THE COMMERCIAL TREATY WITH FRANCE.—THE BUDGET.

HC Deb 21 February 1860 vol 156 cc1475-541

(FIRST NIGHT.)

MR. DU CANE

—Sir,—In rising to move the Resolution of which I have given notice, I trust that it is almost needless for me to say that I stand before the House under circumstances of no ordinary difficulty and embarrassment. The scheme of finance to which I am about to offer my opposition, is one of so intricate and so complicated a character, and has moreover been submitted to the House in a speech of such remarkable eloquence and subtlety of reasoning, that I feel that nothing but the kindest indulgence and forbearance on the part of the House itself, and a confident sense of the justice of my cause, can sustain me to the end in the task I have undertaken. I have no doubt that during the progress of the discussion to which my Resolution will inevitably give rise, it will be my fate to hear a cry re-echoed in this House that which has already been faintly whispered out of doors, that in bringing forward this Motion I am allowing myself to be made the instrument of a party and a factious movement. If, Sir, by a "party movement" may be interpreted to mean any desire on my part needlessly to interpose between the House and the discussion in Committee of these financial proposals with a view solely to embarrass Her Majesty's Ministers and thereby to check the further progress of useful and beneficial legislation, I trust that it is indeed unnecessary for me to enter my most emphatic disclaimer against any such intention. On the contrary. I believe that I am interpreting, not merely my own feelings, hut the feelings of the large majority of those Conservative Members I now see seated around me, when I say that it is with sincere regret that we have found that the financial proposals of the Chancellor of the Exchequer are not such in their leading features at least if not in all their minor details, as to entitle them at our hands to an honest and independent support. But if, Sir, on the other hand, openly and fearlessly to throw down the gauntlet to a scheme of finance I believe from my heart to be as dangerous as it is unjust, openly and fearlessly to vindicate that which I believe to be a sound and true Conservative policy towards the people of this country, if that by any chance can be construed into a party move, then I say that I frankly, nay more, that I gladly, accept the term. And this much, perhaps, the Chancellor of the Exchequer will permit me to say as the only and perhaps the best return for the graceful compliment he was pleased to pay me yesterday evening, that if I cannot give his financial proposals a warm support, he shall find me to be that which I for one think better than a mistrustful adherent or a lukewarm partizan—an open and a candid enemy. Now, Sir, with the permission of the House I will state as concisely as I can the main reasons I have for objecting to these proposals. I object to the Budget in the first instance because it appears to me not merely to fail to grapple with the financial exigencies of our present position, but to leave the country rather worse off than it found it, in a state of increased and increasing financial deficiency. I object to it in the second instance, because the principal remissions of taxation which it proposes, I allude more especially to the reduction and abolition of the duties on wine and paper, unobjectionable perhaps in themselves at the proper time, appear to me to be singularly inopportune and uncalled-for at the present period, when we find that the income tax is to be reimposed at a higher rate than was ever before known in time of peace. And last, certainly not least, I object to the Budget, because it appears to me to be based on an uncalled-for and a one-sided commercial Treaty. I certainly was in hopes that the result of last night's discussion might have tended to relieve me from entering at all upon this latter objection, but in that expectation I have been somewhat disappointed. By the vote of last night we have been placed, I think the House must agree, in this somewhat extraordinary and anomalous position. We cannot at any future period venture to amend in any essential point the Treaty itself, without vitiating at the same time some important feature of the Budget; we cannot now venture in any essential point to amend the Budget, without running the future risk of vitiating and annulling the Treaty. We are called upon in short, by Her Majesty's Government to open our mouths to their widest possible stretch, and swallow in one great gulp the Budget and Treaty combined. And all I can say is, that if the constitution of Parliament and the country can stand the dose, it must make up its mind from henceforth to swallow anything.

Now, Sir, I fear it will be necessary for me to detain the House for a few moments while I recount as briefly and succinctly as I can those which appear to me to be the main features of our financial position as laid down by the right hon. Gentleman himself and the manner in which he proposes to deal with the difficulty of our situation. And first as regards the question of an increased and increasing deficiency. The right hon. Gentleman, estimates the income of the country for the present financial year at £60,700,000, and its expenditure at £70,100,000, the deficit for the year being thus, £9,400,000. Well, this being so, the right hon. Gentleman, acting upon a very simple, but at the same time a very novel principle as applied to financial matters, that his deficit, Is great, because it is so small— Would it were greater, then 'twere none at all"— proposes further to increase it by the reduction of some duties and the total abolition of others to the extent of £4,000,000 upon articles which, for the most part, to use the words of the noble Lord, the Member for London in his first despatch to Lord Cowley and Mr. Cobden— Are not in general articles of such primary necessity or such universal use among the people of the United Kingdom as to entitle them upon that ground to the special attention of the Government. The right hon. Gentleman next in order proceeds to reduce this deficiency to the extent of £2,000,000 by means of sundry savings proposed to be effected in the Revenue Department by making certain allowances for increase of consumption as the natural result of the reduction of duties, and by certain other charges of an entirely new character. This, according to his own Estimate, still leaves the total deficit for the year at £11,500,000. Now this deficit he proposes to supply by re-imposing in the first instance the income tax at 10d. in the pound, bringing to the revenue a sum of £8,472,000. He then re-imposes the extra duties upon tea and sugar, and he calls in the malt and hop credits to the amount of £1,400,000. These sums amount in all to £11,972,000, and thus, according to the right hon. Gentleman's own statement, we shall have a surplus of £470,000.

Now I will ask the House to observe in the first instance that out of these sums there is one item of £535,000 that must be regarded as being altogether of a speculative character, as it is supposed to be derived from the increased consumption that the right hon. Gentleman looks to as the first result from the diminution of the duties upon wine and spirits. And further let us remember that should this scheme meet with our sanction, we shall have next year to submit to a further reduction of these duties to the extent of £250,000. I will next ask the House to observe that by anticipating the malt and hop credits to the amount of £1,400,000, the right hon. Gentleman is in point of fact, calling in the latter portion of a sum of £2,500,000 which has hitherto been considered, and by nobody more so than the right hon. Gentleman himself, in the light of a loan by the Government to the malt and hop interests of the country. While, therefore, on the one hand by anticipating these credits, very considerable annoyance and in many instances posi- tive injury will result to the smaller members of the malting community, the right hon. Gentleman is availing himself at the same time of an entirely temporary expedient, and I take it we are fully justified in assuming that no such sum will be forthcoming next year to meet the financial exigencies of the country. I will next ask the House to observe that the right hon. Gentleman proposes to postpone altogether, for a period of three years, the payment of £1,000,000 of Exchequer bonds which became duo in the present year. These bonds accordingly will have to be re-issued, and therefore one of the very first happy results of the year of bliss that was to result from the falling in of the Terminable Annuities, is a considerable addition to the unfunded debt of the country. And lastly, I will ask the House to remember that the income tax of 10d. in the pound and the war taxes on tea and sugar are only to be re-imposed for one year, and therefore the Chancellor of the Exchequer for the year 1861–2 whoever he may have the good or bad fortune to be, for I confess I have never considered the position of the Chancellor of the Exchequer to be a very enviable one, cannot possibly reckon on a renewal of these taxes without obtaining the formal consent of Parliament. Now, Sir, let me carry the House with me for a moment in imagination to the commencement of the year 1861, and let me ask them to contemplate what will in all probability be our financial position. I take it in the first instance that unless, which in the present aspect of the Continent is most improbable, the House shall agree to sanction any very considerable reduction of the Army and Navy Estimates, our expenditure will be very much the same as at the present period, to wit £70,100,000; and to this, as I have shown,' we must also add £1,000,000 of Exchequer bonds. But what, let me ask, will be the state of our income? We shall, as I have already shown, virtually have parted with the income tax and the tea and sugar duties; we shall have anticipated the malt and hop credits, and we shall have done something more: we shall have pledged ourselves to a further reduction of the wine duties to the amount of £250,000; we shall have pledged ourselves also to a further sacrifice of paper duty—and, if at the same time we allow for a sum of £250,000 as the remaining portion we have yet to receive of the Spanish debt, I think the House will find that our total loss of revenue will amount to £12,172,000. Now, if we deduct this sum from the present revenue, it will leave us exactly £58,392,000 to meet £71,100,000 of expenditure, and the Chancellor of the Exchequer will therefore have to announce to the House of Commons the pleasing intelligence of a deficit of £12,700,000. But if we take also into consideration, as I think we are bound to do, the probability as I shall presently endeavour to show, that instead of an increased there will be a diminished consumption resulting from the first reduction of the wine duties; or, supposing I am here in error, a diminution of the malt tax resulting from a diminished consumption of beer, I think we may be very safely justified in assuming that our total deficiency will not be far off £13,000,000. Now let me ask the House seriously to consider what is likely to be the position in which Parliament at that time will find itself situated. Sir, the night of February 20th, 1860, must, I think, have been long ago destined by the Fates to be a very remarkable era in the annals of Parliament. It is not often that our Parliamentary bill of fare is so luxuriously catered for, that we have a choice presented to us of dainties of the first class for our discussion. Animated debates on subjects of interest are, I fear, rapidly becoming the exception and not the rule, and I should think that seldom, if ever, has it happened to a Government to have to choose on the same night between three subjects of such vital consequence to the future welfare of the country, as a French Treaty, a Budget, and a Bill for the Amendment of the Representation of the People. I have not, I fear, the honour to agree on many political questions with the hon. Member for Birmingham; yet, I think from what I have read of his speeches out of doors, he will agree with me when I say that the two subjects of a Budget and a Reform Bill are somewhat intimately allied. For it must be the general tone and character of a Parliamentary majority that will ultimately determine the general nature and incidence of the taxation of the country. The noble Lord the Foreign Secretary, owing to circumstances over which he, perhaps, had no control, has postponed the introduction of his Reform Bill to what he imagines to be, and I sincerely hope he may find to be, a more auspicious moment. It is not for me, on the present occasion, to widen the field of discussion by indulging in speculation as to the probable provisions of his measure; but I think, at the same time, I shall be fairly interpreting the general feeling both of the House and the people of the country, when I say that there is a growing desire amongst both that this great constitutional question should not be made the stalking-horse by which to hurl Ministry after Ministry from office, and that we should, if possible, during the present Session endeavour to effect its settlement upon a fair and an equitable basis. Well now, I will ask the House to indulge in what, at the present moment, they may possibly think a rather wide stretch of the imagination. I will ask them to conceive that we have passed the Budget, that we have passed the Reform Bill, and that somewhere about the commencement of next year, a new Parliament, returned by constituencies into which new and popular elements have been introduced, is assembled in this House for the first time. What will be the position of affairs with which that Parliament will inevitably have to grapple. They will find, in the first instance, awaiting them, a deficiency of £13,000,000, and they will find also renewed for one year only and shortly about to expire an income tax of 10d in the pound. But in what state, let me ask the House, will they find this tax? They will find this tax, the retention of which as a permanent feature in the taxation of the country almost every statesman, from Mr. Pitt down to Sir R. Peel, and from Sir R. Peel down to the present Chancellor of the Exchequer, has condemned in the very strongest terms, existing at the highest rate ever known in time of peace, in its most odious form and controlled by no prospective legislation as regards its diminution. Consider then for a moment what must be the inevitable consequence. They will stand between Scylla and Charybdis. You will have cutoff from them by this Commercial Treaty several of our surest and safest sources of indirect taxation, and you will see one of two evils inevitably happen. Either you will see the engine you have left so ready to hand, seized with avidity, established in a graduated form as a permanent feature in your taxation, and mounting to a rate which will soon render it utterly oppressive and unbearable even to the most ignorant and patient subject for taxation; or, on the other hand, you will see adopted a hardly less pernicious course. You will see ignorant impatience running riot in the House, and developing its first fruits in the restoration of that miserable and cheeseparing system of economy which has already wrought us such disastrous fruits, which disbelieves in war till the enemy is thundering at your gates, and laughs to scorn the very idea of national defences. Sir, I say to Her Majesty's Ministers, I say emphatically to the right hon. Gentleman, "Beware what you are about with this great chasm yawning before you in increasing this tax to its present rate." I ask the right hon. Gentleman, "Can it be you, you who have exhausted your matchless eloquence and powers of reasoning to demonstrate the hardness of this tax, its unequal incidence, its inquisitorial character, and yet withal its enormous power if reserved as an engine for national emergency. Can it be you, who now without a thought or heed of future consequences, throwing aside all regard for prospective legislation, recommend to the country its re imposition in its present most aggravated form?" I will not weary the House by quoting Hansard as I could do, column after column, upon the subject of the income tax. Who is there, let me ask, that does not remember the Budget of '53, and that elaborate essay which has since been, as it were, a very textbook to every political schoolboy on the question? Who is there that does not remember how every form in which this tax could be permanently retained, or its incidence graduated, was successively paraded, minutely analyzed, torn to shreds, and scattered to the winds. And now, when the year has arrived that was to have brought to us our hour of financial millennium, the hon. Gentleman remorselessly adds to the burden on our backs, cuts the rope from the vessel of State, and sends us groaning into the future of a financial purgatory. And yet, Sir, I venture to maintain that there are reasons why a reduction of this tax, however slight, would have come at the present time with peculiar grace at his hands, and have been regarded as a peculiar boon by the people of the country. They had long regarded him as the very champion of its extinction. In time of war they had borne its increase without a murmur, for they knew that the extraordinary exigencies of the country required extraordinary demands on their part, both of patience and of patriotism. They had submitted too to see the burden of taxation heavily laid upon the necessaries of life, for they thought that there was a day at hand that should bring to every cottage in the land an hour of joyful and of welcome relief. The hour arrives and their hopes are doomed to a cruel disappointment. They learn for the first time that a new and startling financial doctrine is henceforth to be paramount. They hear for the first time that to assist a neighbour in difficulties, who is himself (for we cannot and ought not to conceal it) the cause of our own extravagance, justifies our adding to the weight of our domestic burdens. That a lavish and uncalled-for generosity to France is openly vaunted as a nobler aim for the Government of our country than a fair and impartial justice to England. They learn this and they will ask you to render them an account. If you say, we could not help it, we had no alternative, I think they will meet you with a very simple question, They will ask you "where is the £4,000,000 of indirect taxation you are thus recklessly to cast into the ocean of a blind and a speculative future?" That is the question the people will ask, that is the question we are asking for them. And when we are told of party in connection with this question, I say, thank God that the names and traditions of party are not yet extinct! thank God that there is a party yet left in the land, call it Conservative, call it what you will, that will put forth its strength and animate its ranks on behalf of the people of the country, and assist the effort of an independent Member to confront oppression and to quell injustice.

