a sinking fund; but the thought never entered the mind of any individual who supported that measure that the means for carrying it out were to be provided by borrowing for the purpose. The one exception to which he referred was the proposal for the penny duty on cheques, and he would ask the right hon. Gentleman to give it his mature consideration before he proposed it formally to the Committee. It was no new question in the House of Commons; it had been considered by the right hon. Gentleman the Member for the University of Oxford (Mr. Gladstone), and by the right hon. Gentleman the Member for Radnor (Sir G. Lewis), while they held office. No doubt the imposition of a penny stamp on cheques was a very tempting thing. He had even heard some say that they would have a positive pleasure in putting an adhesive stamp to a cheque; but, without carrying that idea too far, it no doubt appeared to the Chancellor of the Exchequer a very pleasing and apparently very easy mode of raising a certain amount of revenue. But he would warn him that if he imposed this stamp duty on cheques, he would interfere with another source of revenue from stamps—namely, the receipt stamps. If persons had to affix a penny stamp to cheques they would dispense with the receipt stamp. But that was not the serious objection to this measure. He was quite certain that the right hon. Gentle-

  1309
  man, if he persisted in the proposal which he had made, would find that all those who were really conversant with the subject— namely, the country bankers—entertained an apprehension that it would interfere most materially with the small circulation of the country. He thought the Committee were not aware of the immense and increasing importance of the use of cheques in the transaction of business throughout the country. In the small towns and in the agricultural districts the practice of keeping accounts with country bankers was now grown to he very common, and had increased in an enormous ratio—indeed, it would have been impossible with our circulating medium to have transacted the amount of business and to have done it with the same facility as was done now by means of cheques. The substitution for capital was the introduction of cheques. There was not a small farmer or trader in the country who did not now keep his account at a banker's, and the cheques for small sums which this class of men drew from time to time on their bankers, formed in fact a very large amount of the small circulation of each district. He was quite sure the right hon. Gentleman, if he imposed this stamp, would not find it would produce nearly the amount he anticipated— without taking account for the moment of the reduction it would effect in the receipt duty; and he would find that, besides the inconvenience, it would produce absolute loss and detriment to the country. He had no doubt that the day after to-morrow he would have representations enough on the subject from the City of London; but the loss they would sutler would not nearly approach that of those who lived in the country. And yet in the City of London it would be most severely felt by stockbrokers and persons of that class, with whom the number of cheques which were drawn daily was something enormous, amounting to thousands. But he would not dwell upon their case, as it was the small country towns that would suffer most by the measure, and he trusted the Chancellor of the Exchequer would give it serious reconsideration before pressing it upon the Committee.
  MR. INGRAMsaid, he was greatly disappointed that the right hon. Gentleman had not proposed a repeal of the paper duty. Every statesman of any note, for the last dozen years, had expressed his opinion against this tax, and had voted against it. He would ask the right hon.
  1310
  Gentleman still to take the subject into consideration, and as a substitute he might propose a 6d. income tax instead of a 5d.; or he might devise some plan for preventing the legacy and succession duties being avoided wholesale, as they wore at present, under the name of free gifts. To meet that case, he would propose that there should be levied a 1d. in the pound upon all the property in the country once every ten years. [Laughter.] Hon. Gentlemen need not laugh; he knew the proposition was sound — much sounder than the plan of a loan to pay off their obligations. He protested against this tax going on year after year, to the injury of trade. If cotton or calico had been taxed as paper was taxed, calico would never have become the great staple trade of the country. He hoped that in next year's Budget the paper duty would be repealed, which was a question not only of good faith, but of the education of the country.
  MR. BAGWELLhad very little to say to the first of the two propositions of taxation which the right hon. Gentleman proposed. Cheques were little used in Ireland; the transactions of the country were carried on in bank notes; so that the right hon. Gentleman would not get much of his new revenue from Ireland. But the other proposition was a more serious one, though, being an Irish question, he supposed its remission was past praying for. He did not object to any tax upon whisky, if it would decrease the consumption; but from his experience as a resident in Ireland and as a magistrate he believed it would do no such thing, but that it would send forth a quantity of deleterious and most execrable stuff upon the country. He believed also it would greatly increase illicit distillation, for the people saw no harm in illicit distillation as a question of morality—it was only wrong to be found out. If there was a good crop of next year's mountain oats, he believed the Attorney General for Ireland would find his duties much increased. The proposal might be advantageous for the great distillers, but he did not think it would be so for the country at large. He hoped Government might be able to find some other means of meeting the deficit than by taxing Ireland.
  MR. BAXTERwished to confirm to the full extent the remarks of the Chancellor of the Exchequer as to the effect of the increase of the spirit duty in Scotland. It was feared that there would be an increase

  1311
  of illicit distillation; and the proposal to increase the duty had met with opposition from a great part of the people of Scotland. But at that moment there was no kind of opposition to the law as it stood; and if Scotland were now polled, he believed they would not find a hundred men prepared to go back to the old system. He wished to express his satisfaction generally with the financial measures proposed by the Chancellor of the Exchequer. They were characterised by great soundness and discretion, considering the circumstances of the country, and he hoped they would receive the sanction of the House.
  MR. PULLERsaid, that in reference to the proposal to impose a penny stamp on all cheques, it was only a few days ago that a country banker had descanted to him at great length on the injustice inflicted by the exemption which the London bankers had hitherto enjoyed in this respect. Whereas the result of the existing system was, that the country bankers themselves were frequently obliged to put stamps on cheques to the amount of 100 or 200 every day. As to the argument that this proposition would discourage the use of cheques, it might be worth considering whether our circulating medium had not been too much contracted, and whether it was not in some degree owing to the over-expansion of our banking system that the commercial panic had pressed so heavily on the country.
  MR. STEUARTsaid, that though he had come into Parliament pledged to obtain, if possible, a total abolition of the income tax, he should have been prepared, considering the circumstances of the last year, to support a proposition for arresting its temporary reduction from 7d. to 5d. Considering the large, extraordinary demands which had been made in the past year on the Exchequer, among which was £l,500,000 compensation for Sound Dues, he would not have been surprised if that increase of the income tax had been proposed: he was doubly glad, therefore, to find that the Chancellor of the Exchequer had not thought it necessary to sour the temper of the country by professing to put off the relief to which every one had been looking. He fully concurred with the hon. Member for Montrose (Mr. Baxter) in what he had said as to the effect of the increased spirit duty in Scotland; and he could not see why Ireland should be considered so far behind the rest of the country as to require a different system. He was surprised to find
  1312
  Irish Members protesting against a measure for putting Ireland on an equality, with regard to the spirit duties, with England and Scotland. With respect to stamps on cheques, it had always seemed to him strange that persons residing fifteen miles from a town should pay for stamps on cheques, while persons living in town were entirely exempted from any such obligation; nor could he conceive that so small a tax could lead to any diminution in the use of cheques. He hoped the excellent Budget which had been proposed would be accepted by the House. Since the Government came into office they had reduced the expenditure £800,000, and he had little doubt that in time, and with the peace policy now inaugurated, that further reductions would be made, and that they would in 1860 reach the desired consummation when the taxation of the country would be placed on a fair and equal footing.
  MR. GLADSTONE: Sir, I am glad to hear from the general tone of the discussion that the feeling of the Committee is favourable to the spirit of the proposals of the right hon. Gentleman the Chancellor of the Exchequer. As regards the proposal to place a penny stamp on all checks, I have no doubt it is one on which there will be a great difference of opinion. But the Chancellor of the Exchequer will receive both from London and the country information supplied by those most competent to give it, which will enlarge the means at present in his possession for forming an opinion on this point, and will enable him either to persevere in, or else to withdraw his proposal without any discredit; for, of course, there could be no disgrace in withdrawing it if it wore plainly shown to be contrary to the general convenience of the country. With respect to the equalization of the spirit duties, I certainly, for one, feel bound to tender my thanks to the right hon. Gentleman for the course which he has taken. I remember that on every occasion when an increase of these duties has been proposed we have heard dismal vaticinations from Gentlemen representing Irish constituencies to the effect that the only result would be an immediate increase in illicit distillation, and a total failure in the anticipated increase of revenue. I do not blame those who uttered these prophecies, because there was a time when they were uttered with perfect truth—in the year 1842. It will be remembered that in that year Sir Robert Peel proposed an increase of duties

