ADJOURNED DEBATE. THIRD NIGHT.

HC Deb 29 April 1861 vol 162 cc1219-333

Order read, for resuming Adjourned Debate on Question [22nd April], "That Mr. Speaker do now leave the Chair."

Question again proposed.

Debate resumed.

MR. HORSMAN

Sir, towards the close of the discussion on Thursday evening an apprehension was expressed on this side of the House that those who were unfavourable to the Budget might resort to the same delays as last year defeated the Reform Bill. And there is no doubt that there is a sufficient resemblance between the two cases—that there is such a remarkable similarity between the relation of the House and the Government to the measure before us and to the country, that, at first sight, that apprehension might appear not to be ill-founded. In the month of April last year we were considering a measure which derived its chief character and importance from one leading provision which was desired only by a minority of the House, which the House generally both disliked and dreaded, and which it was well known that a majority even of the Cabinet viewed with anything but favour—but as to which the personal honour of a leading Minister was so committed, that he was allowed by his colleagues to experiment on the opinions of the country. This year we have a Budget which also derives its chief interest from one leading provision, which is again acceptable mainly to that same minority—which at the close of last Session a majority of this House and the country plainly showed that they did not desire—which again is believed to be the not willing act of the majority of the Cabinet—but, as to which the personal honour of a Cabinet Minister is again so committed, that he also is allowed to indulge his fancy by a still bolder experiment on the patience of Parliament and the good sense and understanding of the country. Last year the hon. Gentlemen on the other side of the House refrained from committing themselves by any opposition to the second reading of the Reform Bill. They knew that the feeling against the £6 franchise in the form then proposed was as strong on this side of the House as on that. They knew it was too earnest and too honest a feeling to be long suppressed by honourable men; and they judged, and, as the events proved, wisely judged, that the rejection of a measure which was so distasteful to both sides could not be devolved exclusively upon one. This year they are equally well-informed. They know that the reopening of the paper duty, with the constitutional question it involves, was anything but an agreeable surprise to many hon. Gentlemen on this side of the House. They know that the disapproval of that step is again felt by earnest and honourable men. They again hesitate, and wisely hesitate, by a hostile Motion at the very outset to give a party character to objections which they know are not confined to one party, and as to which that rumour, so fatal to the Reform Bill is again afloat—namely, that among the secret ill-wishers and only half-disguised disapprovers of the measure not the least considerable may be found on the Treasury Bench. In this condition of affairs—each party watching the other and hoping much from the earnestness and sincerity of the other—the country meanwhile as immovable as it was last year, but plainly repudiating all sympathy with the agitators for change—the possibility might be feared of our being again drifted into the desultory discussions and protracted skirmishes of last year. But the parallel goes no further. The preliminary debate in which we are now engaged is but the necessary clearing of the ground for the real battle to be fought in Committee, The feeling and opinion of the House are now too well known, the duty of the House is too unmistakable, to allow of any more trifling with the question. And, Sir, the character and dignity of this House require that we should proceed with great deliberation to select the points on which the waits to he carried on, and then grapple closely with them, fight manfully with them, and leave the issue to the country. I must say I think it a matter of great regret that these questions of the paper duty and the House of Lords have come upon us again so soon. The events of last year are not so remote, nor our recollections so obliterated, nor the repeal of the excise on paper so urgent, nor the case against the House of Lords quite so clear, as to justify any Minister in assuming that the defeat of July will be converted into a triumph in April. The restirring of the question on this occasion is, I think, every way unfortunate. We have hitherto had an unusually tranquil Session, in every way the reverse of last year. The Ministry in their policy have not been aggressive; the House, on the other hand, has been anything but obstructive, and we had begun to hope that the Government, after running through the Estimates without sustaining any other than a few harmless defeats, would have rewarded our good behaviour by an early prorogation in July. But the sky is