I have now, Sir, dealt with the question of the deficiency and the income tax, and I will proceed next in order to offer a few remarks to the House on the reductions of taxation by which the deficiency already created is proposed to be increased to the extent of £4,000,000. And first and foremost let me deal with the reduction of the wine duties. Now, I am not prepared to say that in the due course of events and dealing first with those taxes which are really at this moment pressing upon the bonâ fide necessities of the people, it would have been inexpedient to let the duties upon wines and spirits come in also for their share of reduction. But putting aside altogether the priority of claim that the duties on tea and sugar or the malt tax may have to be dealt with in the interests of the consumer, let us deal with the abstract question of the expediency of the reduction of the wine duties at the present period. I have made it my business during the last few days to make inquiries upon this subject from authorities who have better means than I have of obtaining in- formation on this subject, and I find existing an almost unanimous opinion that whether we look at the question as a matter of revenue, or whether we take it in the interests of the consumer, there never was a period so utterly inopportune as the present to make this reduction. The right hon. Gentleman drew indeed a pleasing fiction of the halcyon days that are soon to arrive when wine is to be no longer the luxury of the rich, and the choice products of the vineyards of France and Spain were to be brought to their very doors at a cost next to nothing. But I fear it must be my painful duty upon the present occasion somewhat rudely to dispel his dreams, and recall him to the more sober realities that beset the question. It is a fact to which I boldly invite contradiction, that at this moment, partly from vine disease and partly from a succession of bad vintages, the stock of wine both in Spain and the south of France is so reduced in quantity that it will need a succession of three or four most abundant harvests to restore it again to its normal average. It is a well-known fact also that ever since the first announcement of this Commercial Treaty the Bordeaux wine-merchants, in anticipation of a very considerable rise in price as the first effect of the reduction of the duty, have been withholding all the stock they possibly can from the English market, and that in many instances the principal Spanish dealers are refusing to part with their stock upon any terms whatever. I believe it also to be a well-known fact that the great hulk of the retail dealers in this City are now engaged in laying in their stocks for the year in order if possible to escape the rise in price which they foresee as the inevitable result of the first reduction of the duty. Well, Sir, but let us inquire for a moment what, presuming that no rise occurred, that price is likely to be even for the cheapest wines. I hold in my hand an extract from a circular from the London correspondent of one of the largest and best known houses at Bordeaux. I find from that circular that the lowest priced wine they can possibly send at this moment into the English market, a pure wine certainly, but of the thinnest and poorest character, would be at the rate of £10 a hogshead at Bordeaux, or from 26s. to 27s. a dozen in England at the existing rate of duties; 21s. or 22s. should the duty be taken off. Now, this is a wine, as I said before, of the very thinnest and poorest character, utterly unsuited, unless a complete and sudden change should take place, to an English taste and palate. And yet this is the cheap wine which you fondly expect to bring by this Budget to the poor man's door; which is in one moment entirely to supplant beer, the national beverage, at more than treble its price; which is to check the cultivation of barley and inflict thereby an irreparable injury upon the farmer, the maltster, and the brewer of the country. Why, the very idea appears to me to he so absurd upon the face of it, that I wont presume on the present occasion to start an agricultural grievance, and stand before the House in the once well-known character of a farmer's friend, on the question of the malt tax. But I may at least presume, by the way, to ask the right hon. Gentleman what sort of even-handed justice is this which, upon his own showing, proposes while carrying out the doctrines of free trade to their fullest extent to leave the home producer of the staple beverage of the country heavily taxed, to enter into competition with the untaxed foreigner. As regards Spanish wines the case may perhaps be slightly different. No doubt that there are several of the lighter Spanish wines that would in time grow into greater favour with the people of this country; but here again remember that you will have to contend, as far as the prospects of the revenue are concerned, in the first instance with repeated bad harvest?, and a diminution of the stock in the hands of the merchants. Well, Sir, but to pass on to another part of the case against the wine duties, I think the House can hardly have forgotten the right hon. Gentleman's pathetic narrative of the sufferings to which we are all of us liable from the adulterated concoctions of the British merchant. One would have thought as we listened to his description that adulteration of wine was a crime utterly unknown upon the Continent, and peculiarly indigenous to a British soil. But I fear that the blue-book recently published on the trade and vineyards of the Continent tells us a somewhat different story. Adulteration, I fear, is a crime common to every country, and to none more than the regions round about Bordeaux. Why, one-half the cheapest wines manufactured at Bordeaux are nothing more than a sort of Arragonese or Catalonian syrup which is in the first instance imported across the Spanish frontier into France, doctored at Bordeaux with vinegar, and then reimported into Spain to be sold in large quantities as prime Bordeaux. There is again in the Gulf of Lyons a seaport called Cette, the chief trade and business of whose population is nothing more or less than wholesale adulteration and imitation of every species of French wine. The adulteration too, of Austrian wine is perfectly notorious. And can the House suppose for a moment that, supposing the duties are reduced and the price of wine cheapened to the extent that the right hon. Gentleman supposes possible, we shall not have the British and Foreign adulterators competing with one another for English custom, with what results, to use the right hon. Gentleman's own expressive language—with what results to a discerning public I need not pretend to say. But let me revert for a moment to the subject of pure wine, and let me give the House an instance of the sort of market even a cheap pure wine is likely to command in this country, judging by the reception it not unfrequently meets with elsewhere, and let me take the case most analogous to England itself—the case of Australia. A few years since one of the largest firms at Bordeaux sent to a house at Melbourne a large consignment of wine; of all growths, including some 4,000 dozen of a light and pure wine, which cost about 10s. a dozen at Bordeaux. At the time I' am speaking of there had been a succession of good harvests; the price of wine was generally cheaper, and consequently the wine itself was of a better quality than could now be obtained at the same price. Well, the cargo reached Melbourne, and after an interval the Bordeaux merchants received a letter from their correspondent at Melbourne, stating that the wine in question had met with no sale whatever among the middle and working classes, upon whom they chiefly depended for custom, and requesting that by the next ship they would send them a wine of a far higher quality and price. And yet this is the reduction of taxation for which in the present year alone we are to allow to the revenue a sum of £530,000 for increased consumption. For the sake of a mere speculative theory like this we are to be asked to supersede our native beverage by taking off duties upon wine which was now and must for some time continue to be emphatically a luxury of the rich, and yet at the same time you call on us to continue the war duties on tea and sugar, which are emphatically the necessaries of the poor. I cannot better conclude my observations on the subject of the wine duties than by quoting a remark made to me a day or two since in conversation by a friend who had long lived in the neighbourhood of Bordeaux and who was conversant with all the mysteries of the wine trade. This gentleman thus summed up the whole case in a nutshell:—"If," said he, "I were a Bordeaux wine merchant, I should be in raptures with this Commercial Treaty. If I were an English wholesale dealer, depending for my custom upon the upper classes of society, I should be indifferent to it. But if I were an English retail dealer, depending for my custom upon the lower classes, and having, as I inevitably should, to encounter increased price and diminished consumption as its first results, I should go against it tooth and nail."

I will now, Sir, having dealt with the question of the wine duties, proceed next in order to offer a few remarks on the proposed abolition of the duties on paper. Now I trust that the House will not imagine that I stand here to advocate the retention of the paper duty as a permanent feature in the taxation of the country, or that I would wish to uphold the justice of any tax as a tax per se that might tend to retard the spread of sound and useful knowledge and education. I will not attempt on the present occasion to follow the right hon. Gentleman into that interesting and ingenious narrative he gave us of the various branches of trade in which paper at this moment forms so conspicuous an ingredient. And as regards the pleasing prospect of studding our villages and streams with thousands of paper mills bringing employment and prosperity to a happy and contented rural population, I am well contented to leave the right hon. Gentleman in the hands of the great Leviathan of the Press, who but two days afterwards utterly dispelled the illusions of fiction No. 2 of the Budget of 1860. But when the right hon. Gentleman told the House that he felt himself bound in no slight measure as regards the remission of this tax by the opinion it had embodied in a Resolution some two years since, I must confess I was considerably surprised. If an expressed opinion of the House that it is inexpedient to retain a tax as a permanent feature in the taxation of the country, is an adequate and valid reason for proceeding to its immediate abolition, without reference to present financial requirements, how does the right hon. Gentleman pretend to justify for one moment the retention of the income tax. If there is one tax above another that this House has condemned, not by a vague and solitary Resolution, but by its voice as speaking through repeated majorities led by the right hon. Gentleman himself, and even by statute of Parliament, it is the income tax. If, again, there is one tax above another that the Government ought not to have parted with at the present moment in accordance with their previous professions, it is the paper duty. And yet you select a period when a deficiency of nine millions is apparent, by your own showing, to increase the one and to abolish the other. What has been the history of this duty on paper in connection with previous Budgets. In his memorable Budget of 1853 the right hon. Gentleman refused in any way to deal with either the duties on wine or on paper. He had the whole world of taxation then before him to pick and choose from, but he left them both untouched. Well, Sir, time went on, and from the year 1853 to the year 1857 I take it this House and the country heard little enough of reduction of taxation. But in the year 1857 the right hon. Baronet the present Home Secretary (Sir G. C. Lewis), then Chancellor of the Exchequer, brought forward his financial statement; and now, let me ask, did he deal with the question of the paper duty, and the advantages its remission was likely to confer on the public as regards the spread of literature and education?— I confess, "he says," having carefully considered the subject, I do not believe that the total abolition of the paper duty would produce to the ordinary purchaser of books any appreciable advantage. Therefore, Sir, without at all denying the claims of the paper duty to be considered at a time when our expenditure may be less and our revenue may be greater, I cannot admit that at the present moment it is a proper subject for remission. Well, but what was the state of our finances in the year 1857. Why, the right hon. Baronet was positively that rara avis in the history of finance, a Chancellor of the Exchequer with a surplus. He was in such a state of financial plethora that the hon. Baronet, the present Member for the West Riding, who moved the Address to the Crown at the commencement of that Session, said that he could only compare him "to a prize ox in the midst of a circle of butchers." And how, let me ask, did the right hon. Baronet further proceed to justify his retention of this and other taxes? He did so upon a theory of taxation, in which for the most part I cordially agree, but which I maintain to be the direct opposite of that upon which the present Budget is based. The right hon. Baronet quoted the following extract from the writings of Arthur Young: If I was," says Arthur Young, "to define a good system of taxation, it should be that of bearing lightly on an infinite number of points, heavily on none. In other words, that simplicity in taxation is the greatest additional weight that can be given to taxes, and ought in every country to be most sedulously avoided. Now this is a theory of taxation to which, as I said before, I venture to give my cordial assent, but which is diametrically opposed to the principle of the present Budget. The present scheme is nothing more or less than a system of financial complications to result in complete simplicity of taxation. But a few days afterwards a still more extraordinary scene took place in the House. The present Chancellor of the Exchequer seized his opportunity to make a furious onslaught upon the whole financial statement, which he condemned as being founded on principles of finance contrary to those which for years past had regulated the whole course of the taxation of the country. But it now appears that the Nestor of Tiverton has been able to compose the differences of this financial Achilles and Agamemnon, and that they can sit side by side in the same Cabinet united in bonds of brotherly affection. I now come to the year 1858, the period at which the House affirmed the memorable Resolution which has exercised such irresistible influence with the right hon. Gentleman, and I will ask hon. Members to listen to the terms of the Resolution itself. That this House is of opinion that the maintenance of the excise on paper as a permanent source of revenue would be impolitic. Now I think the House must see at once that this is a Resolution asserting a mere abstract principle of the very vaguest character which cannot, put upon it the widest construction you will, be construed in any way so as to fetter us as to any particular time in which to deal with the duty. And perhaps hon. Members will agree that one of the shortest and at the same time most sensible speeches ever delivered in the House was made on that occasion by my hon. Friend the Member for Norfolk, who interposed before the question was put from the chair, and said, "I only want a single word. I presume we all fully understand that the Resolution means nothing." But it is a somewhat remarkable fact that the nearer we approach to the present period the stronger appear to have been the objections of Members of Her Majesty's present Government to deal in any shape with this duty. The right hon. Baronet the Home Secretary used rather strong language with respect to the proposed abolition of the tax in the year 1857; but in the year 1858 the noble Lord the Foreign Secretary was really quite abusive. The noble Lord said on this occasion— The House would recollect that last year the Chancellor of the Exchequer proposed that the income tax should be kept up at 7d. in the pound, and instead of 1s. 3d. the duty on tea should be 1s. 5d. with a proportionate increase of the sugar duties. This year they had allowed the income tax to fall from 7d. to 5d. in the pound, but they had kept up the duty on tea to 1s. 5d. and retained the proportionate increase of the sugar duties. It was, therefore, almost a matter of good faith that when next there was a reduction of taxes those duties on tea and sugar should be reduced, which were in fact war duties, and there could be no greater claim for reduction than upon articles which entered so largely into the comforts of the people. Now, Sir, these are arguments to which I most unhesitatingly give my assent, and than which I feel that if I were to talk for an hour upon this subject I could not advance any that are likely to have greater weight with the House. But what a change now appears to have come over the spirit of the noble Lord's dream! The Chancellor of the Exchequer in 1860, in the face of a deficiency of nine millions, proposes to increase the income tax, to retain the war duties on tea and sugar, and to abolish the paper duty. And the noble Lord sits by his side and applauds the proposition. Sir, there appears to me to run throughout the whole of this elaborate scheme, dexterously veiled, it is true, but more apparent here than in any other part of it, a desire to conciliate at all hazards and at any price the favour and good will of a certain section of politicians beneath the gangway, without whose support we are plainly told that no Administration can endure for a day. I remember to have read, that in the days when the struggle between free trade and protection was at its fiercest height, the hon. Member for Rochdale, to whom we are so indebted for the construction of this French Treaty, told this House that he addressed them in the name of the people who live in towns, and who will govern the country. The day has come when we are called on to witness the fulfilment of his prophecy. We have here before us a Budget which bears but too plainly the image and superscription of people who live in certain towns; and if there is one epithet that I have heard applied to it oftener than another out of doors it is that it is simply and essentially a Manchester Budget. The right hon. Gentleman the President of the Board of Trade is, as we all know, an able and distinguished Member of this House. His administrative abilities may be, doubtless, as useful inside the Cabinet of the noble Lord as his destructive powers have been effective against it outside. But, great as those abilities may be, I cannot help thinking that the people of the country will imagine that the noble Lord has purchased them somewhat dearly by dear tea, dear sugar, increased income tax, and a million of money. The Chancellor of the Exchequer told us the other night that if he wished to scatter a thousand blessings on the land we should set free the trade of its people. To that doctrine, honestly and impartially carried out, I give my entire concurrence; but I think he will find that at this moment the middle classes feel themselves but poorly compensated for increased income tax by a dream of cheap wine. He will find too that the great masses of the working population are but sadly recompensed by a fiction of paper mills for dear tea and sugar.

