Commons Sitting of 22 April 1861

MINUTES.
For Banffshire, v. Major Lachlan Duff Gordon Duff, Chiltern Hundreds.
PUBLIC BILLS—1o Dwelling for Working Classes; Combination of Parishes Dissolution (Scotland.)

MARRIAGE LAW AMENDMENT BILL.

  QUESTION.
  MR. MONCKTON MILNESsaid, he believed that an erroneous impression prevailed in some quarters that the Marriage Law Amendment Bill, of which he moved the second reading on Wednesday last, was lost in consequence of the adoption of the Amendment proposed by the hon. Member for Northamptonshire, North (Mr. Hunt), he would, therefore, beg to ask Mr. Speaker, in what way he could proceed with that measure so as to act with the greatest respect to the decision at which the House had arrived, and without availing himself of any technical advantage which the forms of the House might be thought to give him?
  MR. SPEAKER: On the order for the second reading of the Marriage Law Amendment Bill the House declined to read the Bill a second time, and passed a Resolution to the effect that any measure having for its object the placing of the Law of Marriage, in regard to the prohibited degrees, on a different footing in different parts of the United Kingdom would be highly inconvenient. That Resolution docs not dispose of the Marriage Law Amendment Bill, and it is competent to the hon. Gentleman to ask the House to name another day for the second reading of the Bill. I am not quite sure whether the hon. Member's question did not go further, and whether he did not ask me what course he could pursue, observing due respect for the decision of the House. If that question was addressed to me, I should say that the most direct way of making his Bill conformable to the opinion of the House as expressed in the Resolution of Wednesday, would be to withdraw the Bill and to re-introduce it in such an amended shape as might make it in harmony with that expressed opinion.

  AMALGAMATION OF THE ARMY IN INDIA.—QUESTION.
  MR. BENTINCKsaid, he rose to ask

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  the Secretary of State for India, Whether he has any objection to lay before the House Copies of the Orders or Communications sent or made by him to the Governor General for carrying out the amalgamation of the Royal and Local Armies, and for giving effect to Her Majesty's Warrant for the formation of a Staff Corps for India, dated January 16, 1861, together with Copies of all Dissents and opinions recorded on that measure by Members of the Council of India in January, 1861?
  SIR CHARLES WOODsaid, it would not be expedient at present to produce the communications he had made to the Governor General with respect to carrying out the amalgamation of the Royal and Local Armies. The Governor General had power, in concert with the Commander-in-Chief, to modify the details of the measures contained in the communications from England, and it was desirable that those measures should not be announced until they had assumed that authentic shape in which they would stand after receiving the corrections which the Governor General was empowered to make. He should then, however, have no objection to produce all the papers on the subject.
  SIR MINTO FARQUHARsaid, he wished to know what was the object of the Committee now sitting in Calcutta on the amalgamation scheme—whether it was for settling the details or for the purpose of introducing modifications. If the latter, would the modifications be sent home for the approbation of the Government before being adopted in India?
  SIR CHARLES WOODsaid, he did not quite understand the necessity for the appointment of a Committee at all, but the Governor General had appointed a number of officers for the purpose of looking into the details of the scheme, and ascertaining the wishes of their brother officers upon certain points. He hoped this inquiry would not lead to any great delay. The Governor General had power to modify the scheme, and to carry it into effect without waiting for the approbation of the Government in England.
  CAPTAIN JERVISsaid, he wished to inquire when the Calcutta Committee were likely to make their Report, and whether their Report, when made, would he published?
  SIR CHARLES WOODsaid, he had no information upon these points. He only knew that a Committee had been ap-
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  pointed, and that they had already made one Report.

  THE SLAVE TRADE.—QUESTION.
  MR. W. E. FORSTERsaid, he would beg to ask the Secretary of State for Foreign Affairs, Whether the Conference of the Ambassadors and Ministers of the Courts of France, the United States, Spain, Portugal, and Brazil, which in his Circular Despatch to Her Majesty's Ministers at these Courts, dated 11th February, 1860, he proposed should be held in London in the months of May or June of that year, to consider what measures can be taken to check the increase of the Slave Trade and finally provide for its total abolition, was held, and if not held in consequence of the refusal to attend such Conference by any of the above-mentioned Powers, whether he has any objection to state which Powers so refused, and on what reasons they based their refusal?
  LORD JOHN RUSSELLwas understood to state, in reply, that the Power which refused to attend the proposed Conference was the United States, and that in consequence of that refusal it was not thought expedient to proceed further in the matter. The Papers would be laid on the Table in a few days, and the House would then see the reasons upon which the Government of the United States based their refusal, as well as the precise answer which was given to them.

  SUBMARINE TELEGRAPH CABLES.

    QUESTION.
    MR. GORE LANGTONsaid, he wished to ask the President of the Board of Trade, Whether he can explain the cause of the delay in the publication of the Report of the Commission on Submarine Telegraph Cables, which he stated, in answer to a question on the same subject on the 25th of February, would be ready for issue in a short time?
    MR. MILNER GIBSONstated, that the Report of the Commission on Submarine Telegraph Cables was delayed for the revision of the Appendix, which contained some papers by the scientific members of the Commission.

    RIVER GAMBIA.—QUESTION.
    MR. BUXTONsaid, he would beg to ask the Secretary of State for Foreign

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    Affairs, What the object was of the recent expedition from Gambia against a neighbouring Chief; whether the expedition was authorized by Her Majesty's Government; and, if not, whether it has their approval?
    MR. CHICHESTER FORTESCUEsaid, the Chief referred to by the hon. Gentleman was the head of the most powerful Mahommedan tribe on the Gambia, and during the last two years had given great cause of complaint, having been in the habit of plundering both natives and Europeans very much at his pleasure. Six months ago an officer was sent by the Government of Gambia to the Court of this Chief for the purpose of obtaining redress for the sufferers. That gentleman was dismissed with marks of personal disrespect Thereupon the Governor proceeded, with the approbation of the Home Government, to blockade the port belonging to the Chief with the view of bringing him to terms; but that blockade, though persisted in for some months, did not produce the slightest effect. At last, in January, the force at Gambia was increased by the presence of a man-of-war, and by the arrival of West India reliefs, and advantage was taken of that circumstance to organize an expedition against the offending Chief. That expedition invaded his territory; it was conducted with great gallantry and success against an obstinate resistance; and, after a few day's warfare, it ended in bringing the Chief to terms and inducing him to sign a Treaty with the Government at Gambia, making some reparation for the robberies he had committed, and binding himself to keep the peace for the future. The instructions given to the Governors on African stations were, that they should not engage in any considerable expedition without the consent of the Home Government; but in the present case it appeared to the Government that the object in view was a proper one, that the expedition had been admirably carried out, that the circumstances which enabled the Governor to organize it might not have occurred again, and that all his proceedings in the matter were deserving of approbation.

  THE LACE MANUFACTURE.

    QUESTION.
    LORD HENRY LENNOXsaid, he wished to ask the Secretary of State for the Home Department, Whether it is the intention of the Government to introduce during the present Session any measure to
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    carry out the Recommendations of Mr. Tremenheere, contained in his Report on "The expediency of subjecting the Lace Manufacture to the regulations of the Factory Acts?"
    SIR GEORGE LEWIS: Sir, the Report to which the noble Lord has referred has been for some time on the Table, and I was in hopes that before the Government was asked whether it was their intention to legislate on the subject, there might have been some expression of opinion in this House, or that I should have received some communication from the trade and others interested in the question with regard to the recommendations of Mr. Tremenheere. However, that has not been the case. As far as I am able to form a judgment on a rather technical question, I am favourable to the recommendations in the Report of Mr. Tremenheere; and I shall be prepared to introduce a Bill during the present Session founded on them. I will lay the measure on the Table, and will then see how far it meets the views of the House.

    EMPLOYMENT OF WOMEN.—QUESTION.
    VISCOUNT RAYNHAMsaid, he wished to ask Mr. Chancellor of the Exchequer, Whether, in order to extend the useful employment of Women, it would, in his opinion, be advisable to levy a Tax upon all Men employed in Linendrapers' and other shops of that description?
    THE CHANCELLOR OF THE EXCHEQUER: Sir, I do not at all keep out of sight the fact that the distribution of employment between men and women is one of the most important of all social questions, especially as measures have been taken—unfortunately, as I think—by some portions of the operative classes to keep women out of their fair share of employment. But, although I hold that opinion very strongly, and think the matter to which my noble Friend refers a very important one, I do not think his proposal to use taxation as an instrument to determine the question should be adopted.

  CASE OF HENRY DENHAM.

    QUESTION.
    VISCOUNT RAYNHAMsaid, he would now bog to ask the Secretary of State for the Home Department, If Henry Denham, who was convicted at the Central Criminal Court in 1850 of a garotte robbery, and sentenced to twenty years' transportation,

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    is the man who, under the name of Charles Turner, alias Henry Miller, alias Henry Denham, was convicted at the Lambeth Police Court on the 4th inst. of being found lurking about with intent to commit a burglary and of violently assaulting a police-constable, and was sentenced to imprisonment for four months; and, if so, under what circumstances the said Henry Denham was at that time at liberty; and, if under a letter of license, whether it is the intention of the Secretary of State to withdraw such letter?
    SIR GEORGE LEWIS: Sir, in answer to the question of the noble Lord I have to state that the license given to the convict has been revoked.

    PAUPER CHILDREN.—QUESTION.
    VISCOUNT RAYNHAMsaid, he would also beg to ask the President of the Poor Law Board, What steps he proposes to take with reference to the condition of Pauper Children in Workhouses, as stated in the Report of the Commissioners on Education?
    MR. C. P. VILLIERSwas understood to say that the Report had only just been distributed to the Board over which he presided. The subject to which it referred was under the consideration of the department, and probably would be inquired into by the Select Committee now sitting on the Poor Law.

  DRAWBACK ON PAPER.

    QUESTION.
    SIR MORTON PETOsaid, he wished to ask Mr. Chancellor of the Exchequer, If it is contemplated to allow the Drawback of Duty on Paper, as proposed last Session?
    THE CHANCELLOR OF EXCHEQUERsaid, it was the intention of the Government to adopt as nearly as might be the same regulations with respect to the drawback of duty on paper as those contained in the Bill of last Session—that was to say, that there was to be a partial drawback at the rate of a penny a pound, upon all paper in stock up to a certain day, and that the whole of the drawback was to be allowed on paper made subsequently to that day. He would very shortly be able to state what that day was to be; but the principal and the general substance of the arrangement would be as nearly as possible the same as those that were embodied in the Bill of last Session.

    SUGAR AND HOPS.—QUESTION.
    MR. DODSONsaid, he would beg to ask Mr. Chancellor of the Exchequer, What loss he estimates would ensue to the Revenue of the financial year 1861–2 if the Duties on Sugar were renewed, from the 1st of July next, at the rates at which they stood in September, 1854, under the Act of the 17 & 18 Vict. c. 29, instead of at the rates at which they now stand; and whether he will state at what amount he estimates the Revenue to be derived from the Excise Duty on the growing crop of Hops and from the Customs' Duty upon Hops in the current financial year?
    THE CHANCELLOR OF THE EXCHEQUER: Sir, I hope my hon. Friend will not think it any want of courtesy on my part if I state, in answering questions of so unusual a description, that it is not the ordinary practice, unless in the ease of articles of a very peculiar nature, for the House to desire to be informed of the estimated amount of revenue that each taxable article will yield during the year, and a good deal of inconvenience would result from any change of practice in that respect. I will only say that the estimate for hops is taken, as in Customs and Excise generally, upon the supposition of a moderate crop, not on the supposition of a total failure like last year. With respect to the loss that would ensue from a reduction of the duty on sugar from the 1st of July next, I do not like to give an estimate for that, because it would imply that the Government had proposed such a measure. But, most certainly, if they had proposed any measure relating to the duties on sugar, it would not have been a reduction of duty to take effect on the 1st of July, Generally speaking, without pretending to give any minute calculations, I may state that the loss would be from £1,000,000 to £1,250,000 for the first financial year in which the reduction might take place.

  AGRICULTURAL STATISTICS.

    QUESTION.
    MR. CAIRDsaid, be wished to ask the Secretary of State for the Home Department, Whether, considering the deficiency of the last Harvest, and the importance of definite information on the home supply of corn, Her Majesty's Government will endeavour to ascertain, with as much accuracy as possible, the acreage under the various agricultural crops in Great Britain for the present year?
    SIR GEORGE LEWISsaid, that the question of agricultural statistics must be regarded, to a great extent, as a question of expense, and the course he would be prepared to pursue upon that subject would depend very much upon the machinery which was to he employed for collecting those statistics. His hon. Friend had privately informed him that the machinery he wished to make use of was the County Police in England, just as the constabulary were employed for a similar purpose in Ireland. But there, was this difference between these two forces, that the latter body were paid entirely out of the Consolidated Fund, and were under the control of the Government, while the English County Police were entirely under the control of the County Justices. He confessed that it seemed to him there was a good deal of spare time at the disposal of the County Police, which might, if the Magistrates at the different Quarter Sessions were so minded, be employed in collecting information of that description; and the course, therefore, which he was ready to take was to address a letter to the magistrates at the different Quarter Sessions asking them whether in their opinion it would be desirable that the County Police should be made use of for that purpose. The statistics he proposed to collect would not extend to stock or to the amount of the different kinds of produce, and would be confined to the acreage under the different species of crops.
    MR. CAIRDsaid, that in consequence of the reply of the right hon. Gentleman he would withdraw the notice which stood in his name for Friday next.

  BUSINESS OF THE HOUSE.

    QUESTION.
    In answer to Colonel FRENCH,
    SIR JAMES GRAHAMstated that the Report of the Select Committee on the Business of the House had been laid on the Table on Friday last. It was now in the hands of the printer, and he hoped and believed that on Wednesday morning the Report and Proceedings of the Committee, with the evidence, would be in the hands of the Members.

    MARRIAGE WITH A DECEASED WIFE'S SISTER.—QUESTION.
    MR. MONCKTON MILNESsaid, he wished to ask the hon. Gentleman the
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    Under Secretary for the Colonies, Whether any correspondence has passed between the Government of South Australia and the Colonial Office upon the subject of marriage with a deceased wife's sister, and if so, whether he is prepared to lay it on the Table of the House?
    MR. CHICHESTER FORTESCUEsaid, that a Bill for legalizing marriage with a deceased wife's sister, or rather two Bills in succession, had been sent from South Australia to the Colonial Office in order that it might receive the Royal Assent. It had remained there two or three years waiting for the decision of the House of Lords in the case of "Brook v. Brook." If the result of that decision had been to make a South Australian marriage legal in England he had no doubt that the Royal Assent would have been given to that measure. But as the result of that decision had been of a contrary kind his noble Friend at the head of the Colonial Office had thought it right to advise the Crown not to sanction the Bill passed by the South Australian Legislature. He had only to add that there would be no objection to lay before the House any correspondence that had passed upon the subject.

    WAYS AND MEANS.—COMMITTEE.
    Order for Committee read.
    THE CHANCELLOR OF THE EXCHEQUER THE CHANCELLOR OF THE EXCHEQUER moved the Order of the Day for going into Committee of Ways and Means.
    Motion made and Question proposed, "That Mr. Speaker do now leave the Chair."
    MR. T. BARING: Sir, it is generally understood that the night a Budget is produced is not the best time for discussing its merits or defects. Of course, the Committee must be taken in a great measure by surprise. Much of the information so given could be previously known only to the Chancellor of the Exchequer. The facts must be assumed, many calculations require to be examined, and it is not, therefore, surprising that a week ago the discussion which took place in this House was confined to substitutes for the remissions proposed by the right hon. Gentleman. But when the character of the scheme is considered it must be seen that there is some necessity for discussing its general nature and principles. I wish to explain why I now venture to address the House instead of waiting till we get into

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    Committee. In Committee it is usual to confine our observations to the particular Resolution before us, but, as the right hon. Gentleman says it is his intention to comprise all his financial proposals in one solo and entire measure, he seems to invite, if not to require, us to deal with them as a whole. I must apologize to the House for venturing to occupy its time, but there is such general interest felt in the state of our financial concerns that, humble as I am, I may be permitted to express opinions which may be quite erroneous, but which I sincerely entertain. I am happy also that we live at a time when experience has shown that a Budget may be modified or rejected without any change in the position of the Ministry. I am glad that we have seen Budgets withdrawn and fresh ones introduced. We have seen taxes remitted, or taxes the remission of which, when proposed, has been refused, without having any effect upon the Cabinet. In fact, a change of the Budget does not involve a change of Ministry, and I rejoice that it is so, because I think it would be most unpardonable obstinacy on the part of public men to adhere to the terms of a Budget which was opposed to the wishes and feelings of Parliament. It would be unfortunate for the free exercise of the judgment of this House if the rejection of any portion of a Budget were to be construed into a vote of want of confidence. For myself, I beg sincerely to disclaim any intention to convey such a censure in the course I am now taking. It is desirable that the House and the country should perfectly understand not only our present financial position, but our financial prospects; and although I am aware that I am not competent to throw light on this important subject, yet I think the discussion which I have ventured to initiate may enable us to ascertain not only what are the views of the Government, but what are the views of hon. Gentlemen on both sides.
    I assure the House I have not the presumption to attempt to follow the right hon. Gentleman through all the statements and illustrations contained in his most able speech. I am not about to weary the House with a reference to many of the topics on which he touched, even although I may not agree with them, Neither is it my wish to revert to past legislation. My real object is to state my opinion as to our present position and the wisdom of the right hon. Gentleman's in-
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    tended policy. I need not, therefore, advert to the Commercial Treaty with France—that is an accomplished fact, and I heartily join, as I think we must all do, with the right hon. Gentleman in trusting that it may be successful in promoting the mutual interests of the two countries, and in removing any feelings of jealousy or animosity which may at present exist between them. But when the right hon. Gentleman himself said the treaty was a one-sided instrument he really acknowledged the objection which was entertained to it on this side of the House, in addition to the objection founded on the loss of revenue it would entail. Nor is it necessary for me to enter into any minute calculation as to the injury sustained by the Exchequer last year, as compared with the year preceding, on account of the one being leap-year and the other having two Sundays instead of one. In the first place, we all know that, as regards one great source of revenue—the income tax—an ordinary year yields as much income as a leap-year; and, again, it must not be thought that the consumption of articles contributing to our Customs or Excise lies dormant during the Sundays. If it were otherwise, what a godsend the abolition of Sundays would be to the Exchequer. The right hon. Gentleman says every day brings £100,000 to the revenue; so that, if there were no Sundays, according to this calculation, you would gain a total sum of £5,200,000 per annum. But you can hardly rely on that reason as an explanation of the deficiency. The right hon. Gentleman ascribed the increased importation of butter, cheese, and similar commodities to the removal of duties; but I think it was due to a much sadder cause—namely, the failure in the production of the articles of food required by the people of this country. I will not enter into the question whether great importations are always a test of national prosperity; nor, although, no doubt, when we import gold, that gold must be paid for in our exports, whether the exportation of our home treasure to meet a sudden demand, and the monetary difficulty consequent upon it, is not in reality a national calamity. I only wish to state, with every deference to those from whom I differ, my conviction that the provision which the right hon. Gentleman, the Chancellor of the Exchequer, proposes to make for the future is neither safe, wise, nor politic. I ask what was our position at the termination of the last financial