suddenly overcast, and a storm has come from the quarter whence we least expected it. The Chancellor of the Exchequer, sailing on a smooth sea, with the whole ocean of finance to navigate in, has run his vessel on the only rock that was laid down in the chart. I think the matter is very much to be regretted, but our astonishment is even greater than our regret. We came down here on the night of the financial statement, all expecting to listen to a Budget which we hoped and believed it would have been a pleasure for us to pass with unanimity. We were prepared, perhaps, for some high colouring to which, under the circumstances, there would have been no objection. We expected to be told that the national finances were in a most flourishing condition, and I certainly do not know what is the state of the national finances which my right hon. Friend, with that courage which makes light of difficulties, with that power of persuading himself that what ought to be may be and shall be under his earnest and vigorous treatment—I cannot, I say, imagine any condition of our finances so desperate that, under his agreeable but at the same time powerful handling, might not be shown to be most flourishing. Of course, we expected to hear that this year he really had a surplus, although I am forced to confess that, after a fortnight's very diligent study of his figures, I am not reassured by the very ominous resemblance it bears, both as to its amount and source, to the ill-fated surplus of last year. We were promised last year, after all remissions and deductions, a surplus of £464,000. This year, after all remissions and deductions, the surplus is with more moderation but with equal confidence, placed at £408,000. Last year the surplus was obtained by leaving out of the account the expenditure in China. This year a surplus is obtained by putting into the account an indemnity of three-quarters of a million, which, as far as the evidence before the House goes, it is most probable we shall never receive from China. I was prepared to bear, and with other Members who had opposed it, I should have been rejoiced to learn that the commercial treaty with France, as far as time had permitted a development of its results, had proved as successful as its promoters could desire. These were all statements for which we were prepared; and if in any respect my right hon. Friend should appear too sanguine in his views, he would at least carry with him the sympathies and good wishes of the House for the full realization of all his hopes. But, I confess, I was not prepared to hear my right hon. Friend take a proud stand upon the Budget of last year, and remembering how the re venue from the paper duty, which he attempted to squander away in February, became a godsend in July. I was not prepared to hear him adopt the tone of an injured man, and taunting those who last year, distrusting his calculations, had checked his prodigality, and saved his Exchequer. I did not expect to hear him taunt them with the injustice of their opposition, and the ignorance of their unfulfilled predictions. But least of all was I prepared for his calling upon the House, upon the very first occasion, with the shortest interval of breathing time, to re- peat what is now acknowledged to have been the folly of last year, and to do so not simply and courteously to the Lords, but mistaking the feeling of the country, and miscalculating the strength of the Government in this House, he asks us to do it by a measure in such a new form as to combine a repeal of the duty with an affront to the House of Lords. I repeat, I think it is a matter of extreme regret that we should thus have a revival of the controversy of last year, which would have been better buried with the year—and, before the Budget is disposed of, I think my right hon. Friend will himself feel the embarrassment occasioned by his aggressive proceeding. Last year, when the Budget was introduced, all the odds were on his side. The House was with him—the country was with him—his alleged surplus was generally believed in, and his opponents had a difficult and uphill battle to fight. But they won the battle, and before the summer was far advanced the country was awakened to the delusions of the spring. This year all is changed, all but the high courage which courts danger, and the indomitable faith that will acknowledge no defeat. All else is changed. The relative claims of the taxes to be dealt with is better understood. The Government is not more strong, the Chancellor of the Exchequer, its brightest ornament, its mainstay and support—for he is the key-stone of the arch that joins Birmingham to Tiverton—he has been proved to be not infallible; the mistake that would have been made by the repeal of the tax last year is now universally admitted; and many members on this side of the House come to the consideration of this question in a very different mood, and are determined to look for themselves into the finance of the country, as a responsible and real business.