I have now, Sir, stated my opinion as regards the merits of the leading features of the right hon. Gentleman's scheme, and I will not upon the present occasion weary the House by going at length into other and less important details. I will not, therefore, follow him into the second or supplementary part of his scheme as regards the minor alterations in Customs' duties. There are several to which I see no objection, there are others to which objections may be raised, but which I think are already provided with champions in this House to do battle in their defence. I will not, therefore, on the present occasion, discuss the grievances of the silk manufacturers with the right hon. Gentleman the Member for Coventry (Mr. Ellice), nor will I open the sores of the licensed victuallers. The hop-growers of Kent and Sussex have abler advocates by far than I am to fight their battles; but serious as each of these questions doubtless are, they do not appear to me to go to the heart of the Chancellor of the Exchequer's proposals. We shall, therefore, I think, should my Resolution be negatived, be enabled to discuss them with greater advantage in our progress through Committee. And then I must say, that if I may judge from the number of Amend- ments that are gathering thick and fast on the notice paper, from the number of public meetings which have been held throughout the length and breadth of the country, and the number of private grievances which each hour has placed in my hands from the moment that I first gave notice of my Resolutions, I think the right hon. Gentleman will find a nest of hornets awaiting him. But I will now pass on to consider briefly the last of the objections I have advanced to the Budget, that it is based on a one-sided and uncalled for Commercial Treaty. Sir, there was no part of the right hon. Gentleman's eloquent narrative that elicited a warmer burst of applause from those who sat around him than when he said, "What we have done is good, nay, doubly good, good for ourselves if France had done nothing; doubly good, because France has done a great deal." But I presume the right hon. Gentleman will not deny that his proposition may have a converse, and that if what he has done can be demonstrated to be financially bad, it must be doubly bad when fettered and restricted by a one-sided Commercial Treaty. Now, Sir, I certainly did not receive the very slender political education I ever had in a free-trading school, but it was my fortune to enter this House for a brief period in the year 1852; I witnessed on that occasion the closing scene of that great and prolonged struggle between free trade and protection, and I was one of those who went through the ceremony which I believe at that time was familiarly spoken of as "bowing to the voice of the country." I made my bow and very soon afterwards, through the intervention of five impartial Gentlemen in a committee-room upstairs, I retired into private life. But in thug bowing to the voice of the country I had always understood that we had pledged ourselves from henceforth to carry out the policy of free trade in its fullest and most extended sense. Now the more I scrutinize the provisions of this Treaty the more I am puzzled to discover on what principle you pretend to base it. I ask myself in the first instance, "Is this free trade? if so, why in the name of the first free-trader do you fetter and restrict free trade with a treaty?" I ask myself in the next instance, "Is this reciprocity?" and here indeed my mental confusion becomes worse confounded. I had always thought reciprocity to be reciprocity should be arranged upon fair and equal terms to both sides. To give a familiar illustration of what I mean, I would say, "If I ask a friend into my house one week, and he invites me in the next week to return the visit, and sets before me as good an entertainment as that which I have offered to him, that is my notion of a fair and a perfect reciprocity." But what are you calling on us to do? You are calling on us to admit into our house to-morrow, and from henceforth at all times and at all seasons a crotchetty neighbour who keeps his doors resolutely slammed in your face for a year to come and then only promises to open it half way for nine years more; keeping a strong chain up all the time, while he reconnoitres your personal appearance before he lets you in altogether. And to think for one moment to whom it is that we are mainly indebted for this enormous blessing. We were told the other night that our old friend Protection, driven from the palaces of our country, had sought for refuge in holes and corners. That was unkind treatment doubtless, and I think my hon. Friend the Member for West Norfolk, when he so gallantly announced his intention of defending these relics of his ancient faith might have added, had he thought of the quotation— Extrema per illos Justitia excedens terris vestigia fecit. But here, methinks, we have the unkindest cut of all; we have the great high priest of free trade himself recanting, abjuring the worship of his favoured deity, and falling prostrate on his knees before the monstrum horrendum of one-sided reciprocity. Well, Sir, but again I had always thought that one of the privileges which this House had ever held most dear, was the power of retaining in its own hands the power of remitting or imposing taxation. But if you pass this Treaty in its present shape, not merely will you cut off from henceforth several of the most valuable and harmless sources of our indirect revenue, but you will fetter and restrict in the most arbitrary manner for years to come the whole system of the future taxation of the country. No matter how great may be our financial exigencies; no matter how complicated our political embarrassment, unless, which I think the House will agree with me is not very likely, we agree to annul this Treaty by mutual consent; or unless, which God forbid! we are involved in a French war, what we have once done we shall never again be able to undo. Fetter the taxation of the country in this way for ten years to come! why then do you leave the income tax and tea and sugar duties without prospective legislation even for a year? Legislate in this way for ten years! is there any man amongst us, let me ask, who can tell what one year, what six months may bring forth? You have tried your hand before at this far-sighted legislation. In 1853 you tried to cast the horoscope of 1860, and with what result? The financial sky was then bright and clear, there was but a small speck darkening the future of the Continental horizon, but you saw it not, and in one short year we had drifted into war upon a Budget of peace. The financial sky is now dark and gloomy, the clouds are gathering fast upon the horizon of the Continent, and yet you fondly hope that upon the shoulders of this Treaty and with a Budget of war, we shall drift into the haven of everlasting peace. Sir, I may be blind, but I think at all events I shall not be without companions in my misfortune when I confess that I am utterly unable to discover the benefits we are to derive from this Treaty. Is it, as has been so frequently stated, that we may enable the Emperor of the French to exhaust our resources of steam coal, and supply himself with one of the principal munitions of naval warfare? An excellent object, doubtless, that for France, but one which I protest against on behalf of England. The hon. Member for Birmingham told us last night with his accustomed frankness, that we know nothing whatever about the subject when we alarm ourselves on this head, and that any one who knows anything at all knows that one North colliery contains coal enough to supply for a year the whole French navy. [Mr. BRIGHT: Hear, hear!] That may be so, and my ignorance of this matter may be very profound; but let me ask the hon. Member to explain to us, if such is the case, how it is that at this moment the price of coal in this City is rapidly rising in price, and that which has hitherto been a blessing and a necessary alike to rich and poor, threatens to become an expensive luxury to the rich alone. If the object of this Treaty be to stimulate free trade, how can you justify for a moment the retention of the differential dues on foreign shipping? If it be to return to the days of reciprocity, why, when you reduce the duty on French wines, do you make no stipulation for a corresponding reduction of the French duty on English beer? Why, when you add to the income tax to abolish the paper duty? do you make no attempt to have the prohibition removed from French rags, which would be the greatest boon you could achieve for the manufacturer of paper. And, above all, if this be a fair and impartial free-trade Treaty, why have you so studiously endeavoured, from first to last, to stifle a fair and open discussion of its terms? Why has it been, as it were, smuggled into the House in a clandestine manner, and shaken out upon the table from the same bag with a Budget that I must say is in every way worthy of its compeers? You have told us that a similar treaty was one of the most glorious acts of Mr. Pitt's brilliant and statesmanlike career, but it appears, withal, that the policy of Mr. Pitt is so antediluvian that it is necessary to reverse it. Mr. Pitt took treaty first and Budget afterwards, but we are called upon imperatively to discuss at once both Treaty and Budget, and then when the Budget is passed and the mischief is effected beyond recall, we are promised the luxury at some future period of a separate discussion on the Treaty. I know why it is said that this haste is necessary. It is necessary, we are told, in order that we may render the Emperor of the French independent of the will of his own Legislative Assembly, which is opposed to this change, and which speaks in this instance the wishes of a large majority of the French nation. If that be so, I can only say it is an additional reason why this measure should receive at our hands the strongest opposition. Remember, as we were told last night, that the Legislative Assembly of France is elected by ballot and universal suffrage and every other appendage of the most wide-sweeping Reform Bill that the hon. Member for Birmingham could desire. You tell us that the grand result of this Treaty will be the vast extension of our commercial intercourse with the people of France, and that it will carry with it to the furthest end of Europe the blessings of peace and civilization. That is an object which I trust it is needless for me to say will at all times command my most hearty support, but I venture to question the policy of the means by which you are proposing to effect your object, and to doubt the permanence of an alliance cemented at a moment of mistrust and danger. Sir, I have now brought nearly to a close the remarks I have ventured to make on the financial proposals of Her Majesty's Government, and I feel that an apology is due from me to the House for the length of time I have ventured to detain them. I have endeavoured to show that the scheme we have before us is one which fails to grapple honestly and manfully with the exigencies of the time, and disappoints the just expectations of the people of the country. I have endeavoured to show that it is a scheme which is based on unsound and dangerous principles of finance, and that it is clogged with a treaty which forces, uninvited, commercial changes upon an irritated and an angry nation. In conclusion, Sir, allow me to observe that I listened and I shared in the thrill of admiration that ran through the House at that magnificent peroration in which the right hon. Gentleman commended his financial policy to a fair and impartial trial at the hands of an English Legislature and an English people. That fair and impartial trial I cannot doubt for one moment that we shall both of us receive at your hands. But the right hon. Gentleman has so often charmed the ear of this House with his eloquence, his tongue has so often "dropped manna," and has made "the worse appear the better reason," that he has left to the newly initiated novice in the mazes of Parliamentary discussion a somewhat wide choice of impassioned finales to select as his model either for future study or for present imitation. If in the course of his varied career he has shown that he can invoke an English House of Commons with signal success to sanction his own elaborated schemes of finance, he has shown us also that for the measures of a rival he has spells that can arouse them to censure and to condemn. It may be that in the hands of an uninstructed novice the charm of the arch magician may lose its power, it may be that the arrow I am now venturing to borrow from his quiver will recoil upon myself, but I cannot refrain from concluding these my imperfect observations in the words in which but eight years since the right hon. Gentleman summoned the House to pronounce the doom of a Conservative Budget, and sign the death warrant of a Conservative Administration— I am sure, as Englishmen, you will tolerate me when I tell you that if you give your assent and high authority to this most unsound and destructive principle on which the financial scheme of the Government is based,—you may refuse my appeal now,—you may accompany the right hon. Gentleman the Chanceller of the Exchequer into the lobby; but my belief is that the day will come when you will look back upon this vote—as its consequences sooner or later unfold themselves—with bitter, but late and ineffectual regret. The hon. Gentleman concluded by moving the Resolution of which he had given notice.

MR. BENTINCK

seconded the Motion.

Motion made, and Question proposed,— That this House, recognizing the necessity of providing for the increased expenditure of the coming financial year, is of opinion that it is not expedient to add to the existing deficiency by diminishing the ordinary revenue, and is not prepared to disappoint the just expectations of the Country by re-imposing the Income-tax at an unnecessarily high-rate.

MR. GOWER

said, he would not attempt to consider in detail the comprehensive Budget which had been laid before the House, but would leave it to be dealt with by abler hands. On the general question, however, he must beg leave to express his dissent from the opinions which had been expressed on the previous evening, for he regarded the scheme of the Chancellor of the Exchequer as a continuance of the commercial policy and principles of Sir Robert Peel, which had conferred inestimable benefits on the country, and it would therefore receive his warm and cordial support. The issue really narrowed itself into the question whether that policy was or was not to be continued, and he must say that the question was very fairly raised by the Resolution they were now considering. If its spirit were taken as exemplified in the very fair and moderate speech of the hon. Gentleman, it must appear directly opposed to the policy of Sir Robert Peel, and such as might fairly have been brought forward in 1842. But, with regard more especially to the French Treaty it was very desirable to know what were really the opinions of hon. Members opposite with respect to free trade. It was highly satisfactory to hear the right hon. Gentleman at the head of that party say on the previous evening that he approved of free trade, but there was a certain want of heartiness in the way he expressed himself that made him (Mr. Gower) doubt not the sincerity, but the strength of his convictions. He had also remarked that whenever throughout the debate any Protectionist's argument or sentiment was uttered, it had always been received with the loudest cheers by hon. Gentlemen opposite. Again, in the speech to which they had just listened, the House had been told by the speaker that he bowed to free trade; this was not what they wanted to know, but whether hon. Gentlemen opposite believed in those principles; because the assurance that they were ready to act contrary to their convictions could not be very reassuring to the country. Free-traders held that measures of that class were beneficial to the country which adopted them; and if the opponents of the Treaty were prepared to make this admission, there was no force whatever in the objection urged by them that this was a one-sided measure. Therefore, if hon. Gentlemen opposite were earnest in their adhesion to free trade a great deal of time might be saved and the country might proceed at once to carry out the stipulations which had been entered into. The Chancellor of the Exchequer had clearly explained that what we stipulated to do was beneficial to ourselves; there could not be, therefore, any question of indemnity. The hon. Gentleman opposite held that it was contrary to the principles of free trade to engage in any commercial treaty whatever. This was a doctrine which had been very much put forward, but he could not understand upon what ground. No doubt Free-traders had hitherto condemned treaties of commerce; but for what reason? Because they had invariably been passed on principles of restriction—they nearly always aimed at favouring the manufactures of one country at the expense of the other. But in order to judge of a commercial treaty it was necessary to look at its stipulations, and if they found nothing in them of a restrictive character, he did not see how the Treaty itself could be regarded as opposed to free trade. It was perfectly preposterous to suppose that a treaty between two countries, made in order to carry out a policy, could in itself be opposed to it. One of the principal stipulations in this Treaty is a total abolition of commercial restrictions; was that contrary to free trade? This abolition he advocated as a matter of justice. The community ought not to be taxed for the benefit of any particular class. Protective duties were an injustice to the consumer, and by retaining them England was rendered liable to the charge of insincerity in her advocacy of free-trade principles. No doubt there were great alarms in some districts as to the effects of the proposed measures; but no great commercial reforms could be undertaken without causing similar apprehensions. It was not for the permanent interest of any trade to have to rely on artificial prices. In bad times it was the protected trades that suffered most because their market was a limited one, and when the Home demand failed they had no other market to go to. They could not compete in the general markets of the world. When Mr. Huskisson proposed to reduce the protective duties, Mr. Williams, the then Member for Macclesfield, gave a most melancholy description of the distress of that manufacturing town; he said that one-third of the population were in a state of destitution, and begged the Government not to inflict such a blow on the place as the reduction of the duties would be. The appeal was not listened to, and the blow was inflicted. What since then had been the condition of Macclesfield? He believed no manufacturing town had been so prosperous. The great objection made to the reduction of wine duties was that it could not increase consumption. One of the reasons stated was the failure of the wine crop abroad. But he had been assured that the vintage of last year was a very good one; in the Spanish wine-growing districts they had not skins enough to contain the wine. It was stated that for other reasons they could not expect any great increase in the consumption of wine. But it was laid down by Mr. M'Culloch that in every instance in which and adequate reduction of duties on an overtaxed article had been made, the reduction had been followed by the cessation of smuggling and increased consumption. It is true that there had been reductions of duty that were not followed by increased consumption, as in 1829, when Mr. Huskisson reduced the duty on sugar three shillings per cwt. But it was because the reduction was not sufficient. In 1847, however, a liberal reduction of the duties on sugar was followed by an enormous increase in the revenue from that source. It was asserted that French wines would not find any great consumption in England on account of climate; but he doubted the statement, if it was placed within reach of the population. The quantity of claret imported into Holland was five times that imported into England; as England had ten times the population of Holland, the consumption of wine per head in the latter country must be fifty times our own. Yet Holland had a cold, damp climate, not unlike that of England, if climate affected the consumption. In Sweden, Denmark, and Hanover, and other countries in the north of Europe, though the disproportion was not so great, yet relatively there was more wine drunk than by the population of England. They were told that wine was a luxury, and that the working classes would be discontented if the duties were taken off it. He did not think so. Some years since an association was formed in the Potteries, a district which contained 100,000 inhabit- ants; the object of the association was the reduction of the duty on wine. The working men did not advocate the reduction, from a wish to drink wine themselves, but because they knew they never could expect a free trade with France as long as high duties were continued on her produce. The right hon. Member for Stroud (Mr. Horsman), had on a previous evening alluded to the probable duration of the supply of coal. He fixed it at 300 years, There was no authority for such a statement except in an article in the Edinburgh Review; and the calculation there applied only to one coal-bed. The best authorities gave from 1,200 to 2,000 years as the probable duration. He thought, therefore, they might defer the consideration of this subject for about 1,500 years. But then there was the military argument connected with it; this was supposed to be a very serious matter. They were told the Treaty would furnish France with cheap iron and coal; but at present the French Government paid no duties on these materials when imported for its own use. Again, in the event of war with France, we should be in the same position as if the Treaty had never been made. Besides, France had plenty of coal for marine purposes if she would only go to the trouble and expense of raising it. As to the question of war with any third Power, he knew of no Powers except Russia and America with whom, during the next ten years, there was any possibility of England being engaged in a maritime war. America had immense coal-fields of her own. Russia had some in the South. English coal, besides, could not be excluded from Russia unless its export was totally prohibited. Did hon. Gentlemen imagine that England would inflict such a blow on one of our most important and growing interests, and likewise indispose neutral Powers towards us at a moment when we should be most bound to husband our resources. If such a measure is contemplated, it was not unreasonable for the Emperor of the French to protect himself against an emergency which would so greatly disturb the manufactures of that country. Now one word with regard to the Emperor of the French. He had never been an admirer of the policy of the Emperor of the French, and it was not his intention now to say a word to flatter him. But he must express his belief that the Emperor had not been fairly treated by some hon. Members in the discussion upon this Treaty. For years they had been ad- vising the Emperor in that House to adopt free trade in France and to break through the commercial restrictions which were inflicting so much injury upon that country. The Emperor, at last with great moral courage, undertook to break through these restrictions, and what was the return he met with? Why, they cavilled at the mode in which he had done it. He should be delighted if there existed in France free institutions, a free press, the right of political assembly, and a Chamber of Deputies freely elected in which the matter might be publicly canvassed. But the Legislative Chamber was at present an exclusive body made up of old officials imbued with the traditions of protection, and if free trade depended upon their support, the interests and welfare of the whole country would he sacrificed to obsolete opinions. These difficulties ought to be weighed when the Emperor of the French took a course that he had always been assured in that House would confer inestimable benefits upon France. A petition had been presented in which the petitioners expressed a hope that the provisions of the Treaty would cause "perpetual peace between the two countries." He was not quite so hopeful, but he entertained no doubt that if France, imitating our successful example, left her industry unfettered; and if, abandoning false ideas of military glory, she devoted herself exclusively to the arts of peace, she would take a far juster view of what constitutes the real greatness and nobleness of a nation. If she did so, that House would incur a great responsibility if it rejected a measure fraught with such inestimable benefits.