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    year? The right hon. Gentleman stated the deficiency at £2,271,000, part of which he said belonged to a previous year, although it had all still to be paid for; and he told us that it was very gratifying the result was such as it was. No doubt the case might have been worse; but I confess that, although authorized by Parliament, the mode in which the deficiency was met is not satisfactory to my mind. It was met by the absorption to a great extent of our available means for future purposes, and by an increase of the National Debt, besides the continuance of the floating debt consequent upon the renewal of exchequer bonds which had been promised to be paid off. All this was done by the sanction of Parliament, and I do not censure the right hon. Gentleman in any way for the course he pursued; but I wish to explain that, if adopted as a permanent measure for meeting our permanent wants, it is neither satisfactory nor safe. The question is whether with that absorption and that addition to the National Debt, is it wise to have recourse to a remission of taxation of a character that cannot restore and recuperate itself, and which cannot be reimposed in case of need by any future Ministry? I say, then, that the Government ought to have been warned that the right course for them to follow was to retain taxation to such an extent as would secure us against every exigency, and to reduce or remove only that portion of our taxation which by increased consumption and the augmented resources of the country might be restored to the amount required by the public service. If there ever was a moment when prudence would dictate a cautious policy to Parliament, looking to our foreign relations, looking to our home concerns, to the state of our trade, and the uncertainty of the future, I may be bold enough to say that now is the time when over caution would be a virtue and rashness a grievous vice. But, assuming that we have perfect peace both at home and abroad, and a good harvest next autumn, let us consider what are the wants of the country, and what the means by which it is proposed to meet them.
    Our whole expenditure, we are told, is estimated at £69,900,000 for the year. Now, that, I have no doubt, has been fixed as the maximum point it can reach, because the Budget shows that we ought to be insured against any fresh demand of money. I do not believe the Chancellor of the Exchequer would propose to remit
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    the duties which he proposes to take off if he did not feel confident that under no circumstances whatever could he have to call upon this House for further grants of money. So I take that for granted. There are two items which strike me as a little doubtful. I speak with diffidence upon such a point, but, if I am not mistaken, our naval affairs are in a state of transition. There are changes being adopted in the form of construction and arming of ships which must be very costly in their nature. I will not say much about the money for fortifications, but the right hon. Gentleman must recollect, although he did not mention it in his speech, that the interest upon the annuities granted for that purpose, in proportion as the money is expended, must increase the charges upon the country. Those are two items which are not, perhaps, of exceeding importance, but still they are matters which suggest doubts as to the future expenditure of the country. The total revenue is put at £71,823,000, giving an apparent surplus of £1,900,000. Supposing that all is prosperity and sunshine in this country during the next year, I do not believe—although I speak without authority upon that point—I do not believe that the estimates of the right hon. Gentleman as to the produce of the Customs and Excise are at all exaggerated. But will he tell us that there may not be such circumstances in this country, such as a failure in the coming crops, such a cessation of demand, such a stagnation of trade in the manufacturing districts, and loss in the agricultural districts, as may materially diminish the revenue of this country? I do not make any charge against the right hon. Gentleman, but he is aware how £600,000 disappeared last year from a failure in the crop of hops and of malt. One may be permitted to say that nothing can be more dangerous than to reckon upon everything being in a state of perfect prosperity when we know how much a partial adversity will cost us. There is another item which appears to me of a doubtful character—the £750,000 which the right hon. Gentleman expects to receive from China. There is the credit of £800,000 of last year, which is, I suppose, to be provided out of balances in the Exchequer or by Exchequer Bonds. Then on the other side we have this £750,000. I cannot help thinking it would be rather the wiser course to await the certainty of such a payment before we proceeded to

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    dispose of it. The right hon. Gentleman calculates upon a surplus of £400,000, but if this £750,000 is not paid that surplus will be turned into a deficiency of more than £300,000. Once it is in our Exchequer, we can do what we like with it; but, looking at the uncertainty of events in China, unless I had been assured by the right hon. Gentleman that the whole cost of the China war will be met by the sums already voted, I should have said, "Let us wait awhile. The balance is not yet struck, and we may be called upon to pay a good deal more than we at present expect." We are told we are to have the £750,000 clear, hut I do not clearly understand that point. The noble Lord opposite told us that the amount which had already been received from the Chinese Government was £250,000. We must remember that of the 8,000,000 taels which the Chinese Government has engaged to pay, about £650,000 is applicable in the first instance to the payment of claims of British merchants. If only £250,000 has been received, there is still £400,000 to pay before the British Exchequer can get a single penny. Now is China such a speedy paymaster; can she pay so rapidly? I doubt it. In the Earl of Elgin's despatch of October 25th he says that to obtain a large indemnity is simply impossible, and then he goes on to say that it will be necessary to take 40 per cent of the gross Customs' revenue of China for about four years in order to provide payment of the indemnities already claimed by Baron Gros and himself. We may therefore calculate upon considerable uncertainty in the transmission of money from China to the British Exchequer. Upon those considerations I, for one, would rather say, "Let us pause in our remission of taxation, or at least let us pause before we remit any duty which is not of a character to be revived if once remitted." I believe that after all it is for the interests of the country and the promotion of real economy that the Government should not be a needy Government, and should not be compelled to borrow, nor to have recourse to any shifts upon the occurrence of exigencies. The right hon. Gentleman has estimated that he has £1,900,000 to dispose of, and he does so by taking off 1d. from the income tax for three-quarters of the year, and remitting the paper duties from October the 1st, or half a year's loss to revenue. But for next year he gives up
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    in reality the whole of these duties; he gives up £1,100,000 of income tax and £1,300,000 of paper duties, making together £2,400,000. Upon the 1st of May 1862, there will be another £1,000,000 of Exchequer Bonds falling due, which ought to be paid, and which a promise had been given should be paid. Thus there will be next year a deficiency of £3,400,000 to be made good, and, unless it can be shown to the House that there will be, a great reduction in our expenditure, I say it would be unwise to assent to such a sweeping reduction of our income. Now upon what grounds can we expect a large reduction of expenditure? I should be very happy to support any prudent measures of economy, but when it comes to a question of economising in what is necessary for the safety of the country, or for the maintenance of our good faith, I doubt whether this House or the country would assent to any reduction. We all hope there may be no wars in Europe; but can we be sure of it? We all trust that if war does break out, we may be exempted from it; but are there not in such cases measures of precaution, measures which good faith and honour require us to take, which may entail large expenditure? And how could we meet that expenditure with our present financial prospects? We are about to take off duties which produce £1,300,000 a year, and which, when once remitted, can never be renewed. If the same wants which occurred last year should arise in the next year, we shall not only have to restore the penny of the income tax we are now about to remit, but we must add another penny to replace the void caused by the remission of the paper duties. We must again have recourse to an increase of direct taxation, and whatever may be the comparative merits of direct and indirect taxation, it must be borne in mind that direct taxation might be pushed to such an extent as to become not only unpopular but impossible. The right hon. Gentleman said that the difference between 1853, also a year of bad harvest, and 1860 was of a very striking-character. I do not profess to be able to explain that difference, but I cannot help recollecting that in 1853 the income tax was 7d. in the pound, and in 1860 it was 10 d., with a forced collection of an extra payment in that year. There is no doubt that direct taxation carried beyond its ordinary limits presses on the power of

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    consumption. And there is another case in point. The House will recollect that the income tax during the war was 16 d.; and by a Vote of this House it was in April, 1857, reduced to 9d. The year 1857 was a most calamitous year for all the interests of the country. Money was at one time at 10 per cent. and yet I believe the revenue from all other sources was wonderfully increased. So when you remove duties on consumption you may, in replacing it by direct taxation, defeat your own intention. We do not take into account the probabilities of war; we do not want to go to war with any country, and I hope no country wishes to go to war with us. But it behoves us to consider that if we stand badly for a time of peace, what would be our condition in a time of war. The operation of a bad harvest has already diminished the revenue. Trade has been greatly affected by the recent events in India, which have diminished the means of consuming our manufactures in that empire. The Levant trade, from similar causes, is also much circumscribed. Our trade with the United States has been disorganized, and, to a great extent, stopped by what has occurred in America. Only look at the returns of the two last months, and see to what an extent our manufacturing interests have been affected by these events. If the disorganization continues you cannot expect to sec prosperity and employment revive in the manufacturing districts, additions made to the annual savings and wealth of the people, or a great increase of revenue. There were difficulties with regard to Turkey as well as the United States, and no one can say there was a present prospect of their being overcome. If they are not, what will be the prospects of next years' trade no one can tell; what are the prospects of the next harvest no one knows. But with such prospects before us no wise man would adopt measures which might lead him to a deficient revenue. I should for myself be glad to see a portion of the income tax taken off, and the paper duties left as they are. Without touching on the constitutional question I think the decision in "another place" last year was a godsend to the Exchequer. Had the paper duty been given up, your difficulties, which are great enough now, would have been increased by the loss of a million. But what do you say now? You say you are quite safe; that you have a large sur-
    908
    plus, and that you may give up the paper duty. But if you do give it up, recollect that you cannot put it on again. And why do you give it up? Is it that the duty is oppressive? I admit that there are inconveniences in every Excise tax that is an interference with manufacture. But what are the tests of a duty that is oppressive? Either that the revenue derived from it is diminishing or that it does not keep pace with an increase in other branches. But I have here a Return of the amount derived from the paper duty, which was made in "another place." It is for the three years 1858–59–60, and it shows that in 1858 the amount was £1,200,000; in 1859 it was £1,258,000; and in 1860 £1,331,000. No one can say that an increasing tax is a tax that is pressing on the resources of the country. But it is said the House of Commons has declared this tax to be inexpedient, and has promised to take it off; and that nothing releases us from the obligation to remove it when we think we can remove it fairly. But let me ask the House have there been no other pledges given? Has this House made no other promises? I believe that on financial measures this House has given pledge after pledge, and made promise after promise; and that not by Resolutions only, but by formal Acts of Parliament. An Act was passed for the gradual reduction and removal of the income tax; where is the tax now? An Act was passed for the reduction of the war duty on tea and sugar; where is it now? An Act was passed creating a Sinking Fund for the reduction of the Debt; where is the Sinking Fund? An Act was passed for the payment of the Exchequer Bonds, but where is the money to do so? There have been no end of promises. Do I blame Ministers and Governments for not adhering to these Resolutions? No; because my conviction is that the great pledge, resolution, and promise this House has made is to keep faith with the public creditor, and provide the means of carrying on the public service with the least pressure on the resources, means, and comforts of the people. That promise we must keep, and as long as we adhere to this we may dispense with Resolutions for the removal of a particular tax. This House is not bound to repeal a tax if it sees it is not wise to dispense with it; or if there is a surplus it should apply it to the reduction of a tax that would re-

    909
    produce itself by an increase of consumption. But we shall, perhaps, be told we are not in the position of a Chancellor of the Exchequer, and have not his knowledge of our resources. He tells us we have a surplus, and that we can dispense with a duty amounting to nearly £2,000,000. If so, I say, apply it where you may by a remission, best promote the enjoyment of the people, and yet retain a power of raising a future taxation, if necessary. With regard to the income tax I believe we underrate its pressure upon consumers. When I think it is to be made our only source, or our only great source, for patching up our wants in time of peace, I confess I do not see how it is to be applied in time of war, If I were asked how a portion of the surplus would he best used I should reply by a reduction of the import duty on tea. I may be told that the consumer would not obtain the full benefit of the remission, but he would obtain a large advantage, and besides the temporary loss of revenue might be turned into an increase.
    But there is another feature of this change which I wish the House to consider. I have said that our trade to other parts of the world is not in a prosperous condition. We have, however, now a new source of trade open to us, having, by arms, forced an entrance into China. We have gained the opening of various ports in China, and increased facilities of access there. Well, then, what will you do for China? You expect to extend your trade with her. How will you enable her to pay for the manufactures which you hope she will take from us? The natural answer is—by taking more of her tea; and remember that in so doing you not only increase your commerce with China, hut your manufacturers at home, who thus find a greater demand for their products, will be able to employ more labour. By reducing the tea duty I believe we shall benefit, to a far greater extent than by the remission of the paper duty, those whose welfare I am sure all here are anxious to promote, although some may arrogate to themselves the peculiar merit of considering it—I mean the welfare of the poorer classes of this country. There is no doubt that our consumption of tea might be greatly increased. It has generally increased since the duties were lowered, except during the last year, by about 5,000,000lb. annually, and with a reduction of duty our consumption might
    910
    be still further extended. There is now brought within our reach another country with which we have recently commenced a trade, and which produces tea to a great extent—I mean Japan. Well, if we really have this surplus, and if it be not a deceptive surplus, let us apply it in such a way as will stimulate trade with these countries, benefit our manufactures, and improve the social condition of the people. I confess, Sir, I have a strong opinion that the course proposed by Her Majesty's Government for the abolition of the paper duties is neither wise nor safe, and I beg the Ministry to reconsider the matter; I beg them to ascertain whether their future position is so secure that they can afford to wipe off at once and completely this source of revenue. I say this from no wish to disturb their position on that bench, for there is no calamity which at present I should more deeply deplore than a succession of weak Governments. I desire a strong Government; but I am convinced that neither this present Ministry—strong as they may be in talent and in the majority at their command in this House—nor any other can be strong unless they possess a strong financial position. I am convinced that, unless you give evidence to the world as well as to this country that your finances cannot he embarrassed, you cannot exercise that influence and that power which it is desirable you should possess abroad, nor can you with safety carry on the government at homo. While the country is in a state of comparative prosperity, direct taxation may be assented to; but in a moment of reverse and of trial public opinion may pronounce against the income tax. We have heard from the right hon. Gentleman the Chancellor of the Exchequer that the only mode of removing or of reducing the income tax is by effecting a reduction of the expenditure. That is an admission that there are no other taxes to which we can resort. Now, reduction of expenditure, as I said before, is not only desirable, but it is the duty of this House, when it can, to enforce it. Let the strictest economy prevail, but do not let us, under the plea of economy or reduction of expenditure, move a stone in the fabric of the Government or jeopardize the safety of our trade. If the apprehensions which I have expressed, and sincerely expressed, may be thought to possess any weight, I beg they may be considered by the House and by the Government. Let mo ask the Government to remember that whatever

    911
    may be the feeling of the country, whatever the pressure brought to bear upon them for the removal of a tax, it is their duty to weigh the consequences of such a remission, and upon their shoulders rests the responsibility of jeopardizing the national interests and the national finance. I beg pardon of the House for having troubled them so long, but I am bound to say that if the question be put to me whether the present financial measures are safe, wise, and politic, or even (I may say so without offence) honest to the country, I cannot, if I am to decide aye or no, answer this question otherwise than in the negative. I trust, however, that both the Government and this House have still time for reflection, and I trust that upon this matter they will come to such a decision as will show that they are determined to act more wisely and to consult more surely the safety of the national finances than by carrying out any temporary engagements into which they may have entered. I trust that they will feel the responsibility which rests upon them of providing against every danger, instead of acting from jealousy of any supposed interference with their privileges. Such a feeling ought not to influence the House of Commons, and I hope will not influence them, when they have to decide on measures which involve the credit of the nation and the interests of the people.
    MR. WHITEsaid, he had understood the hon. Member for Huntingdon to propose that, instead of the proposed remission of the paper duty and the reduction of the income tax, the duty on tea should be reduced from 1s. 5d. to 1s. per lb., but he (Mr. White) thought it was a wiser policy of the Chancellor of the Exchequer in effecting any remissions to make such proposals that the whole amount remitted would go into the pockets of the people, and while he hoped the time might shortly come when the right hon. Gentleman would be able to reduce the duty on tea, he did not think a case was made out for such reduction at the present time. On that point he would remind the House that the duty on tea was 2s. 2¼d. in 1849, 1850, 1851, and 1852, the average price to the consumer of common congou, which he took as an index of value—it being the article of staple consumption—was 9¾d. per lb. in bond. The average price of common congou during the years 1857, 1858, 1859, and 1860, with a duty of 1s. 5d. was 1s. 3¾d. per lb. Hence
    912
    they had a remission of duty to the extent of 35 per cent, while the diminished cost to the consumer was only 17 per cent. It might be said that that was owing to the disturbed state of affairs, and to diminished imports, but such was not the case. From 1849 to 1852, the average import of tea into the United Kingdom amounted to 59,225,000lbs., while from 1857 to 1860 the average imports amounted to 75,822,000lbs. His experience of China warranted him in saying that that country, being the sole source of supply for the article, excepting the small quantity obtained from Assam and now from Japan, every diminution of duty had caused an increased demand and an augmentation of cost. And until the mighty advantages which people supposed would result from the Treaty of Tien-tsin were realised, it was hopeless to expect that any reduction of the tea duty would lead to such a diminution in the sale price as could afford satisfaction to a Chancellor of the Exchequer for having made such a sacrifice. With respect to the paper duties he should now say nothing, nor would he have ventured then to address the House, except upon a subject to which he had given much attention.
    LORD ROBERT MONTAGUsaid, this House has not forgotten, Sir, how much we, last year, were charmed and beguiled by the eloquence of the Chancellor of the Exchequer. But when we had had a month of calm and sober reflection, we began to suspect that the advantages which he had promised us were more specious than real; and that the arguments which he brought forward had fallacies concealed in their folds. He showed us an Exchequer, full, at least, of words and long-sounding periods. Of course he (Lord Robert Montagu) did not for a moment suppose that he could have intended to mislead the House: all he meant was that he himself was carried away by the specious appearance which his scheme presented. An eloquent man always begins by persuading himself before he can persuade others; he must be carried away himself before others would follow. For eloquence (to borrow the expression of an eminent writer of the present day) is nothing but "the art of putting things." Your own feelings will depend on the way in which you put a thing before your own mind. You may put it before yourself in a bright and attractive manner; or else you may discard all poetry and fancy and re-