I will not upon this occasion trouble the House by entering into those financial details, on which grave doubts have been raised on higher authority from both sides of the House. I apprehend our object upon this occasion is rather to consider the general character and principles of the Budget, and to elicit from the Government those explanations, and from the House that general expression of opinion, which may guide and simplify our deliberations and proceedings in Committee. The financial policy of the Government is presented to us in a series of Resolutions—which we cannot rightly appre- ciate or deal with except in the manner which the right hon. Gentleman invites us to consider them—as a whole. The first Resolution is a reimposition of the war tax on incomes, at a slightly reduced amount. The second Resolution reimposes the war taxes upon tea and sugar. The third repeals the Excise on paper; and then comes—last, but certainly not least—the proposal of the Government, which has not been set down on the paper, but as to which the speech of the right hon. Gentleman was but too intelligible, that all these Resolutions, so varied in character, so opposite in their ends, are not to be embodied, as last year, in separate Bills, but are to be combined in one Bill, and sent to the House of Lords in that new form, purposely and most significantly to deprive the Lords of their hitherto acknowledged and accustomed power of independent deliberation and judgment; and to leave them no alternative but either submissively to accept it on their responsibility reject the financial policy of the Government as a whole—and I say on their responsibility to reject, because the supply granted to Her Majesty being inseparably mixed up with the other portions of the Bill, new and embarrassing consequences may be involved in its rejection. Each of these Resolutions, as the House will observe, raises a distinct and important question of policy. Upon the first Resolution, for reducing the income tax, we must consider whether the income of the country is greater than its requirements are likely to be. That compels us to look at the aspect of the Continent, the probabilities of peace or war, and the calls that may be made upon us for an increase of our war expenditure. The second and third Resolutions suggest a comparison of taxes, and, assuming that a reduction of taxation is practicable, we have yet to consider the policy or the justice of repealing the duty on paper in preference to lowering the duties on incomes or tea and sugar. But when those which are peculiarly financial questions—and as financial questions are common to every Chancellor of the Exchequer and every House of Commons—are disposed of, then comes that very different and greater question as to the form in which we are to give legislative effect to the changes we have determined upon. Are we to do it in a new form, provoking a conflict with the House of Lords, by seeking to deprive them of a right which they would have continued to enjoy without question if last year they had not presumptuously interposed between the Chancellor of the Exchequer and mischief to the country? The House last year, with the utmost deliberation, and after the fullest inquiry and discussion, came to the almost unanimous opinion that the House of Lords had committed no invasion of our privileges. Are we now to descend so low as to allow my right hon. Friend and the minority who supported him, even with the aid of the colleagues whom he has since coerced, to reverse that judgment and prostrate the House of Lords, betrayed and abandoned by us at the feet of that minority who, when the question was fairly raised last year, were so distrustful, if not of their cause, at any rate of their strength, that in the division forced upon them the loudest complaints against the Lords actually voted with the majority for their entire requittal? We must remember, when we come to discuss this Bill, that the form in which it is to be sent to the House of Lords is not on this occasion a mere technicality. It might have been so two years ago, and might be so two years hence; but now, when the very first occasion is seized to reintroduce the same Bill by the same Minister, cheered on by the same party, it ceases to be a mere technicality, for we cannot separate the change from the motive which dictates it. It assumes the character, not merely of a rebuke and reprimand, but it takes the form of a Bill of pains and disability, calculated to signalize the triumph of one party and the defeat and degradation of another.