LORD ROBERT MONTAGU

said, that if he desired notoriety, or if singularity were his object, two courses were open to him. He might either be the only one to disparage the ability and eloquence which the right hon. Gentleman the Chancellor of the Exchequer had exhibited the other night, or he might be the only one to praise the Budget which he had propounded. He should take neither course. The former was debarred to him because he entertained a great admiration for the right hon. Gentleman and his dazzling talents; and the latter course was precluded for reasons which he would presently mention. No one ever sought to find fault with that which was entirely bad. If a thing was utterly worthless it was at once cast aside. They only picked flaws in that which was essentially good. It might, therefore, well be that the system which the right hon. Gentleman had proposed was good in a commercial point of view. But there were other considerations which must be regarded. The hon. Gentleman who had just sat down had assumed that all who sat on the Opposition side of the House were necessarily Protectionists. That was not the case, for there were many Free-traders amongst them. These might, however, support the system usually upheld by Protectionists, but not upon Protectionist grounds. The treaty with France, for instance, could not be so well defended politically as it could from a commercial point of view; and while Protectionists might regard it as contrary to Protectionist principles, others might object on purely political grounds. It reminded him indeed of an old tale with which they were all well acquainted in their youth, of a man who desired to obtain an old but valuable lamp, and who went about crying "New lamps for old ones." The Emperor Napoleon had gone about declaring that the protection of British shipping system was old and effete, and said to the Government, "Give me this old lamp, and in exchange I will give you a French moderator, spick and span new, from the Imperial factory. So also the restraint on the export of coal is part of a musty-fusty system, and Customs' revenue likewise. These are all old lamps; but you shall supply the French dockyards with cool; you shall increase the French merchant shipping as a nurse to her navy; you shall encourage French merchandise by impoverishing your own; these are new lights, which you shall have in exchange." The Treaty assumes an exchange, but he (Lord R. Montagu) would ask, why there was any treaty at all? Were we not competent to repeal our Customs' duties ourselves? We surely did not need the signature or leave of an Emperor for that purpose. But if there were to be a treaty surely the conditions ought to be equally balanced. We ought to get as much as we gave, and the same freedom of commerce should be given to us that we conceded to them. The whole of this Treaty proceeded upon a totally different assumption. It would be seen in the third page of the Correspondence that for a slight reduction on the other side we were to make a clean sweep of articles subject to Customs' duties. If hon. Members compared what the Treaty gave the Emperor with what the Emperor gave this country, there was no approach to equality. On the side of France there was a transition from high to moderate duties—on the side of England a total remission. Now, if at any future time the Emperor should wish to make a further reduction, would he not ask for fresh favours from us, and then what should we have to give him? Look again at the third Article of the Treaty. The Emperor was to retain all the existing differential duties against English vessels entering French ports, but French vessels were to come here free of duty. He supposed that every hon. Member had that morning received a statement relative to the Island of Mauritius. The trade to that island was at present carried on principally by French vessels. In former times, however, English vessels used to have the preponderance of the carrying trade from that island. The same change would now take place with regard to France under this present treaty, as it would be cheaper to export English goods in French vessels; since otherwise the French vessels would have to return in ballast. Now, with regard to coal—another vexed question. It had been said that the French had as good coal as we. Then why, in heaven's name, did they not dig it? And what is the use of the 11th Article of the Treaty? By that article Her Majesty resigns the power she now possesses by law, of prohibiting the export of coal. But there was this difference between a law and the Treaty. The law might be repealed when Parliament should so determine; but under the Treaty it must he continued for ten years. Another anomaly in this part of the subject was this, that we were going to allow coal to go to any part of the world free of duty, with one exception, and that exception was our own metropolis. And what were the arguments that were advanced in favour of this treaty? They were told that it would cement friendship with the kingdom of France. How was that to be brought about? The noble Lord opposite (Lord J. Russell) had stated that the form of a treaty had been chosen because by the French law it could be forced on the Chambers without consulting their wishes. It was therefore to be forced on France against its wish. Was that likely to cement a friendship between the two countries? France was not a commercial nation like ourselves; it was not influenced by commercial considerations, but by pas- sion and traditions of glory; it was to a man Protectionist, and the people of that country would not thank us for a treaty which obliged them to open their ports to our goods. The House was told the other night that the noble Lord at the head of the Government intended to present a Resolution, so that the House might have an opportunity of expressing an opinion on the Treaty. He (Lord R. Montagu) did not know whether that was an afterthought or not; but this objection to such a course should be borne in mind that the Resolution would not go to "another place," and thus the other branch of the Legislature would not have an opportunity of expressing an opinion upon the Treaty. It appeared then from all this, that a Liberal Government assisted in forcing a treaty on the people of another nation. By binding the House of Commons by the Treaty for ten years, they deprived them of the privilege of altering their Customs' duties as they pleased: they deprived the other branch of the Legislature of the privilege of expressing their opinions on the Treaty, and took from the Queen the privilege of prohibiting the exportation of coal. It had been stated by the Chancellor of the Exchequer that the relief to the consumer by the reduction which he proposed would amount to £2,777,000, while the loss to the revenue would be only £2,100,000, being a net gain to the consumer, (who of course made up the deficiency of revenue), of £677,000, by the reduction of the duties on French imports. But who was the consumer? The whole nation is the consumer. Divide that sum among the whole nation, and each person would gain only a very small fraction of benefit. The soap duty had been repealed, and yet soap had not become cheaper nor the people whiter. The corn laws had been repealed, and yet the Chancellor of the Exchequer allowed that bread had not become cheaper. When the leather duty was repealed, pictures of a paradise of cheap boots and shoes were depicted; yet shoes cost just as much as ever; so also butter, cheese, meat, and bacon retained their prices. And, indeed, Sir R. Peel himself had stated that in the case of many articles which had been dealt with in the same way, the consumer was robbed while the revenue suffered. These were the arguments for the Treaty. But to advert to the more important question of the maintenance of the income tax, he might observe that no less an authority than the Chan- cellor of the Exchequer himself had, in 1853, pronounced that impost to be one which tended to encourage immorality among the community by reason of the system of self-assessment, and in other respects to be open to the gravest possible objections; and yet the right hon. Gentleman did not hesitate not only to continue but to increase, in time of peace, a tax which he had declared ought to be regarded as a great resource to be resorted to in time of war. He had said of it in 1853, that a Minister had only to "stretch out his hand and reach this weapon from the shelf." The right hon. Gentleman did so once to stir the flames of war, and now he used it to cement the bonds of peace: he has taken down the weapon, he will say, to beat it into a ploughshare and have done with it. It was all very well to say that the tax would only be a temporary expedient; it had gone on from year to year, since its first imposition for a period of three years. In short, its term was for one year, renewable for ever, as there appeared at the present moment as little chance of its being dispensed with as ever, particularly when it was taken into account that the Chancellor of the Exchequer had anticipated the malt and hop duties, that the payment of Exchequer bills had been postponed, and that there would be next year "no little account" from Spain on which to rely. The right hon. Member for Stroud (Mr. Horsman) had said the previous evening, no doubt in the heat of debate, that the Chancellor of the Exchequer, with such a deficit staring him in the face, and a larger deficit looming in the future, was like a man who had spent all his money and then went out into the highway and robbed the first comer. He thought the right hon. Gentleman should rather have said that the Chancellor of the Exchequer was like the scion of some noble house, who at the last hour of the night tried to retrieve, by a desperate throw for "double or quits," the ill-fortune which had clung to him all day. He must say he thought we ought not to receive this Treaty with an increased income tax and reductions in a failing revenue, or allow our hands to be tied, and give what had always been our greatest strength into the hands of a man of dark designs, of simulated friendships, and of sudden animosities. Shall we let him store his dockyards, and nurse a powerful navy, and by a stroke raise up strong genii to overturn our unsuspecting land. Under these circumstances he should with confidence ask the House whether they were prepared to sanction the proposals which the right hon. Gentleman had submitted to their notice.

MR. BAXTER

said, that representing, as he did, a great commercial constituency, likely to be affected not only by the Treaty with France, but also by all the financial proposals of the Chancellor of the Exchequer, he was most anxious to address a few words to the House. He must record his conviction that the Budget of the right hon. Gentleman was the best and boldest which had been submitted to Parliament since the days of Sir R. Peel. He might also observe that the speech in which it had been introduced had not, for simple eloquence and lucid arrangement, been excelled in any Legislative Assembly in the world. The manner in which it had been brought forward, however, was of minor importance as compared with the great principles which it involved. The more the reasoning of the right hon. Gentleman was considered, the more unanswerable it appeared. He quite concurred with the right hon. Gentleman in the opinion that one of the greatest benefits which could be conferred upon the labouring population of England was to extend the trade and commerce of the country so as to render that labour, which was the poor man's capital, more valuable. Compared with this the remission of taxes was worthless. And how, let him ask, did our trade with France at the present moment stand? Why, it might be said with justice that with that vast country, containing as it did 30,000,000 or 40,000,000 of inhabitants, we carried on scarcely any trade at all. If, however, the remission of duties which was proposed in the Budget were carried into effect, our commerce with France would increase, although perhaps in some cases—as, for instance, in the case of flax-yarn, in which his constituents were interested—the advantages which the Treaty was calculated to confer might not be quite immediate. But, although that might be true, the Budget was no less entitled to the support of the House, and he felt assured that when the treaty which Louis Philippe had concluded with Belgium should have expired, and when the French should have come to the knowledge of the real substantial benefits certain to flow from a free-trade policy, they would not only be encouraged, but most anxious to take further steps in the same direction, and thus a great benefit to all classes would be the result. Was it not likely, he would ask, that Austria, Spain, Russia, and Italy—especially if the were free Italy, would, seeing the prosperity which the adoption of such a policy had brought France, revise their commercial codes, and put in a claim to the enjoyment of some portion of that prosperity? He was surprised to hear hon. Gentlemen connected with commerce tell the House that in this Treaty we ought to expect France to go as far in the policy of free trade as we went ourselves. Had they forgotten that it was only fourteen years since the corn laws were repealed, and we ourselves established that free-trade system which was now allowed by all parties to be a happy system? Entertaining the opinions he did, he could not help looking upon the proposal of the Government as the inauguration of a free-trade system in hitherto monopolist Europe, and if he were right in that view, no man could exaggerate the extent to which the commerce of Great Britain would, as a consequence, be increased. That proposal would, moreover, as the Chancellor of the Exchequer had stated, tend to bring within the reach of the poor man many articles which had hitherto been regarded as the luxuries of the rich. The hon. Member for Essex (Mr. Du Cane) was mistaken in supposing that the supply of wine on the Continent was diminishing. It was well known that the vintage of 1859 in Spain was so abundant that the people were compelled to have recourse to the most extraordinary expedients to treasure up their wine. The hon. Member for Essex (Mr. Du Cane) used an argument which amounted to this—that under the system proposed by the Government, wine would become so bad that people could not drink it, and so dear that we could not obtain it; and yet that it would drive out of consumption the whole beer of England, and thereby seriously affect the revenue. The hon. Member for Essex also denounced the repeal of the paper duty, and said the Government had resolved to take off this tax in consequence of a vague and unmeaning Resolution of that House. But why did the hon. Gentleman not oppose that Resolution when it was proposed? The truth was that the paper duty was condemned on all hands, even by the officers of the Inland Revenue who had to collect it, and by a unanimous Resolution of that House, and he was surprised in these circumstances to hear its repeal opposed by the hon. Gentleman. The right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli) had once spoken of the National Debt as a mere fleabite. Without going so far as that, he (Mr. Baxter) would say that the amount of duties now proposed to be taken off was but a fleabite in comparison with the advantages we should derive from the reduction. We should have a great increase in our trade and a great decrease in our Custom-house expenditure; and he believed there was a chance of creating a taste among the people of England for the light and pure wines of the Continent. And all the advantages that were to be obtained from the changes now proposed under the Treaty we were to have for an additional penny in the pound on the income tax. He would advert in a very few words to the political reasons in favour of the Treaty. Why was it that Great Britain and the United States of America, who were always quarrelling in words, and perpetually engaged in squabbles in all parts of the world, never came to blows? Every sensible man on both sides of the Atlantic knew that war was impossible, simply on account of the enormous trade carried on between them, which in itself was sufficient to insure a firm and lasting peace. But with this great and neighbouring country, France, we had no such influences at work in the cause of peace. Our trade with France was a mere bagatelle compared with what it ought to be; and it was evident that the extension of that trade would eventually lead to a better feeling between the two countries, no matter who ruled in Paris, and give relief to the taxpayer from the enormous pressure laid upon him to sustain our vast naval and military armaments. He was anxious to know whether the opinion of the hon. Member for Essex that our expenditure could not be less in future than £70,000,000 per annum was indorsed by the leader of the party to which he belonged. He (Mr. Baxter) was sanguine enough to look forward to a considerable reduction of expenditure, and unless right hon. Gentlemen on the Treasury bench were prepared to lake that manly course they might look forward to changing places with hon. Gentlemen opposite. The noble Lord who spoke last repeated a statement that he had often heard of late, that the Treaty was contrary to the principles of free trade. His answer to that was that on our part it was a treaty only in name. We reduced our duties not to France only hut to the whole world; and it was well known that the French Emperor could not have brought about the change he desired in any other way than by a treaty. They had heard many commonplaces about Richard Cobden having deserted the principles of free trade in negotiating this Treaty; but he maintained that if the hon. Member for Rochdale succeeded in this great attempt to draw the two countries more closely together and in establishing a more intimate commercial relationship between them, he would accomplish a task as great and beneficial as that which he accomplished when he brought about the repeal of the duty on corn. The Chancellor of the Exchequer would, no doubt, see it would be necessary to amend his Budget in some particulars; but, looking at it as a whole, he held that if the House, from mere party feeling, or from petty jealousy of France, would not sanction the measure, it would not only do a most unpatriotic deed, but a deed that they would repent of in all time coming.