  1313
  to the amount of 1s. on Irish spirits, and from the belief which was entertained that it would stimulate illicit distillation that increase was given up in 1843. It is therefore natural that similar expectations should be entertained now. I myself was one of the first persons who, some ten years after that lime, revived the proposal of an augmentation of these duties. I did so because I thought the time had arrived when, from the altered circumstances of Ireland, the evil which had formerly defeated the measure could be overcome. My success and that of my right hon. Friend opposite, the late Chancellor of the Exchequer, who also raised the duties on Irish spirits, proved that that expectation was not without foundation. It is quite time that we should go on in this direction, and remove what is decidedly a blot in our fiscal arrangements by the establishment of a uniform rate in all parts of the Empire. It is no doubt a practical question whether there is not a point of increase where we may run the risk of reviving illicit distillation; but on that point the Chancellor of the Exchequer has of course consulted the heads of the Revenue Department, and no persons are more competent to give him information on which to ground his judgment than they. I trust the time has come when the landlords of Ireland, acting upon more enlightened views than have sometimes prevailed in that country, are prepared to join themselves with the Government in setting their faces against illicit distillation; because it is very much upon their influence that the Government must mainly depend for success. I rejoice to say that in Scotland it has been to the co-operation of the landlords in discountenancing illicit distillation that the virtual extinction of that vicious demoralising practice is in a great degree owing. With regard to that larger portion of the deficiency which is connected with the discharge of debt, of course I cannot be expected to look with sanguine pleasure upon an arrangement the substance and pith of which are to postpone the obligation to discharge that debt. It would have teen infinitely more gratifying to me to find that the Government were in the condition and the House in a disposition, to take some bolder and stronger measure on this point. But we must not expect more from the Government than can fairly be thought to be within their power. Looking at the present state of political affairs, to the division of parties in this House, and
  1314
  above all to the peculiar circumstances of the last year, and the mode in which this deficiency has been brought about, I do not feel that I have any right to complain of the proposal. There is one point which I am anxious to bring yet more clearly before the attention of the Committee. Much has been said to-night on the subject of the income tax. The right hon. Gentleman, if he had thought fit, might perhaps have induced the Committee to consent to some augmentation of the income tax, but he has on this occasion, as on former occasions, distinctly expressed his opinion and that of the Government that it is desirable not to disappoint the expectations of the country in this matter if we can possibly avoid it. I confess that I, for one, entirely concur in the views of the right hon. Gentleman; and I cannot but appreciate the disposition which the Government has shown to avoid pressing the request for an augmentation of the income tax at the present time—when the pressure has been very considerable, and the inducements to such a course very great—from the motive that they are unwilling to lead the country to believe that the reasonable expectations which have been formed of the extinction of the tax arc to be disappointed. But, if those expectations are not to be disappointed— if they are reasonable in themselves—if, as appears to be the case from the discussion to-night, every Gentleman who sits in this House looks forward with eagerness and desire to the extinction of the income tax, let us not forget the one consideration which must press upon our minds as a matter of the greatest weight and importance, if, indeed, these expectations are ever to be practically realized. The real impediment to the extinction of the income tax does not consist in any change of circumstances that has occurred since 1853 in connection with the war. It is perfectly true that the war has made a permanent addition to your burdens of about £1,250,000 per annum; but no one will say that a change in the circumstances of the country to that extent is of itself sufficient to cause an abandonment of the expectations which the country has been taught to entertain with regard to the extinction of the income tax. The real difficulty which lies in the way of the extinction of the tax is the expenditure of the country. For three years before the war, ending in 1852, the expenditure of this country was between £50,000,000 and

  1315
  £51,000,000 per annum. The mode of calculation now is different, because since that time we have thrown into the estimate the cost of collection, and probably, if we add that cost, the expenditure of the country should then be stated at £54,000,000 or £55,000,000 per annum. But what is the expenditure of the country now, as it has been stated by the right hon. Gentleman to-night? Though he and his Colleagues, much to their credit, have endeavoured to effect some reduction in the Estimates for the year, yet, notwithstanding this, and apart from all charges connected with the reduction of the debt, I understood him to say that £63,600,000 is the regular ordinary expenditure for the year. If we have made an augmentation in the permanent expenditure of the country amounting to £8,000,000 or £9,000,000 a year, of which only £1,250,000 is connected with the permanent annual charge entailed by the war, then it follows that we have added £7,000,000 or £8,000,000 a year, apart entirely from war obligations. And if there is such an addition to our expenditure, it needs no wizard to discern where we are to seek for the causes which may prevent the non-extinction of the income tax. An hon. Member (Mr. Ingram), I think, very naturally cries out for the abolition of the paper duty; another Gentleman, with whom I do not so warmly sympathize, calls for the extinction of the hop duty; and another speaks in a most touching manner of the advantages to be derived from the abolition of the malt tax. Some of the proposals thus made may be unreasonable, and some of them may be, and are, very reasonable; but at this time, owing to the state of our expenditure, we are not only precluded from the process of a reduction of debt, but precluded from carrying forward those beneficial changes in our commercial system of which some yet remain to be accomplished, and which have proved of such enormous benefit and advantage to all classes. At this moment it would be unreasonable to make large demands on the Government in this direction. The right hon. Gentleman says, and says truly, that the reduction of expenditure, if it is to be effected wisely and safely, must be done deliberately. It is but fair that the Government should have the leisure of a recess, in order to enable it to deal satisfactorily with a subject of that magnitude; but let us bring it fully and clearly before our own minds, and more
  1316
  than ever now, when we are repeating what we have before said on the extinction of the income tax, that if we mean to extinguish that tax we must review the whole expenditure of the country. The circumstances of the country, I hope, may be favourable for it, when the right hon. Gentleman and his colleagues can address their minds to the consideration of the subject; and I trust that when the Government meet Parliament in another Session we shall find that we are not only disposed to recognize in words our obligations to the country on the subject of the income tax, but that we have the prospect of keeping the scale of our national expenditure down to such dimensions as will give a practical character to our expectations, and enable us to cherish the reasonable hope of being able to confer upon the country, at an early date, an actual and positive realization of their wishes.
  MR. SLANEYsaid, he supposed that this might be looked upon as the first step to the extinction of the income tax, and if the right hon. Gentleman could get rid of it without imposing any fresh taxes he should be most happy to see it abolished: but if new taxes were to be imposed which would fall upon the shoulders of the humbler classes, it would be the greatest possible hardship and injustice. At present the income tax was a payment made by the rich, the great, and the oppulent; but if fresh taxes were put upon articles of consumption they would fall upon those who were really not able to afford them. If they could take off the income tax without putting more taxes on the poor, he, for one, should heartily rejoice; but he should protest against taking it off in order to put it upon the humbler classes, whose consumption of taxable articles was comparatively larger than that of the more oppulent classes. He congratulated the right hon. Gentleman the Chancellor of the Exchequer on his able statement, and he gave a hearty concurrence to all his propositions on the conditions he had just stated.
  MR. NEWDEGATEsaid, he was very glad to find that the pressure of the income tax was to be mitigated. He was firmly convinced that the people of this country would never be satisfied until that odious impost was removed, and he believed that the most popular portion of the statement which the right hon. Gentleman the Chancellor of the Exchequer had made that evening, would be that which showed that

  1317
  Her Majesty's Government meant to keep faith with the country by providing for the extinction of the tax. He did not think they were called upon to enter at that moment into the question of what was the best substitute for that tax which it would be possible to devise. That was a wide subject, and one which might well engage the attention of Her Majesty's Government and of Parliament before they met for another Session. He believed himself that there were many means of supplying the deficiency which the abolition of that tax would occasion. But he would not then attempt to discuss that subject; he had risen for one purpose and one purpose only; and that was to express his sincere obligation to Her Majesty's Government for having presented upon that occasion a scheme which, although it might be no striking financial feat, entitled them to the great and real honour of having wisely estimated the condition and the wants of the country. He was convinced that among practical men, among men of business, the proposals of the right hon. Gentleman the Chancellor of the Exchequer would be received as a well-considered scheme for carrying on the financial affairs of the country at a period of considerable difficulty, and would be accepted with frankness and even with gratitude.
  MR. CARDWELLsaid, he was one of those who originally objected to the creation of the War Sinking Fund, and therefore he was not at all surprised that on this, the first occasion on which a large sum was called for upon its account, it should be the wish of the House to abandon that scheme. With regard to the other part of the debt, he could not help offering to the right hon. Gentleman one observation, which, however, in the present temper of the House, he did not anticipate would meet with general acceptance. Concurring with the view of the right hon. Gentleman that it was desirable to secure the abandonment of the income tax and the period fixed for its execution, he looked with some apprehension at the particular period which had been fixed for the payment of the £2,000,000 bonds which formed part of the subject of this discussion. These bonds were originally issued for the purpose of anticipating half a year's produce of the war income tax; and, therefore, if they were to be liquidated by taxation— which was the proper course—it was out of the income tax that they ought to be paid off; and if it were not done before the ex-
  1318
  tinction of that tax he did not see how they were to be liquidated at all. If he correctly understood the arrangement of the right hon. Gentleman, it was that these £2,000,000 were to be reborrowed in the current year, a year in which the declining income tax was still at an amount larger than that at which it would stand in any future year; but their repayment was to be thrown upon the years 1862 and 1863. Now, if we could not afford to repay them at present, what would be our position for their repayment at that time? No doubt, as compared with the present year, there would be a gain of, in round numbers, £3,000,000, because there would be the falling in of the long annuities, amounting to £2,000,000, and the produce of the additional taxation now proposed by the right hon. Gentleman, amounting to another million. On the other side, however, the income tax would have entirely ceased. That amounted to no more than £6,000,000; and, therefore, in three years we should be in a worse position by £3,000,000 than we were at present. Yet it was part of this arrangement to postpone the debt from the present year for the purpose of throwing it upon those which would be comparatively less able to bear the burden. The increase of the duty upon spirits was a proposal which, he thought, almost every Member of the House would support; and he must do their Irish friends the justice to say that they had only given to it that qualified opposition which was naturally to be expected from the representatives of those whose interests were particularly affected. The stamp duty upon cheques, everybody must agree, was very inviting to a Chancellor of the Exchequer. It looked a very small tax, and the receipt stamp had been so successful that he was not surprised that this proposal should have been made. At the same time he anticipated that there would be considerable oppostion to it, and he, for one, should not be surprised if it never passed into a law. Upon the whole, he was very glad that he could generally concur in the proposals of the right hon. Gentleman; but if he thought that his views would have any influence in the matter, he should have recommended the bolder course of taking the additional 2d. upon the income tax for one year, which would have furnished £2,000,000 for the liquidation of the Exchequer bonds. That would have been the more straight forward course, and would have avoided throwing