Now the first point in the Budget is the reduction of the duty on income, and it is stated that a great boon is given to the country by reducing the duty 1d. in the pound. But, so far from admitting that the reduction of the income tax to 9d. is a great boon, I say on the admission of the right hon. Gentleman himself, and on his own figures, it is the perpetuation of a great injustice. Because what does he tell us? He says he has a surplus of £2,000,000, which he intends to divide equally between income and paper. But. I beg to ask, are those two taxes regarded in the same light by the country at large? Do they fall under the same classification in our financial system? Why, the manner in which this remission of the income tax is put forward to sugar the repeal of the paper duty is conclusive on that point; and if, before the scheme was determined on, the country had been polled as to which tax should be remitted, I will not say ninety in every hundred of the whole population of the island, but, I believe, ninety-nine in every hundred, would have voted for a remission of the income tax and the war duty on tea and sugar in preference to the Excise on paper. If that is the case, are we faithful to our duty to the country in allowing any portion of the surplus to be applied to the repeal of the least onerous and the least obnoxious tax? I have said I do not admit that the reduction of the income tax is any boon; but I say more—I deny that there is any reduction at all. Practically, the right hon. Gentleman reimposes it, and that was very clearly shown by the right hon. Gentleman himself in his Budget speech of last year. He made no mystery about it, and if any one will refer to that speech he will see the very different mode in which this tax has been dealt with on two different occasions, when two different policies were pursued by the Government. Last year it was the object of the right hon. Gentleman, the Chancellor of the Exchequer, to reconcile us to additional taxation; accordingly, he began his speech by giving us what was really an appalling account of the state of the national finances. The deficit was described as a "great chasm," but how was that chasm created? "I take the war taxes," said the right hon. Gentleman, "not at the rate paid in the last year, but at the rate at which it now stands by law." The income tax expired on the 31st of March; using that expiration for the purpose of his argument, he made it the commencement of the "great chasm." The war duty on tea and sugar expired at the same date, and it was treated in the same manner, as adding to the deficit. There was the chasm, and the only question was how it was to be filled up—whether by a shilling or one-and-sixpenny income tax; but the general conclusion was that there must be a great increase of direct taxation. But, as the right hon. Gentleman commenced in the process of reconstruction, replacing one after another the duties he had removed, and after we had been kept in apprehension for some time, he at last told us he was only to increase the income tax by a penny, the sensation of relief was indescribable, and the gratitude of those who had not watched the process was absolutely boundless at the result of that miraculous operation that could avert national bankruptcy with a penny. But those taxes were only renewed for one year; they have again expired, but where is the "great chasm?" We have not heard of any "great chasm"—we have not heard of any deficit this year. Those same duties, the lapsing of which last year formed the most interesting and exciting portion of the right hon. Gentleman's statement, have this year been passed over in total silence as a matter of course portion of the legitimate and natural elements of an available surplus. It is quite obvious why a different argument has been used on two different occasions. Last year we were thrown into a panic to make us part more easily with our money. This year, as we were not to be taxed, there was no need that we should be frightened, so our nerves were spared, and we were let off more easily. I do not notice the different mode of proceeding last year for the purpose of complaint, or even of criticism. All the right hon. Gentleman did was to put forward on each occasion, with the most prominence, the arguments and illustrations that made most for his case. I only ask permission to apply the same process to the Budget of this year, and to treat the taxes that have expired as lapsed taxes, and, legally, non-existent. They have been demolished by law. Then, for the work of reconstruction, it will be necessary to reimpose the income tax; but at what rate? Manifestly at the rate required to meet the exigencies of the country. But what rate is that? The right hon. Gentleman has told us that an income tax of 10d. will give a surplus of 2 millions, therefore an income tax of 10d. is not required; a tax of 8d. will suffice, and we may take off 2d. from the tax. Well, if the right hon. Gentleman can take off 2d. of a war tax, and only takes off a penny, applying the other penny to the remission of a less exceptionable duty that is not a war tax, I say, so far from conferring a boon on the country, he is only perpetrating a great injustice. This repeal of the paper duty, as the hon. Member for Horsham (Mr. Seymour FitzGerald) told us, is regarded by everybody out of doors not as a financial, but as a political concession; so far from being a relief to the nation it is only a sop to a clique. But I must say, looking at the state of affairs abroad, and listening to the speeches of our own Ministers, I find it very difficult to believe that we can safely reduce the expenditure at all. I find it still more difficult to re- concile the warlike tone of the speeches of the First Minister of