    913
    gard the same thing in a matter-of-fact way. The one way of putting a tiling may he as correct as the other; but your own feelings and those of others depend entirely on the way in which you yourself view a circumstance, and the manner in which you put it to others. The right hon. Gentleman, being a sanguine man, talked last year of £1,850,000 surplus; while a more matter-of-fact man, looking at the probabilities of the case, would have said that, instead of there being a surplus, there would most likely be a deficiency. Again, the Chancellor of the Exchequer on Monday spoke of a deficit in last year's accounts of only £855,000. This was the sanguine way of putting it. But if he had put it in a matter-of-fact way, he would have said that the expense was vastly larger than he had at first anticipated, but that the paper duty was thrust upon him, that he took £1,500,000 out of the balances of the Exchequer, that he received another £1,500,000 by renewing Exchequer-bonds, that he retained £800,000 out of the China Vote, and that even then there remained a deficit of £855,000. So, again, he held out hopes of a surplus next year. This was an attractive way of putting it. But as the whole income tax had already expired, and as the war duties on tea and sugar expire on the 30th of June, and as the £750,000 from China, which he counted upon, was very hypothetical, and as there was a further drop in the Customs revenue (under the French Treaty) of £700,000, which the right hon. Gentleman had not allowed for, it would be quite as correct (only more matter-of-fact) to speak of a deficit of £13,000,000. Similarly it was pleasanter to talk, as he did, of remitting 1d. of income tax. But as there was no such thing as an income tax now, the matter-of-fact way of putting the thing would have been to talk of imposing an income tax of 9d. So, again, a matter-of-fact man might not think of repealing taxes until he had a surplus in hand. But a man of a more sanguine and poetic turn would repeal when he saw a visionary surplus—a fair prospect of a surplus, perhaps, but yet a fair and delusive prospect like that of a mirage in the desert. The right hon. Gentleman was like the sanguine Mr. Micawber in Dickens's tale, who was always in difficulties and always waiting for something to turn up to relieve him. He had misled the House last year, not intentionally, hut because he himself
    914
    had first been carried away by the specious appearance of his own Budget. His speech last year was like a magnificent explosion which was pleasing to the eye, but when the smoke cleared away and we came to walk over the ground we found the destruction and ruin he had caused. His anticipations and hopes of last year were entirely exploded and dashed to the ground. First, with regard to the "Penny taxes:" the right hon. Gentleman had introduced them with a great eclât, as if he were inaugurating a new era of taxation; they came before us with a prestige, as if the right hon. Gentleman had with infinite labour given birth to a new system of finance. But how had his scheme turned out? His penny duties "had produced nothing but trouble, obstruction, and delay," to use the words of the memorial presented by the commercial community. His calculations as to the saving in the expense of collecting the revenue were mistaken, and he had to come to Parliament late in the year to ask for a Vote of £232,000 to cover his miscalculation. The Customs had produced £135,000 less than anticipated, although, according to his own confession, about half-a-million had come into the Customs department which did not belong to it—it had come "unlawfully" (to use his own expression) or abnormally to the Customs. He said, moreover, most truly "wine, and wine alone, has done all and more than I expected." And in the case of the Excise his calculation had been equally over sanguine, for there was a deficit of £1,196,000 below his Estimate. Besides, he had to contract a new debt to pay off the old; he renewed £1,000,000 of Exchequer bonds; in March last he borrowed £594,000 in Exchequer bonds; and he raised £680,000 to meet the exigencies of the bad harvest. All this justified our statement last year that his Budget did not make sufficient provision for the expenses of the year. So also in this year's Budget, the right hon. Gentleman—while he displayed a great intellectual agility in vaulting among figures and details in a perplexing manner—reckoned on the Chinese indemnity, which might never come to hand; there was a further drop in the Customs under the French Treaty, to the extent of £700,000, which he had omitted from his calculations; and by the remission of the paper duties and the 1d. income tax he compromised the revenue of next year to the amount of £2,500,000, notwithstanding

    915
    that there was £1,000,000 of Exchequer bills falling due that year and £1,000,000 in each of the two years following. The best judgment on this proceeding was pronounced in the words used by the right hon. Gentleman himself in 1857. He then said:—
    "Is it not your duty to show us that the Chancellor of the Exchequer next year will be able to pay his way? [This was said in 1857, and he is speaking of the falling in of taxes in the year 1858–9.] Is it to be supposed for a moment that we are this year to curry favour with the country by voting away the money of 1858–9, in order that the Chancellor of the Exchequer in 1858–9 may be obliged to come down to the House in time of peace and reimpose the income tax?" [3 Hansard, cxliv. 1000.]
    And he continued—
    "For one, I will not he responsible for creating that deficiency. It fills me with astonishment that Her Majesty's Ministers … show so much indifference to what I, for one, must venture to call the very first principles of duty in regard to the finances of the country." [3 Hansard, cxliv. 1006.]
    Putting 1861 for 1858, and 1860 for 1857, exactly the same language might be applied to Her Majesty's Ministers now. It must also be remembered that the 9d. income tax is imposed for one year only; next year there will be a deficit of £10,000,000 more in consequence of this falling in. Now, the right hon. Gentleman had also in 1857 expressed himself as follows:—
    "I protest.… on behalf of what I regard as sound, straightforward, and, if I may venture the expression without offence, honest modes of dealing with taxation and expenditure. The hon. and learned Member for Newcastle (Mr. Headlam) says that the only way to keep the income tax under our control is to vote it from year to year. Now, I beg leave to differ in opinion altogether … because the annual voting of the income tax tends to take away the solidity and stability of our finance." [3 Hansard, cxliv. 2067–8.]
    Such was the language used by the right hon. Gentleman in 1857, and yet he now proposes, regardless of the opinions which he then enunciated, to impose the income tax from year to year. He appealed the other night to what he had accomplished in 1853. His principles then were good, his system then was sound, but what was it? To let the revenue depend on indirect taxation, and to "call out the giant to aid us in time of war." And on ap. 18, 1853, in speaking of the income tax he complains of—
    "The tendency to immorality, which is, I fear,
    916
    essentially inherent in the nature of the operation." [3 Hansard, exxv. 1304.]
    To borrow the simile to which the right hon. Gentleman himself on Monday last had recourse, he in 1853 paid his addresses to a sister of retiring disposition and modest mien; in this year 1861 he kept company with the sister of bold and forward manner and demoralizing tendencies; and next year he may have to sing the wrath of Achilles, and the woes of Helen, which sprang from her commerce with Paris. The paper duty which he asked Parliament to repeal was commonly spoken of by Members sitting on the Ministerial side of the House as a tax upon knowledge, but it was no such thing; this is merely a term invented to prejudice the judgment; it simply bogs the question. The issue before the House is whether it is wise to impose an income tax of 9d. and war duties on tea and sugar in order to repeal the duty on paper; or whether we should retain the paper duty, a tax collected without difficulty, not felt to be a burden, and which in no way hampers trade, but is a source of national power. This was proved by a return furnished to Lord Monteagle in 1860, in which it was stated—
    "There is no article subject to Excise survey in which the increase in the quantity charged has been so constant and so great in each successive year."
    And in a Return moved for by Lord Camperdown, it is stated that—
    "The net produce of the duty was £1,103,754, in 1858; £1,321,105, in 1860. The net produce of the Customs duty on paper imported into this country was £9,886 in 1858; and £27,230 in 1860."
    Lord Monteagle's Return says also—
    "There is scarcely any duty in the collection of which our interference is so little felt."
    And after speaking of the magnitude of our trade in paper—
    "We are entitled to regard this as some evidence that our fiscal regulations do not press unduly upon the manufacture of paper."
    Now, he need scarcely remind the House that the revenue on tea, sugar, and tobacco had fallen off to the extent of £52,000, so that it was evident the taxes on those articles pressed heavily on the production. But it was contended that the duty on paper ought to be repealed in preference to those on tea and sugar, upon the ground that by taking that course collision with the House of Lords would be

    917
    avoided. In his opinion, however, no course better calculated to renew that collision could be pursued. The action of the Government in repealing the duty looked, indeed, somewhat in the light of bravado, they "dared" the Lords to resist; while, if we leave matters alone, there can be no collision. It must also be taken into consideration that, in order to effect their object, they asked the House to sacrifice that which was the source of employment to 50,000 workmen, and which produced a large amount of revenue, all for the purpose, as it would seem, of conferring a boon on the penny newspapers, which misinform, misguide and mislead the million. In making these observations he must not be supposed to be the advocate of keeping up the paper duty in the face of an overflowing Exchequer; that for which he contended was that if there were certainly a sum at the disposal of the Chancellor of the Exchequer the tax upon paper was not the first to the remission of which it ought to be applied. The war duties upon tea and sugar called, in his opinion, more cogently for repeal. Upon that point he might quote the right hon. Gentleman the Chancellor of the Exchequer himself. In 1857 he said—
    "When war taxes are granted they are invariably granted by the Parliament for the purposes of war in time of war."—[3 Hansard, cxliv, 989.]
    Again—
    "Before the Speaker leaves the chair, if health and strength be spared me, I shall invite the House to declare that, whatever taxes we remove, we will not impose more duties upon the tea and sugar of the working man."—[3 Hansard, cxliv, 1010.]
    Upon the same point the noble Lord the Member for the City of London had also committed himself, when, on the occasion of the debate with respect to the paper duty in 1858, he said—
    "It was, therefore, almost a matter of good faith, when next there was a reduction in taxation, that the duties on tea and sugar should be reduced, which were, in fact, war duties; and there could be no greater claim for reduction of taxation than in those articles of consumption which entered so largely into the comforts of the people…. he was sure that if there was a duty of 1s. on tea the increased consumption would soon bring up the revenue."—[3 Hansard, cli, 134.]
    Such was the language used by the noble Lord; and there were, he thought, few hon. Gentlemen in that House who would seriously contend that the reduction of the war duties upon tea and sugar would not be more acceptable to the humbler classes
    918
    than the remission of the duty on paper. Could anybody suppose that when the working man returned to his home weary after the toils of the day he would not prefer to a penny paper an exhilarating beverage? From the one he would derive refreshment and enjoyment; over the other he would in all probability doze. He might further observe that of all the sugar used in the country, 40 per cent, and of all the tea 45 per cent, was consumed by the poorer classes, who would in no way be benefited either by the repeal of the paper duty or the imposition of a reduced income tax. Independently of that fact, there would, if the war duties on tea and sugar were repealed, be an increased consumption of those articles; and as a consequence it would be found that the revenue would ultimately be in no material degree affected by their remission. But if those taxes were not remitted, it would still, he manitained, be sound policy in the event of a reduction of taxation being decided upon to deal with a duty which might be easily reimposed rather than with one to which it would be difficult, if not impossible, again to resort. A charge coming within the former category was the income tax, which the right hon. Gentleman might have taken advantage of his surplus to reduce by an additional penny in the pound, instead of taking the course which he had adopted. In speaking of that impost in 1857 the right hon. Gentleman said—
    "The income tax is an admirable instrument for national purposes upon a great and adequate emergency; but it is a dangerous instrument to retain in time of peace."—[3 Hansard, cxliv. 148.]
    He then went on to say that he looked upon the arrangement of 1853 in the light of a compact, adding that it was the duty of the House to adhere to the pledges then given with respect to the extinction of the tax in 1800. And again he said—
    "How it is that hon. Gentlemen sitting on those (the Treasury Benches) find such facility for giving assent to contradictory propositions, it is not for me to say. But of this I feel convinced, that if I may assume to exist in this House of Commons the same feelings which existed four years ago, … the express pledges which were given to the country on the subject of the income tax will be rigorously maintained."—[3 Hansard, cxliv, 985.]
    And he continues to assert that even—
    "The taxing and borrowing occasioned by the Russian war could not absolve them from the promises held out to the people of England in 1853."—[3 Hansard, cxliv, 995.]

    919
    That being the opinion which the right hon. Gentleman entertained on the subject of the income tax, he might be permitted to refer to another eminent authority, Mr. M'Culloch, who, after mentioning the paper duty, and saying that Excise taxes were by much the fairest, most equal, and least burdensome of all taxes, added—
    "To repeal a tax, especially if it press on an article in general demand, is always an acceptable measure, and is apt to be hastily agreed to by a weak or popularity-hunting Government."
    Now, those words had been written some time ago, and could not, therefore, be construed as containing any personal allusion. But, setting aside all that could be said against the remission of the paper duty and in favour of a reduction of the income tax instead, was it, he would ask, certain that there would next year be a sufficient amount of money in the Exchequer to meet the expenses of the country? Will not new taxes be required again this year to meet the ordinary expenses of the year? Is it so certain that there will be no extraordinary expenses? In 1858, when the financial horizon was comparatively clear, the right hon. Member for Ashton had proposed to the House a merely theoretical condemnation of the duty on paper, and had not pressed for its immediate repeal. Were our financial prospects now so much better than then, that we could pursue with greater safety now a path which we had in 1858 declined to tread? Would the sacrifice be less dangerous now than it was then? Last year the Chancellor of the Exchequer had promised that the treaty with France should inaugurate a reign of peace and tranquillity. But war and expenditure were rising, like dark and threatening clouds, and obscured the horizon. France had lined the southern shores of the Lake of Geneva; she had seized positions in Syria and on the Red Sea; she sat on the seven hills of Borne, and held the destinies of Italy in her grasp, and at any moment she might with her iron hand crush those new-born liberties. She had sown animosity in Syria and Hungary, and had fomented discord in Poland and in Schleswig. That might lead her to make fresh annexations and new "revendications," as guarantees against the aggrandisement of other Powers. There was no commercial confidence in the Disunited States of America, for there was impending
    "The intestine shock
    And furious close of civil butchery."
    920
    So that our trade with the North would be impaired and our imports from the South would be diminished. The tramp of "war's fiery-footed steeds" shook the earth, and the busy note of preparation was heard. Was this, then, the time to endanger the revenue because of some romantic visions of an over-sanguine Chancellor of the Exchequer? Last year the House was three times called upon to patch up an inadequate Budget. Let it now, profiting by experience, demand that every source of revenue should be nursed and fostered to bear the coming strain.
    MR. BAXTERsaid, that he would not follow the noble Lord who had just sat down in his arguments in connection with our foreign policy and the present state of the Continent; but there were one or two remarks which fell from the hon. Gentleman opposite (Mr. Baring) which called for a reply. They must all feel that there was no man in that House more competent to give an opinion on a question of this nature, and they must likewise admit that there was no higher commercial authority. At the same time he (Mr. Baxter) could not forget that the hon. Gentleman was one of those representatives who resisted those great free trade measures which had saved the country from revolution, and the benefits of which even the most sanguine of their supporters never for a moment realised. He had listened with regret that night while the hon. Gentleman attacked the Budget, as he (Mr. Baxter) believed that the more it was examined the more it would be found to be based on the truest principles of financial legislation, and on sentiments the practical adoption of which by that House would add immensely to the comforts and contentment of the industrial classes. He had viewed with a good deal of curiosity and interest some of the statements that had been put forth from time to time with regard to the present financial condition of the country. They all knew that a great organ of public opinion had prophesied a deficit of something like £3,500,000, and the fact that the Vote for China last year of £3,800,000 was a special and extraordinary Vote, and would not, as a matter of course, be repeated in 1861–62, seemed to have been overlooked. He was quite sure that every hon. Gentleman who had all along been a warm admirer and advocate of the principles of free trade must have listened with mingled feelings of gratification and surprise to what he must characterize as the triumphant vin-