  1319
  the debt from a year in which we were comparatively well able upon others in which we should be comparatively unable to bear it, and would, he believed, have rendered much more certain the final termination of the income tax at the period at which it was proposed that it should become extinct.
  MR. BASSsaid, that like the right hon. Gentleman who had just spoken, he did not entertain any sanguine expectations that the proposed arrangement would issue in the termination of the income tax in 1860. Moreover, he thought a well-regulated income tax was one of the least objectionable taxes that could be imposed, and he should be very sorry to see it entirely removed from our system of taxation. As regarded the stamp on cheques, it seemed to him that the hon. Member for Kendal (Mr. Glyn) had looked only at one side of the question, in saying that the taxpayer would be relieved from the payment of the receipt tax; he had overlooked the fact that the tax on a cheque would be paid by the drawer, while the receipt tax would be paid by the receiver; and it was not to be supposed that the payer would be satisfied with a receipt which consisted only of the placing of a stamp on a cheque. There were other grounds on which a tax on cheques seemed to him unobjectionable. That morning before leaving Staffordshire, he drew a cheque on London for £2 12 s. on which there was a penny stamp; whereas if he were to draw a cheque to-morrow for £2,000, he would not have to pay one farthing. He could not see why there should be this distinction. On the whole, he thought there was no part of the Budget which was less liable to objection than the proposal that there should be a stamp on cheques.
  MR. W. WILLIAMSsaid, he had no fault to find with the statement of the right hon. Gentleman; but he could not help calling the attention of the Government to the marked increase of the expenditure of the present year as compared with that of 1852–53, when the Earl of Derby last held office. The Chancellor of the Exchequer bad told them that night that the estimated amount of expenditure for 1858–59 was £63,600,000, whereas in the year to which he had called attention it was only £50,770,000, being a difference of £12,800,000; and deducting interest upon the debt occasioned by the late war, he found an increase of ordinary expenditure of £7,600,000. He was sorry that the
  1320
  right hon. Gentleman had not provided for the payment of £2,000,000 Exchequer bonds and the extinction of £1,500,000 debt at the close of the war. He considered that it was not only objectionable, but most unjustifiable to increase the public debt of the country in time of peace. The amount of the national debt was now £807,000,000, and yet the right hon. Gentleman proposed to increase it. It might enable the right hon. Gentleman to get easily through the year, but for his part, he should feel inclined to submit to almost any kind of tax rather than to increase that debt. If the right hon. Gentleman had proposed a tax on real property sufficient to cover the debts on the Exchequer bonds he should have cordially supported the proposition. As it was, he did not think that less objectionable taxes could have been proposed than those which the right hon. Gentleman had submitted to the House, and to that extent he cordially approved of the scheme. He was astonished to hear so much objection made to the proposed penny stamp on cheques. Even if it were a real pressure it would fall only on those who could well afford to pay it, and he hoped the right hon. Gentleman would persevere with it. He congratulated the right hon. Gentleman on having been so successful in devising the ways and means necessary for the service of the year.
  SIR FRANCIS BARINGsaid, that the great merit of the right hon. Gentleman's Budget was that he admitted that—he would not say the contract, because there might be some objection to that term—but that the expectations which had been hold out to the public that the income tax, as a permanent tax, was ultimately to be removed, were valid as concerned the great party of which he was the leader in that House. That was the great advantage which the right hon. Gentleman proposed, —an advantage so great that he (Sir F. Baring) would have been prepared to support the imposition of taxes of a much more objectionable nature than those which he had suggested in order to carry out that arrangement. The right hon. Gentleman the Member for Oxford (Mr. Card-well) thought it would have been better to continue the 2d. additional income tax for a year in order to pay off the Exchequer bonds, and he (Sir F. Baring) was quite prepared to say that, financially, that might have been the better arrangement; but it would have been an arrangement that would not have effected the object

  1321
  which the Chancellor of the Exchequer had in view, because unfortunately the financial pledges of that House were not always adhered to, and there would have been a great insecurity in the public mind as to the fulfilment of that respecting the income tax. If the right hon. Gentleman, who had expressed a very strong opinion upon that subject while upon one side of the House, had immediately after he had taken his seat on the other side proposed the continuance of the 2d. income tax, an impression would have arisen in the public mind that it was never intended to carry out the promise that had been made with respect to that tax. Therefore, although financially the right hon. Member for Oxford was right, yet the course proposed by the Chancellor of the Exchequer was preferable, as tending to keep faith with the nation. The hon. Member for Lambeth (Mr. Williams) had spoken of economy. That was not the time to discuss the extent of expenditure nor the nature of the Estimates; and what had been said by the right hon. Member for Oxford University was quite true—it could not be expected that a Government just coming into office should go particularly through the Estimates of their predecessors so as to propose any very large reductions of expenditure. The Government must to some extent adopt the Estimates of their predecessors, and be allowed an opportunity of looking into the expenditure. But at the same time he quite concurred in the observation of the right hon. Member for the University (Mr. Gladstone) that it was to a reduction of expenditure alone they must look for a solution of the question whether the income-tax should be completely abolished or no. Budgets might do a good deal, but the only real hope of the removal of the income tax lay in a careful scrutiny of the public expenditure. He had himself always held the opinion that perfect efficiency was consistent with economy, and that the measure of efficiency in the public service was not the amount of money expended. But if our expenditure was to be continued at the present amount, though the budget might have been prepared in perfect good faith, he could hardly believe that the expectations of the right hon. Gentleman would be justified, or that in 1860 we should be nearer to the extinction of the income tax than we were at present.
  LORD JOHN RUSSELL: I shall not long detain the Committee, but I cannot
  1322
  help adverting to one or two observations that have been made, especially by the right hon. Member for Oxford City (Mr. Cardwell). I confess, too, I cannot agree with the hon. Member for Lambeth (Mr. Williams) that this is a time in which the Government could have reduced the expenditure below the amount now proposed for the service of the year. Considering the revolt in India, and the state of affairs generally, I think the expenditure is reduced as much as it is possible it could be reduced, under the circumstances. There is one step, indeed, which the Government have taken—no doubt adopting the intentions of their predecessors—that causes me regret: I mean the disembodiment of the militia. I believe that which was called into active service by the Government, last year, to be a most effective force; and I therefore regret it is now to be disbanded. As to the manner in which the right hon. Gentleman proposes to meet the expenditure of the year—with respect to his equalization of the spirit duties, that seems to me to be a very wise measure; and I think Irish Members, although bound to object, still felt the force of his observations upon that subject, I agree with him that the Irish distillers will derive great benefit from the intercourse which will arise from opening the market between England and Ireland. As to the stamp upon cheques, more consideration is required, but I do not think they will create such embarrassment as has been supposed. There may, however, be objections of detail which are not yet apparent. There is one thing in which I agree with the right hon. Member for Oxford (Mr. Cardwell). Of course I do not mean to say in what manner the money should be raised to pay off the Exchequer bonds or to continue the Sinking Fund—that is especially a difficulty for the Chancellor of the Exchequer; but I own, without at all maintaining the wisdom of establishing the Sinking Fund, I think it would have been a good example if this country had been called upon to pay off, in this year, some of the debt incurred by the last war. My right hon. Friend has said that these £2,000,000 Exchequer bonds were to pay off a debt incurred before the taxes were imposed in the first year of the war. It has always appeared to me that when a country enters into war —and the doctrine is applicable to this as much as to any other country—it is a great temptation to be able to raise £30,000,000 or £40,000,000 at once; and if only the

  1323
  interest of that sum is charged upon the present generation, it will willingly accept that burden and leave the greater one to posterity. It appears to me that we are under an obligation to pay something beyond the interest during the present year, and the plan of the right hon. Gentleman does away with that obligation. The nation acquiesced in that war, and, if we had paid off a part of our debt, we should have shown our opinion of the necessity of the war, and that we were willing to bear our burden on account of it; but when we come to 1863, the Chancellor of the Exchequer of that day will naturally say, "This is not an obligation incurred by us; we may as well leave it to posterity, and put it in the great mass of debt; let it be a part of the National Debt—we will provide for the interest, and that is the extent of our obligation." I certainly do regret that we are about to repudiate that obligation, as I think it would have shown a good example to the next generation if we had proved our readiness to meet our liabilities on account of the war we ourselves had waged. We are now paying, as the right hon. Gentleman just observed, £28,000,000 a year for the debts incurrred by our ancestors. Our ancestors found it a very convenient thing to raise loans on any terms, and to leave to us the obligation of repayment; and we have found how hard it is to meet the obligations we have inherited. I am sorry the right hon. Gentleman has not thought proper to teach the present generation a better lesson.
  MR. WHITEsaid, the Chancellor of the Exchequer had referred to China, in order to explain a possible expenditure; but he (Mr. White) thought the right hon. Gentleman might be perfectly tranquil on that score, as the costs of the late war were paid with the utmost facility by China, to the extent of 21,000,000 dollars; and so, upon the present occasion, if those now representing this country in China knew their position, they would be enabled to make proper arrangements for trade which would insure us against any ultimate loss on that account. All moneys which the China war had cost, or might cost, should be regarded in the light of money lent rather than as money spent, because the expansion of trade which would follow, upon judicious arrangements, would more than repay to the Imperial revenue any indemnification which might be exacted from them for the cost of the war.
  THE CHANCELLOR OF THE EXCHEQUER: Sir, I must thank the House for the courteous and candid manner in which it has received the propositions which, on the part of the Government, I have had the honour of submitting. The position in which we found ourselves was one of great difficulty, as every hon. Gentleman who has addressed you has recognised, and one in which it would have been impossible for us to have dealt with these matters had we not trusted to the indulgence of the Committee. The right hon. Member for Oxford (Mr. Cardwell) has expressed a wish, in which, financially, I quite sympathize, that we had been able to pay off the £2,000,000 Exchequer bonds; but the right hon. Member for Portsmouth (Sir F. Baring) has replied so well to that wish, and has so completely expressed my views on that subject, that I need not dwell upon that point. We had to consider whether it was a matter of high policy or not that we should announce to the country that what it believed to be the compact of 1853 —and which, at all events, we knew was a serious engagement—should be carried into effect or not — whether we should show to the House that the spirit of this great arrangement should be observed. It seemed to us, after mature deliberation upon the course which we had resolved upon, that it should be dealt with in a manner that should not lead on the part of the nation to any suspicion—that the country should not imagine that what we proposed was only for the moment and for the occasion — that it was only to be a semblance of fidelity, and not the fact. It appeared, therefore, to us best, when at this time by the action of law the income tax descended, not only to leave that alone, but to make an arrangement with respect to the Exchequer bonds which should prevent the inference being drawn that we were preparing for 1860, impedimenta which would render the sincere carrying into effect of our policy impossible. I cannot share the apprehensions which were expressed by the right hon. Gentleman (Mr. Cardwell) upon that head; for although the income tax in 1860 may have ceased —as I hope it will—I cannot believe that the country will not be able to meet the claim of £1,000,000 a year for two years. Has the right hon. Gentleman no confidence in the progressive prosperity and the increasing resources of the country? Does he suppose that four or five years are to pass over our heads,