the Crown, and of the noble Lord, the Secretary for Foreign Affairs, with the Chancellor of the Exchequer's, that self-contradictory objurgations of the increased expenditure of the country. He invites us to compare the expenditure of 1853 with that of 1861, and pronounces the increase to be enormous and incredible—"incredible" was the epithet he used. And then, assuming to himself entire freedom from all complicity with the folly and immorality of the nation, he turns from the painful evidence of the warlike spirit of his own countrymen to the more pleasing contemplation of the peaceful attitude of France, the truly Christian spirit the Emperor has displayed in his interviews with Mr. Cobden; the hatred he has exprsssed for war, his love and respect for treaties, and the truly benevolent and enlightened spirit in which he has tamed down the military passion of his countrymen, and won them over to the interests of trade and the arts of peace. Now, before I proceed to speak of the policy of France and its effect on the taxation of England, I beg to put to the House one question. If the expenditure of the country is too large, who is responsible for it? Who prepares and proposes the Estimates? Who finds the Ways and Means? Under whose authority is the scale of our armaments adjusted? Everybody knows that there is not a shilling of the expenditure that is not suggested, recommended, and demanded by the Ministers of the Crown. On their responsibility they make known the national wants, and on their representations we adopt them, and I think it is rather hard on us that we should be so often taken to task by my right hon. Friend for extravagance for which, if it be extravagance, he, more than any man now living, is responsible. I do not wish to deal ungenerously with the right hon. Gentleman, but let me in a few sentences show what our expenditure is. I make no reproach against the right hon. Gentleman—quite the reverse. [Laughter.] He will understand me, though, by that laugh, it seems some hon. Gentlemen do not. I have here a table of the expenditure of the years from 1853 to 1861. The three years 1855–56–57, being the years of the Crimean war, are exceptional. But I find that in 1853 the expenditure on the army was £9,256,000; in 1857 it had risen to £12,370,000; in 1858 it was £12,512,000; in 1859 it was £14,056,000; in 1860, £14,900,000; and for 1861 it is estimated at £15,266.000. The navy, in 1853, cost £6,511,000; in 1857, £9,937,000; in 1858, £9,215,000; in 1859, £11,823,000; in 1860, £13,331,000; and the Estimate for 1861 is £12,029,000. Now, observe that though in 1857 and 1858 there was a considerable increase, as compared with 1853, yet the most remarkable and striking increase has taken place in the last three years, 1859, 1860, and 1861. But under what Administration, under what Chancellor of the Exchequer? The expenses of the army in 1857, when the right hon. Baronet the Home Secretary was Chancellor of the Exchequer, as compared with 1853, has risen 25 per cent. In 1858, when the right hon. Gentleman opposite (Mr. Disraeli) was Chancellor of the Exchequer, the difference was also 25 per cent; but in 1861, as compared with the same year, it was 40 per cent. In the expense of the navy the difference between 1853 and 1857 was 35 per cent; in 1858 it was 35 per cent; and in 1861 something approaching 100 per cent. Now, I will repeat that it is creditable to the Government that during the last three years they have undertaken this increased expenditure in order to put the country into a proper condition of defence. I repeat—and this, perhaps, will be now more intelligible—that it is no reproach to the right hon. Gentleman the Chancellor of the Exchequer that he, a Member and mouthpiece of the Government, should have asked us to vote these Estimates. So far from being a discredit to him, I say that I am one of those who have urged upon the Government this increased expenditure, and I have expressed my readiness to vote any censure upon them if they had neglected to make it. I mention this, therefore, as no reproach to the Chancellor of the Exchequer; but if the country does not reproach him, he certainly ought not to reproach the country. I would put this question to him—As a Minister of the Crown, speaking in this House with the knowledge which he possesses as a Minister of the Crown, does he, or does he not, think any portion of this military expenditure unnecessary and avoidable? If he tells me what I do not expect to hear—that which I should be much surprised to hear—that he does think it unnecessary and avoidable, then I would ask how could he reconcile it to his public duty that he should be the Minister to propose it for our adoption? How can he employ his influence and his eloquence to persuade us to adopt that which in his conscience he condemns? But if, on the other hand, he tells us—what I am sure he will tell us—that, however much he regrets it, he thinks this expenditure necessary and unavoidable; then I say, what is the meaning of those speeches in which he holds up the country in an odious light to public reprobation, as influenced by foolish, by aggressive, and even by immoral tendencies.