    921
    dication of the financial policy of last year, which the Chancellor of the Exchequer addressed to the House a week ago—a vindication in which the doleful prophesies to which he had referred were scattered to the winds. Even the most ardent Freetrader must feel surprised at the wonderful results of that free trade policy which the hon. Member for Huntingdon (Mr. Baring) had steadily and continually opposed, but the extension of which the right hon. Gentleman below him (the Chancellor of the Exchequer) so manfully and nobly carried out, and for the inauguration of which they must not forget that the country was indebted to the political sagacity of Mr. Cobden, and the high-minded patriotism of Sir Robert Peel. The hon. Member for Huntingdon spoke as the representative of the gentlemen in the City who preferred a safe Chancellor of the Exchequer. What did they mean by a safe Chancellor of the Exchequer? It struck him that they really meant a thorough Tory Chancellor of the Exchequer, who would do nothing, but be quite contented with preserving and keeping their accounts; in fact, with acting as a kind of head bookkeeper to the State, without adapting, as the right hon. Gentleman had continually done, his financial arrangements to the progress made in the science of political economy, and to the ever-varying wants and circumstances of this great commercial nation. Two main objections had been taken out of doors to the Budget of the right hon. Gentleman. He understood the hon. Gentleman, the Member for Huntingdon, to admit the Estimates for the ensuing year were not founded upon an over-sanguine view of the resources of the country. But he went on to advert to the state of our trade with Turkey and the United States, in order to show why the revenue for the ensuing year would not be so large as was calculated by the right hon. Gentleman. The statements of the hon. Member on this point were somewhat contradictory. In looking into the figures it did not appear to him that the Budget was open to the criticism which had been passed upon it by the hon. Member for Huntingdon, that the Estimates of the Chancellor of the Exchequer for the ensuing year, though they might be correct enough in a time of ordinary prosperity, could not be depended upon in the actual state of political and commercial affairs throughout the world. That criticism, in the first place, was contrary to the opinion of the heads of depart-
    922
    ments, who seldom made errors in their calculations. But what were the figures themselves? The Customs produced last year £23,305,000, and all the Chancellor of the Exchequer calculated for in the ensuing year was £23,585,000, being an increase of only £280,000, which he thought was a very moderate amount of increase to expect, considering the bad harvest and other adverse circumstances of last year. In the Excise the Chancellor of the Exchequer looked for an increase of only £28,000, and in the Stamps an increase of £112,000. Taking those figures, and making allowances even for commercial disasters which might occur in the year, he did not think his right hon. Friend (the Chancellor of the Exchequer) could be fairly charged with an exaggerated estimate. He (Mr. Baxter), on the contrary, had heard gentlemen of great mercantile authority state that in their opinion the right hon. Gentleman had understated the amount of revenue likely to he yielded in 1861–62. But the hon. Member for Huntingdon had called upon the Chancellor of the Exchequer to guarantee a state of peace. Everybody knew that the right hon. Gentleman was a bold man; but Chancellors of the Exchequer, when preparing their financial statements, should not be required to take into account remote contingencies. We were subject to visitations of Providence, and, if we were to arrange our financial legislation upon the probability of a foreign war breaking out, it would be impossible for the Chancellor of the Exchequer to bring forward a Budget which could reasonably be discussed either in that House or out of doors. He might be allowed, in conclusion, to express his gratitude to the Chancellor of the Exchequer for his admirable remarks on the subject of our national expenditure—a subject which could not too frequently engage the attention of the House. There was a steady and growing conviction in the public mind that the expenditure ought to be considerably, though gradually, reduced. His fear was that if the present enormous expenditure were continued in a time of peace there would not only be very serious discontent among the taxpayers, but Parliament would be driven against its will to a more sweeping reduction than prudent men would approve. The whole expenditure of the United States was under £20,000,000 for a population of about 32,000,000, whereas our expenditure verged upon £70,000,000 for a popula-

    923
    tion of 30,000,000. He admitted that the salaries and financial arrangements of the United States were low, and might with advantage to the country be increased; but at the same time there was a wide margin between £70,000,000 and £20,000,000, and he did hope that what had been so eloquently said by the Chancellor of the Exchequer would be borne in mind. To one other subject he would allude—namely, the Commercial Treaty with France. He was very glad to hear the statement of the right hon. Gentleman as to the eventual success of that treaty. Every one who had paid any attention to the negotiations which had been carried on with the French Government, after Parliament was prorogued last year, must cordially concur with the right hon. Gentleman in the eulogium he passed on the good faith, the liberality, and excellent feeling, which from the beginning to the end had characterized the Government of the Emperor. The merchants of this country were beginning to find out the advantages they would derive from the treaty. He met the other day a large manufacturer on his way home from Paris, where he had been establishing a house for the sale of his goods; and before a dozen years had passed over their heads they would look back with astonishment on the little commercial intercourse which had existed between the two countries before Mr. Cobden undertook his most beneficent, but at the same time very difficult and laborious task.
    MR. BANKS STANHOPEsaid, he could not help paying a passing tribute to the good sense, good feeling, and good taste which characterized the speech of his hon. Friend the Member for Huntingdon. While in his speech on the Budget, the Chancellor of the Exchequer had stated, in one manner, things which he (Mr. Stanhope) would have put very differently. He for one should oppose that part of the Budget which related to the remission of taxes, on the ground that he did not believe that the Chancellor of the Exchequer had any real surplus at all. The right hon. Gentleman alleged that he had a surplus of £1,930,000, out of which he proposed to give up £850,000 for the reduction of the income tax, and £650,000 for the reduction of the paper duties. If there were a real surplus, no doubt it might be divided in that way, though he should contend even then that it might be better applied.
    924
    But before he could say that there was a real surplus, he must ask them to consider what a surplus was. He had always thought a surplus was the balance between the estimated expenditure and the amount to be derived from taxes already in existence, and voted by Parliament, and which, therefore, were under the control of the Chancellor of the Exchequer. What, without intending anything uncomplimentary to the Chancellor of the Exchequer, he should call a fictitious surplus, was a surplus on which the taxes already established by law did not enable him to count, and which was not therefore under his control. If he ventured to set up his opinion on this point against that expressed in the eloquent speech which the Chancellor of the Exchequer had delivered on Monday night he did so on authority which the right hon. Gentleman, least of all hon. Members in that House, could deny, namely, the authority of the right hon. Gentleman himself, and of his own speech in 1860. What was the way in which he (Mr. Gladstone) then treated the financial position of the year? He then said, and no one who had heard that speech could well forget it, "I must take those taxes to which I am by law entitled, and I find then that there is a deficiency of several millions." But the position was the same and the figures were the same to a certain degree. He, therefore, could not admit to even so talented an orator as the Chancellor of the Exchequer the right to take as existing those taxes which would expire if not reimposed, or give him the right to say—"I will take those taxes that you gave last year, and if you reimpose them they will give me a surplus." As far as he could see there would be, taking the taxes which were in existence, a deficiency of several millions. That could be made up by the renewal of an income tax of 8d. in the pound, which would leave a surplus of £200,000. It was not from any niggard feeling that he (Mr. Stanhope) objected to give the 9d., but he must remember that the right hon. Gentleman claimed the merit before the country of giving a reduction of the income tax. Now, if he (Mr. Stanhope) was right in the statement, that at present the income tax did not exist, and that an 8d. income tax would be sufficient, then, there was not only no reduction, but the Chancellor of the Exchequer was adding an unnecessary 1d. to the income tax in 1861–62. A similar ar-

    925
    gument was used in 1857 by a member of the present Government, who, when it was proposed to reduce the duty of 1s. 9d. on tea to 1s. 1d., contended that, as the expiration of the additional duty would have left the duty at 1s. 3d. if no reimposition had been proposed, the change was, in point of fact, an addition of 4d. and not a reduction of 2d. But before all other considerations he would have regard to the safety of the finances and honour of the country, and he would cheerfully give an additional 1d. or 2d. of income tax provided it were actually necessary. But with regard to the additional 1d.—for we were asked for 9d., while 8d. was all that was necessary for the service of the country—he wanted to know how it was to be applied. Last year was a disastrous one. Between the actual revenue and expenditure there was a deficit of £2,200,000. He was, therefore, prepared to say at once that if the Chancellor of the Exchequer had come down to the House, and told them that last year had been disastrous, for reasons over which he had no control, and that he had actually been obliged to take from the balances in the Exchequer, and that he wished therefore to have a greater amount in hand than appeared absolutely necessary in order to supply that deficiency, then he would most cheerfully have agreed to give the penny. So he would gladly have given it if the Chancellor of the Exchequer had said that there were a million of bonds which it was necessary or expedient to pay off as they came in, or if he had said, "Though with 8d. in the pound I shall still have a surplus of £200,000, yet, with another million added, I should feel more safe, and should be assurred that I shall have a real surplus next year; and this will so far add to our resources, that in 1862 I shall be prepared to meet you and say, 'This is an actual balance in hand: a substantial surplus, from which I can give relief to tea or to paper.' "If he had said that, he (Mr. Stanhope) would have given the 1d. But as one of those representing the payers of income tax, he objected to give an extra penny of income tax to reduce any permanent tax of any sort, whether it was on paper or on hops; for, though he did not suppose anything could be more thoroughly objectionable than the tax upon hops, and though he had great sympathy with the agriculturists, on whom it pressed so severely, yet he would not impose an extra 1d. on those who paid income tax to
    926
    relieve any other class of the community whatever. Now, he confessed he was at a loss to discover why they were called on to take off the duty on paper. They were generally referred to a Resolution of the House in 1858, but if he was light in what he collected from the debate on that Resolution, he was perfectly willing to abide by the opinion of the House as then expressed, and to carry out the idea expressed in that Resolution. He would call their attention to the Resolution passed, the Resolution rejected, and what was said in the debate. The Resolution relating to the paper duty passed by the House in 1858 was—
    "That this House is of opinion that the maintemance of the excise duty on paper as a permanent source of revenue would be impolitic."
    He was quite ready to admit that proposition, but he denied that it in any way bound them to impose an additional penny on the income tax in order to take off the paper duty. Still less did that Resolution require them to keep on the war duties upon tea and sugar, with a view to repeal the duty on paper. The Resolution of 1858 as originally proposed by the right hon. Member for Ashton contained these words—
    "That such financial arrangements ought to be made as would enable Parliament to dispense with the paper duty."
    Those words, however, the House rejected, and not a single speaker supported them in debate. Yet the House was now called upon to do the very thing which it refused in 1858 to pledge itself to do—namely, to make such financial arrangements as would enable them to dispense with the paper duty. The right hon. Member for Buckinghamshire, who was Chancellor of the Exchequer when the right hon. Member for Ashton's Motion was discussed, said the duty on paper was one of those taxes which should be got rid of at a favourable opportunity, but he declared at the same time that it was then impossible to repeal it. The hon. Member for Birmingham (Mr. Bright) then wished the House to affirm that when the state of the Treasury would permit of it the duty should be repealed. That of itself amounted to an admission that in 1858, at least, the duty could not be remitted; and certainly the circumstances of the Exchequer were not now more favourable for such a measure. The noble Lord the Member for London, in the same debate, spoke in favour of the reduction of the duties on tea and sugar. What was the rate of the income tax in

    927
    1858? Why, only 5d. in the pound; and yet the House then unanimously rejected a Resolution declaring that arrangements should be made for taking off the paper duty. He maintained that when they had a surplus they ought to remit such taxes as pressed most severely on the people, and, if it were necessary, even to continue the late amount of the income tax in order to dispense with the war duties on tea and sugar; that would be infinitely preferable to abolishing the paper duty. The House was bound in honesty to remove from the people the heavy burdens imposed in time of war, and then, if a future emergency arose, they could fairly ask the nation again to submit to increased taxation. Then, again, what was to be the state of affairs during the next year? Not even the noble Secretary for Foreign Affairs, nor the noble Lord at the head of the Government, would venture to assure them positively that there was no chance of war in Europe. In order to be prepared for that contingency, the Chancellor of the Exchequer ought only to reduce those taxes which would be likely to give springs to commerce by an increased consumption, and not to abolish them. If the paper duty was abolished the Exchequer would lose £1,300,000. If the tea duty were reduced by, say one penny, the Chancellor of the Exchequer himself could not say that they would lose the full amount of the reduction, as the increased sale might make it up; and if war should break out, he could re-impose it, and it would be cheerfully paid. The course now proposed by the Government was to take a penny more than they required from the income-tax payer, and in order to console him for his loss they gave the penny to somebody else. That reminded him of an incident which happened to two friends, one of whom owed the other a sovereign. They both went to the opening of a church, and, a collection being made after the service, the one friend said to the other "You know I owe you a sovereign?" "Yes," said the other, pleased at the prospect of payment. "Well," continued the first friend, "I'll tell you what I'll do for you; I'll put it in the plate." That was very much what the Chancellor of the Exchequer proposed to do with the unfortunate income-tax payer. What the right hon. Gentleman took from him was to be bestowed on the newspaper proprietor. In conclusion he would only observe that he agreed with the hon. Mem-
    928
    ber for Huntingdon that a modification of the financial arrangements need not involve a change of Government, and neither his speech nor his future votes would be directed in hostility towards the right hon. Gentleman. But he could not silently assent to a system of finance which he believed must lead to one of two dangerous alternatives—cither that by trusting almost entirely to the income tax as a source of revenue they might seriously, and perhaps fatally, affect the industry and real property of the country, or they would arrive at the other alternative, which he regarded with still greater dismay—that some day, goaded by the incessant pressure of that tax, the nation would make a hasty and unconsidered step, suddenly strike off some millions from the expenditure, undo the work of former years, and by a spirit of false economy create a necessity for future Governments to have recourse to violent legislation or else to affect injuriously the army and navy of Great Britain, upon which she must rely to maintain her own honour and to preserve her power unimpaired among the nations of the world.
    MR. DODSONsaid, the Budget was an audacious Budget beginning with deficiency and ending with deficiency, for the Chancellor of the Exchequer had no sooner shown a surplus than he proceeded to annihilate it by reducing taxes. Still, for his part he was prepared to say that the proposition of the right hon. Gentleman was characterized not only by audacity, but by foresight. Putting last year's deficiency out of sight, he had shown that, for the current year, if he assumed the expiring taxes to be continued, he should arrive at a surplus of £1,900,000 which he had no sooner told the House than he proceeded on the strength of it to reduce taxes to the amount of £2,500,000. Still as the reduction of the income tax was only to be for three quarters of the financial year, and the paper duty for the last half year, the full effect of the reduction was thrown on the year 1862–3, so that the right hon. Gentleman, by his own Estimates, would have a surplus for this year of £400,000. As to the policy of making a prospective reduction of taxation he could not gather that any of the Gentlemen on the other side had a right to object to that principle, for, though they cavilled at the remission of the paper duty, they did not say what they would propose, or offer any distinct opinion, except that some

    929
    said they should like to take another penny off the income tax, and some said that they should like to remit the war duty on tea or on sugar. But if the Chancellor of the Exchequer had done that, he would have made a still greater gap in our financial resources, so that, in fact, his opponents wanted him to go further in remitting taxes by anticipation. He saw no occasion to mistrust the calculations of the Chancellor of the Exchequer, whose calculations of last year had, he thought, been fulfilled as nearly as could be expected. The hon. Member for Huntingdon had alluded to the bad harvest, and expressed an opinion that we had not yet experienced the full weight of that misfortune, but no doubt the Chancellor of the Exchequer had not omitted that circumstance in his calculations. Then, as to the £750,000 expected from China, which was said to be uncertain, he could not see why they should doubt the payment, especially as the Customs in the Chinese ports were received by English collectors. The hon. Member for Huntingdon had raised a doubt as to whether they should get the money for the Chinese indemnity, on the ground of an observation in a despatch of the Earl of Elgin. But in that despatch the Earl of Elgin recommended the Government not to insist on a larger indemnity, for fear they should so distress the Chinese Government that they would be unable to pay, which surely implied that if the smaller amount only were insisted on, they would be able to pay. The right hon. Gentleman's calculations for last year had proved remarkably correct. He had estimated the receipts from income tax, post office, miscellaneous, and Customs at £50,887,000, and they had produced £50,847,700, so that, in a calculation of £50,000,000, he was only out £40,000. The total revenue from the Excise certainly fell short of the calculation by about two millions, being about nineteen millions instead of twenty-one millions. But this was mainly owing to the decrease in the items of the malt duties, which fell short by £800,000; the spirit duties, which fell short by £900,000; as that was a superfluous article of luxury, its consumption was checked at such a time; and lastly, the hop duties, estimated at £300,000, had entirely disappeared. It was satisfactory that the consumption of other articles, such as tea, coffee, cocoa, raisins and currants, and tobacco, all belonging to the comforts of the people, had increased dur-
    930
    ing the year, and the decline in sugar was but very small. The hop duty, as he had said, had entirely failed, and that showed the folly of levying a tax on an article so exceptionally uncertain and unreliable as hops. The crop of wheat or barley might vary from one season to another, but only within certain limits which could be reckoned upon. It was very different with hops. He saw no reason to question the calculations of the right hon. Gentleman with regard to his estimate of income. As far as he was aware no one on either side of the House found fault with the remission of the penny income tax. There was a greater variety of opinion with respect to the proposed remission of the paper duty; and however desirable that remission might be in itself, it was a question whether other interests had not a greater claim for consideration. It was not the remission most acceptable to himself, and he should reserve to himself full liberty to discuss its merits when it came specifically before the Committee; but he thought it advisable to go into Committee as soon as possible, for the purpose of enabling the House to discuss the various propositions which would then be brought forward.
    MR. BLACKBURNsaid, that they had two questions to consider upon that occasion, the first of them being whether they were likely to have such a surplus as would justify them in repealing any tax, and the second, whether the mode in which it was proposed that they should apply that surplus was the best that could be adopted. Upon the first of those points he had to observe that the Chancellor of the Exchequer had no doubt the best opportunities of forming a correct judgment; but he (Mr. Blackburn) could not help thinking that past experience justified them in looking with considerable distrust at the Estimates of the right hon. Gentleman. Taking the expenditure and the revenue together the expectations formed by the right hon. Gentleman last year had been erroneous to the extent of not less than £2,000,000. The right hon. Gentleman at present anticipated an increase of £270,000 in the income tax; but he (Mr. Blackburn) did not see any grounds on which that anticipation could be based. So also he calculated upon an increase of £1,000,000 in the ordinary revenue of the year; but if he did not get that increase what became of his surplus of £1,900,000? Unless the right hon. Gentleman could clearly prove he