  1325
  and that our resources will not so increase, unless we are visited with some great calamity—such as a war or a famine—that we shall be enabled to meet such a demand with facility? Has he no confidence in increased revenue, in increased retrenchment, and in that Sycee silver which was promised by the hon. Member for Plymouth? I, Sir, have confidence that these bonds will be met by the revenue of the year, that they will never be funded, and that they never will become a part of the permanent debt of the country; and I have the greater confidence, because I believe that there will be a ready disposition on the part of the nation to support sound financial views if they find that in this great matter Parliament has kept faith with them. It will be necessary to have a Vote of a Committee in Supply for the purpose of those bonds, and I have prepared a Resolution which I propose to move to-night. That must be followed by a Committee of Ways and Means on Wednesday, and I trust that the House will not object to our taking that course. I have listened to all that has been urged with regard to the two new taxes which I have proposed; and, with respect to the first of them, I must say that I think that the general expression of feeling on the part of the Irish Members appears to be genuine and good-natured — for I cannot believe the opposition which they have shown arises from anything more than a desire to exhibit that power of speech and eloquence which characterizes them, and in which I candidly confess they excel both Englishmen and Scotchmen. I am sure that they will find on reflection, however, that the measure is really calculated for the benefit of their country. One hon. Gentleman, I must confess, alarmed me. He reminded me of a deputation which waited on me a few weeks ago, and said that the policy which I was pursuing would open the door to smuggling. I have no wish to say a word in disparagement of the revenue police of Ireland, but with the utmost respect for that late force I think the system now existing is preferable and more efficient, and I have no apprehension, with the aid of the constabulary, to whom will be confided the duties of the late revenue police of Ireland, that smuggling will increase. The right hon. Gentleman the Member for the University of Oxford did me the justice to suppose that I would not take the responsibility of introducing this proposition to Parliament had I not,
  1326
  after careful research, satisfied myself that there was no probability of there being any recurrence to illicit distillation in Ireland. We have three times since 1853, I think, raised the duty upon Irish spirits — the aggregate of those amounts being greater than the change which I now propose— and illicit distillation has not been heard of. I do not ascribe that especially to the constabulary force; I ask, is there no change in Ireland? Is not there a higher tone, a greater sense of duty and love of order in Ireland; and is it not true that things that were done twenty-five years ago in that country no man would think of doing at the present time? Not merely because the moral sense of the country is higher, but its material prosperity has also improved. Ireland has risen. She stands much higher, both in the material and the moral scale, and I am satisfied that the result of this change will, when it is understood, receive the approbation of the Irish people. It is not in my power to consent to postponing the Resolution on the subject, but the hon. Member for Cork (Mr. Deasey) will lose nothing by that, because be is not bound by the Resolution being passed; but the interests of the revenue require that the moment such a Resolution is proposed it should be passed. It must appear hereafter in the shape of a Bill, and he will have every Parliamentary opportunity of discussing it; but I trust that we shall hear no more of opposition, and that the Irish Members generally will give it a generous support. With respect to the stamp upon cheques, which has been objected to by several hon. Members experienced in banking, I must inform the hon. Member for Kendal (Mr. Glyn) who seems to think that Chancellors of the Exchequer bring forward measures without giving them the least previous consideration, that I have endeavoured to make myself master of all the objections that can be urged to that proposition. They have been urged before in this House, and nevertheless a Resolution sanctioning a similar measure has been passed. No doubt I shall hear many complaints and there will be many letters and deputations with respect to it. All that I am prepared for; but is it possible to propose any addition to taxation without undergoing that ordeal? The question is—Is it just and will it be beneficial? As to its justice, I propose to do that which is the first principle of legislation in finance — I propose to put an end to an exemption.

  1327
  As to the result of the measure, all that I, can say is, "try it." When it is necessary to raise revenue, and a measure is proposed which is just in its principle, I think that the best way of settling all disputes as to the result is to try it. So much with respect to the two new taxes which I propose; but there have been some miscellaneous observations and appeals made to myself in the course of the discussion which it would be a want of courtesy not to notice. The hon. Member for Ripon (Mr. Warre) has declared that there is considerable mystery connected with what accrues from the succession duty, and he asked if I would object to lay a return before the House of what has been obtained from that source. The hon. Member, however, will find all the information that he requires in the annual financial accounts. There is no mystery about the matter, and on the table or in the library he will find every information upon the subject, from the time when the tax was first imposed. The same hon. Gentleman has great doubts of the accuracy of my Estimate respecting the returns from the Post Office. Now, that was a subject on which I did not presume to exercise any discretion. It is a department on which it was impossible for me to form any opinion, and I entirely depended, therefore, upon a gentleman who has the management of that department, and who, for thorough knowledge of the subject and for general intelligence, is scarcely equalled in the country. If the hon. Gentleman were to hear the manner in which that gentleman explains the apparent defalcation this year, and calculates upon the sum of £3,200,000, which is the sum that I have fixed on, for next year, I am sure that he would feel that I was justified in adopting that amount. The hon. Member for East Sussex (Mr. Dodson) has made an attack upon me for the contemptuous manner, as he said, in which I had treated the hop planters.
  MR. DODSONwas understood to explain that what he had said was that his constituents would not think that justice had been done to them by omitting to deal with the hop duties.
  THE CHANCELLOR OF THE EXCHEQUER: Well, to be accused of not doing justice is certainly not a compliment. If that be the impression of the constituents whom the hon. Gentleman represents I submit it is not a just one. I ask how could I, with a balance-sheet such as I
  1328
  had to submit to the Committee, enter into the question of the hop duties or of any other duties to be repealed? What encouragement have I to deal with the hop duties? I once attempted to do so and I was unsuccessful. Since then I have received what I may call a "monster deputation," which included almost every hop-planter in Kent and Sussex. I received them, of course with great pleasure, and felt highly honoured by their visit; but the primary and cardinal point of their arguments was that no remission of the hop duty short of its total repeal was for a moment to be attempted. Under those circumstances I could hardly suppose that the hon. Member for Sussex could have contemplated that I could hold out to him or to his constituents any expectation of being able to afford them that relief which they sought; and I may add that I have too much confidence in the courtesy of those gentlemen of Kent and Sussex who waited upon me on the occasion to which I have referred to believe for a moment that they could fancy I was disposed to treat their claims with contemptuous silence. That the interest they represent is depressed at this moment I entertain no doubt; hut unfortunately there are many such classes and districts throughout the country, and I cannot help thinking that with a deficit of £4,000,000 before us it is a somewhat unreasonable proposition to make that I should entirely repeal the hop duties — because nothing short of their total abolition will, I am informed, meet the difficulties of the question. Now, the hon. Member for Devonport (Mr. Wilson) has commented upon the statement which I made this evening; and has stated that he does not feel much confidence in my estimates with reference to the Customs, and still less with respect to those which I have made in the case of the Excise. He seems to be of opinion that there has been an extraordinary addition to the Excise revenue during the past year in the shape of spirit duties, for which I ought not to take credit in framing the Estimates for 1858–9. Now, under the head of Excise for the year which has just elapsed appears an amount which may he called extraordinary; but I doubt whether the hon. Gentleman was correct in attributing the existence of that amount entirely, or even mainly, to the duties upon spirits. For my part, I believe it arose from the malt duties to an extent upon which we cannot now calculate; but, be that as it may, I