With regard to these Estimates there is another point, if we analyze our expenditure, which is still more remarkable. The other day my right hon. Friend in his financial statement congratulated us upon the completion of the French Treaty and pronounced an elogium upon its good fruits. Well, Sir, we are prepared to welcome its good fruits, but among them we cannot yet count the diminution of our war expenditure, because the year 1860, the year of the commercial treaty, is the very year in which our war expenditure has taken the greatest jump; and these two years, 1860 and 1861, in which the commercial treaty (on one side at least) has been in operation are the two years in which the Budgets presented to us have shown the very highest Estimates ever known by this country in a time of peace. They have been, more than any others, war Estimates. The present Budget breathes of war; almost every important item tells of military preparation and sounds the signal of alarm; Estimates unparalleled in peace proclaim the fears of the Cabinet and the well-founded anxieties of the nation. But they are the Budgets of the present Chancellor of the Exchequer to which he applies the epithet "incredible." But let me ask this question—is England the only nation that has thus increased her war expenditure? Is there a single State in Europe which has not been similarly arming; and are they to be told that their arming also is unnecessary, that it is a folly or an immorality; or that they are arming for purposes of aggression? Cast your eyes abroad. Look first to Germany. Germany, torn by conflicting interests and ambitions—trembling for her own boundaries—is her arming folly or a crime? Look at Austria—stricken and struggling, with half her population in revolt, and financially even more than politically insolvent. Go on to Russia, still bleeding from the wounds of the Crimea, and her strength, and her resources severely tried by a great and noble effort of social reorganization. Look at the secondary States of Europe. They will all toil you the same tale of increased expenditure, but none of them will pretend to ignore the cause. Put the question to them. With one voice they will all reply, "There is one quarter to which every eye is turned. There is one name that quivers on every lip. There is one terror that overshadows every throne." And the noble Viscount, our own First Minister has proclaimed it as plainly as any of them. "It is no use disguising the fact," the noble Lord told us in this House, "we are arming against France—against France with an army of half a million of men, capable of sudden expansion, and with ships of war in every quarter of the globe, where she can have no commerce to protect." "We are arming against France" is the universal cry of all the nations—"against France, the destroyer of treaties, the rectifier of boundaries, the champion of nationalities"—and from 1853, the very year fixed on by the Chancellor of Exchequer with singular infelicity for the the commencement of this race of armaments, for he must have forgotten that 1853 was the first year of the restored French Empire, for it was just as that year was about to open that the then ruler of France found himself sufficiently secure on the throne to assume the title and traditions of his Imperial uncle—from that year 1853 Europe has been daily assuming more and more the spectacle of a great camp—her armaments growing with the growth of French power, her alarms and anxieties increasing with the development of French designs. I beg to ask those hon. Gentlemen who are so very much shocked at the increasing military expenditure of England whethey they have ever had the curiosity to cast their eyes across the Channel, and inquire into the progressive expenditure of France during the last few years. If they have done so, they can tell us that in this very year 1861 the Finance Minister of France, with a smaller debt than we have to meet an army and navy more cheaply maintained, has presented a Budget of £75,000,000 sterling. They can tell you this further fact, to which the term incredible might indeed be fitly applied—that in the ten years ending 1858 the debt of France was increased by no less a sum than £120,000,000. Then the Italian war was supposed to have added £30,000,000, and the French papers now inform us that a fresh loan for a further sum of £30,000,000 is about to be negociated, making in all, in addition to an annual expenditure of £75,000,000, no less a sum than £180,000,000 added to the debt of France in twelve years by an Emperor who proclaimed to the world that his mission was peace, and whose friends and eulogists in this House, which is the only free spot in the world where he has friends and eulogists, never lose an opportunity of telling us that he cares for nothing but commerce. Why, let any commercial man picture to himself the effect upon the commerce of Europe of this abstraction of 1,000,000 of men, which is the addition that the aggressive policy of France is computed to have made to the standing armies of Europe—let any commercial man imagine, if he can, the effect upon the commerce of Europe from this million of men being withdrawn from productive labour and maintained in idleness as soldiers. Look at the account which the most intelligent French writers give us of the paralysis which at this moment has struck the trade of France. Every Bourse in Europe is agitated by alarms, because every Government in Europe seems to be watching and waiting upon the will of one man. But when these men are not idle—when the trumpet of war has summoned them to the battle-field, there is another column of loss by desolation and death to be added to the black account; and I say he is a bold man to be a Minister of England—more bold I think he will be deemed than prudent—who can stand forward in this free assembly and venture to invoke any portion of our sympathy or admiration or praise for a monarch, who, tried by any law that we acknowledge, of political morality or Christian faith, can be adjudged to be no other than a devastator and disturber of the world. I must say that I agree most cordially with what was said the other night by the right hon. and learned Gentleman (Mr. Whiteside) that the Chancellor of the Exchequer, in his high position, with the influence that he commands, might have pursued a course far more just and far more efficacious if, instead of addressing his reproaches to the House of Commons, he had felt it his duty, speaking in the presence of the most non-aggressive and conservative assembly in the world, to direct his expostulations to that monarch whose aggressive policy it is that keeps the world in arms. We should have listened, not with applause merely, but with sincere thankfulness to his denunciations of that restlessness which disturbs all Europe; and a warning eloquently and solemnly conveyed by him that the sympathy and the might of England would be directed against any great disturber of the world's peace, would have done more for the reduction of our armaments and of our Estimates than all his upbraidings of his own countrymen for preparations which he knows to be the instinct of self-defence.