    931
    would have the surplus it would not be prudent to apply it to the repeal of a tax. The repeal of the paper duty was to be deferred for six months; would it not be better to defer it for six months more, when the surplus could be shown actually in hand? The hon. Member for Lincolnshire (Mr. B. Stanhope) had clearly shown that the right hon. Gentleman was specially pledged to avail himself of the very earliest opportunity of reducing the duties on tea and sugar; and he (Mr. Blackburn) felt confident that such a measure would be more acceptable to the country, and was more desirable in itself than a repeal of the paper duty.
    MR. POLLARD-URQUHARTsaid, that if the debate closed without some remarks from an Irish Member it might be thought that Ireland was not interested in the question referred to in the financial measure now under discussion. If, however, there was one part of the United Kingdom which ought to be grateful to the right hon. Gentleman for his proposal to repeal the paper duty it was Ireland. That country had undeveloped water-power facilities to a greater extent than any other part of the British Islands. Sir Robert Kane had estimated that there was distributed over the surface of Ireland a water-power capable of acting night and day, without intermission, from the beginning to the end of the year, to the extent of 3,227 horse-power per foot of fall, or for the entire average of 387 feet, amounting to 1,248,849 horse-power, which, taking 300 working days of twelve hours per day, would give 3,038,865 horse-power. A vast number of the poor persons in Ireland would find employment, and a large amount of machinery now lying idle in that country would be brought into use. He repeated that, if there were any portion of the United Kingdom that would be benefited by the repeal of the duty, it would be that depressed and unfortunate country. They had heard a great deal of the former oppression of Ireland and her people. If the noble Lord at the head of the Government and the Chancellor of the Exchequer had put into the Queen's speech a proposition to benefit Ireland they could not have adopted one more calculated for that object than the repeal of the paper duty. He believed that more than one-half the Members from Ireland were Conservatives. He asked them as proprietors in Ireland to accord this boon to the people of Ireland. It
    932
    had been said, in opposition to the proposition, that there had been a bad harvest, with a period of commercial distress, and consequent want of employment by the working and manufacturing classes; but that was the very reason why a bold measure should be taken for the extension of trade and an increase of employment. During the commercial distress which existed in 1842, Sir Robert Peel came into office, and, by making a large reduction of indirect taxation and a total repeal of some of the Excise duties, he gave a vast increase of employment to the working classes. He referred especially to the Excise duties on bricks and glass, and he would give the House figures. In 1841 the number of persons employed as bricklayers was 39,806; in 1851 it had risen to 67,988. The number of bricklayers' labourers in 1841 was 18,363; in 1851, 31,168. In 1841 the number of glass-makers was 7,407; in 1851 it had risen to 12,005. These figures showed an increase of from 40 to 80 per cent. a much greater rate than the increase of the population itself. The population, in 1841, was 18,844,439, and it had risen, in 1851, to 20,959,477, being an increase of 12 per cent. So that the abolition of the duty on bricks and on glass had stimulated employment in those branches of trade to such an extent that while the increase of population upon the Census Returns of 1851 was 12 per cent, the increase of employment in the brick and glass trades varied from 40 to 80 per cent as compared with the Census of 1841. In the same way he believed that the abolition of the paper duties was likely to promote employment in that particular manufacture. The hon. Member (Mr. T. Baring) had said that a full Exchequer was necessary to our power abroad. But the best way to insure a full Exchequer was by reducing expenditure. Enormous armaments did more than anything else to check our industry and to cripple our trade, and he hoped sincerely, with the Chancellor of the Exchequer, that the time would soon come for a diminution in our present enormous Estimates.
    MR. H. BAILLIEsaid, he agreed with the hon. Member for Huntingdon that they were much indebted to the other House for having given them an opportunity of reconsidering this subject. The Chancellor of the Exchequer had felt it to be his duty to place that opportunity within their reach with as little delay as possible.

    933
    Last year his proposal was to abolish the paper duties at a time when he himself admitted that there was a large deficiency in the Exchequer. That was, to say the least, a very unusual mode of finance. But now a totally different proposal was made. The Chancellor of the Exchequer now told them that he had a surplus of £1,900,000, and proposed to divide his favours between those who were anxious to repeal the paper duties and those who wished to reduce the income tax. If this alleged large surplus could be depended upon the proposal would be a plausible one. Unfortunately, however, that was not the case. The surplus revenue was practically a delusion. The right hon. Gentleman seemed to have adopted a system of finance which was very common among certain classes in this country, that of raising money in order to pay debts—in other words, issuing bills, and when they became duo renewing them. That was the way in which the Chancellor of the Exchequer obtained his surplus. He had issued Exchequer bills, now proposed to renew them, and then declared that he had a surplus revenue to dispose of. If that mode of obtaining a surplus was to be adopted, it was clear that no Chancellor of the Exchequer need ever fear a deficit or the want of a surplus. To the repeal of the paper duties he (Mr. Baillie) had no great objection, although he certainly did think, with many who had preceded him in the debate, that, looking at the present critical state of Europe, it would be far better to reduce duties which would give an increase to consumption, and thus would be likely to recover themselves afterwards. But, if we were to repeal the paper duty, we ought to do it with our eyes open. We ought not to be under the impression that we had a surplus, nor ought we to do it with the idea of conferring a great advantage on the public. There were but two modes by which the public could benefit from the repeal of the paper duty—either by cheap newspapers or cheap books. But at the present moment we had the greatest possible number of penny newspapers, and no one could pretend that we should have newspapers any cheaper than they were now. These penny newspapers all appeared to be in a very flourishing condition—they were daily increasing, and were pushing the others out of the field. It was but the other day that one of the oldest high-priced papers in the country—the ancient organ of the Whig party—the Morning
    934
    Chronicle—had been compelled to become a penny paper. Newspapers, therefore, would not be any cheaper than they were now. On the other hand, the duty on paper formed but an inappreciable part of the cost of books; the labours of the author and publisher were the chief items. If they took the ease of Macaulay's History, which sold at 18 s. 6d. a volume, they would find that the duty was only 3d. The abolition of the duty, therefore, would not make books any cheaper. Generally speaking, manufacturers were the best judges of their own interests, and in this case the great body of them did not want the abolition. They said that it would put them into competition with the French manufacturers, who had a great advantage over them in getting the raw material at; half the cost. Give them free trade in rags and they were ready to accept free trade in paper. The manufacturers, therefore, would not benefit by the repeal, but there was one class which would, and, though small, it was a powerful one. The proprietors of the penny newspapers would benefit by it. Though the class did not comprise more than 100 individuals, they were powerfully represented in that House. They were represented in the Cabinet even, and they had supporters enough in the House to enable them to give a casting majority against the Government. They had used their power to force this measure on the Government, and the House was now called upon to sacrifice some £1,300,000 of annual revenue for their benefit. That was the literal state of the case. That they had only lately succeeded in forcing the measure upon the Government was perfectly obvious, because a few weeks ago the noble Lord at the head of the Government told a deputation which waited upon him on the subject that in the present critical state of Europe the Government had no intention of proposing the abolition of the duty. The change of opinion in the Cabinet, therefore, must have been occasioned by some extraordinary pressure, because certainly there had been no change in the state of Europe since that time. But not only must the noble Lord have been surprised at the repeal of the paper duty, but there were other parts of the Chancellor of the Exchequer's speech which must have surprised him. The hon. Member for Montrose (Mr. Baxter) had just now highly eulogized the right hon. Gentleman for his denunciation of the extravagant expenditure of the

    935
    country. It certainly was somewhat extraordinary to hear the Minister who was specially responsible for the expenditure of the country denounce its extravagant character, coming forward like Pilate to wash his hands of the sin which the House of Commons was about to commit in passing his Budget, and insinuating, as he had, that this extravagance had been forced upon him by the reckless conduct of his colleagues. If there was any one individual who was responsible for this extravagance it was the Chancellor of the Exchequer, for since he had been in office each Budget which he had produced had been the most extravagant ever proposed in the history of the country in time of peace, and yet he wished to shift the responsibility from his own shoulders to those of his colleagues. This was not the first time that the right hon. Gentleman had taken upon himself to denounce his colleagues. All must remember in the last Session of Parliament a very remarkable occasion, when he came down to the House and, in the most vituperative language, denounced "the most gigantic innovation of modern times," and at the same time his colleagues, who were prepared to condone the offence. Some might deem that conduct an eccentricity, others would look on it as showing a desire to gain popularity; but no one would be disposed to say that it was either generous or chivalrous, or calculated to raise in the estimation of the people either the sincerity or the political morality of public men.
    MR. W. EWARTsaid, he admitted that it was desirable, in effecting reductions of taxation, to effect them in such a way that the consumer would benefit without any ultimate loss to the revenue, and on this ground he acknowledged that the tea and sugar duties had strong claims on the attention of the Chancellor of the Exchequer. But the argument did not altogether apply to the case of the paper duties. It had been shown that wherever a reduction had been made in the excise duties the consumption of other excise articles had greatly increased. The Excise revenue now was much greater than before the remission of the duties on soap, glass, bricks and other articles. The removal of the paper duty, therefore, would come under the dictum of Mr. Pitt, who said, "Increase by reduction may seem a paradox; but it is essentially true." The arguments in favour of the repeal might be included in three propositions:—First,
    936
    it was a commercial benefit; next, it was a literary benefit; and finally, the reduction was recommended to them by the political interests in the country. The repeal would benefit the commercial classes, as it was an important branch of our manufactures. An abolition of the paper duty would be followed by an enormous increase in the manufacture of paper, as had been the case with regard to other articles which had been liberated from taxation. If the duty on paper were abolished, paper would be extensively used in the manufacture of a variety of articles to which it was not at present applied. He had himself seen large tubes and various other articles which, but for the duty would be composed of paper. With regard to the second point, the hon. Gentleman opposite had denied that in a literary point of view the removal of the paper duty would produce any material effect. With regard to such works as Macaulay's History of England, he (Mr. Ewart) did not deny that the removal of the duty would not materially diminish their price; but with regard to the cheapest literature, the price would be considerably diminished. It appeared twenty-five years ago from the evidence of Lord Brougham and others before the Excise Commission, such publications as The Penny Magazine could only be sold at a profit when the sale was extensive. The removal of the paper duty was of great importance to the publishers of literature of that class. The poorest classes were, therefore, much interested in the abolition of the paper duty, and every species of cheap literature, would derive great advantages from it. But the strongest argument in favour of its abolition was, in his opinion, the political aspect of the question. He deprecated the country being left in the state in which it was last year. He thought it was the highest wisdom to remove all cause of irritation in the body politic as in the body physical; and to invite the Commons and the Lords to cast off the temporary irritation which had arisen between them on the subject of the paper duty. His right hon. Friend had, therefore, wisely taken the first opportunity of redeeming the promise which he made last year. Hon. Gentlemen had talked about pledges with respect to the income tax, but the pledge to abolish the paper duty dated so far back as the reign of Queen Anne. The Act of Parliament which imposed a duty on paper in 1711, stated that the reason why that duty was imposed

    937
    was "to raise money to carry on the present war until Her Majesty (Queen Anne) should be able to establish a good and lasting peace." Therefore, according to the original pledge given to the people of this country, the expiration of the duty ought to have taken place so long ago as the conclusion of the war conducted by the Duke of Marlborough. Coming to later times he found that Sir Henry Parnell and other eminent men, Commissioners of Excise, about twenty or thirty years ago, in the year 1836, had said it was desirable, if it were possible, that the duty on paper should be abolished. There was every reason for thinking that the time had now come when this duty should be swept away; and he thanked his right hon. Friend for the bold and consistent manner in which he had redeemed the pledge he had virtually given during last Session. During this debate the question of direct and indirect taxation had been referred to. The Chancellor of the Exchequer had compared them to two attractive young ladies of modern times, the daughters of invention and necessity. For his part he thought one of them (direct taxation) was a female of considerable antiquity, born so far back as in the feudal ages. The other was the younger child of commerce and manufacture. The latter of the two had been somewhat unjustly treated. Both he thought ought to contribute their due proportion of taxation; or, if he might parody the lines of Goldsmith—
    "All that Finance's subtlest art can teach,
    Is, but to lay proportioned loads on each."
    Several hon. Gentlemen had expressed their approval of the recommendation of the Chancellor of the Exchequer that there should be greater economy in our expenditure. He cordially agreed with them. He thought there ought to be a most rigid examination of our expenditure, which he believed was capable of reduction. The French estimates had a more businesslike arrangement than ours. We were too unsystematic. He knew not how it happened that our soldier cost infinitely more than a French soldier; of course, in France articles were cheaper, but the difference in the cost was far beyond that. Justice would not be done to this country until our expenditure was thoroughly examined. He cordially supported the Budget of the Chancellor of the Exchequer. He believed it was not only a right but an indispensable Budget, because the first duty of the House was bound to redeem the
    938
    pledges which it gave to the country last year.
    MR. LONGFIELDsaid, that notwithstanding the puff direct as well as the puff inferential, by which the Budget of the Chancellor of the Exchequer was sought to be supported on the Ministerial side of the House, he for one regarded it with very decided abhorrence, both in its substance and its spirit. He disapproved it because he could not but feel that it had been introduced in subservjency to the wishes of hard taskmasters—the Manchester school, and to appease the temper of the right hon. Gentleman the Chancellor of the Exchequer, who sought to involve both Houses of Parliament in a quarrel, from which they had been saved by the good sense of the noble Lord at the head of the Government. To the cause which he had mentioned, then, and not to the fact that it embodied in itself measures which were either wise or good, was it to be attributed that such a financial scheme as that under discussion had been submitted to the House. What, let him ask, was the substance of the scheme? The right hon. Gentleman who brought it forward professed to deal with a surplus, when, in reality, he had to supply a deficiency. A surplus in all sound financial estimates could be based only on known and fixed revenue, which would be available whether Parliament were prepared to assent to the imposition of additional taxation or not; but in the present case the alleged surplus meant, in truth, a deficiency of some £8,000,000 or £9,000,000. It was quite an easy task, no doubt, to create, as the right hon. Gentleman had done, an imaginary surplus, and to dispose of it afterwards as he pleased; but then he had placed himself in a position to remit the paper duty simply by levying upon the country an income tax of ninepence in the pound, without which his surplus would be converted into a deficiency considerable in amount. It was idle to tell him that the abolition of the paper duty would regenerate Ireland. Nothing of the kind. He remembered the circumstances connected with the attempted establishment of several small paper mills in Ireland; but, though the Excise had dealt with them in the most liberal manner, even allowing the owners to smuggle to a considerable extent, they had all died a natural death without their end being hastened by the exciseman. He denied, therefore, that the abolition of the duty

    939
    would be any boon to Ireland. The present was a time of cants. There was the cant of Liberalism, and there was the cant of Reform, but the greatest of all cants was the cant of what were called "the taxes on knowledge." The truth was, those taxes were so small in amount that they never yet prevented a man from being wise or good, generous or great. In the admirable Report of the Royal Commission on Education there was an account given of the expenses of a certain number of National Schools. To upwards of 5,000 schools the contributions made by the State in the shape of salaries amounted to £458,350, in miscellanies to £143,245, and in books to £43,653. The amount spent in books, therefore, was only about one-tenth of the sum paid for salaries; and of the £43,653 paid for books not more than £2,000 or less than 10 s. for each school was returned to the State in the shape of paper duty. The cant about "taxes on knowledge" saved a good deal of argument; it was an excellent watchword for those who voted with their eyes and ears closed, but there was really nothing in it. While he was upon this question he would refer to the opinion of an eminent political economist, Mr. McCulloch, who, in his work on taxation, thus delivered his opinion upon the impost—
    "A duty on paper entails a peculiar grievance on the arbitrary publishing of books by making them pay a tax on their works previously to their being brought into the market before it can be ascertained whether they will sell. This is rather unfair. The furor scribendi is such, however, that this treatment, though it may add something to the cost of successful books, has no influence in checking publication. But except in this respect now mentioned, which is of no great consequence, the existing duty on paper does not appear open to any good objection. Writing paper would probably be sold to the public by retail somewhat cheaper were it repealed, but the difference would be so very trifling that it would be of no importance to any one; and in as far as regards books, newspapers, and other periodical publications, the repeal of the duty would not make the slightest difference in their price. The duty on a copy of the double sheet of The Times is about ¼ d. On a number of The Edinburgh or Quarterly, which sells at 6s., it is only 2d. On Macaulay's History of England, which sells at 32 s., the duty does not exceed 6d., and on the Commercial Dictionary, which is a very large volume of above 1,800 pages, selling at 50 s., the duty is only about 7d. It is idle, therefore, to pretend that the existing duty on paper is any obstacle to the circulation of literature, or that books would be cheaper were it abolished. It is customary, indeed, in the cant of the day, to call it a tax on knowledge, but the larger portion by
    940
    far of the coarser description of paper on which the tax is heaviest is not used either for letters or books, but is employed in the humbler, though not less necessary, functions of wrapping and packing up parcels. And with respect to the paper used in printing, the duty presses on all publications alike, on the bad as well as on the good, and is quite as often a tax upon nonsense as upon sense. Assuredly, therefore, this is about the last tax which should be repealed."
    That was the opinion of a writer who looked upon this question, not as a partisan, but as a political economist, and it was impossible to say, after such an opinion, that there was any ground whatever, except in deference to the cant of the day, for repealing this "tax," as it was called, "on knowledge." He admitted that the right hon. Gentleman the Chancellor of the Exchequer had, by his great talents, made his Budget most enticing and attractive until it was examined. But there were such tilings as memories. They remembered the predictions he had formerly made of the expenses of the China war, his estimate of the probable production of the duty on dock warrants and contract notes. Had any one of his anticipations been fulfilled? It was not till the House of Lords refused to repeal the paper duty that the demand was made for £3,300,000 for the expenses of the China war. He did not say the right hon. Gentleman had known that would be wanted before. Sanguine dispositions were proverbially shortsighted. The right hon. Gentleman was a most brilliant orator, but he saw through a haze—a mirage, tinted with the rosy hues of summer. He indulged in beautiful promises, which wore realized in most scanty performances. He must withhold his assent from the Budget of the right hon. Gentleman. He thought it imprudent. The mode in which it dealt with an imaginary surplus was also objectionable. It did not give them cheaper malt, or tea, or sugar; it proposed to regenerate them through small paper mills on purling brooks. It was most objectionable in every way, particularly in the temper with which it was brought forward, for it was obviously intended to wipe off the sense of the victory obtained ed last year by the House of Lords, and though it had been plentifully puffed by hon. Gentlemen opposite it was not the less likely to be deceptive.
    MR. NORRISsaid, he rose to correct the very erroneous statement of the hon. Member for Inverness-shire (Mr. H. Baillie) that the manufacturers of paper were not