MR. LIDDELL

said, that it was with considerable pain he felt obliged to adopt a course on the present occasion different from that pursued by the party to which he belonged. But he objected to the Motion made by the hon. Member for North Essex. The advantages offered by the Treaty were not to be measured by any arithmetical calculation. It had been observed that the Treaty might be commercially right, but that it was politically wrong. Now, he had a strong feeling that it was right in both aspects, and he therefore intended to give it in the main his support. He opposed the Motion because abstract resolutions in matters of finance were always objectionable. In the abstract, nothing could be more odious than a proposition to increase the income tax; but finances depended upon the circumstances of the time, and the exigencies of the State. Now, the circumstances of the time were of a grave and peculiar nature. The Emperor of the French had recalled to his mind the celebrated words he uttered a few years ago, "L' Empire c' est la paix." They created great surprise at the time, and his remembrance of them now no doubt produced an equal sensation, because no one could deny that his acts had in some degree belied his professions. But the Emperor of the French saw that he wanted many of the most valuable means for the cultivation of the arts of peace, and he looked for the supply of them to a neighbouring country. The Treaty was, in fact, a matter of necessity to France. And viewing it in that light, he was prepared to consider how far its adoption would conduce to British interests, and either alter or amend it in that sense. No doubt the articles we were going to obtain from France were articles of luxury which for many years had been mainly consumed by the rich classes in this country, and no one had complained of their price. But what was the case with France. She wanted the raw materials for carrying on her manufactures. The condition of the two countries was very different. We were at the top of the tree, so to speak, of commercial advancement. France was only beginning to feel her way—emerging from all the darkness of prohibition and restriction. The advantages of the Treaty to France would be immediate; the advantages we would derive might be more protracted, but they would be no less sure. The question was whether they were worth the price we should have to pay for them. He believed in his heart that they would be. Though we were only separated from our neighbours in France by a narrow channel, our trade with that country was infinitesimally small. Last year, as he was assured, it only amounted to some £600,000. That was a state of things so remarkable that he could hardly credit it. If we were on the eve of obtaining with our great and powerful neighbour an extension of trade such as might fairly be expected to follow the adoption of this Treaty, why should we lose the opportunity by sweeping away the whole proposition of the Chancellor of the Exchequer, and refusing to enter on the discussion of the Articles of this Treaty? Embracing the opportunity, he felt perfectly convinced no man living could estimate the amount of extension to which it would lead. With regard to the existing exigencies of the State, he would say that the great blot of the financial scheme of the Chancellor of the Exchequer was that while they were making sacrifices of revenue to France for the sake of obtaining what he considered inestimable advantages, it called on Parliament at the same time to vote unprecedented Supplies in a time of peace. It was that double expense of which the party which sat opposite complained; but if he wanted any proof of its necessity, he found it in the fact that it had been recommended by a Government remarkable for its ability and administrative power, and composed largely of the disciples of the late Sir R. Peel, the greatest of modern economists. He believed that our large military ex- penditure must continue for some time to come, and as long as France remained in its present condition. So long as the Government directed their main energies to the maintenance of a single alliance with a great military power like France, however immense the advantages that alliance might offer, they could not afford to materially diminish their military expenditure. Time might come when this single tie might be broke, and when we should find some of our former friends arrayed against us. But there were other reasons for this great expenditure no less urgent; our army and navy were now undergoing a complete metamorphosis, and this of course involved a large outlay, especially when all the costly applications of science were in process of introduction to every branch of the naval and military services. He was surprised last night to hear the leader of the Conservative party rather step out of his way to pass an encomium upon the institutions of France. He (Mr. Liddell) did not share in his praise, because he did not feel the same respect for them which the right hon. Gentleman appeared to do. The remarkable man who now occupied the throne of France stood upon the threshold which separated despotism and democracy. He stood there alone, unassisted and unsupported by any one of those constitutional props upon which other rulers or Governments were wont to rely in times of pressure and difficulty. If that position depended for its security upon individual courage and individual sagacity it would be safe, but that was not so he ruled over an unstable, an impulsive, but a noble people. They raised him to the throne and he must obey their voice, and if Englishmen mistrusted —he would not say the Emperor of the French himself, because he believed he was firm in his desire to maintain an alliance with this country, but rather the Government of France—it was owing to the circumstances under which that Government was raised to power. He saw every reason why this Treaty should be confirmed by the House. By the extension of our trade with France we should be establishing the most powerful tie between the two countries—namely, that of self-interest. If the alliance between the two countries were, as the right hon. Member for Stroud said, a hollow alliance, would the rejection of that Treaty tend to strengthen it? And he, for one, was not prepared to undertake the grave responsibility of such rejection. Believing then that the interests of this country required a larger extension of our trade with France, and believing that that extension would be the best security that could be given for the peace and prosperity of the two countries, he was prepared to make the great sacrifice that was proposed: and on commercial, as well as political grounds, to support in the main the Budget of the right hon. Gentleman, reserving the full right of supporting such Amendments or alterations as should appear necessary in its future stages.

MR. DODSON

said, he thought the Chancellor of the Exchequer had been hardly treated by some of the hon. and right hon. Gentlemen opposite. The proposed increase in the income tax was not in consequence of the remission of duties, but in consequence of the great armaments that were taking place throughout the kingdom. He differed too from the hon. Gentleman who had just spoken as to the probable permanence of the present great expenditure for the army and navy. He hoped that the state of alarm which rendered it necessary would subside, and that we should not always live in a transition period as regarded the mode of warfare. Fault was found with the income tax because it was unpopular; but, paradoxical as it might sound, its very unpopularity formed, in his eyes, its recommendation. It would probably engender greater watchfulness over the expenditure and thereby conduce to public economy. There never was a time when Parliament was more ready to vote away large sums of money, or when the country looked on with more satisfaction, because it felt that this large expenditure was necessary to put the country in a state of defence. It was said that the Treaty was commercially right, but politically wrong. He rather felt disposed to reverse that dictum and say that it was commercially wrong but politically right, because it seemed to him to be a falling-off from the system which had been long inaugurated of abolishing or imposing duties solely with reference to our own interests and without regard to the convenience of other States. The Chancellor of the Exchequer said the Treaty did not involve any entangling engagement on the part of this country; but several of its terms would considerably tie up our hands. Nor could he help observing that it was possible we might be disappointed in our anticipations of its effect upon some of the articles of commerce referred to in it. It was not impossible that the reduction of the wine duties might neither increase the consumption nor lower the price. Our manufactures might not be admitted to the French markets by the 30 per cent ad valorem duty which had excluded our linen cloths in 1842; while the Article binding us not to prohibit the exportation of coal was one of very questionable policy, and one upon the construction of which the highest legal authorities in the House differed. He thought the Chancellor of the Exchequer had made a bold estimate in calculating that the proposed reduction of the wine duties to 3s. per gallon would lead to an increase of 35 per cent in the consumption. Some years ago the right hon. Gentleman himself, in opposing a Motion of Mr. Oliveira, had contended that a reduction of the duty to 1s. per gallon was not likely to produce any great effect upon consumption. The reduction of the wine duties in 1787 had the effect of a large increase in the consumption: but there were additions made to the duties in 1795, 1803, and 1805, none of which materially affected the consumption, though they brought an increased revenue to the Exchequer. In 1825 the wine duties were reduced nearly 50 per cent, and in 1831 the duties on all kinds of wine were equalized, and the effect was to give a considerable stimulus to consumption, but not by any means in proportion to the increase of population. The truth was that social habits had a greater effect on the consumption of wine, one way or the other, than any amount of duty whatever; and, judging of the future from the past, he thought the Chancellor of the Exchequer had been exceedingly sanguine in the estimate he had taken of the probable increase of consumption from the proposed reduction in the duties. It was important to bear in mind that the wine duties did not stand alone, but formed part of a system of taxation levied on all fermented beverages. At present there was an equilibrium between the duties levied on wine and those levied on beer. Take, for instance, a barrel of porter. That was brewed from two bushels of malt and three or four pounds of hops. It was worth from 26s. to 30s.; it paid malt and hop duties to the extent of 6s., or from one fourth to one-fifth of its value. The present wine duties were equal to 6s. per gallon oils, per bottle, which on a bottle of port or sherry of the kind ordinarily consumed in this country, costing from 4s. to 5s. a bottle, was also about one-fourth or one-filth of the value. It would therefore be felt to be a gross injustice if they reduced by four or five-sixths the duty levied on wine and left the present taxation on that drink, brewed from malt and hops, which, if not a necessary of life, was almost one to the working man in a climate like ours. Moreover, through the operation of the malt and hop duties, when the wine duties were reduced to the full extent proposed by the right hon. Gentlemen, the foreign winegrower would be enjoying a protection in competition with the English brewer and farmer. Hence the reduction of the wine duties seemed to him necessarily to involve a reduction before long of the duties upon beer. He could not look upon the Treaty as consistent with that free-trade policy which this country had hitherto pursued. But then they ought not to be bound by any abstract principles of political economy. If the Treaty would be the means of increasing the commerce between the two countries, and of knitting them closer together in bonds of interest and of amity, it would not, he thought, be too great a price to pay for it, to sacrifice some political consistency and some revenue; and believing that it would have the effect of promoting and fostering the connection with France, while he objected to such commercial engagements on general principles, and while he objected to some particular provisions, he was still ready, on the whole, to give his assent to it. Looking at the Budget as a whole, he thought it not more remarkable for boldness than for foresight, and hoped it would lay the foundations of future prosperity and wealth which would repay this country for any immediate sacrifice, and enable it to bear with case even a greater amount of taxation than it sustained now.

MR. DAWSON

—It has been so often laid down as an axiom in this, and last night's debate, that it is impossible to consider the Budget propositions apart from the Commercial Treaty with France, on which the whole scheme is founded, that I must necessarily examine the principles of taxation and remission of duties which do appear to me to apply to the general interests of Ireland. If I am to judge from the expression of public opinion, as elicited at large and influential meetings, by petitions, and through the ordinary channels of the Press, the people of Ireland do not appear satisfied with the financial expectations of this year—a year which the right hon. Gentleman the Chancellor of the Exchequer has truly described as one likely to stamp, and mark out for the future, the financial character of this nation. Perhaps the best excuse for the fiscal system, as recommended by the right hon. Gentleman is, that these oppressive taxes and duties, which he proposes to impose upon the people of this country for one year, are limited to one year's duration. But how different was the expectation raised by the right hon. Gentleman in 1853! and how impossible is it for this House and the country to forget, that, though originally proposed for three years only, the income tax has now become one of the fixed institutions of the land; and that this 'neat and intelligible tax,' to use the words of the Chancellor of the Exchequer, will be made probably to bridge over all future financial difficulties: for, whether maintained at the proposed crushing rate, or increased, as I verily do believe it will be in future Budgets, though in times of peace, we shall have to make up our minds to this mode of direct taxation in its most vexatious and inquisitorial form. As a salve against this evil, now declared to be a necessary one, we are favoured by a Commercial Treaty with the Emperor of the French, the great principles of which are, that he will accept our iron and coal, the very indispensable commodities for all his aggressive and defensive preparations, and that, in return, we shall be enabled to import, at a lower rate of duty, though at a remote time, French wines, gold and silver plate, or jewels, and other costly luxuries for the richer classes. But as all these matters have been so fully and ably discussed by hon. Members on this side of the House, I shall confine myself to those considerations which affect the peculiar interests of Ireland. If this Treaty is ratified by this House in its entirety, and that the Resolutions for remission of duties shall equally receive its sanction, there must be a considerable loss felt in Ireland by the admission, free of duty, of foreign eggs and butter. Of the first, Ireland exports to England, as her best market, more than 50,000,000 annually; and of butter an immense quantity is produced beyond the consumption in Ireland. But in no way do I, as an advocate of free trade in its most extended sense, object to a repeal of these duties. I am only desirous that, in all our commercial dealings with France, to whom so much is given, we may be met with a corresponding reciprocity. I will take, for instance, the case of linen, the staple manufacture of the most commercial province in Ireland. The duty of 30 per cent ad valorem, as proposed by the French Government, or let us take it at 25 per cent being the maximum amount of import duty after the 1st day of October, 1864, must act as directly prohibitory on the great bulk of linen yarns and linen; and, even if the duty were fixed at 10 per cent, with the unlimited supply now furnished by us of machinery and coal, the French manufacturers will still hold preponderating advantages over all British and Irish competition. In 1840, the French Government proposed to this country to admit linen goods at a duty of 10 per cent, or thereabouts, on the condition that England would permit the free exportation of machinery for the manufacture of yarns; and I need scarcely remind the House that those restrictions on machinery have now been for some years abandoned. The French nation are the greatest consumers of linen in the world; the article, with them, is not one of luxury, but even of positive necessity. The blouse is entirely the adopted costume of the French peasant and the working artisan in all towns. There is not now more than 15 per cent of the trade we carried on with France in linens before the change of duty. At that time, 1840, a business of more than a million sterling was maintained between the two countries; since then there has been a gradual reduction, till now it exceeds but little the sum of £150,000 per annum. By the advantages given by us to France, in the free exportation to that country, firstly of machinery, and now by coal, we shall have afforded facilities to the French people to compete with us, and that too successfully, in all the other markets in the world. A very considerable excitement exists in the North of Ireland upon this subject, and also an apprehension, that without the maximum rate of duty is fixed as low as 10 per cent, that no revival of trade will take place with France, and that no benefit to our manufacturers and merchants will be from this Treaty obtained. It is not my present purpose to enter upon other very glaring inequalities and injustice to interests which will be entailed by the adoption of the Treaty of Commerce in connection with the Budget propositions. Those interests are represented by able and distinguished Members of this House, and will be defended with all the advantages of Parliamentary experience. I shall only say, that in the votes I may be called to give, I shall act with a sincere desire to unfetter commerce and extend our trade; but also upon the principle that the people of these kingdoms shall not be subjected to an immoderate and excessive taxation, without the most positive proof that the advantages to both countries shall be rendered equal.