  1329
  altogether differ from the hon. Gentleman as to the principle upon which the Estimates ought to be framed. I think, indeed, that, in order to illustrate the financial position of the country, it is essential to call the attention of the House to some particulars connected with the various branches of our revenue for the year which may have just expired; but I must, at the same time, maintain that the only sound course to pursue in dealing with departments such as the Customs and the Excise is to frame your estimates in accordance with that which you believe will be the probable consumption for the year for which you are about to provide. You must not argue in this crude manner that, because last year £18,000,000 were obtained from a particular source, you would be justified in estimating the revenue from that source fur the next year at £18,200,000. Upon the contrary, you must take article by article, and frame your estimates upon the probable consumption of that article within the year for which it is your object to make provision. I cannot, therefore, concur with the hon. Gentleman in the opinion that extraordinary and eccentric circumstances, such as those to which he has called the attention of the Committee, ought to exercise any influence upon the shape which the Estimates ought to assume. The same observation applies equally to the Customs, where I am told that there was an extraordinary payment for tea which ought not to have come into this year's accounts. Again, I say that my estimate is framed on the probable consumption of this year, which I have taken on the opinion of men of the first experience, and who arrive at their conclusions with the greatest discretion and caution. I, of course, am in no respect disposed to shrink from taking upon myself the responsibility of having framed the Estimates which I have laid before the Committee. Upon the contrary, I to the fullest extent accept and embrace them; but I may add, that I have been empowered to state upon the authority of those gentlemen upon whose knowledge and experience I and every gentleman who holds the position which I have the honour to occupy must place the utmost dependence—that there is not a figure which I have submitted to the Committee which has not their fullest sanction. I have had documents containing a general view of the state of the country, its trade and manufactures, sent to me by persons who hold influential, but still subordinate, positions to those
  1330
  eminent gentlemen to whom I allude, and who take a much more sanguine view in reference to the Customs than I have thought I should be justified in taking as the basis of the calculation which I have made. My object has been to lay before the Committee estimates which I conceive to be fair, temperate, and cautious. I have the utmost confidence in the progressive prosperity of the country. I do not look forward to any sudden or violent change in that respect; but I anticipate that steady and gradual improvement will continue to take place which, if no calamity should befall us, will, with the blessing of Divine Providence, cause our resources next year to assume a most satisfactory aspect. It remains for me only to thank the Committee once more for the indulgence which it has extended towards me this evening, an indulgence which I can assure them I deeply feel.
  SIR HENRY WILLOUGHBYasked what change the right hon. Gentleman proposed to make in reference to Exchequer bills?
  THE CHANCELLOR OF THE EXCHEQUER: It is my intention, when the state of public business permits, to bring under the notice of the House the whole subject of the account and appropriation of the public money, and I shall then state what are the measures which we propose to bring forward upon the subject generally, and what the course is which we recommend to be taken in the case of Exchequer bills.
  1. Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged and paid the following additional Duty of Excise, (that is to say):—
  For and upon every Gallon of Spirits of the strength of Hydrometer Proof which, on or after the 19th day of April, 1858, shall be distilled in Ireland, or be in the stock, custody, or possession of any Distiller in Ireland, or of any person in trust for him, or for his use, benefit, or account, or which having been distilled in England, Scotland, or Ireland, shall, on or after the said day, be in warehouse in Ireland, and be taken out of warehouse for consumption in Ireland, or which having been taken out of warehouse in England or Scotland for removal to Ireland, shall, on or after the said day, be brought into Ireland, the additional Duty of One Shilling and Ten Pence, and so in proportion for any greater or less degree of strength, or any greater or less quantity.
  2. Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged and paid, on and after the 19th day of April, 1858, in lieu of the Countervailing Dues now chargeable under any Act or Acts in force, on Spirits of the nature or quality of British Spirits, manufactured or distilled in the Islands of Guern-

  1331
  sey, Jersey, Alderney, and Sark respectively, and imported from any of the said Islands into Ireland, the following Countervailing Duty (that is to say): For and upon every gallon of such last mentioned Spirits of the strength of Hydrometer Proof, imported into Ireland, the sum of Nine Shillings, and so in proportion for any greater or less degree of strength, or any greater or less quantity.
  3. Resolved, That no Drawback of Excise shall be allowed or paid for or upon any Made Wines which, on or after the 19th day of April, 1858,shall be removed from England or Scotland to Ireland.
  4. Resolved, That, towards raising the Supply granted to Her Majesty, the following Duties of Customs shall be charged, on and after the 19th day of April, 1858, on the articles undermentioned, on their importation into Ireland, in lieu of the Duties now payable thereon—namely:—

  Spirits,

  s.

  d.

  —not being sweetened or mixed with any article so that the degree of strength thereof cannot be ascertained by Sykes's Hydrometer; for every Gallon of the strength of proof by such Hydrometer, and so in proportion for any greater or less strength than the strength of proof, and for any greater or less quantity than a gallon, of and from a British Possession in America or the Island of Mauritius, and Rum of and from any British Possession within the limits of the East India Company's Charter, in regard to which the conditions of the Act 4 Vict. c. 8, have or shall have been fulfilled the Gallon

  8

  2

  —Rum Shrub, Cordials, and Liquors of and from a British Possession in America, or the Island of Mauritius, or a British Possession within the limits of the East India Company's Charter, qualified as aforesaid the Gallon

  8

  2

  5. Resolved, That it is expedient to amend the Laws relating to the Duties of Excise and Stamps.
  6. Resolved, That, towards making good the Supply granted to Her Majesty, the Sum of £20,911,600 be raised by Exchequer Bills for the service of the year 1858.
  Resolutions to be reported To-morrow; Committee to sit again on Wednesday.
  Resolutions agreed to; House resumed.
  On Motion that the House resolve itself into Committee of Supply,

  THE RECALL OF LORD HOWDEN.
  SIR DE LACY EVANSrose to call the attention of the House to the recall of Lord Howden, from the office he has held as our Minister at Madrid. The subject was one in which he took a great interest, having been engaged in two of the wars which had taken place in Spain; but he was actuated by no motives of a personal character, but solely by considerations bearing upon the general policy of this country in her relations with the Spanish Government. However difficult were the circumstances of Spain at the present moment—and un-
  1332
  doubtedly they were so — there was no country in Europe which had made such rapid advances during the last fifteen or twenty years in all that constituted social and material improvement. He would remind the House that within that period the monastic institutions and the vast estates of the monastic orders had been swept away, and the property distributed, not amongst a few favoured families, but among the great body of the people. Independently of that, and in the midst of all her difficulties, that country enjoyed the form of a constitutional Government; and he thought it a matter of importance that the policy which had hitherto been pursued by England towards Spain should not retrogade, or the Quadruple Treaty upon which that policy was founded be abrogated. That treaty had been acted upon for the last twenty years both by France and England, and always with good faith, by successive Ministries, and that brought him to the particular question which he desired to bring before the House. Upon the present Government coming into office, two important diplomatic changes were made—the one by the recall of our Ambassador from Vienna, the other from St. Petersburgh; but it so happened that the Ambassador at each of these places had already announced his intention to retire from his post; it was a matter of course, therefore, that those changes should take place. But that was not the case with regard to our Minister at Madrid. No offer to retire was ever made by Lord Howden, and no cause had been assigned for his removal. The first question was, then, what could have been the cause of this special measure with regard to Lord Howden? He found that on the very next morning after the recall of Lord Howden was known at Madrid, the six journals which represented the great parties in Spain — Democratic, Absolutist, and Liberal—published articles expressing their astonishment and regret at the occurrence, and containing the highest culogiums on his conduct during the several years that he had represented Great Britain at the Court of Madrid. Now, he thought it was rather remarkable that the noble Lord should have been so fortunate as to have obtained such a concurrence of opinion from such very opposite sources. The absolutist organ particularly stated that it was totally unable to assign the cause for the recall of Lord Howden—"but this we do know, that it is a subject of great regret

  1333
  throughout this capital, and we also know that during the several years that he has represented his Sovereign at this Court he has displayed in very difficult circumstances excellent tact and great benevolence towards all sides." The other journals, the organs of Liberalism, were still more profuse in their eulogiums; and under these circumstances it was quite clear that the recall of Lord Howden could not have arisen from any dissatisfaction which was entertained towards him at Madrid. The noble Lord the Member for Tiverton (Viscount Palmerston) was well aware that there had been many occasions on which the old rivalry between France and England had displayed itself in our representatives at Madrid; but that could not have been the case in this instance, for there had been a hearty concurrence between Lord Howden and the Marquess of Turgot in all their proceedings. What, however, rendered the circumstance more unsatisfactory still was that the Marquess of Turgot also had been recalled. Now the question was whether the recall of these Ministers had not originated in the exigencies of a foreign Government, and in a determination to change the policy which had hitherto been observed towards Spain; and, if that were so, he was at at an utter loss to imagine what was the advantage obtained by the late change in Her Majesty's Councils, so far as the independence of the British Cabinet of foreign influence and dictation was concerned. He should like to know, therefore, on what ground it was that the removal of Lord Howden had taken place. In saying this he did not in the least question the authority of the Sovereign, or the advisers of the Sovereign, in recalling a foreign Minister; of course it would be absurd in him to do so. It might be supposed that Lord Howden was recalled because he was a Member of the Whig or Liberal party; but that could not be the cause of his recall, for it so happened that in 1852, when the present Government were last in office, and Lord Howden felt himself bound by etiquette to express to them his readiness to resign his post, Lord Malmesbury, then as now the Secretary for Foreign Affairs, told him that it was his services and his talents at Madrid alone that were required by Her Majesty's Ministers, and not his votes in the House of Lords. On the present occasion, however, Lord Howden had omitted to tender his resignation; and although he had no idea of having committed any offence during
  1334
  the short period that Her Majesty's Ministers had been in office, we found that he had been sent to the right about. He (Sir Do L. Evans) conceived that this was an unfortunate indication of the disposition of the Government at the present moment; for there was just now a project much spoken of at Madrid called the "dynastic fusion," and that "dynastic fusion" was supposed to be an attempt to revive the Carlist cause, destroy the constitution, and in fact undermine the throne of the present Sovereign, and there were persons who supposed that the old policy of the Bourbons was about to be again resorted to. He hoped that the right hon. Gentleman (Mr. Seymour Fitz Gerald), would be able to state that there was no foundation for these representations, and that the change of our Minister at Madrid had not originated with a foreign Power, and was not the result of submission to or the dictation of that Court.
  MR. SEYMOUR FITZGERALDWith reference to the question which the hon. and gallant General has put to the Government, I beg to say that, if there had been the slightest ground for the suspicions which he entertains, there would have been some justification of the observation which he has addressed to the House. Now, inasmuch as I am in a position to state that there is not the slightest justification for any of the insinuations which the hon. and gallant General has thrown out, I think I may with confidence assert before the House that the observations of the hon. and gallant General are in themselves most unprecedented, and that if such a course as this were generally followed of questioning Ministers respecting matters which are entirely within the competence of the advisers of the Crown, most mischievous and dangerous results must ensue. ["Hear, hear!"] Perhaps hon. Gentlemen will permit me to complete my observations, which they will then have an opportunity of answering. The hon. and gallant Member states that, coincident with the recall of Lord Howden, the French Ambassador also has been recalled; that he is convinced a pressure has been put upon Her Majesty's Government, and that the recall of Lord Howden from Madrid is in consequence of some dictation addressed to Her Majesty's Government by a foreign Power. I meet this by a simple statement that I am myself unaware that the French Ambassador has been recalled from Madrid. I would also