Considering the Resolutions as a whole, it appears to me that when we come to Committee we shall have to concentrate our attention on two points, and two points only; the first, the existence of any surplus; and the second, the application of it. There is one conclusion I gather from this preliminary discussion, and that is that on the part of those who last year opposed the repeal of the paper duty, and upheld the privileges of the Lords, there is on this occasion no disposition to recede one step from the position then honourably taken up and successfully maintained. If the stand which they have determined to make should be a successful stand, the Budget will be sent back for correction and what will be the consequence of that? That is the question which everybody has been asking—to which every one endeavours to get an answer; and the answer to which I believe is very easy. The hon. Member for Huntingdon (Mr. T. Baring) the other night commenced this discussion in a speech which was remarkable for its ability—still more remarkable for the knowledge, the thought, and the mastery of the question which it displayed, but most of all remarkable for the strong conviction of the impending danger, and the deep sense of responsibility under which he spoke. It was evident to those who listened to him that he felt more than he ventured to say, and that he feared more than he expressed. I must say that I think he acted most fairly to the House, and in conformity with the oldest and wisest usages of Parliament when he refrained from committing it by a Motion to any definite expression of opinion at that time. His object was to place our condition fairly before us, and gain time for us to pause and reflect; and I think it is very difficult to over-estimate the public service he has rendered by securing to our proceedings that necessary deliberation which only one in his high position as an authority on financial matters could have commanded. And when he both commenced and concluded his speech by the strongest expression of his opinion that a change of Government, caused by a defeat of the Budget, would be a public misfortune, he expressed, I will venture to say, not only the general sentiment of this House, but the opinion of every thoughtful man in the country. No one, looking at the state of affairs abroad, and of parties at home, can be anything but a careless observer who would not regard a change of Ministry at this time, caused by an aggressive movement, as a most perilous event. But I am comforted by the conviction that there never was a time when such a change so caused was not only so improbable but so impossible. The reasons are very simple. There must be two parties to every change of Government, the party going out and the party coming in. It is apprehended that the Government may be defeated in Committee of Ways and Means on one of the series of Resolutions in the details of the Budget, and although the general construction of the Budget will not be in any way affected by that defeat, still they are to take it so much to heart that they will resign their offices. I should like to know why? I do not wish to remind them of their misfortunes, but certainly it is a fact that they have undergone some other defeats, and their worst enemy cannot say of them that under those defeats they have shown themselves too sensitive or thin-skinned; and on this occasion, in the present state of Europe, and in the responsible position of the Government, with no one desirous to remove but every one assisting to keep them there, I must say that for any friend of the noble Viscount to imagine that he would take such a course as is apprehended is not very complimentary either to his patriotism or philosophy. But suppose anything so improbable were to happen, in what way would it be met by the party opposite? I think they would very naturally tell us that this was a House of Commons which had been elected by their own appeal to the country, that its first act was to displace them by a vote of want of confidence, and for them, therefore, to undertake the Government at this time in the same House of Commons with a declared majority against them—so far from being in fulfilment of any public obligation or public duty, would be, under the circumstances, so impolitic, if not so rash, that among leaders and followers there could be but the in- terchange of one opinion, that in the present position of the party, with their improving prospects, and consequently their increasing responsibility, such a proceeding would not only be undignified and unsafe, but absolutely suicidal. I think, too, it was no less necessary, and no less becoming, that the hon. Member for Huntingdon should give us that assurance which the House had a right to look for, and which he gave us most unmistakeably in bis speech, that that great party, though not ready to assume the Government, did not on that account feel itself relieved from the functions and responsibilities of Opposition. Never, surely, did it behove any constitutional party in this House to be more wise in council, and more united and vigorous in action than when they have publicly declared their wish not to displace the Minister in whom they trust; and yet have to guard against the peril of their unwillingness to displace him, leaving the national finances, and even the national institutions, unprotected, while another colleague of that Minister, whom they think a rash colleague, under the warrant of his more Conservative chief whom in his