MR. FRANK CROSSLEY

had listened with considerable attention to the course of the debate, and he had found some disparity in the views entertained on the other side of the House. For example, the hon. Gentleman the member for North Essex (Mr. Du Cane) had laid considerable stress upon the fact that the working people of this country were going to have dear tea and dear sugar; and the noble Lord the member for Huntingdon had stated that wine would be no cheaper, and that paper would be no cheaper by the abolition of the duty. The noble Lord said that some years ago the duty upon leather was taken off, yet boots and shoes were no cheaper; that the duty on soap had also been taken off, yet soap was no cheaper. Now the noble Lord ought to bear in mind the prices at which those articles would have been had the demand then been what it now was. As to soap, he (Mr. Crossley) could speak from experience, that it was decidedly cheaper; but when the consumption went on increasing, from the article being in demand, it was thus possible that it might be as dear as it was before the reduction. The position of the Chancellor of the Exchequer was one of great difficulty. We had the largest deficit in the revenue in his recollection, and it had occurred under most remarkable circumstances. There were three circumstances, all of which would have led us to suppose that instead of a deficit we might have had a surplus. We had had peace—he meant as far as we were concerned—in Europe; and he would almost say we had had peace with all the world. As to the prosperity of the country, he did not recollect any time in which it had been so great as during the past year. He did not mean with regard to any one branch of industry. Taking away the manufacture of cotton, it might be that many other branches of industry had seen more prosperous times. But, taking them altogether, he did not think there had ever been a time in which the country had been more prosperous. He was only stating a fact when he said there was not a town or village of any importance in any manufacturing district in Lancashire or Yorkshire that had not machinery standing, not from want of orders, but from want of people to attend to it. We had had a most extraordinary falling in of no less a charge upon the public revenue than £2,136,000 in terminable annuities; and he had been rather disappointed to find that the Chancellor of the Exchequer had not given hope that, at same future time, we might look for similar golden days when other terminable annuities would fall in. He quite agreed with the right hon. Gentleman that we should not live to see the day; but he (Mr. Crossley) had on former occasions stated how the Chancellor of the Exchequer might set about a course which would ensure the falling in of a considerable amount of terminable annuities. He (Mr. Crossley) had had a table prepared by a very experienced actuary, from which he found that if £500,000 per annum were set aside out of the revenue, with a view to the reduction of the national debt, by creating terminable annuities at sixty years, assuming Three per Cent Consols to be at £95, those sixty years' terminable annuities would be worth £79 1s. 9d., being a difference of £15 18s. 3d., That £500,000 per annum would create £3,412,183, and that would be the amount falling in every year, commencing sixty years from the present time. But suppose the Chancellor of the Exchequer wished to fix the time further, and he devoted £500,000 per annum to annuities terminable at 100 years' date, taking bonds at £95, a terminable annuity would be worth £90 3s. 3d. or a difference of £4 16s. 9d., so that £500,000 per annum would be creating a falling in at the expiration of the term to the amount of £10,335,917 per annum. He again threw out these suggestions for the use of the Chancellor of the Exchequer. The national debt was now so large that everything ought to be done to diminish it; and if we now put some such plan forward, as our forefathers had done with the terminable annuities just expired, he thought we should be taking a very wise course. He had thus stated three things, which ought to have produced a surplus, namely, peace, prosperity, and the falling in of more than £2,000,000 annuities, and he may well ask how it was they had got into all this difficulty? For this he did not mean to cast the blame upon any individual. He believed the country at large, and every newspaper in the kingdom, had been get ting up a most absurd cry, namely, that the Emperor of the French would some day be in London for the purpose of sacking it. He had never held that opinion. He looked upon the Emperor of the French, whatever else he might be, as a man of very great ability. He had had the advantage of having lived in England; he had seen something of society in this country; and he knew too well what Englishmen were made of to attempt any such foolish experiment. He was quite as likely to go some fine morning into New York harbour as he was to arrive in the Thames. It was not, however, the newspapers only that were responsible for the feelings of the country. Governments on both sides had lent considerable influence to the cry, by bringing forward large Estimates. He recollected very well that when Lord Derby's Government came into office they took very great credit for reducing the Estimates; but very soon afterwards they actually increased them, and found fault with their predecessors for not having done their duty in spending enough in keeping up armaments by sea and land. This had been going on until we had now raised the expense of our armaments to nearly £30,000,000perannum. ["Hear!"] Hon. Gentlemen did not seem to like the income tax. They seemed to believe the Chancellor of the Exchequer in 1853, when he said we should have no income tax in 1860; but they appeared to forget, or to take no notice of the money that had been spent. When he saw the Estimates increasing as they had, he saw it was impossible they could do without an income tax, or some other direct tax that would produce a large sum of money. He agreed with the Chancellor of the Exchequer, if we had a great work to do, and a large sum to raise, we must free industry from its shackles, and therefore be approved of the course which the Government had taken in negotiating the Treaty with France. It would have the effect of creating more employment for the people of this country, and of giving them better wages for that employment. It would revive our trade with France, which, as the House had been told, had gone down to almost nothing. If the duties on British manufactured goods were reduced, as they were in many cases, from a prohibitory rate of something like sixty per cent to thirty and to twenty-five per cent, by-and-by, the result must be an immense influence upon the demand for them. Until lately the manufactured goods of this country paid thirty per cent on entering the United States. Those rates had recently been reduced to twenty-four per cent, at which they still remained. He therefore saw no reason why we should not begin to do proportionately as large a trade with France as we were doing with the United States. The two countries were nearly situated; the climate of each was admirably adapted to the people of the other, and he believed it was the intention of Providence that one country should receive the products of the other in return for its own, so that the people might become as citizens of the same city, and in that way they might be saved the expense of armaments. As soon as we could increase our trade with France, the two Governments might attempt to go to war if they liked, but they would in so doing soon be ousted. Governments, however, would remain at peace; Emperors would not have it in their power to go to war, because a large and profitable trade would be carrying on between the two countries. With regard to the licensing system he believed the Chancellor of the Exchequer would find it necessary to make considerable alteration in his propositions. It had been found that the facilities with which beer houses could obtain licenses had produced a great deal of harm. There were thousands of these places of temptation to working men to spend money but scarcely any to save it; the fact being that there were at this present moment not less than thirteen counties in England without a single savings bank in any one of them. He recommended Mr. Sikes' plan of savings banks to the consideration of the Government, by which every money-order office connected with the Post Office would practically become a savings bank issuing £4 notes bearing interest at 2½ per cent, and he added that the reduction of the duty on French wines would be of service by introducing alight, wholesome beverage. But whoever sold wine or beer ought to be under the supervision of the magistracy or some other stringent authority. He must say, with regard to the Treaty, and with regard to the Budget, that they had given the greatest satisfaction to his constituents. He had received a great number of letters, and the writers were most anxious that this Budget should pass with alterations in minor details; and it was only in minor details that alterations were required. By this Treaty they would throw open to this country markets which they had not had before, and supply the means of reducing their armaments.

MR. HENNESSY

said, he would not advert to the great political questions connected with the Budget, but would confine himself to a consideration of its effects upon Ireland. As far as Irish interests were concerned, he believed the Budget to be the very worst ever laid before the Imperial Parliament. When the right hon. Gentleman proposed an income tax of 10d. in the pound, he said he was about to remit certain duties, and the consumer would gain as much by the remission as he would be called on to pay in income tax. That might be true as regarded the British consumer, but not in respect of the Irish consumer. On the article of currants alone the British consumer was relieved to the amount of £300,000, while the relief to the Irish consumer was only £720. Then, again, with regard to butter the British consumer would be benefited to the extent of £94,795; the Irish, who imported no butter, would not be relieved one penny. And the same might be said with regard to eggs, upon which the British consumers would gain £23,846, and the Irish consumers not a farthing. There were other articles, with respect to which the proposed reductions of duty would, be said, operate in a similar way. Thus, there would be a gain on corks of £8,000 to the British consumer, to the Irish nothing; on firewood, to the British consumer £589, to the Irish nothing. Taking the whole of the principal articles of consumption together, the total relief to the British consumer would be £580,000, and to the Irish consumer only £800. In like manner, as regarded the income tax, it had been the boast of those who defended that tax that the classes who had the highest incomes in England paid more income tax than the classes below them; in Ireland the case was the very reverse, the three lowest classes of incomes actually paying 40 per cent more than those above them. This fact indicated that the income tax pressed with an arbitrary and unequal severity, and that though it was equal in theory, it was not so in reality. With regard to the tea duties, he had received important communications from large tea-dealers in Ireland, stating that the reduction of the tea duty to 1s. a pound would have occasioned an immediate increase of consumption to the extent of 25 per cent, and a gradual increase within two years to the extent of 75 per cent. Thus, by the reduction of the tea duty, combined with the consequent increase of consumption, the right hon. Gentleman would have increased the revenue by £350,000 per annum from Ireland alone. When the tea duties were reduced in Ireland the population was greater than it is at present. In the year 1840 the population of Ireland was over eight millions. The population now is about seven millions. But in 1840 Ireland consumed four million pounds of tea; now they consume ten millions of pounds. They now consume a larger quantity because the duty has been reduced, although the population had diminished. He thought, therefore, he was justified in saying that if the tea duty were still further reduced there would be a still further increase of the revenue. Last year the duty paid by Great Britain amounted to £4,500,000; the duty paid in Ireland on tea was £700,000; that is to say, they paid in Ireland only one-sixth of the duty which was paid in England. He thought, therefore, that if the duty were still further reduced more would be paid into the Exchequer than by the taxes which the Government now took from Ireland. He mentioned only these few facts, to show that he was perfectly justified in voting for the Amendment.

MR. GRANT DUFF

said, that he would approach the consideration of this much-canvassed Treaty from its weakest side, the side which had been alluded to by the noble Lord who had spoken a few minutes before from the opposite side of the House (Lord B. Montagu). It was said, and with some plausibility, that we, the free Parliament of England, were conspiring with the ruler of France to defraud the Parliament of France of its right to discuss a great change in the commercial policy of that country. But this objection disappeared when the state of the case was understood. There was no real Parliament in France. The body called the Corps Legislatif had nothing in common with that illustrious assembly which once gathered within the same walls, and was swayed by the eloquence of M. Thiers and M. Guizot, M. Berryer, and M. Lamartine. A great deal had been said on the other side of the House as to the election of the Corps Legislatif by universal suffrage, but surely every one was aware that, with rare exceptions, the members of that body were, to all intents and purposes, nominated by the Government. Why then should it be said that we were not at liberty to treat with the Emperor directly, but that it was our duty to force him, by a pedantic adherence to political purism, to effect the desired change in the commercial system of France by means of an assembly of his creatures? It seemed to him that the only question which we had a right to ask was, whether or not the Treaty was good in itself, and he thought that it had been conclusively shown that it was good. There was one point, however, which had not been taken up, on which he wished to say a few words. The conclusion of the Treaty at this particular juncture would be of immense advantage to Europe. In at least two great countries, a struggle was going on between the money-making tendency and the warlike tendency. In Germany, this struggle was most fiercely waged, and in France it was not less remarkable. No one could doubt about the strength of the warlike tendency, if he recalled the extreme bitterness of the tone which the French papers adopted towards England a few months ago; and as to the money-making tendency, it required but little acquaintance with the social state of France to know that a great change had taken place during the last ten years. Till lately, the small traders in the towns and the rural population hoarded their savings in five-franc pieces, until they had enough to buy a little patch of land. Now, however, the small traders everywhere, and the peasantry in many districts, bought Government securities and shares in industrial undertakings, most of which were quite sure to be depreciated by war. That surely was a great gain to the cause of peace. By upholding the Treaty, we should encourage this tendency. It might be said that this was merely casting out Moloch by Mammon. Well, be it so; if the contest was to be between the two, by all means let us support the milder spirit. But it was said that we might have obtained equal advantages, without fettering ourselves by a treaty. Those who said so, altogether miscalculated the strength of the Protectionists and Prohibitionists in France. They had not witnessed, as he had done, the outburst of indignation with which the announcement of the Treaty had been met by many circles in Paris. Why, it was only a month or two ago that in the place which one would have fancied to have been the very citadel of liberal opinions on these subjects, in the Academie des Sciences Morales et Politiques, a most lively discussion had taken place on some of the elementary doctrines of political economy, in which, if M. de Lemergne and others had supported the right side, M. Cousin and M. Troplong—great names— had been opposed to them. Passing from the Treaty to the closely allied subject of the wine duties, he would only allude to one obvious consideration. It was said that the British palate would never reconcile itself to French wines. He had no doubt that other speakers would refute this erroneous opinion by an appeal to the novelists of last century, and above all to the English dramatists of the century before; but he would refer merely to the case of Scotland. It was notorious that, up to a comparatively recent period, French wines had been largely consumed in Scotland, and hon. Members would remember the epigram,— Firm and erect the Caledonian stood, Prime was his mutton, and his claret good— 'Let him drink port,' the English statesman cried; He drank the poison, and his spirit died. The fashion of drinking claret had not been merely a passing one. Sir Robert Gordon, writing about two hundred years since, mentions that having passed rapidly from Normandy to Morayshire, he had found French wines cheaper in the North, than he had left them beyond the Channel, With regard to the Paper Duty there seemed to be a general consent as to the propriety of its early abolition, but some hon. Gentlemen on the other side had objected to its immediate abolition. He, however, did not wish it to be kept up an hour longer. There were pressing reasons for its disappearance. First, there was the rapidly increasing expense of our system of education. It was clear that this could not go on indefinitely. We must find some other plan. Now, school education up to a point is very important, but, after all, the most important education is that which a man gives himself. Teach every one to write and read, and let the price of the materials, so to speak, of reading and writing be as cheap as possible. What folly to have the school-door open with one hand, and keep out books with the other. After all, the education question was the great question. They were going to reduce the franchise, and they were going to do well, but only on condition that they infused now energy into education. With education the franchise was a blessing— without it an extension of the franchise would be a curse. It was but the other day that a French Republican leader had said to him, "Let your countrymen be warned by us. Let them not reduce the franchise too far." ["Hear, hear! from the Opposition benches.] Ah! hon. Members opposite might cheer, but he would beg to remind them, and especially the right hon. Member for the University of Dublin, who honoured him by his applause, that in France only one man in ten could lead. With regard to the simplification of the tariff, he thought it an enormous benefit, not only because many things would be admitted duty free which were useful and desirable, the tax on which did very little for the revenue; but, because when things were once made plentiful, all sorts of new uses were found for them, and even trades sprang up in the most unexpected ways. Soon, too, the obnoxious search at the Custom-house would be done away with, and this, though it seemed but a little tiling, would be a great boon to the most valuable part of our population. Did not every one, even the least thoughtful summer tourist, who returned to our shores, bring with him more or less of that knowledge which is power, not only to individuals but to nations? Ere long, he hoped that we should be able to say to other nations, "We, Englishmen, have no passports, we have no detention at the Custom-house, and very soon we hope to have no quarantine."