  1335
  say that I feel certain that no such suggestions have been addressed to Her Majesty's Government by the Cabinet of France; and I am perfectly sure that, in a matter of Such extreme delicacy and importance as tills, if any such suggestion had been addressed to them, they would not have been listened to by Her Majesty's Government, who would feel they were called upon to act solely in reference to British interests, and the policy which those interests call upon them to pursue. I am glad that the hon. Gentleman has disclaimed having brought forward this Motion on personal grounds. But as I have heard from one or two quarters in this House that the recall of Lord Howden has been found fault with, because it was supposed to have been done in an unceremonious manner, and not with that consideration for his feelings to which so distinguished a servant of Her Majesty was entitled, I shall shortly state to the House the manner in which the recall was made. It is perfectly true that the recall of Lord Howden was conveyed to him by electric telegraph, and that may perhaps seem to be an abrupt method of communicating the information to him; but on the same day on which that telegraphic message was sent, a private letter, which I have seen, and which was couched in the most courteous terms that one gentleman could possibly use to another, was despatched by a special messenger to Lord Howden by the noble Lord who presides at the Foreign Office; and the only reason why the telegraphic message was sent was, that it was thought proper and right that the first intimation which he could possibly receive of this change in his position should be made to him from the Government direct, and not, as it might possibly otherwise have done, from some other source. I must also say, in reference to what was stated by the hon. and gallant General as to the circumstances of 1852, that he has not been accurately informed as to what happened at that time. It is quite true that, upon the entrance to office of Lord Derby's Government, in 1852, Lord Howden tendered his resignation, and the noble Earl who was then, as now, at the head of the Foreign Office, requested him to remain in his position for a short space of time. Accordingly Lord Howden continued to occupy his post; but he intimated that by a given day it would be necessary for Her Majesty's Government to find a successor, as it was impossible
  1336
  for him to continue to serve under the Government. The hon. and gallant Gentleman, therefore, though he was aware of the first resignation of Lord Howden, and is also aware of the fact that Lord Malmesbury requested him to continue, is evidently not aware from his statement tonight that a short time afterwards Lord Howden intimated it would be impossible for him to continue in his position. The hon. and gallant Gentleman said he thought it was his duty to ask on what grounds Lord Howden is recalled. I can only say that I do not think it is consistent with my duty to gratify the gallant General by giving him the information. I may say that though in the exercise of his undoubted discretion, and in reference to the exigencies of the public service, and consulting, as Lord Malmesbury will over be found to consult, the best interests of the country, he has felt it his duty to recall Lord Howden; yet that removal does not imply—it is not intended to imply-any censure upon that noble Lord. It was not intended to imply any distrust in him. It was only intended as an expression of Lord Malmesbury's opinion that the interests of the country, in the present particular circumstances, would be better served by the appointment of another diplomatic agent in his place. If the hon. and gallant General supposes that there is any secret intention to promote what he called an absurd "dynastic fusion" in Spain, I can only say that no such idea is entertained by Her Majesty's Government; and if such an idea were entertained, it would not be to the Court of Denmark, or to a person who is innocent of all Carlist intrigues, that we should have gone to find a successor to Lord Howden. The gentleman whom we have chosen to succeed Lord Howden at the Court of Madrid we have selected because he is universally considered to be one of the most clearsighted, one of the most accurate, one of the most intelligent, and one of the most honest servants of the Crown. I hope I have now satisfactorily answered the hon. and gallant General. I have stated that the change was not made in any way discourteously to Lord Howden, or with any view of supporting or maintaining any particular side of politics, such as the hon. and gallant General has suggested. The Government has made the change only because they think it advantageous to the public service, and I do not suppose that the hon. and gallant General will question

  1337
  the right of the Government to choose their own agents, or, in other words, the right of the Crown to select such servants as may he considered most efficient for the service of the country.
  VISCOUNT PALMERSTONsaid, he quite agreed in the general principle laid down by the hon. Gentleman, that it was expedient in regard to diplomatic appointments that the advisers of the Crown should be at liberty to choose their own agents; but he did not think that the present Government were, perhaps, the best entitled of all others to maintain broadly that principle, because he thought he remembered that the noble Lord at the head of the Government did on a former occasion call on the House, and with some success, to interfere very strictly and decidedly with the freedom of the Government of the day to choose their own agent at a very important foreign post. With respect to the manner in which Lord How-den had been recalled, he could not say that he thought the explanation at all satisfactory. He did not, as he before intimated, question the act of the Government; for, having been long at the head of the Foreign Department, he knew that it was impossible to expect that the Government should at all times explain the grounds why they thought it expedient to make a change in their diplomatic arrangements; but he could not at all see that it was necessary to send Lord Howden his recall in an abrupt manner by telegraph. The House had been told that, at the same time that a messenger was sent off in the utmost speed with a courteous letter, it was necessary to send to Lord Howden an electric shock, in order to prevent him from hearing of his recall from any other source. He had hoped that the Foreign Office kept its secrets better than that. Was it to be supposed that when a special messenger was sent off with a courteous and private letter, all the world must know its contents, and that some person would by electric telegraph anticipate the arrival of the messenger, and inform Lord Howden what he was to expect in the course of a few days? However, he should not have risen on the present occasion, except that he felt it due to Lord Howden to bear testimony to the great ability with which that noble Lord had discharged the important duties intrusted to him for a long course of time at Madrid. He had most ably represented the character and policy of the British Government, and conciliated the
  1338
  esteem and regard of all those with whom he had to do at Madrid, and had contrived to act with the most perfect cordiality with the representatives of foreign countries. His hon. and gallant Friend had stated that it had so happened that on former occasions the policies of the two Governments were supposed, unhappily, to diverge, and not to be so much in unison as when Lord Howden represented England at Madrid; and therefore, both personally and on public grounds, the late Government thought it right, for reasons of which they were the best judges, to place the interests of the country at Madrid in other hands than those of Lord Howden.
  MR. KERsaid, that whatever might be the merits of Lord Howden, his successor was one of the best servants of the Crown. He would well sustain the honour of England, and was not a man who would submit to act in any way unworthy of his country, or in opposition to the principles of constitutional freedom.
  Motion agreed to.

  SUPPLY.—EXCHEQUER BONDS.
  House in Committee; Mr. FITZROY in the Chair.
  The following Vote was agreed to:
  (1.) £2,000,000, Exchequer Bonds.

  SUPPLY.—NAVY ESTIMATES.
  (2.) £34,671, to complete Sum for Wages for Navy.
  SIR FRANCIS BARINGrose to give an explanation with regard to a matter which had been alluded to the other night.
  THE CHAIRMANsaid, it would be irregular to refer to what took place in Committee of Supply upon a previous evening.
  SIR FRANCIS BARINGsaid, he had supposed that in the consideration of these Estimates he should be at liberty to allude to questions which had arisen before relating to the same subject. However, he would endeavour not to shock the ears of the Committee in this way. It was known that the Vote for Wages had been transferred from the Accountant General to the Surveyor. That arrangement was made in 1848, and not in 1850, as was supposed—before, therefore, he was in office. He was furnished with papers in explanation of the question.
  THE CHAIRMANagain reminded the right hon. Gentleman that his observations were irregular.
  SIR FRANCIS BARINGwould bow at once to the decision of the Chairman, but at the same time thought it very hard that questions should be referred to one day without any notice to him, and that when he was furnished with papers to show that the allegations made were entirely incorrect, the Orders of the House prevented him from making any explanation on the subject.
  SIR JOHN PAKINGTONhoped that, in declaring certain allegations made on a previous occasion to be incorrect, the right hon. Baronet was not referring to what had fallen from him, because he decidedly denied this.
  SIR FRANCIS BARINGsaid, he was not allowed to state what was incorrect, and seemed to be in this position—that the right hon. Baronet was permitted to allude to the debate while he was prevented from doing so.
  Vote agreed to.
  (3.) £789,742, to complete Sum for Naval Stores.
  ADMIRAL DUNCOMBEtrusted that the reduction in this Vote had not been made without due consideration, for it was of the utmost importance that the steam machinery of the navy should be kept in the most efficient state. The hon. Member for Lambeth (Mr. Williams) had formerly complained of the amount of the Vote taken for steam machinery; but without it, it would have been impossible to send out many of the vessels which composed our magnificent fleets in the Baltic and Black Seas during the war. There was, however, one point in which he thought economy might be enforced with advantage. He noticed an increase of £35,000 for coals used by steam vessels, and of £20,000 for fuel for steam transports, making altogether an increase of £55,000 upon this one item alone. Now, steam ought, in his opinion, to be considered as only an auxiliary for the large vessels in the service; and if the captains were made to understand that it was not to be employed except in cases of emergency, there would be much less wear and tear of machinery, as well as a large saving of expense in coal. He also thought that a stock of well-seasoned timber ought to be kept in our dockyards, for if this had been the case when the gunboats were required during the last war, they would not have been attacked with dry rot as was now understood to be the case.
  SIR JOHN PAKINGTONsaid, he had
  1340
  stated upon a former occasion that the reduction of £50,000 made in this Vote for the purchase of steam machinery had not been resolved on without due deliberation. The Board of Admiralty had carefully reconsidered the question, and, after having communicated with the Surveyor of the Navy on the subject, had determined to persevere in the reduced Vote. The communication which he had received only on that very day from the Surveyor fully justified the reduction; but if an opinion to that effect had not been received from this officer, he had been prepared even at the Very last moment to reconsider the amount of the Vote. With regard to the use of steam only as an auxiliary, he fully concurred with his hon. and gallant Friend's opinion on this point. There were already very strict injunctions to this effect. Captains were bound to enter on their logs every case in which they had recourse to steam, and the Board had it in contemplation to insist more urgently on the observance of these orders, and on the employment of canvas, except in cases of emergency.
  LORD ELCHOrose to call attention to the suggestions which had been made for the construction of ships clad in mail, on the plan invented by the Emperor of the French. He doubted whether any of the six which we had constructed had been under fire. One of the French vessels of this kind had been engaged at Kinburn, but it was a question, after all, whether these ships fulfilled the promises held out respecting them—whether they were really shot-proof. Wrought-iron shot would very easily go through these iron plates. No ship's crew could stand the splinters that such shot would make; and, therefore, as he had been informed, the French objected to iron-plated ships. The Admiralty might endeavour to cover the ships in the Royal Navy with an impenetrable mail, but it should be remembered that the power of projectiles was undergoing a great and constant increase; and that increase he believed would be more than a match for any improvement that could be effected in the construction of ships. The press had claimed the honour of having occasioned the introduction of the present improved small arms into the army; but he thought it right to state that it was to Lord Hardinge, as was generally known, that the army was indebted for them. And it was owing to the recommendation of his noble