    941
    anxious for the repeal of the Excise on that article. When the remission of the Excise duty upon paper was discussed in that House the trade met, and appointed a committee to watch the proceedings of the House and promote the repeal of the duty. During the progress of that measure through the House, the Treaty with Prance disclosed that there was an engagement for the equalization of the Excise upon paper made in England and the Customs' duty on paper imported from France. That immediately called the attention of the paper-making trade, that whilst the equalizing principle of free trade was to be applied to the competition between home-made and foreign paper, there would still remain, unless by negotiation an arrangement were made for the removal, an export duty on foreign rags. To that subject the trade had addressed themselves, but they had never lost sight of, or been indifferent to, the advantage the public would have, or they themselves would gain, by a repeal of the paper duty. In the present year a meeting had taken place on the subject of the export duty on foreign rags, which had been attended by sixty or seventy gentlemen, who paid more than half the Excise duty, every one of whom had expressed the opinion that there was nothing so much to be desired as a fair adjustment of the export duty on foreign rags, and with it the repeal of both the Excise and Customs' duties. He had attended the deputation which had waited upon the noble Lord, and his impression of what had taken place then was, that the Government had not the assurance of any large surplus to deal with, and, therefore, the noble Lord was not in a position to say much on the subject of the repeal of the Excise on paper. There was no paper-maker who did not desire that it should be abolished during the present Session, for they all felt that it was a great oppression, and its repeal, and subsequent re-imposition by the other House, had left the trade subject from time to time to all the inconvenience and embarrassment which belonged to a great change, without any of the incidental advantages. It was not fair of the hon. Gentleman who had last spoken, when he referred to the incidence of the paper tax upon the literature of the country, to take the books which adorned his table and amused his leisure. If he had gone into educational establishments supplied with elementary books, printed from stereotype plates, he would
    942
    have found that, on books bought at the rate of 7½d. a pound, 1½d. was duty. In many cases it was 15 or 20 per cent. It was not just to take books like Macaulay's History, and say that the incidence of the paper duty was so slight that no one need care. The general feeling out of the House, in relation to the Budget of the Chancellor of the Exchequer, amongst all classes—the traders, manufacturers, merchants, and bankers, and the general public—was one of deep satisfaction, combined with a determination to give it all the support which its merits deserved.
    MR. R. LONGsaid, he wished to apologise to the right hon. Gentleman the Chancellor of the Exchequer for some hasty words which he (Mr. Long) had uttered on the night when the Budget was introduced. He had complained that the right hon. Gentleman had not spoken one word of sympathy for the agriculturists, but he had had an opportunity of looking again at that speech, and he found that he had done the right hon. Gentleman some injustice. He therefore hoped that the right hon. Gentleman would forgive him for his hasty observations. To come now to the immediate question before the House. He had heard the able, lucid, straightforward, and argumentative speech of the hon. Member for Huntingdon with great pleasure, and as a young Member of the House he could not help being struck with surprise that, in the present state of public feeling, when there was a great impatience of taxation, and when a general outcry was raised against the heavy pressure of the taxes, a gentleman belonging to the mercantile body—a class by no means distinguished for a love of taxation—should rise and protest against the remission of a duty on one of the articles which produced a revenue to the country. If he felt regret at the rashness of the Chancellor of the Exchequer, he was at the same time much gratified to find that there was sufficient spirit, independence, and earnestness of conviction on the part of the Member for Huntingdon to have induced him to stand up and resist the repeal of a duty which as a taxpayer and the representative of taxpayers, he must otherwise have been only too glad to see got rid of. He confessed, however, he was much surprised to find that the speech of the hon. Gentleman had not been followed by a more active conclusion. He thought it would have been a more fitting conclusion to such a speech had the hon. Gentleman

    943
    moved an Amendment in opposition to the Chancellor of the Exchequer's Resolution expressive of the opinion largely prevalent on that side of the House, and still more largely prevalent out of doors. He did not profess to be in the secrets of the leaders of his party, and, therefore, could not say why such an Amendment had not been moved. He could not but suspect, however, that the reason was that there was a firm persuasion on that side of the House that the occupants of the Treasury bench were fully conscious of the rashness of the course taken by the Chancellor of the Exchequer in respect to this paper duty, and that hon. Gentlemen opposite would not act with straightforwardness on the question, but that, disapproving it in their hearts, they would give it as insincere a support as they gave to the second reading of the Reform Bill of last year. The point, however, for their consideration was—what would be the result of the Budget proposed? Was it of a nature that they could trust? It appeared to him that it was of a nature the very reverse. He should not venture to follow the speech of the hon. Member for Huntingdon, who had already thrown such a flood of light upon the internal condition of the country, and had shown so clearly the critical state of affairs abroad and of trade at home. But he would ask what was the bearing of the Budget upon their taxation generally—how would it affect the financial system that remained? Did not the repeal of the tax proposed make the case for the repeal of others equally strong? Were they not obliged to propose the repeal of the paper duty in consequence of the agitation that existed on the subject? Upon the same principle how would they be able to resist the Motion of the hon. Member for Dudley (Mr. Sheridan) next year for the repeal of the duty on fire assurances, a tax on thrift and prudence which was ten times as objectionable as the excise duty on paper? How would they be able to resist the demand for the repeal of the duty upon hops? That was a duty which always appeared to him to be indefensible in principle and abominable in practice. Nothing more odious, more unjust, and indefensible than the duty upon hops was to be found in the fiscal systems of either the Czar of Russia or of Napoleon III. He was perfectly astonished that the farmers of England did not unite together and demand its repeal. Well, how would the Govern-
    944
    ment resist the claim that would be made next year for the repeal of that duty? Did they think the world would become more pacific than it was at present? If they acted upon that principle, he asked, where would the Government stop, and what taxes would they have left? With all deference to the opinion of the right hon. Gentleman, it was a rash and unwise course to repeal the paper duty. The right hon. Gentleman, in his eloquent speech, which charmed the House on both sides, apologized for leading the House, as he said, through a wilderness of figures, and he went on to say that he paid his addresses to two fair ladies who were well dowered and full of charms, and whom he designated by the names of Direct and Indirect Taxation. The right hon. Gentleman, however, did not give them the whole of the story. No one for a moment supposed that the right hon. Gentleman spoke practically. It appeared, however, that he entered the wilderness with those bewitching young ladies a rich man, but returned a very poor man, having allowed one of the ladies to wheedle him out of £1,000,000, cash down, while the other had extracted from him a promise of £1,230,000, which must be paid on the 1st of October next. As an independent Conservative Member, he therefore protested against a Budget which would render it more difficult to uphold the public credit at home, or to maintain those establishments on which depended the honour and dignity of the country abroad, and if any hon. Gentleman would propose a practical Amendment condemning both the principles and details of the right hon. Gentleman's scheme he would give him his most hearty support.
    MR. BLACKsaid, it was not his intention to have spoken on this question, but the hon. Gentleman who had just sat down had thrown out a challenge, to the effect that hon. Members on the Ministerial side of the House were disposed to conceal their opinions on matters of reform, and with regard to the paper duty. Now he had never shrunk from giving his sincere opinions on both of those subjects; but he thought it was a waste of time to go back on what had been said and done five years before. Times had changed, and the circumstances under which they acted had changed; it was of little consequence to him what others had said formerly, and how inconsistently they had acted. What was the proper thing to do now? He would

    945
    endeavour to take a pounds, shillings, and pence view of the case. A great deal had been said about taxes upon knowledge. He would not dwell upon that point, but would show how the paper duty acted. Hon. Members talked of it as if it was a matter only of books and writing paper. He believed one-half of the paper made was used as wrapping paper by wholesale houses and small tradesmen. He understood that upon the coarsest packing paper, the material of which cost 20 s. there was added 14 s. in the shape of duty. This was paper which was used in wrapping up various articles, and if they repealed the tax it would be a great relief to small tradesmen, and to a portion of the public in one way or another. What the Chancellor of the Exchequer got was £1,400,000, or more nearly £1,200,000. He should like to know how much the public paid of this £1,200,000; let him, at the same time, trace the tax as it affected books. Macaulay's History had been alluded to, but that was a high-priced book; not because of the printing and paper so much as for the copyright. Taking an ordinary book, of which the cost of the printing was about equal to the cost of the paper. Supposing that the amount of tax upon the paper used for such a book was 1s., the manufacturer charged interest upon that shilling; the wholesale dealer did the same; the publisher, who reckoned three years as a moderate period for disposing of an edition, must have his profit; then the wholesale bookseller must have his; and then the retailer, so that by the time the book reached the hands of the reader the 1s. tax had become 2s. Probably the £1,200,000 paid into the Exchequer represented a cost of £2,000,000 to the public. In that way the tax became an extravagant way of levying money. He should like to see the duty on tea and sugar repealed; but the public did not pay so much in proportion upon these articles as upon paper. The whole amount of duty on tea and sugar went into the Treasury, whereas only a portion of the paper duty was obtained.
    MR. WARNERexpressed his belief that the Budget would be received with satisfaction by the commercial constituency which he represented. As to the paper duties, he thought the Chancellor of the Exchequer had very little choice in the matter if he found that he had a surplus, for it had been condemned by a
    946
    deliberate vote of the House, and given rise to an unfortunate controversy which it was desirable to stop. The more constitutional course for hon. Gentlemen opposite, who were in favour of the duty, to take, would be to move a Resolution to set aside that Vote. He had taken no part last year in the agitation against the House of Lords. He thought then, and he thought still, that no great harm had been done; for the Commons had the remedy in their own hands. But it was necessary to deal with the question now, unless they were content to sacrifice their privileges. The right hon. Gentleman had done right to reduce the income tax; but he was sorry he had given relief only in the amount and not in the form of the tax. He hoped there would be a revision of that tax next year. They could not expect to arrive at strictly equal justice, but they could approximate to equality. The fundholder ought to pay on his property as all other persons did upon theirs. At present he paid on the net income only, while the taxable income of all other classes was subject to large deductions before it became available for expenditure. If the tax were continued in its present form it could not fail to cause irritation and disaffection. He hoped, also, that the Chancellor of the Exchequer would abandon the present system of quarterly collection of the tax and collect it half-yearly, and he should be glad to have an assurance to that effect.
    MR. BENTINCKsaid, he wished to thank the hon. Member who had just sat down for the question he had put, and the opinion he had expressed with respect to the continuance of the quarterly collection of the income tax. He was also glad to hear from the hon. Gentleman that he saw no harm in what had been done last year by another branch of the Legislature, as it was clear that if no great harm was done then there was no great probability of any great good being done now. He would now approach that casket in which the financial gem had been presented to the House—he meant the eloquent speech of the Chancellor of the Exchequer. He had listened to that speech with the closest attention. He had admired its eloquence and its sophistry. But the social and financial morality of the right hon. Gentleman as laid down in that speech was of a somewhat remarkable character. Its social character had been adverted to by the hon. Gentleman who had just spoken

    947
    (Mr. Long), when he referred to the picture drawn of himself by the right hon. Gentleman as at the same moment addressing two beautiful damsels. The picture was remarkably well sketched by the right hon. Representative of one of our great seminaries of learning, piety, and virtue, but he (Mr. Bentinck) thought the right hon. Gentleman's constituents would be somewhat surprised when they were informed how he employed his leisure hours. In that glowing outline of two fair damsels, to both of whom it was, he said, not only his inclination, but his duty to pay his addresses, the right hon. Gentleman described them as the daughters of Necessity and Invention. He (Mr. Bentinck) was sorry to say that nearly half a century since he had had impressed on him the truth that Necessity was the mother of Invention. The right hon. Gentleman had thus led the House to a subject so painful that he was glad they had to deal with his financial and not with his social morality. The right hon. Gentleman commenced his great speech by expressing his gratification that protection had been finally disposed of. His constant reference to the fact showed the unsoundness of the position on which the right hon. Gentleman and his supporters stood. What he complained of was that the Chancellor of the Exchequer carried the principles of free trade to lengths which its promoters had never contemplated. The right hon. Gentleman rejoiced over the increased consumption of French wines, and referred to a supposed objection of his to those articles of import. But what he had objected to was not the light wines, but the bad wines. He regretted that the right hon. Gentleman proposed, not to repeal taxes on articles of consumption, which might afterwards become more productive, but to repeal taxes which could never be levied again—such as was the paper duty—and thus dry up altogether one important and essential source of revenue. The right hon. Gentleman had also boasted of the price of corn since the repeal of the corn laws. He (Mr. Bentinck) did not think the repeal had reduced the average below the point it was fifteen years before and since that event. The right hon. Gentleman said he regretted that the French Treaty was still a one-sided instrument. That was what the right hon. Gentleman was last year told by Opposition Members it ever would be, and he wished the right hon. Gentleman could have informed the
    948
    House when it would have two sides. The right hon. Gentleman went on to assure the House that the extension of certain branches of commerce was to be ascribed to the existence of that treaty; but he (Mr. Bentinck) was at a loss to understand how such a one-sided treaty could have produced beneficial consequences to the commerce of this country. There were two views of commercial undertakings, one by which they gained, and the other by which they lost; and he should be much surprised to hear that the commercial transactions which had taken place in consequence of the French Treaty were of a beneficial character. The right hon. Gentleman talked of the country "electing" to be governed at an expense of £75,000,000, as if it was a pleasure to the country to be governed at a great expense. He (Mr. Bentinck), however, believed that many causes were to be assigned for the increased expenditure of the last few years; and although he did not sec the way at present to reduction, there was no man in the House who lamented it more than he did. He should like to ask the right hon. Gentleman, however, when he talked of the country electing to be governed at an expense of £75,000,000, whether it had ever occurred to him what was one of the principal sources of that large expenditure? Had the right hon. Gentleman totted up the expense of the Russian war? And if he had done so, and had taken into account the increase in the national debt caused by that war, had it ever occurred to him to consider the causes of that war; and that one of the principal causes was the helplessness of that Government of which the right hon. Gentleman formed a prominent Member? Could the right hon. Gentleman recollect any event which, from the commencement of the differences with Russia, showed foresight and energy as characteristic of that Government? Did the right hon. Gentleman recollect the despatch of 10,000 English troops to Malta to intimidate the Emperor Nicholas, allowing him at the same time to understand that arrangements had been made for bringing them back? And yet that demonstration was to induce him to secede from a position which he had taken up in the East. Perhaps that Government more than any other was the great cause of the indispensable expenditure, though the right hon. Gentleman now charged the House and the country with desiring a large expenditure.

    949
    He should have studied the history of his own time before he taunted the people of England with desiring an expenditure over which they had no control, and for which he himself was largely responsible. Then he made a happy quotation from a speech of the right hon. Gentleman the Member for Coventry, delivered last year, to the effect that we ought not to repeal the paper duty so long as it involved the continuation of an odious tax. If it were possible to use one argument stronger than another against the repeal of the paper duty it was that the repeal would entail in perpetuity odious taxation. It was the very position in which they were placed, with this difference, that there were two odious taxes which were entailed upon the country by the repeal of the paper duty; perhaps the most odious taxes that could be laid upon the people of this country. He had wondered how it was that hon. Members opposite should, without explanation, have been induced to show such a marked difference between their professions and their practice. The House was in the habit of hearing a great deal from hon. Members below the gangway about the people, for those hon. Members arrogated to themselves more especially the position of "friends of the people." They professed to defend the rights, the interests, and the pockets of the people; but where were the "friends of the people" now? The right hon. Gentleman proposed to repeal the paper duty, but neither he nor any hon. Member opposite had attempted to show how the great masses of the people of the country would in any way be benefited by the repeal of the paper duty; and, indeed, if the assertion had been made, there was the satisfaction of knowing that it had been by anticipation disposed of. A penny paper would never cost less than a penny, and, therefore, the whole thing was humbug. If this was all that was involved in the repeal of the paper duty, he wanted to know where was the benefit; and, on the other hand, were they to be told that there was no benefit to be derived from the repeal of duty' upon tea and sugar? Would not such a repeal benefit the poorer classes of the community? He wanted to know, then, what the "friends of the people" were about, and why they were in a mass prepared to support a financial arrangement by which the only persons to be benefited wore those who had money interests in penny newspapers? On the other hand, would not
    950
    every man in the country derive a certain definite benefit from the repeal of duty on tea and sugar? That, however, was not all. The paper duty had existed for a very long time, and might be considered a part of the permanent revenue of the country, whilst the additional tax on tea and sugar was admitted to be a war tax, and he wanted to know from the "friends of the people" on what ground they proposed to remit a tax which could in no way benefit the poorer classes, whilst they maintained war duties upon articles of every-day consumption, and which necessarily contributed to the comfort of the poorer classes? He hoped that they should have full explanations on these points, and then they would be able to understand what the "friends of the people" were about. It was a sort of friendship which he trusted that he should never receive from any man. There was another claim for remission which might fairly be urged. Why in all financial arrangements proposed by the right hon. Gentleman did he deal with the rural districts in precisely the same way as the hon. Member for Birmingham proposed to deal with thorn upon questions of reform—namely, by utterly ignoring their existence. In those localities largo numbers of the people were suffering under taxes of an odious description, which were open in a threefold degree to all that might be urged against the paper duty—he alluded to the duty upon hops and that upon malt. The rural districts, together with the poorer classes generally, would be benefited by a repeal of the hop duty, and by a remission of a portion of the duty on malt. He wanted to know, therefore, why it never occurred to the right hon. Gentleman that there were such places as the rural districts in existence, and he trusted that the right hon. Gentleman might, during the debate, be brought to recognize their existence, and also the further fact that there were county Members in that House. They had adopted all the arrangements of the right hon. Gentleman so quietly for some years past that it was quite natural that he should have forgotten them; but it was high time for them to remind him that they were there. If the rural Members supported this Budget they would be doing all they could to ignore the interest of those they represented. They were bound to give their strenuous opposition to the right hon. Gentleman. It was impossible to say what the object of the repeal of the paper