SIR STAFFORD NORTHCOTE

said, he was anxious to express his sense of the great merits of the scheme proposed by the Chancellor of the Exchequer, which was then under their consideration. The hon. Member for West Norfolk (Mr. Bentinck) had remarked, after his right hon. Friend had concluded his statement the other evening, that he had never before known a case in which so much tinsel had been wrapped up in such glowing colours. That, however, was not his (Sir S. Northcote's) opinion. On the contrary, he readily admitted that there was a good deal of sterling gold in the proposals that had been made by his right hon. Friend. But, at the same time, he could not help remembering the proverb that oven "gold might be bought too dear." They had then to consider whether the price which they would have to pay for the advantages which were held out to them was not higher than that which those advantages were worth. He did not mean to enter into a minute examination whether this concession on the part of France was precisely equal to that concession on the part of England; or whether some duties might have been a little less and some restrictions spared. There were many points upon which, if disposed, they might be critical, and probably many details would on a future occasion demand discussion. The great benefit of the scheme was the simplification of the tariff; but upon that point there was a difference of opinion in 1857 between the Chancellor of the Exchequer and the Home Secretary. The right hon. Baronet, who was then Chancellor of the Exchequer, was of opinion that a large number of duties of small amount was better than a small number of heavy duties; while the present Chancellor of the Exchequer ridiculed the argument by saying that, according to this theory, the perfection of finance consisted of an infinite number of infinitesimal duties upon an infinite number of articles. His own opinion agreed with the present Chancellor of the Exchequer, but it must be remembered that part of the price which they were to pay for a simplification of the tariff was the imposition of an infinite number of infinitesimal duties upon every transaction in commerce, and perhaps the commercial classes would experience almost as much inconvenience from the infinite number of stamps as they would avoid by sweeping away a certain number of duties. It was a question, however, upon which he did not wish to express at that moment any decided opinion. Before he entered into a consideration of the general merits of the financial scheme, he wished to say a few words in reference to the Treaty with France, which the House had decided should be considered along with the Budget. He was not disposed to quarrel with that arrangement. It had been stated by many hon. Members on that (the Opposition) side of the House that the Treaty was opposed to the principle of free trade. The remark had been made jestingly; but on the other side of the House some serious apprehension had apparently been felt on the subject, and an anxiety shown to repudiate the idea that a Treaty negotiated by the present Government and by Mr. Cobden could be contrary to the principles of free trade, which reminded him of the French proverb qui s' excuse s' accuse. Now, he had been brought up in the belief that treaties of reciprocity were not much in favour with the free-trade school, but that their creed was that we ought to legislate for our own benefit and leave other nations to follow the course which they thought their interests dictated. This Treaty, however, conferred benefits on both France and England, and therefore was a measure which should not be condemned on that ground. Still the leading members of the free-trade party in that House had been led into inconsistencies in reference to that matter, which made him doubt whether they would necessarily adhere under all circumstances to their own professions. He found, for instance, that when a complaint was made from the Opposition side of the House that injustice would be done under the Treaty to our shipping interest, the right hon. Gentleman the President of the Board of Trade, who was by far the purest Free-trader on the Treasury Bench, replied that, under that arrangement, differential duties would be established in France in favour of both English and French ships against those of the rest of the world in the case of goods exported from our shores to that country, so that the right hon. Gentleman seemed to have no objection that a practice should be adopted in France at variance with his own free-trade principles. That, however, was a matter of minor importance, and although it was an indication that there were matters in connection with the Treaty which took off the keen edge of free-trade principles so strongly professed by noble Lords and right hon. Gentlemen opposite, he (Sir S. Northcote) would not further insist upon it. Neither would he cite upon that occasion the language which had been employed last year by the noble Lord the Secretary for Foreign Affairs or by the noble Lord at the head of the Government upon the subject of commercial treaties. It was well known that such treaties had never been looked upon with any favour by free-trade writers, but there was one treaty of that description which those writers had signalled out for their special reprobation, and that was the Methuen Treaty, which had been concluded in the beginning of the last century with Portugal, and under which, in consideration of certain advantages which Portugal gave us, we were bound to admit into our ports Portuguese wines at a lower rate of duty—he believed one-third lower—than the wines of France. It was true that there was, at first sight, no such Article in the present Treaty. But it cer- tainly contained a very curious provision in reference to the wine duties. It was set forth in one of the Articles that the duties should be fixed in three classes, at 1s., at 1s. 6d., and at 2s., according to the quantity of spirit which the wines contained. The wines of Spain and Portugal would generally come into the second class, those of France, for the most part, into the first; therefore, the effect of the Treaty would be that, generally speaking, the wines of France would be introduced at 1s. a gallon, those of Spain and Portugal at 1s. 6d. This was the exact converse of the Methuen Treaty, and in his opinion it was questionable how far this was consistent with our free-trade principles. It was said by the hon. Member for Montrose that if this reduction were made we should be able to go to Austria, Spain, Portugal and other countries which now imposed prohibitory duties on our manufactures, and get them to do for us what France had done. But it was not easy to see how that could be done. We should have nothing left to offer them. If we offered to reduce their wine duties they would reply, "You have done that already, but you have arranged what remains to the advantage of France. Let us come in at the same rate as the French, and we will open our markets to your goods." But we could not do this, for the Treaty bound us for ten years. In the Ninth Article there was a stipulation that if we thought proper to impose fresh duties on home made spirits, we might raise the duties—on what did the House think? On all wines? No; on wines of the second and third classes. So that while the clause provided that we might raise the duties on the wines of Spain and Portugal, we must not touch the duties on the wines of France, which would still come in at 1s. the gallon. He might be told that this was a provision introduced partly for the protection of the revenue and partly against interference with our home distilleries, and that it was not a new principle, because at present there was a certain duty on proof spirits, which was increased if the spirits were above the proof strength. So we did; but we did not raise the payment by jumps, but by a percentage, whereas in the Treaty a degree above the limit caused the duty to jump from the 1s. to the 1s. 6d., or from the 1s. 6d. to the 2s. He might also be told that the duty was made ad valorem, in order to admit the light and cheap wines of France, which by the present system of an equal duty of 5s. were excluded; but be was informed that the finer wines of Spain and Portugal would probably be found to contain less than 15 degrees of spirit, as would likewise the best wines of France, so that they would pay the lower duty; while the cheaper but stronger wines of Spain and Portugal, which were really fitted for the consumption of the poor, would pay the higher rate of duty; and, if so, the duty, at first sight ad valorem, would, on examination of the circumstances, be found to be an ad valorem reversed, and would press heaviest on the cheaper kinds of wine, It might be that the Government had information in their possession which would show that the effect he had described would not be realized, but until the system had been tried its working could not be known accurately, and his objection to the proposition of the Government was, that it tied our hands for ten years, however the system might work. However, he would say this—and it was an admission that he was willing and anxious to make to the Government—that, setting aside some of these points of detail, he approved of the negotiation with France. He saw very great advantages that might probably he derived by our trade. This was an admission that he made without the slightest hesitation. Though the Treaty did not give all we wished, and all we had a right to expect, and although it contained a condition which would be embarrassing to us, he was free to admit that it made a breach in the French system of prohibition which might be attended with most important consequences. If, then, he felt obliged to oppose the whole scheme, it was not because he undervalued the advantages of it, but that he objected to the price we were called upon to pay for it. The hon. Member for Montrose (Mr. Baxter) had made a most astonishing speech that evening. He had always considered him a gentleman of more than ordinary shrewdness and ability. That evening he had risen and in a speech setting forth the great advantages of the Budget of the Chancellor of the Exchequer, he paid, as was natural and as was done by all, his tribute to the manner in which the financial statement was brought forward. Probably, he thought that all the eulogium had been exhausted, and that he must try and find something now; and therefore, the particular quality he selected for especial praise was what he called the Chancellor of the Exchequer's "simple eloquence." Now the eloquence of the right hon. Gentleman nobody doubted; but that its characteristic was simplicity he (Sir S. Northcote) was hardly disposed to admit. The hon. Member for Montrose seemed to have been led away by it however, for shortly afterwards he made another statement showing in what way the "simple eloquence" of the Chancellor of the Exchequer had taken effect on him, as we were told art, when well concealed, was ever sure to do. After explaining the advantages of the Budget, the Member for Montrose had asked, "And what is the price? You may have it all for an additional income tax of one penny in the pound for one year." Why this is dirt cheap. One penny in the pound for one year. The Chancellor of the Exchequer also took care, both at the commencement of his speech and at the end of it, to put the bargain in that way. He said there was a deficit of £9,400,000 to meet, and these two modes of doing it. We might have a niggardly Budget, with a ninepenny income tax, and keep on the war duties on tea and sugar; or a liberal Budget, giving up the tea and sugar duties, with a shilling income tax. He went on to state that there was a treaty with France, a simplification of the tariff, a repeal of the paper duties, and he showed how he proposed to compensate the losses we were to sustain, at least to a certain extent. And then he asked, "And how are we going to make this out? Why, by one penny addition to the income tax you can get all that." Certainly at that price the Treaty was cheap, but then the right hon. Gentleman added that, by collecting three quarters of the income tax in the financial year he could get £8,472,000; he could get £1,400,000 by taking up the malt and hop credits; and another £2,100,000 by the tea and sugar. But if the right hon. Gentlemen were going to receive all this, he would not want a ninepenny tax; a sevenpenny tax would be sufficient. Seventenths of £8,472,000 would produce £5,930,400; and adding to this£2,100,000 from the tea and sugar, and £1,400,000 for the calling in of the malt and hop credit, and there was the exact sum of £9,400,000, which was the amount that was wanted.

THE CHANCELLOR OF THE EXCHEQUER

Where is your surplus?