  1341
  Friend the Member for Tiverton (Viscount Palmerston) that the monster mortar invented by Mr. Mallet was introduced to the public service. The Committee to whom the examination of it was referred declined to approve it; but the strong recommendations of his noble Friend prevailed, and the result had been most successful. Dr. Scotland, in a work on projectiles, the frontispiece of which contained a description of the mortar, stated it was thirty inches in diameter, its bursting charge 4801b., and the extent of its penetration twenty-seven feet; whereas that of the ten-inch mortars was only between five and six feet.
  SIR CHARLES NAPIERsaid, he wished that, before they proceeded any further with the construction of ships, they should have a regular trial of the strength of an ordinary three-decker and of a frigate plated with iron on the principle which he recommended. In order to make that experiment, he would get two such ships to fire broadsides into one another until their respective powers were fully tested.
  MR. LINDSAYcomplained of the unsatisfactory form of the Estimates. Details were given with unnecessary minuteness of comparatively unimportant Votes, while no detailed explanation was given of such large Votes as these:—£363,000 for the purchase of timber, and £509,000 for the purchase of stores. The names and descriptions of the principal ships for which this timber was required ought to be inserted in the Estimates, in order that the Committee might form an opinion of the necessity for such ships, of their size, construction, &c, and make suggestions to the Admiralty. The Committee ought to be furnished with the Estimate of the cost, &c, of every large ship proposed to be built by the Admiralty, to be expended on every ship, and of what was for repairs. Again, we were going on, building large ships, and our only reason was that the French were doing the same. That was true; but when the French were asked why they continued to build large ships, they answered that they were obliged to follow our example. For his own part, he could conceive of a comparatively small ship capable of sinking half-a-dozen of our three-deckers. Let a ship be built to go one knot an hour faster, and to throw shot 500 yards further than our large ships, and he ventured to say that, though she might be no larger than a frigate, she would be able to sink any reasonable number of our
  1342
  men-of-war without one of them succeeding in touching her. America aimed in the Niagara at producing such a ship; she had not succeeded, but had she obtained her object our line-of-battle ships would have been rendered perfectly worthless. What he would suggest, therefore, was, that a premium of at least £1,000 should be offered for a ship capable of attaining greater speed, with larger capacity for guns and stowage than any at present in existence. With respect to the item for the purchase of stores, in 1851 he was a Member of the Committee appointed on this subject when the right hon. Gentleman the Member for Portsmouth (Sir F. Baring) was First Lord of the Admiralty. At that time no improvement had been made in, anchors, and the Government offered a premium for the best that could be constructed. There were six ship owners from the merchant service, and six officers of the Navy, who competed. He was one of them, and they devoted a great deal of attention to the matter. The Report of the Committee was that the Admiralty anchor was the worst; but although it was so pronounced, and eight years had since elapsed, the labours of the Committee had been in vain, and the same description of anchor was now employed. The best anchor was universally stated to be Trot-man's, and we were losing a great deal of money by neglecting to use Trotman's anchors, though they cost only a third of the price, and were little more than half the weight. It was proved that the Himalaya's anchors were far lighter than those used by the Transit, and altogether superior. If the House appointed Committees, he thought they ought to be attended with some benefit, and that the old anchor, when reported against, should not continue to be used. There was another item to which he thought attention should be directed—that for the purchase of coals. He did not advise in general the acceptance of the lowest tender, but in the case of coals he thought that the supply should be thrown open to public competition, and the lowest tenders accepted.
  LORD CLARENCE PAGETadmitted that it was a difficulty at present to line a ship with iron of sufficient strength to resist wrought iron shot; but in a pamphlet recently published by Captain Moorsom, a very distinguished naval officer and the inventor of a shell known by his name, there occurred the following important passage:—

  1343
  "Recent experiments have shown that a 4-inch wrought iron parapet backed with wood is a perfect protection against horizontal shells of any nature yet in use, and that it is a very tolerable defence against the effects of the heaviest solid shot even at short range; indeed, comparing the result of the experiments that I have seen against iron butts at Woolwich with the results of actual service against earth-works, I think the iron butts are equal as a, defence to ordinary earth-works, for even they will not withstand the continued battering of heavy ordnance at moderate ranges."
  It must be recollected, also, that there was a limit to the weight of shot, so that if we could make the side of a ship of sufficient strength to resist a shot of about eight inches diameter—he referred to horizontal firing—we should be proof against even wrought iron. Captain Moorsom said:—
  "The question of applying wrought iron defences to ships of war is merely one of relative weight, and may be stated thus:—Supposing that the Duke of Wellington, 131 guns, was razeed so as to leave only her lower deck battery, the weight removed in hull and guns would be about 1,200 tons; now to case her all round with 4-inch wrought iron plates, extending twenty-five feet from top to bottom, would require a weight of less that 1,000 tons, and it is therefore clear that there would be no difficulty whatever in constructing iron-cased ships carrying one tier of guns, having all the sailing and steaming qualities of our present three-decked ships; and there cannot, I think, be a doubt that the iron-cased single decked ship would be a mere formidable vessel than the wooden three-decker either as opposed to ships or forts."
  He believed the limit of the weight of ships' guns and the size of the projectiles used in naval warfare had been attained, but they had not yet carried the science of strengthening ships' hulls to the full extent. If a 4-inch iron casing would resist an 8-inch iron projectile, he conceived that the best plan would be to give our ships a 6 or 7-inch iron casting, and then they would be protected against any serious damage.
  MR. WARREdeclared that he thought it a Providential circumstance that the small gunboats of 40-horse power which had been sent out to China had safely accomplished so hazardous a voyage, and he hoped that they would not be required to risk a passage home without due consideration on the part of the Government. He believed the engines might be taken out and sold, or applied to useful purposes in the East, and that the hulls would then be of so little intrinsic value, that it would not be worth while to bring them to this country. It had been stated upon high authority, before the Committee which considered the naval and military expenditure of the
  1344
  country, that in consequence of the extensive adoption of steam machinery in the navy, it was impossible to calculate the event of any future naval contest. He thought, therefore, it was of great importance that they should carefully watch the progress of all experiments which tested the efficiency of steam ships of war.
  SIR FREDERIC SMITHsuggested to the First Lord of the Admiralty the propriety of appointing a Committee to inquire into the whole subject. It was obvious that if iron-cased vessels could be built of smaller dimensions than our ordinary ships of war, with an equal amount of efficiency, half the number of the crew usually employed would only be required, and the expense to the country would consequently be greatly reduced. In reference to what had been said about the introduction of the Minié rifle, Lord Hardinge might certainly have first shown the perfection of that weapon, but he believed it was to the Marquess of Anglesey we owed the first introduction of the rifle into the service.
  VISCOUNT PALMERSTONThe question having arisen as to whom the merit is due of forcing upon the attention of the Government the first great improvement of the weapon given into the hands of our soldiers, I think it right to say that Lord Vivian, when Master General of the Ordnance, was the first person who introduced the Minié rifle into the army. The importance of that firearm was afterwards recognised by his successors. I think it is due to the memory of that gallant nobleman to bear testimony to the fact that it was he who first turned his attention to the improvement of the weapon that should be given to the soldier.
  SIR JAMES ELPHINSTONEexpressed his belief that the stock of timber in store in our naval shipyards was insufficient in quantity, and of very inferior quality. There were, however, immense forests of excellent timber in Burmah and in the western districts of New South Wales, which were available for the purposes of shipbuilding, and he thought that teak might very advantageously be substituted for oak timber in the building of screw steamships, which were subjected to so much straining from the vibration of the machinery. He put it, therefore, to the First Lord of the Admiralty whether he would not make some arrangement for procuring a supply of teak timber for the purposes of our navy from the countries above named?
  SIR HENRY WILLOUGHBYbelieved that millions of the public money had been lost in various schemes for shipbuilding adopted according to the ruling fancy of the day; and he was afraid that they had not yet seen the end of that species of expenditure. What security had the Committee that this Vote of £1,389,742 would be the whole sum spent on naval stores? In the last authentic accounts they had a clear proof that the Parliamentary Vote for this head had been exceeded by upwards of half a million sterling. Supposing there was a surplus upon the other items of charge, would the First Lord think himself entitled to add it to the Vote for stores? Would he give them a pledge that, whatever the sum granted for this purpose, the expenditure upon it would be strictly limited to that sum? Without exacting such an assurance, all these lengthy discussions upon the Estimates were a perfect farce. It was perfectly astounding to find that Her Majesty's Government were the greatest dealers in stores in the whole world; they bought and sold those articles, and the country lost enormously by both operations. He should like to inquire what was the prime cost of the articles represented by the last item of £1,200,000 which appeared under the head of Stores. He believed it was something prodigious. The evidence taken before the Committee on Public Moneys showed that what were called "old stores" were often now stores. One of the first checks which the House ought to impose should be directed against the wasteful and unnecessary purchase of stores.
  SIR FREDERIC SMITHsaid, that he happened to be in Paris at the time that the French were experimenting upon an improved firearm, and he reported to Sir John Burgoyne that he had seen a French weapon much superior to the ordinary rifle. His letter was forwarded to the Marquess of Anglesey, then Master General of the Ordnance, and afterwards submitted to the authorities at Woolwich, who thought that no musket was superior to that used by our rifle corps. Lord Anglesey then communicated with him on the subject, when he furnished that nobleman with the testimony of Marshal Marmont and others, to prove that, in future wars, our artillery must be very careful how they got within range of the improved French weapon. Application was subsequently made, through Lord Normanby, to the Minister of War at Paris, and a musket
  1346
  of the description in question was sent to Lord Anglesey, upon which a further inquiry was instituted. He was ready to admit that a debt of gratitude was due to Lord Vivian for the attention he had paid to the muskets and swords of our army, and especially to the swords.
  LORD ELCHOexplained, that he had not meant to state that Lord Hardinge introduced the Minié principle into this country.
  CAPTAIN VIVIANsaid, that he remembered, as a boy, seeing in Lord Vivian's room samples of arms in use in every state in Europe. He had the honour of introducing the two grooved rifle into our service. Prior to that, the old eight or ten-grooved rifle was in use in our service. Now, quoad rifle, there was no difference between the two-grooved rifle and the Minié rifle. The peculiarity of the latter weapon lay in the expanding ball. The two-grooved rifle was nearly as easily loaded as the Minié rifle. In the old rifle you could not use a large charge of powder, because the ball stripped. But any charge could be used with the two grooved rifle. Therefore, he thought that credit was justly given by the noble Lord the Member for Tiverton (Viscount Palmerston) to Lord Vivian, for introducing into use in the army a rifle similar to that which was now in use.
  SIR JOHN PAKINGTONsaid, he could give no pledge to the Committee that none of the Votes should be exceeded; and, upon that point, he must observe that the Estimates of the great services were, generally speaking, wonderfully correct. He would not give his sanction to the diversion of money voted for one purpose to another, except in the manner sanctioned by the Appropriation Act. With regard to timber, he had heard no complaints of the quality, and there were 9,000 loads more in the dockyards at the end of 1857 than there were at the end of 1856. The Government would take into consideration the disposal of the gunboats, and was obliged to the hon. Member for Ripon (Mr. Warre) for the suggestion. At the risk of drawing upon himself the indignation of a previous First Lord, he would repeat his opinion, that some of the Estimates were not presented in the best shape, and that, among others, the form of this Vote may be improved, so as to give more details. With regard to single-deck ships, encased in iron, being more effective engines of war