    951
    duty was; there were so many covert objects that it was difficult to say what the real object was. He confessed, for himself, that not being in the habit of diving into these mysteries, he was very much puzzled. He could see but two possible objects. One was that the measure was an attempt to reclaim the wavering allegiance of a certain portion of the supporters of the Government who sat below the gangway. There was no doubt that down to a very recent period those hon. Members used to make very able and eloquent speeches, but they were anything but flattering to Her Majesty's Government; and, in short, he might even apply a stronger epithet to the manner in which they used to address distinguished occupants of the Treasury bench. But lately "A change had come o'er the spirit of their dream," and for some reason it appeared that the repeal of the paper duty was so soothing to their feelings that all at once they became the strenuous supporters of the Government. Without saying how that had been brought about, seeing that no beneficial result was likely to follow to any one, it was impossible but to suppose that there was some kind of object such as he had stated in framing this measure. He merely threw this out as a suggestion. There was another reason. It was impossible for any man, with regard to what passed last year and what was passing now, not to believe that the present proceeding was neither more nor less than an attempt, or rather intention, to defy, not to say insult, the other branch of the Legislature. He, for one, could look upon it in no other light. He trusted that branch of the subject would be fully gone into before the debate terminated. He was at a loss to understand if that was not the object on what ground it was that the right hon. Gentleman proposed to depart from the course adopted last year, and embody the whole of his measures in one Bill in order to debar another portion of the Legislature from dealing with it? That appeared to him (Mr. Bentinck) so obvious, that he hoped before the Budget was disposed of there would be full and ample discussion of that question to elicit the opinion of that House as to whether they were prepared to sanction the course taken by the right hon. Gentleman, and that he would be called upon to show on what ground he thought it necessary to depart from the course of proceeding of last year. He was quite aware that he would be told
    952
    that there were precedents for the course of proceeding. Precedents, he believed, there were; but without looking into the matter he was inclined to believe that the precedents were so rare that they were rather a sort of exception that proved a great rule. He was bound to say that it was impossible to characterize the Budget in anything but very strong language. He did not wish to speak with any discourtesy, personally, of the right hon. Gentleman. He was speaking of his measures, and the Budget was an act of bad faith. Speaking of his past financial measures and his present financial measures, it was an act of bad faith on the part of the right hon. hon. Gentleman, and founded on what he (Mr. Bentinck) for one believed to be a misconception of his position. He would not call it a mis-statement, because, no doubt, the right hon. Gentleman was fully impressed with what he said. It was an act of bad faith based on misconception. It was an act of bad faith because the right hon. Gentleman had been pledged, and pledged in the most solemn manner, for many years, as far as pledges could be called solemn—the right hon. Gentleman had been pledged for years past—repeatedly pledged over and over again that the whole financial object of his public life would be the repeal of the income tax. Therefore, coming from the right hon. Gentleman, the present financial arrangement was an act of bad faith. Prom what he (Mr. Bentinck) had been enabled to gather from the speech of the right hon. Gentleman, and the confirmation he had received from the admirable speech of his hon. Friend who opened the debate, his belief was that the misstatement was the assertion of the existence of a surplus. He did not believe in a surplus, and he thought when they came to discuss the details the right hon. Gentleman would be very much puzzled to show one. Why, upon the figures of the right hon. Gentleman himself, it did not amount to a million, because there was half a million of Exchequer Bonds, which in plain English meant borrowed money, and there was the £750,000, the Chinese indemnity, of which in all probability they would never see a shilling. Would any man in that House, would the right hon. Gentleman himself even, with his power of oratory and powers of persuasion, would he try to pursuade the House or any man in his senses that in the present state of affairs in China any one could calculate from day to day upon

    953
    receiving a shilling? Why the Emperor's own throne was not worth a fortnight's purchase. And yet the right hon. Gentleman told them, in trying to prove the existence of a surplus on which to base a financial change, that they were to rely for a portion of the surplus on the Treasury of a country at the moment in a state of revolution. But, looking at the matter in a more solid shape, where would they be next year? Would there be a surplus then? Would it be possible for the right hon. Gentleman after repealing the paper duty—taking his own calculation, taking his own valuation, he (Mr. Bentinck) asked the House would it be possible for him in another year to fall back on the resource of the tea duty at the war rate? No, there was nothing but a larger income tax, and that was what the House and the country had to expect. He would now quote a few lines from a high authority, who said—
    "You must look over the existing duties calmly and candidly, and consider by what relief or remission you can do the greatest good to the consumer, to trade, and to the revenue. By that rule, and by that rule only, we can judge."
    Now, he (Mr. Bentinck) would like to know whether the right hon. Gentleman had followed that good advice himself? The same person followed up that statement by another, referring to Sir Robert Peel—
    "Whatever Sir Robert Peel did with respect to commercial reform he did it always subject to the paramount obligation, of which he was conscious, to maintain the principle that ample sums should be raised in the year for the service of the year, and for the maintenance of a steady surplus of revenue above expenditure. He never allowed even his eagerness for commercial reform to make him deviate for one moment from that fundamental and yet more important view. All his operations were conducted subject to the control of that principle."
    It was not often that he (Mr. Bentinck) found himself eulogising the financial views of that distinguished statesman, but he was bound to express his sincere regret that the right hon. Gentleman did not take him as his model on the present occasion. The same authority said—"These are not times when we ought to trifle with the revenue"—speaking of times much less uncertain, and in a much less disturbed state of things in Europe—"to trifle with the revenue. No economy is so good as that of maintaining the finances in a high state of credit." Was the present course likely to maintain
    954
    them in a high state of credit? The right hon. Gentleman said yes, and all he (Mr. Bentinck) could say was that he envied the right hon. Gentleman his sanguine disposition. The authority from which he was quoting went on to say—
    "The Chancellor of the Exchequer has departed from the sound policy of supporting a surplus revenue, and no Minister will ever receive my support for his financial policy which proceeds on such a system. It is a principle most dangerous and inconsistent in a Conservative Government."
    The House would be surprised when they heard the authority he had been quoting. He had been quoting a speech made by the right hon. Gentleman himself in commenting on a speech made upon his financial proposals in the year 1852 by the right hon. Gentleman the Member for Buckinghamshire. He (Mr. Bentinck) was not there to defend the financial views of the right hon. Gentleman the Member for Buckinghamshire; therefore do not let them be told that he was now defending a Budget to some details of which he had formerly taken exception. The right hon. Gentleman the Member for Buckinghamshire was well able to defend himself, but he (Mr. Bentinck) had a perfect right, when he found the right hon. Gentleman the present Chancellor of the Exchequer bringing forward financial proposals in 1861 diametrically opposed to the views he expressed in 1852, he had a perfect right to quote the right hon. Gentleman's own words against himself, and he asked the House whether they believed what the right hon. Gentleman told them then, or what he told them now? The financial career of the right hon. Gentleman had always been a perfect enigma. He (Mr. Bentinck) had been at a loss to understand how any Member of that House could have failed to have observed the paradoxical course he had always adopted. The right hon. Gentleman was pledged more distinctly than any man in that House to the repeal of the income tax. When he remembered all he himself had heard the right hon. Gentleman say on that subject—it was fresh in his recollection—when he recollected the singular views, expressed in eloquent language, of the right hon. Gentleman, and yet found him perpetrating the most marvellous paradoxes, he could not help thinking that the right hon. Gentleman, in dealing with financial questions, had taken for his model that monarch who was described in some very old and well-known lines—

    955
    "A man whose word no one relics on,
    Who never says a foolish thing and never does a wise one."
    He (Mr. Bentinck) had no wish to enlarge on this subject. All he could say was that he hoped the House would pause before they wore induced to sanction the proposed measure of the Chancellor of the Exchequer, for he believed it to be equally impolitic, unjust, and prejudicial to the general interests of the country.
    SIR JOSEPH PAXTONsaid, he thought that some of the statements of the hon. Gentleman who had just sat down were founded on very erroneous views. The hon. Member said that the only persons benefited by the repeal of the paper duty would be the proprietors of penny papers, The hon. Gentleman could not know much of the manufacturing interests of the country if he thought that paper was only used for purposes of literature. The repeal of the paper duty would be a great boon to his (Sir Joseph Paxton's) constituents. Every yard of ribbon made in Coventry caused the consumption of a yard of paper, and to his constituents the repeal of the paper duty would be a very great boon. It would also be a boon to Nottingham and other towns where great quantities of paper were used in making up parcels. He believed that the paper manufacturers were the only persons opposed to the repeal of the duty. That was not to be wondered at, for the manufacturers of glass and other manufactures had taken a similar course in respect to the duties on the goods which they produced. A great deal was said about the impropriety of admitting foreign paper without having at the same time a free importation of rags. He was very much astonished that paper makers had not endeavoured to get a supply of rags from India. A gentleman of his acquaintance imported a very considerable quantity of rags from India last year, and told him that he had made 30 per cent by the operation, and he intended to import rags from India on a much larger scale this year. If France should, therefore, deny to them the use of her rags, it was, easy to get them from their own possessions in India. He claimed the support of the right hon. Member for Buckinghamshire on the question of the repeal of the paper duties. The right hon. Gentleman said that on commercial as well as in a moral and literary and educational point of view, he should be glad if he could feel
    956
    it his duty to propose a remission of the tax; and he added those were the opinions he had always expressed. He would tell the right hon. Gentleman that it was now in his power to settle the vexed question of the paper duty, and to put an end to the yearly differences that must take place on the question. The hon. Gentleman the Member for Huntingdon (Mr. T. Baring) had adopted a very doleful tone in reference to our financial prospects. If, however, the hon. Gentleman had all the forebodings he had expressed to-night, it was somewhat surprising that he should connect himself with the proposed Exhibition of 1862, upon which, directly and indirectly, a million of money would be expended.
    SIR STAFFORD NORTHCOTEsaid, he thought it natural the hon. Gentleman opposite should dislike to hear what the hon. Member termed doleful views respecting the state of the country. The realization of the Budget depended, in fact, upon the continued prosperity of the country, and hon. Gentlemen, therefore, might well be dissatisfied with any statements which tended to throw doubt upon the picture of prosperity painted by the Chancellor of the Exchequer. He was surprised that after the moderate and able speech of his hon. Friend (Mr. T. Baring) no Member of the Government—the right hon. Gentleman, the President of the Board of Trade, for instance, or some other Minister—had risen to dispel these rather gloomy reflections. But, whatever might be the opinion of the House on this point, he was sure they must be gratified at the tone and temper in which the debate had been conducted. "With regard to the Budget, it had its political as well as its financial side. Upon the whole, and very properly, the discussion had turned upon that part of it which was really the more important—namely, its financial aspect; and to that he would confine himself. Now a private Member always laboured under a disadvantage when he rose to throw doubts upon the calculations of a Cabinet Minister. But he was encouraged by the fact that the events of last year showed that the calculations even of Cabinet Ministers were not infallible; and there were instances in which calculations made on the Opposition side of the House, replied to authoritatively from the Ministerial bench, nevertheless, turned out correct, while the authoritative contradiction was proved to be fallacious. He would

    957
    refer to one of these instances—the controversy which had taken place between his right hon. and gallant Friend (General Peel) and Lord Herbert with regard to the sufficiency of the amount taken for the Army Estimates. When the amount was aked for the right hon. and gallant Member expressed his firm conviction that it was insufficient, and the noble Lord, the Secretary of State for War, several times replied to him, founding his statements on official information, and maintaining that the amount was sufficient. How had it turned out? His right hon. and gallant Friend was right, and the Secretary of State was wrong; for a further sum of no less than £450,000, or nearly half a million more, was found to be required. The right hon. Gentleman, the Chancellor of the Exchequer, shook his head at this statement; but he (Sir Stafford Northcote) was prepared to maintain the literal correctness of his statement. When the accounts wore delivered at the beginning of the year it was found that £250,000 of the amount allotted to the navy had been given up by that department, and handed over to the army, because it was found that the army wanted more money than had been asked for on account of it; and, still more lately, the House had heard of a further sum of £200,000 for the excess on the army expenditure of 1859–60. These points were not immaterial to the question before the House, because they justified the presumption of those who questioned statements which they were told they ought to take on trust. He could besides mention other instances, but he would content himself with one. Last July the Chancellor of the Exchequer, when presenting his supplementary Budget, told the House that he was about to take out of the balances in the Exchequer a certain sum for the supply of the war just expired. In justifying the course of taking so largo a sum as £1,286,000 out of the balances he said those balances were very satisfactory, that they had amounted to a certain sum in March, in June to something less, but that in September he expected they would be rather more satisfactory. Instead of that, however, they turned out to be less satisfactory, being in September £2,500,000 below what they were in June. That was an instance pregnant with results, for it showed that the balances in the Exchequer were by no means in a state to be trifled with, and that his right hon. Friend
    958
    must be cautious how he dealt with them. In that case he had been deceived to the extent of £2,500,000, and if the House looked carefully at the accounts before them, they would see that the balances last year must at times have been inconveniently low; and his right hon. Friend had had to resort somewhat largely to borrowing on deficiency bills. Such instances as these justified doubts of his right hon. Friend's present calculations. It was said, however, both in and out of the House that the calculations made on the Opposition side of the House as to the probable results of last year had not been borne out, and that the financial results of the year were thoroughly satisfactory and quite justified the policy of the Government. Such statements occasioned him the greatest surprise. Why, the calculations made on the Opposition side of the House had been justified almost to the letter. They said that the provision made by the financial arrangements of last year was insufficient, and it had not proved sufficient. The right hon. Gentleman, the Chancellor of the Exchequer, had made a statement perfectly and literally correct in one sense, but it was taken up by the world at large in a sense which was not correct. The right hon. Gentleman had stated he had a surplus, but how had he got it? As the hon. Member for North Lincolnshire (Mr. B. Stanhope) had well shown, the House had at that moment to deal with a deficiency. If they should decline to vote the taxes proposed, there would be a deficiency upon the year of something like £8,500,000. [The CHANCELLOR of the £20,000,000.] His right hon. Friend was right; for if the tea and sugar duties were not renewed, the deficit would be to that amount. But it would be only fair to take the calculation upon the same principle on which it was taken last year—that is to say, they should take the tea and sugar duties at the rate at which by law they ought to stand; and he would remind the Chancellor of the Exchequer that last year he thought it fair to assume that the extra duties on tea and sugar should be matter of consideration by the House. Thus the House had at that moment a largo deficit to deal with, and that ought not to be forgotten by the country. The right hon. Gentleman said that hon. Gentlemen on that side of the House had. predicted a much larger deficiency than bad occurred. They were perfectly justified in doing so. They

    959
    spoke of the circumstances as they then stood for their consideration, and of the proposals as they were originally made. They spoke with the duty on spirits at 8s. per gallon, which was now 10 s.; and with the repeal of the paper duty in prospect, which had not taken place. The difference between the spirit duties at 8s. and 10 s. was £1,500,000, and the paper duty, £1,300,000, made up £2,800,000, which brought the deficiency up to between £11,000,000 and £12,000,000, which they always said would have to be dealt with. He thought it right to remind the House of the position in which we stood, because it was quite time that they should consider fully and fairly, without excitement, the financial position of the country, and that they should disembarrass themselves of the false impression that the financial scheme of last year had turned out better than was anticipated. He freely granted that in some respects the policy of his right hon. Friend had turned out satisfactory, and he begged leave to congratulate him particularly upon the results which he had stated of the Treaty with France. He was not surprised at those results. He had always expected and always said, that taking off duties would increase our trade and would increase the imports and exports of the country. But at the same time they must look at their finance as a whole, and accept the consequences to which it led. It would not do to look only on the bright features, particularly when there was reason to believe that some of the brightest would not present so favourable an aspect next year. Last year they had a deficit, which had been variously stated, but the fairest estimation of which seemed to be about £2,500,000. His right hon. Friend told them that there was a sum of £300,000 which properly belonged to the last year, but on reflection he would probably hardly care to calculate the matter in that way, because if they were to take the benefit of £300,000 in 1860–61 on account of wine drawbacks which arose out of the financial arrangements of that year, but which he said properly belonged to the year before, then he must also take into account expenses which might belong to that year but which would fall due this year, namely, the sum of £750,000 with respect to the China war, which they knew was still standing over. Taking the deficit at £2,500,000, as stated by his right hon. Friend, he wished to know how that de-
    960
    ficit had been met. The right hon. Gentleman told them the other night that that deficit had been met partly by taking £1,450,000 from the balances in the Exchequer and partly by adding £460,000 to the unfunded debt. But the two did not make up the £2,500,000.
    THE CHANCELLOR OF THE EXCHEQUERsaid he had not attempted to explain the other night how the deficit was met.
    SIR STAFFORD NORTHCOTEsaid, that if that were the case, the House had a right to complain that the right hon. Gentleman had not explained the matter. He had not seen a corrected report of his right hon. Friend's speech, and he spoke only from the notes which he had taken at the time; but the only figures which at all attempted to explain how the deficiency was met were those two items, and when he saw the papers next morning he was puzzled, in common with several other gentlemen, to make out how the difference arose. Of course, he did not mean to say that his right hon. Friend would make such a blunder as to pretend to account for the matter in that way, but these were the only figures which he referred to on that point, and it was not until he saw the account of the income and expenditure just published that he saw how the matter stood. That return, however, was by no means so satisfactory as an explanation from his right hon. Friend. Though he had had a short experience at the Treasury, he confessed that he was not thoroughly master of the principles of that paper, or of all its details, and no doubt there were many hon. Gentlemen who had not his advantages who would be equally unable to understand fully the intent and meaning of the entries in it. In order to understand the statement it was absolutely necessary to take into consideration what his right hon. Friend deliberately omitted from his statement the other night—the Vote for fortifications. The money borrowed on that head last year was small in amount—£200,000, and the sum expended was £50,000; and, therefore, though it complicated the account, it was not so very material. Still, the House ought to protest against any scheme of finance being brought forward, or any statement of our financial position being made, from which the account of what they had borrowed for fortifications was deliberately omitted. His right hon. Friend stood in a peculiar position with regard to that outlay, be-