SIR STAFFORD NORTHCOTE

said, there would be very little difficulty in getting a surplus. In the first place, it might be provided by some other form of taxation; but in truth that would not be needed, for it was the inevitable nature of the Excise and Customs' duties, if left to themselves, to go on rising year after year. He believed firmly that if the Government had not proposed to deal with these branches of the revenue, they would in themselves have afforded a surplus. His right hon. Friend, as an instance of the elasticity of the revenue, had referred to the increase which had taken place between 1832 and 1853, notwithstanding the removal of Excise and Customs' duties to a very large amount. Between 1832 and 1841 duties were remitted and the revenue increased. From 1841 to 1853 taxes were remitted to the extent of more than a million a year, and the revenue increased at a larger rate. But what had happened since 1853? Between that year and 1858 we had put on more than we had taken off, and the balance, as he calculated it, exclusive of the malt duty, imposed and taken off, was this, we had added £5,347,000, and we had remitted £5,011,000. But during that time there was a gradually increasing revenue to the extent of £760,000 per annum on the Customs and Excise duties. When his right hon. Friend asked, therefore, where they were to get their surplus, his reply was that they would probably find it in the natural progress of their Customs and Excise duties, and he said it with the more confidence, because his right hon. Friend admitted that the sum of £640,000 would probably be lost to the Customs' duties this year, in consequence of the agitation connected with the Treaty. [The CHANCELLOR of the EXCHEQUER dissented.] He would not, however, insist upon that point, because he wished to point out to the House that they should not really want a surplus of £3,000,000, and that an income tax of 7d. in the pound, along with the natural elasticity of the revenue, would amply cover the deficit. Now, if the deficit could be covered by a 7d. income tax, while the Chancellor of the Exchequer demanded 10d., then the price which they were called on to pay for the advantages of this Treaty was not one penny, but three pence. The question, moreover, he maintained, could not be considered merely as an arrangement for the present year; in process of time the revenue might recover; but in giving relief to the consumer, as it was termed, to the extent of £4,000,000 they had struck a very serious blow at the finances of the country, and for the present, additional taxation in some form or other should be imposed. In what form was it to be raised? Was it to be an income tax of 10d.? No; if this scheme were adopted, it must be at the rate of 1s. in the pound at least. So that when hon. Gentlemen in that House spoke so very glibly of getting those immense advantages for an additional 1d. of income tax, they were really talking in a way which deluded the public, and presented a wholly incorrect view of the matter. What were they to do next year? They would not then have the advances on the malt tax to help them—it was out of the question to propose additional duties on tea and sugar. But even this was not the end of their losses, for they spoke of relinquishing a million on the paper duty; the fact was that the tax amounted to £1,200,000, though it appeared to be only a million this year because the abolition of the duty was not to take place till July. He did not wish to speak at large upon the paper duty, but he might call attention to the very prosperous state of that branch of the revenue, which from £810,000 in 1849 had, with one check which lasted for one year, steadily risen to £1,142,000 in 1858, being an increase of £332,000, or more than forty per cent, within a period of ton years. He was not defending the paper duty—he did not mean to say that the mere increase afforded any reason for refusing to take off an impost which was considered to press upon the people of this country and on the springs of industry; but when large reductions and abolitions were proposed, mainly depending upon the elasticity of the revenue to supply their place, it was the duty of Members to call attention to the elements of this elasticity, and to see in what they really consisted. No doubt the revenue was to a wonderful extent elastic, but it could only be so according to certain principles and laws; and if the duties which were the elements of this expansive power were taken away, it followed that elasticity itself would no longer exist. Since the year 1849, although taxes to the amount of £1,700,000 had been abolished, the revenue from Excise had actually increased from £15,500,000 to £17,500,000. That was an increase of £2,000,000; nay, if they looked to the articles that had yielded the increase, and deducted the articles on which taxation had been wholly remitted, they would find that it was an increase of more than £4,000,000. But whence did the increase arise? Of the total increase, £3,200,000 had arisen from spirits; £448,000 on malt; £173,000 on hops; and £332,000 on paper, leaving only £70,000 increase from other articles. These were the principal elements of elasticity; and what were they going to do with them? The increase which had taken place upon spirits was due, let it be remembered, not to consumption, but to increased taxation. In the year 1849 the quantity which paid duty was 22.962,000 gallons; in 1858 it was 23,686.000. Only 700,000 gallons additional paid duty in the latter year, and yet the revenue was increased by upwards of £3,000,000. This was because the duties in Scotland and Ireland had been raised. In one sense it was through elasticity, because it showed that the improved circumstances of the people enabled them to pay a higher price. For the future, however, it would not be in their power to raise the duty on spirits, because the French Treaty would stand in the way. He did not mean that they had absolutely bound themselves in the Treaty not to do so; but what was likely to he the effect on their relations with France if, after concluding a treaty in which they had consented to a rate on spirits lower than what the Government themselves had wished, they were obliged for purposes of revenue to increase the duty? Of course it was not to be expected that the introduction of cheap French wines over here would lead to an increased consumption of malt and hops, or enable the Government to lay a higher duty on those articles. Therefore, they were really crippling themselves as to malt and spirits, and were giving up paper altogether. He did not think it was right to make such reductions at a critical time like this, and to trust to the elasticity of the revenue to make things square. No doubt, if there was an increased consumption of wine, the revenue would recover; but this cheapening of wine was only an experiment, and one on the success of which it would be some time before they could pronounce. What had been the effect of reducing the duty on tea —an article for which it was not necessary to create a taste as in the case of wine, but which was in large and constant use among all classes of the community? That duty had been gradually lowered from 2s. 1d. per lb. to 1s. 5d., and the result was an increased consumption of tea to a remarkable extent; but yet the revenue in 1851–52, before the reduction, was £5,984,000, and it was now under £5,500,000. The people had no doubt been benefited by the change, but it was clear the revenue had suffered. It was said that if they stimulated the trade and manufactures of the country the people would grow richer, and more money would flow into the Exchequer in the long run. But if they went on stopping up one after another of the channels which conveyed the wealth of the people into the Exchequer, how would it find its way there? If the plan was a good one, had they not better take off all the Excise and Customs' duties at the same time? It would, on the principle he had referred to, greatly improve the condition of the people. Hon. Gentlemen opposite were constantly pointing to the conduct of Sir Robert Peel as a precedent; but he could not see that that was a case in point. When Sir Robert Peel brought forward his scheme, there were symptoms which showed that the system of indirect taxation had reached its limit; all attempts by Chancellors of the Exchequer to get more money by an increase of Excise and Customs duties had failed; and, as no more could be done in that direction, direct taxation had been resorted to. The unfruitfulness of indirect taxation proved there was something rotten in it; and that it was at that time carried too far. Sir Robert Peel not only saw that they must have recourse to direct taxation, but that their whole system was rotten, that industry was cramped, and that relief must be given. In setting free trade and manufactures he broke up virgin soil—he brought in raw material free of duties, and removed or lightened the taxes on labour. The effect was enormous. It was to be recollected, too, that Sir Robert Peel put on an income tax for a sufficient time to cover the deficiency to be anticipated, for a sufficient period to give his scheme time to work. But in the present instance they were entering not upon an entirely new field, but on one in which a great deal had already been done, and where, though there was still something, there was very little left to be done. And, instead of putting on an income tax to cover the operation of the scheme, the Chancellor of the Exchequer put on only as much as would tide over the year. Then, again, Sir Robert Peel removed restrictions upon materials imported for manufacture. The present Government sought to remove restrictions upon articles of export; and it was not to be expected that the stimulated exportation of coal and iron would lead to as great an increase in the manufacturing prosperity of the country as the changes effected by Sir Robert Peel. These, however, were points of infinitesimal importance compared with the great objection to the scheme, which was, that it threw away the opportunity of reforming the direct taxation of the country, which had now got into as unwholesome a condition as that of indirect taxation in Sir Robert Peel's time, and was in as urgent need of attention. People had been taught to look forward to the year 1860 for the settlement of the income tax question, and, although they were aware it could not yet be got rid of, yet they thought they had a right, after all the exertions which others had made to enable the Government of this period to keep the promise held out to the country, to expect that something would be done to place the system of direct taxation, if not upon a permanent, at least on a less temporary footing than at present. The Opposition had been taunted with founding all their arguments on the assumption that the expenditure of the country was always to he at £70,000,000 a year; but the truth was that the present Government had the credit, such as it was, of proposing the largest Estimates known. With such heavy expenditure during the present year, and with the present uneasy state of Europe they could not expect that the Estimates could be all at once enormously cut down, and they would have to face the liabilities of the next year with a deficit of £11,000,000 or £12,000,000—a million out or in now-a-days was nothing. And this they would have to do in the first Session of a reformed Parliament, elected under the influence of the exciting oratory of the hon. Member for Birmingham, who demanded a reform of Parliament for the express purpose of overhauling the whole financial system of the country. No man has used stronger language with regard to the finances than the hon. Member for Birmingham; he wishes to get rid of all Customs' and Excise duties, and replace them by a property and income tax in order to encourage free trade. They were cutting off the possibility of looking to the Customs and Excise duties as sources of revenue; but they must still look forward to a large expenditure for the military and naval establishments; and they might have to meet a new reformed Parliament with an enormous deficit. They would then be told that the income tax would not suffice to cover it, and therefore these establishments must be cut down. The hon. Member for Birmingham would be delighted, whether the movement ended in cutting down the expenditure or laying on a tax on property; in either case he would have gained one of the two objects he had constantly pursued. If the Budget had been proposed by the hon. Member for Birmingham, it would have been, for his theory, perfectly sensible and rational. He (Sir S. Northcote) should have resisted it as a dangerous measure, yet he should not have been astonished at it. But that such a Budget should be proposed by the right hon. Gentleman, and the other occupants of the Treasury bench did perfectly astonish him. Did they look forward to cutting down the expenditure to anything like the amount the hon. Member for Birmingham suggested? However hopeful they might be that the peace of Europe would be preserved, they must think it necessary that the national establishments should be kept up, and not for much less than the present expenditure. They could not look forward to any great reduction of expenditure; he trusted, then, that they did not contemplate such a property tax as the hon. Member for Birmingham suggested—a tax that would take £8 a year from every £100 of realized property. They were running the risk of a reckless onslaught on the national establishments, by which the country might be exposed to great dangers, and thus a measure of economy might ultimately prove a measure of great extravagance, or they ran the risk of having a tax laid exclusively on the owners of realized property, from which the capital of the rich traders and manufacturers who reaped the most advantage from free trade would be specially exempted. An able weekly newspaper, the Economist, said there were two dangers to be feared from this policy; one was the risk of a reckless assault on the establishments of the country; the other the temptation to run into debt. It supposed "a reckless Chancellor of the Exchequer, like Mr. Disraeli," who would postpone the payment of national liabilities; he did not quite see why it introduced the name of his right hon. Friend, as a Chancellor of the Exchequer likely to rush into debt, as the Budget of the right hon. Gentleman proposed to postpone the payment of Exchequer bonds to the amount of £1,000,000. The blame of postponing these liabilities could not be thrown wholly on his side of the House, for the right hon. Gentleman did not oppose that part of his right hon. Friend's Budget; he rather applauded it. The right hon. Member for Buckingham- shire had taken that step, because he believed that the House would desire to abolish the income tax this year. It would have been better that that step should not have been taken, if they could have foreseen what was coming; but it was hard that the fact should be thrown in the teeth of his right hon. Friend. He had endeavoured to state very generally the objections which he entertained to this scheme; and he hoped the Chancellor of the Exchequer would understand him as appreciating the advantages offered; whilst he seriously put it to the Government to consider well within themselves whether they were not exposing the country to serious risks if they left affairs for next year in the serious dilemma which he had endeavoured to describe. He felt that there had not, within the memory of many of them, been so serious a crisis as they might be exposed to next year.

MR. AYRTON

said, that the discussion of the previous evening had not been without a good effect on the present debate. It had resulted in the Government adopting a course that did them honour—they had told their opponents to choose their weapons and make their attack, the Government was prepared to make its defence. The great question was now brought on, divested of the difficulties that had hitherto surrounded it. Whether the Treaty deserved the support or censure of the House was now submitted to it in a direct and distinct form. It was no longer competent to hon. Gentlemen on the other side of the House to get rid of the Treaty by a side wind. It must now be regarded and examined as a fact. The House had also to consider a question of deep political interest—the relation the public burdens were to bear to the property of the country. It was not the country at large that was disappointed by the renewal of the income tax, but a class. He would admit that the general policy that dictated the negotiation with France was wise and discreet, and the object sought to be obtained just and legitimate. The general scope of the Budget, too, had deservedly commanded the respect and admiration of the country, and there was no just reason to impugn it on the ground upon which it was attacked to-night. The question, however, remained—on what basis was the taxation of the country to be maintained? He held that the best mode of imposing taxation upon the great body of the people was to select those articles which were not necessary for the maintenance of life, but which were regarded as comforts and luxuries. When they approached the next grade of the community, the manner in which they were taxed resembled a poll-tax or capitation-tax upon the individual consumer. It was necessary to levy a considerable sum in the form of taxation upon property, but the amount was small in comparison with the amount levied upon the necessities and luxuries of the people, such as spirits, beer, wine, &c. In 1802 the expenditure for military purposes was £37,000,000, and the revenue raised from Customs and Excise was £17,000,000, and from stamps and taxes, including the taxes upon property, £13,000,000. This was the apportionment of taxation of Mr. Pitt, the greatest man who ever appeared in the history of this country, and who knew so well how to appeal to the heart of the nation that 500,000 men out of an adult population of 2,000,000 or 3,000,000 were trained to arms in answer to his appeals to the patriotism of the country. If they passed to the era of peace, they found that the expenditure was nearly that of the present year, being £27,000,000 for military purposes. The indirect taxation was then £34,000,000, and the Excise and taxes raised £25,000,000. Looking at these proportions and the relative amount of indirect taxation at a later period under Sir Robert Peel, he thought that the owners of property had no reason to complain of the measures now under discussion as unfair and unjust. The fact was, that the amount of indirect taxation was so disproportionate to the direct taxation of the country that, so far from the Chancellor of the Exchequer being called upon to relieve property from its burdens, it became rather his duty to endeavour to arrive at a more fair adjustment of the charges which pressed upon the public. With respect to the duties which were levied on certain articles of consumption, and which it was proposed to reduce or to abolish, he could only say that they exercised an extremely prohibitory effect so far as those articles were concerned. If any man for instance would take the trouble to consider the result of the present duty on wine, he thought he could hardly fail to come to that conclusion, or to perceive that the trade in that article would be greatly increased by a remission of duty, which would admit of its being generally sold. It had been said, indeed, that it was impossible for France to increase her trade in wine, and it was true that for ten years her annual pro- duction was not 10,000,000 hectolitres, the hectolitre being twenty-two gallons; but in 1858 she got up to 45,000,000, and he left the House to consider what field there was for trade in such an amount of production. So it was with regard to brandy, and several other articles of consumption, to which he need not more particularly allude. But to pass to the question of the duty on paper, he must contend that that was a tax which was at variance with every principle of sound policy, and his only cause of surprise was, that it should so long have remained unrepealed. The state of this question of the paper duty was such that the Chancellor of the Exchequer had no alternative left but to propose its abolition, or change the system of collection. No man could define what paper was for any purpose of revenue, and the decisions of the courts were palpably ridiculous. It was found impossible to hold the industry of the country in the fetters of a Parliamentary definition. He had himself sent the Chancellor of the Exchequer a series of arguments in favour of abolishing the duty, written on what was to all intents and purposes paper, and, at the same time, intimated to him that it was not paper within the definition of the Excise, and could not, therefore, be chargeable with duty. This difficulty of defining what was paper chargeable with duty and what was not was one which no Chancellor of the Exchequer could get over. Then the exemptions had accumulated to such a degree that it became impossible, if the grounds on which these exemptions were made were logically acted upon, to raise the duty at all; and, besides all this, the Customs' duties had gone out of harmony with those of the Excise—so that the Chancellor of the Exchequer, on these grounds also, had no alternative but to remit the duty. He advocated the abolition of this duty on the broad ground of industry. The duty being three halfpence the pound, and the price of the raw material a penny, the duty on the latter was actually 150 per cent. He considered the tax on paper scarcely second in its evil consequences to a tax on the clothing of the community. Hon. Gentlemen opposite, moreover, ought not, in considering this subject, to overlook its importance as affecting the consumption of an agricultural product. In America, where there was a manufacture of paper equal to the wants of three times the population of this country, the consumption of agricultural produce which it occasioned was deemed a matter of no small importance. How the duty interfered with the progress of literature and the just remuneration of authors it was unnecessary for him to show. The tax had been condemned by a Committee of that House, and he asked what other article on which a Committee had passed such a condemnation now remained as an article of revenue? It was said by hon. Gentlemen opposite that we ought not to abolish indirect taxation, because it led to an increase of the income tax; but he warned them to be careful of leading the people to infer that there was an indisposition on their part to impose just burdens on property. Nothing would so indispose the people to bear taxation as to tell them that the owners of property were unwilling to share the public burdens, and sought to maintain a tax which affected industry and permeated every occupation of the people. By affecting to disregard this matter, they could not escape its consideration. The time was coming when the people, who had been long kept at bay, would, through their representatives in that House, compel them to treat this subject on plain principles of justice and right. They would not long be able to escape their fair share of the public burdens because of the influence which wealth, rank, and the present constitution of the House of Commons gave them. It was of the utmost importance, then, that they should prepare for the proper consideration of this question in another House of Commons. He admired the wisdom of the Chancellor of the Exchequer in proposing only to renew the income tax for one year. He confined it to the exigencies of the season; adjourning the further consideration of the income tax until they had disposed of the other complicated subjects which had been set before them. In a future Session they would be enabled to consider its bearings fully with the view of placing it on an improved footing. He maintained that in any definite scheme of finance they must make the income tax a permanent source of revenue, and determine what proportion it should bear to the other sources of taxation. He hoped when the next Budget was proposed they would set themselves to clear away all the remaining objections to the present system of finance, and put the income tax on a just and permanent foundation. The mode of dealing with this question, suggested by the Resolution, was fraught with inconvenience, and would be injurious to the public interests, and therefore he should vote against it.

MR. HUBBARD

said, he would move that the debate be now adjourned.

VISCOUNT PALMERSTON

said, he wished to express a hope that the House would come to a decision on the question before it on Thursday night.

Debate adjourned till Thursday.