  1347
  than the three-deckers, the hon. and gallant Admiral (Sir C. Napier) suggested a duel between one of each sort. The hon. and gallant Admiral would, no doubt, be prepared to take the command of one of them, and he hoped he would favour the Admiralty with a suggestion as to who should command the other. [Sir C. NAPIER: The First Lord of the Admiralty.] He trusted that, in speaking thus, he should not be supposed to undervalue the opinion of the hon. and gallant Member. He was very much obliged to him, and also to the hon. Member for Tynemouth, and his noble Friend the Member for Sandwich. After his short experience, he was sure they would not expect him to give any definite pledge; but he was glad to be able to inform them that the question of encasing ships with iron was now under the consideration of the Surveyor General of the Navy.
  MR. W. WILLIAMSrecommended the adoption of the system in the United States, where a certain number of ships were ordered, and an estimate obtained of their cost.
  MR. BENTINCKsaid, that a Committee of the Admiralty, in 1851, found that the Admiralty anchors were inferior to six other descriptions, and reported in favour of Trotman's anchor. It had subsequently been reported that the practice had been continued of purchasing the old Admiralty anchors, which were only half as efficient, weighed double the weight, and cost three times the money. He wished to know whether the practice was still continued?
  MR. RICHARDSONhoped some explanation would be given with respect to the old stores.
  GENERAL CODRINGTONsaid, the merit of Lord Hardinge was in having introduced the improved rifle generally into the army.
  SIR CHARLES WOODsaid, he could not answer the question as to Trotman's anchor off-hand, the Report of the Committee having been made four years before he was in office. He had not had any complaints of the anchors in use. With regard to old stores, nothing was sold which was fit for the use of the navy. At the end of the war there were large quantities of stores left on hand, as tarpaulings, preserved meats, and preserved coffee. He endeavoured to use coffee in the navy, and issued it to six ships at Plymouth; but in every ship but one the seamen, having been accustomed to cocoa, said they preferred that article.
  SIR JOHN PAKINGTONsaid, with respect to Trotman's anchors, he believed the simple reason why they had not been brought into general use was, that a great number of anchors of the old construction remained in the yards, and these were used from time to time for the sake of economy.
  MR. BENTINCKBut what he complained was, that, in spite of the Report of the Committee, the practice had been continued of purchasing anchors of the old construction up to the present time.
  Vote agreed to.
  House resumed; Resolutions to be reported To-morrow.

GOVERNMENT OF INDIA. (No. 2) BILL.

  SECOND READING DEFERRED.
  Order for Second Reading read.
  THE CHANCELLOR OF THE EXCHEQUERmoved that the Second Reading be postponed until Friday.
  MR. HORSMANsuggested to the Chancellor of the Exchequer the propriety of discharging the Order for the second reading. The House had come to a general understanding to proceed by Resolution on the subject of the future government of India. ["No, no!"] At any rate the Government had undertaken to propose Resolutions with the view of afterwards founding a Bill on those Resolutions. He believed no precedent could be cited for proceeding by Resolutions upon a Bill already before the House. If the House were to proceed by Resolutions, and then to found a new Bill thereon, that, as it appeared to him, would be a perfectly regular course; but the Chancellor of the Exchequer had probably consulted the authorities on the subject, and would be able to state how that was; but, in his opinion, the House would come to the consideration of those Resolutions less embarrassed than if a Bill on the same subject lay upon the table. He (Mr. Horsman) threw out the suggestion to the right hon. Gentleman whether it would not be worth while to simplify their course of procedure in this matter by discharging the Order for the Bill under consideration, and then to proceed upon the Resolutions and found a new Bill on them.
  THE CHANCELLOR OF THE EXCHEQUERThis appears to be rather a technical than a material suggestion. Speaking with great deference, so far as I am informed, it is perfectly consistent to introduce those Resolutions, and afterwards to

  1349
  modify or change any Bill that is introduced, in deference to the opinion of the House as expressed in those Resolutions. The right hon. Gentleman will recollect there are two Bills before us on this subject; and, if there were a general concurrence in the proposition to withdraw both Bills, the course he points out might be a convenient one; but it appears to me, upon the whole, although I am perfectly willing to consider the question, that the objection of the right hon. Gentleman is altogether technical; and unless there were a general concurrence in the withdrawal of both Bills for the government of India, so that the House might start afresh in the discussion of those Resolutions, it would be highly inconvenient to adopt the suggestion. I am informed that, in taking the course I propose to take this evening, I am acting in strict accordance with precedents. No doubt it would have been much more convenient if the Resolutions had preceded the introduction of the Bill; but that is not the position in which either myself or those who are interested in the other Bill find ourselves. What is best to do under these circumstances? We have agreed that on Monday we will enter on the discussion of those Resolutions, and I do not see that we shall at all facilitate the progress of public business by assenting to the suggestion of the right hon. Gentleman. I think that, upon the whole, it would be better that both Bills should be suspended, and that the solemn decision of the House should be taken on the Resolutions as to the principle on which the future legislation for the government of India shall be based.
  VISCOUNT PALMERSTONNO doubt those who bring in a Bill are entitled, with the concurrence of the House, to postpone it to any other day from that which may have been fixed by the Orders. I only wish to say that, in concurring with the Motion of the right hon. Gentleman for postponing this Bill, I hope I shall not be understood as expressing an opinion one way or the other with regard to the suggestion of my right hon. Friend, who appears to assume that the House has agreed to proceed by Resolution. Now, that I conceive to be a question which the House will have to discuss on a future day, and I cannot accept the offer of the right hon. Gentleman that Bill No. I should be withdrawn, accompanied by Bill No. 2. Even though the Bill No. 2 be withdrawn, we have not proposed to alter our course and
  1350
  move Resolutions. Whatever, therefore may be the value of the argument of my right hon. Friend that Bill No. 2 should be withdrawn, because its authors mean to propose Resolutions, the authors of No. I not having altered their course the regular Parliamentary proceedings will continue.
  MR. AYRTONsaid, he could not conceive what had induced the right hon. Member for Stroud (Mr. Horsman) to suggest that there was any understanding on the part of the House to proceed by Resolution. Looking at the Resolutions on the table, and seeing that they wore different from the Bill of the Government, he would recommend, as the more convenient course, that the Government should withdraw their Bill.
  Second Reading deferred till Friday.
  House adjourned at half after Twelve o'clock