    961
    cause he had abstained from taking any part in it; but though that might be a reason for his disowning it, it was no reason for the House, which had not abstained from discussing the question, but which had been a consenting party to the arrangement, putting it out of sight altogether in their calculations. He would take this sum, then, at £200,000, in addition to the increase of unfunded debt, £454,700, and reduction of balances, £1,300,731. Then there was a further sum, repayments of advances, £627,200, and he wished to know to what item of the account that was to be placed. He perceived that in a very able weekly paper that item was called "casual receipts;" but receipts from the repayment of advances could scarcely be called "casual," because they were continually occurring. He supposed, if he understood the matter aright, that they were repayment of advances for public works. Money having been borrowed to lend out for the purpose of public works, it was gradually repaid, to be lent out again; but it appeared that by one of the Returns, instead of being lent out again, this £627,200 had been applied to the expenses of the year. If that were the case it was the admission of a deficit at once. It was an addition to the public debt, though it might have been years ago since the money was originally borrowed. It might be very proper that the money should be applied to the purposes of the year, but it was virtually a new loan, and certainly it ought not to be used in that manner without application to Parliament or without any explanation being given of what had taken place. His right hon. Friend seemed to smile ironically, but if he had fallen into any error in the matter he should be glad to be set right. If the matter were as he supposed, then we had last year added to the debt of the country £1,257,000, and, in another sense, we might be said to have added another million, because we had had to borrow that sum to pay the million of Exchequer bonds which fell due, so that it might not be unfairly said that we had added £2,500,000 to the debt last year. But that was not the worst, because it appeared there was an item of army excess, £200,000; and he should like to know whether that was to be paid out of the balances, or was it to be paid out of the many hon. Gentlemen asking what these Revenue of the year? He could imagine balances were, and it might be said that
    962
    as they came in so conveniently all additional taxation might be dispensed with. Certainly it would be much more agreeable to take a million out of the balances to pay for the repeal of the paper duty than to put on 1d. on the income tax for the purpose. These balances were monies which arose partly from the accumulation of surpluses and the surrender of certain Votes; but to a great extent they consisted of monies already appropriated. It might be very satisfactory to have a balance at one's banker's, but if it were already bespoken for certain specific claims and there were out-standing cheques upon it, it was a very different matter. When the House was told that the balances in the Exchequer were £1,300,000 less than last year, they ought also to know whether the claims on those balances were also less. Before proceeding to throw away further revenue they ought to be satisfied with regard to the condition of their balances, because, when the position of the country was taken into account, it would be seen that of all moments the present was precisely that at which the balances of the country ought to be strong, in order that if unfortunately calls were made upon them before the end of the year they might be able to meet them. The right hon. Gentleman, however, had admitted that they were less by £1,300,000 than at that time last year.
    In considering the income for the year he believed they might assume that in most respects it had been very fairly calculated. He had no reason to suppose that more sanguine Estimates than were justifiable had been formed either with regard to the Customs, Excise, or any other of the ordinary branches of the Revenue. Of course these were always subject to the risk of fluctuations, such as resulted in a great degree from the unfortunate harvest of last year, the effects of which it was difficult to foresee, though at the time his right hon. Friend's Supplementary Budget was brought forward it had become highly probable that its returns would be unfavourable. He was not disposed to find any great fault with the Estimates, but some more positive assurance than had yet been given was required with regard to the £750,000 indemnity on account of the Chinese war, as to which he confessed himself somewhat in the dark. He really could not understand the explanation given of its amount. The noble Lord the Foreign Secretary first spoke of the amount

    963
    received as £600,000, and then reduced it to £200,000; and, finally, it was left in some uncertainty whether the merchants were to be paid next year, or whether their claims were to be settled in the first instance. In dealing with such a small surplus as was claimed, especially when doubt appeared to exist in the minds of the Government with regard to such an important item as £750,000, the fullest and clearest explanation ought to be given. He was told that means existed of calculating the outside sum which this country was likely to receive from a proportion of the Customs' duties, and that if the claims of the merchants were to be paid the first year the receipts would hardly be sufficient for that purpose. It would be unfair to expect an immediate answer on the point, but before finally committing the Government to a measure which could not be reversed, those financial questions ought to be thoroughly sifted, and it would be acting most rashly and unadvisedly to deal with the small surplus apparently at their disposal. On the other side of the account was the Vote of Credit outstanding to China. The answers which he had received on this head from his right hon. Friend were anything but satisfactory, and, considered calmly, he thought the House, likewise, would feel them to be far from conclusive. What was the position of the question? Last year the House granted £3,800,000 for extraordinary expenses in connection with the war in China. The right hon. Gentleman the Chancellor of the Exchequer stated the other night that of that amount he had not had occasion to pay away much more than £3,000,000, leaving, therefore, a balance of about £750,000 still unexpended. That £750,000, accordingly, made part of the balances in the Exchequer; and in estimating their value it became very desirable to know whether that £750,000 was a sum that could be relied on, or whether it was liable to be drawn out at short notice. But his right hon. Friend, in answer to the question which he addressed to him on that point, was obliged to reply that he was afraid it was not in his power to abandon the right of drawing that £750,000, but, on the contrary, that it must remain applicable to the service of the year now passed, as it was probable, according to the best estimates which could be framed, that about that sum would be required to cover expenses already incurred in the course of the last financial year. So that the £750,000
    964
    was as good as gone. How were they to dispose of that amount? If it belonged to last year the deficit was greater than they had been informed by £750,000—that was to say, it was £3,250,000 instead of £2,500,000; and if, on the contrary, it belonged to the present year, no provision had been made to meet it, except it were taken out of the Vote of Credit of £1,000,000 which was asked for the further service of this year. It was very possible that sum of £1,000,000 might not be required in the present year. But the money was voted and in the Exchequer, and was liable to be drawn. The same difficulty presented itself between this year and next which had been felt between this year and last. If the money was to be regarded as duo this year there would be a deficit and not a surplus; while if it fell due next year what became of the surplus which had been promised to meet their engagements? He apologized for these dry and uninteresting details, which he feared must weary the House; but it was necessary to present them with the object of showing that the financial arrangements required careful scrutiny. So much confusion arose in dealing with sums from year to year that he would take a period of three years together. £3,800,000 had been voted for the expenses of the Chinese War, to which a Vote of Credit of £1,000,000 had since been added, making in all £4,800,000. Only £3,000,000 had been actually required, and that left £1,800,000 still unexpended. That sum might either be included in the accounts of the year 1861–62, or thrown over to 1862–63; but in one shape or other it would have to be provided for in one or other of those years. That was absolutely certain; and according as it fell due in one or other of those years the prospects of the right hon. Gentleman for that year were materially altered. The right hon. Gentleman told them that after making all the proposed remissions, he would have a surplus of little more than £400,000; he then said that he expected, it was not quite clear how, but in some manner or other he expected to gain on the Estimates next year £750,000 in connection with the Chinese War. Thirdly, he stated that from the natural progress of the Revenue and the natural elasticity of the country he expected a gain of half-a-million, making a total gain of £1,658,000. On the other side was to be set a loss by the paper duty of £520,000, and by the reduction of 1d.

    965
    from the income tax of £280,000, to which he begged his right hon. Friend would add £1,000,000 for the Exchequer bonds tailing due in May, 1862, for he did not imagine that it was deliberately intended beforehand to postpone those claims. [The CHANCELLOR of the EXCHEQUER: Hear, hear!] He was glad to receive that assurance from his right hon. Friend that it was intended to meet these liabilities. But on that calculation it was evident that a loss amounting to £1,805,000 must be looked forward to as compared with the gain to the Revenue of £1,658,000, so that, on the showing of his right hon. Friend, there would be a deficit of £147,000 to begin with. Adding to that the £750,000 which would form the residue of the outlay for the Chinese "War, and that deficit would be increased to £900,000. He did not deny that these calculations might be shown to be erroneous, but he had made them very carefully, and they established, at all events, that fuller explanation than they had yet received ought to be given to the House before it was called on to surrender permanent taxation.
    The Budget, although on the whole of a provisional character, contained one permanent element—the abolition of the paper duties. Financiers of all classes were agreed for many years past that it was most undesirable to live on a system of provisional finance, and he could quote opinions after opinions, including those of his right hon. Friend himself, who called it "a shifting and unstable system of finance," to show the undesirable nature of provisional arrangements, especially with regard to the income tax. How much greater, however, were the objections with regard to imported articles of trade, such as tea and sugar. Must it not, in the nature of things, be most disadvantageous to persons engaged in commerce of that description not to know what the duties on those articles were to be and to have promises made to them year after year which were continually being broken? At that moment they had a peculiar interest in tea, because the payment of the indemnity from China depended on it. That indemnity was to be paid from the Customs' duties at the ports open to our trade; the amount of these duties depended on the extent of trade; and that, in turn, depended on the amount of duty which we ourselves imposed upon the article. If they did not facilitate the tea trade, they would injure and damage—he
    966
    would not say kill—the goose which was to lay those 750,000 golden eggs. There was another remarkable circumstance to which he wished to call the attention of the House. While during the last year we had imported very large quantities of various articles, the imports of three—namely, tea, sugar, and tobacco—had been almost stationary. Now, the importation of eggs and butter, and other things, had increased, because the duties had been taken off; was it not probable that the importation of tea and sugar had remained stationary because the duties had been left on?
    THE CHANCELLOR OF THE EXCHEQUERsaid, that the consumption had fallen off.
    SIR STAFFORD NORTHCOTEsaid, that the right hon. Gentleman's observation supplied him with another argument. The importation of articles was induced by an expected consumption, and if by the continuance of high duties consumption was discouraged, the merchants would not import such large quantities of tea as they would otherwise do, and thus our receipts would be diminished. He must say one or two words upon the condition of trade, because, strong as were his objections to provisional budgets, he thought that that condition afforded some reasons why the House ought to be content to vote some of the taxes for a period of only one year. The exports last year were stated by the right hon. Gentleman to have reached the satisfactory amount of £136,000,000. His hon. Friend the Member for Huntingdon stated, from his knowledge of the subject, that several branches of commerce were showing a decline, and that assertion was confirmed by the figures which had been laid before the House. In the first two months of the present year the exports had fallen short of those of last year by £3,370,000, showing a decline of 16¾ per cent. Supposing that upon the whole year they declined only 10 per cent, that would reduce them to £122,000,000, a point below that at which they had stood any year since 1857. If that was the case with regard to the exports, what was likely to be the result to the import trade? It was true that they were now importing large quantities of certain commodities, but those were articles of food, rendered necessary by the bad harvest of last year; and if they had to spend so much money upon food, it was clear that they would have less to spend upon other things.

    967
    Buying food, however important a transaction, was not reproductive in the sense in which buying raw materials for their industry was. During the last two months the import of raw cotton, instead of being 1,734,000 cwt., had amounted to only 1,184,000 cwt.; that of wool, instead of 9,033,000lb., had been only 6,229,000lb.; that of hides, instead of 485,000lb., had been only 294,000lb. The imports of almost all articles of manufacture had largely fallen off; and, connected with that, let him call attention to the remarkable decline of their trade with the United States. During the last two months the export to that country of, he might say, every article except coal had greatly fallen off. In cottons, instead of £965,000 worth, they had sent only £671,305 worth; of woollens, instead of £739,028 worth, only £525,991 worth; and upon the whole list of articles exported, instead of £3,594,239, they had sent only £2,274,973, showing a decline of no less than 37 per cent in these two months. In the face of these facts, and considering the uncertain position of foreign affairs, there might be a necessity for a provisional Budget, and for voting taxes for a short time only, because there might be an expectation of greater demind being made upon them, and of their necessities increasing. But was it consistent with these reasons that they should surrender a large permanent source of revenue? It seemed to him to be utterly inconsistent. Let them remember that they had yet to see what would be the operation of the Commercial Treaty with France—although he hoped and believed that its results would be favourable—and had yet to learn whether the increase of the spirit duties would prove remunerative; and until these points had been ascertained they ought not to part with any of their resources. Several of his hon. Friends had pointed out—what every one sufficiently knew—the difference between repealing a tax, such as the duty upon paper, and reducing such duties as those upon tea and sugar. If they took too much from the latter duties they could easily reimpose a part of it, but the paper duty once abolished could not he restored. More than that, if the paper duty was abolished no further sums could be received from it, but in the other case the reduction of the duties might so increase consumption as to prevent the Revenue sustaining any loss from
    968
    the change. Therefore he entreated the House to pause before they committed themselves irrevocably to the proposed step. Considering the state of the Exchequer, that it was not strong, that their expenditure was still large, and that trade was uncertain, he had no objection to continuing the income tax at 9d.; but let them be cautious before they committed themselves to throwing away an important permanent source of revenue, and took a step which, whatever might be the circumstancesof next year, they could not retrace. His righthon. Friend the Chancellor of the Exchequer had two answers to these arguments. In the first place, he said that in another year they might reduce their expenditure. That was really a hope in which the House had indulged too long. He did not mean to say that he did not hope the time would come when we should be able to reduce the expenditure, but lot them wait until they saw their way clear to do it. Did his right hon. Friend think that he saw his way to a reduction of expenditure? He had been in office for nearly two years, but the House had yet seen nothing like a reduction of expenditure. He did not make that a charge against his right hon. Friend. Far from it. Circumstances had been too strong; the feeling of the country, the feeling of that House, and he dared say the feelings of his colleagues had been too strong for him, because the expenditure which the House had voted had been voted at the request of the Government, of which his right hon. Friend was a Member. When the right hon. Gentleman had reduced the expenditure let him take off the paper duty, but when they were asked to surrender that tax in the hope that the expenditure might in some years be reduced, they were asked to surrender the substance for the shadow; and he hoped that while the House would be ready to support the Government in any well-considered measures for the reduction of expenditure they would be firm in retaining the means of meeting any charges which might be made upon the country. Another answer which, perhaps, his right hon. Friend would make was that it was desirable to relieve the industry of the country as much as possible in order to enable it the better to bear the burdens which were necessarily cast upon it. With that argument he went the entire way; but the whole question was, what was the best mode of relieving the industry of the country. That result might be brought

    969
    about either by reducing the income tax, repealing the paper duty, or reducing the duties on tea and sugar. The question was if they abolished the paper duty, would they leave themselves a sufficient number of channels through which the newly created wealth of the country might flow into the Exchequer, and what were the means by which it was proposed hereafter, in case of an increase of expenditure, to draw that wealth into the Treasury? His right hon. Friend told them that the chief sources of revenue to which they could resort were the malt duties, the spirit duties, the tea and sugar duties, and the income tax. The malt tax, they were told, was not productive, and what had taken place with regard to the spirit duties put a further increase of that impost out of the question. The consequence was there were only three taxes to which they could resort in order to obtain an increase of revenue—the tea and sugar duties and the income tax. Now they must contemplate the possibility of even further demands upon them in the event of their unfortunately being involved in hostilities. The three taxes he had mentioned were the only ones which could be used to meet the expenses of a war; but if in time of peace they kept up those taxes at a high rate in order to take off indirect taxation or to relieve the country of other burdens, what would they do in time of war? He held that they ought to maintain their revenue and expenditure on as equal a footing as possible, and reserve those taxes which were their only resort in time of need till their necessities compelled them to fall back upon them.
    MR. SEYMOUR FITZGERALD MR. SEYMOUR FITZGERALD moved the adjournment of the debate.
    VISCOUNT PALMERSTON: Sir, at this hour of the night, when so many hon. Members probably wish to speak, we shall not object to an adjournment. I hope, however, that the announcement of an hon. Gentleman opposite that the debate will last for a great many nights before you, Sir, leave the chair, will not be fulfilled. I trust that on Thursday, when we shall resume the debate, you will be allowed to leave the chair. There will be many opportunities in the course of the Committee for hon. Members to deliver their opinions.
    MR. DISRAELI: The noble Lord says very justly that there will be many opportunities in Committee on the different Resolutions for hon. Members to expresss
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    their opinions; but we must remember that this is the only occasion on which, according to the strict rules of the House, we can have a discussion on the whole project of the Government. It is not from any wish to delay the progress of public business that I make this observation, for I am quite convinced that if hon. Members are prevented from availing themselves of this opportunity for a general discussion, we shall not make that progress in Committee which the noble Lord contemplates. On each Resolution, instead of a discussion confined to its particular merits, there will be a discussion, not strictly regular, but of Parliamentary practice, on the whole plan of the Government. Therefore, I have advised, as far as I could influence the course of business here, that this opportunity should be taken for a general discussion. The discussion to-night emanated, not from this bench, but from what are called the independent Members of the House, represented on this occasion by one of the most eminent of their number. It is impossible for the Committee to form an opinion on any of the Resolutions without further information on various points of the scheme. I have, indeed, not made up my mind as to what course I shall take in Committee. Much will depend on the tone of the debate and the explanations which we receive from the Government. For instance, it is essential to a clear appreciation of our financial position that we should know how the last deficit has been provided for, what is the exact surplus upon which we can really count, whether we may legitimately assure ourselves that the sum of money will arrive from China, and so on. I mention this, because the noble Lord, from the tone of his remarks, seemed to think that it is an unusual course to take this opportunity of discussing the propositions of the Government. If the debate is continued in the same spirit and manner in which it has been pursued tonight, I have no doubt we shall arrive at such a result that when the House goes into Committee we shall transact our business with greater facility and effect.
    THE CHANCELLOR OF THE EXCHEQUER: I am sure, Sir, it was not the intention of my noble Friend to complain of the course which has been taken. I think that it is a legitimate and desirable one, for it gives to every one an opportunity of asking for information on the various points of the scheme, in their relation to

    971
    each other. I share, however, the anxiety of my noble Friend that the discussion, without being in the slightest degree unduly abridged, should be proceeded with all the rapidity which is due to its importance. There are Motions standing for to-morrow, which prevent us from resuming the debate till Thursday. It is important, on account of the very complicated proceedings in the Revenue Department, which are connected with the renewal of the income tax in a year when a new assessment is made, that the discussions on this subject should be taken at as early a date as possible. We shall think it our duty, in case the debate does not terminate on Thursday, to ask for leave to go on from day to day with the financial proposition until the main subjects are disposed of, and we earnestly trust we shall receive the approval and support of the House in making that request.
    Debate adjourned till Wednesday.
    House adjourned at Twelve o'clock.