own Cabinet he has coerced, turns the administration of finance into an instrument of political change, and even goes out of his way to combine a simple relief from an Excise with a stab to the Constitution. I should, indeed, despair of the House of Commons, I should think our boasted institutions might become a bye-word, and the terms "Constitution" and "Conservative" might be expunged from our political vocabulary, if, on an occasion like this, a majority of Members scattered through different parts of the House, but under one common conviction of impending danger, could be deterred by subordinate and secondary considerations from discharging a great duty to the public in the face of threatening events, of which we have been warned so impressively, and feel so deeply, and are, by our principles or antecedents, committed and pledged so strongly. I gather from the speeches on both sides of the House that there is not likely to be any opposition to the first Resolution regarding the income tax. Ministers have proposed that reduction on their own responsibility, and the House can the more easily assent to it because, as the machinery of the tax still remains, it can at any time be easily reimposed, and we know that the nation will readily submit to anything which the public safety demands. But I must say that we shall neglect a great public duty if we let this opportunity pass by without doing that which has of late years been too much neglected if we do not call the attention of the country to the real nature of that tax, to the exceptional circumstances under which it was imposed, and also to the obligation of Parliament under its pledges to reduce it. We are bound to show the country that we think it no light matter to continue this war tax at such a high rate in time of peace, and that we only consent to do this upon the pledge and determination not to allow any less exceptional tax to be repealed in preference. As to the second Resolution, I did not gather from the speech of the hon. Member for Huntingdon whether he intended to move any Amendment or not. He appeared to me divided between his desire to reduce the tea duties and his disinclination to undertake the responsibility of a further diminution of the revenue with so doubtful a surplus, and he did not intimate exactly what course he meant to pursue. Of course it is a matter still open to his consideration, but if it results in his not moving an Amendment, I should also hope that the House will not allow this Resolution to pass as a matter of form. This tax assumes a very peculiar complexion from circumstances which have lately been made known to the House. There are four articles of consumption which are mainly necessary to the poor—these are tea, sugar, tobacco, and fuel. The price of coal within the last year has risen 20 per cent. With regard to the first three we were told the other night by the Chancellor of the Exchequer that the consumption had fallen off; but what a strange confession is this to be made by the House of Commons to the country, that those articles which are in largest consumption among the poor, and of which the consumption is regulated by the cost, are now at such a price that consumption is actually falling off. I say there never was an occasion when it was more obligatory on us to apply that prolific principle of Sir Robert Peel—by a lowering of duties and a reduction of price so to stimulate consumption as to get, with lower duties, more revenue. And when we come into Committee we must on this question have better reasons than any which have yet been given for continuing these high duties at such a time, and we must have reasons not only from the Chancellor of the Exchequer, but, from hon. Gentlemen who represent, or possess to represent, more than any others, the interests of the poor. There is especially one class of hon. Members on this side of the House whose attention will be directed to these taxes in Committee, and whose opinions I hope we shall hear. There are among us those who, through life, as employers of labour in the manufacturing districts, have been brought into constant association with the poor, and whose wants they well know. Some of them are noble examples of employing the means which great prosperity has given them in promoting the moral and material advancement of those by whose hands their fortunes have been made. They have done much, and they have received gratitude and affection in return. And I shall like to know whether, when the new fact is brought under their notice that the consumption of these articles has fallen off, they are prepared to remit the duty on paper, which will give an advantage, certainly not to the poorer classes of the country, and to continue those high duties which are diminishing the comforts of the operative classes, and more and more every day limiting their power of consumption. If we tell them that we are giving more than £1,250,000 to the interests which are represented by the paper repealer, the operative classes will not clearly understand what amount of injustice is done, or the extent of the boon which might be offered to them. But if we give them the account in a way more familiar to them—if we tell them not how much it is a year, but how much it is a day, they will know by the information which is happily now so extensively circulated by moans of the penny newspapers the exact sum which their representatives in this House are giving to the paper repealers and taking away from the operative classes. They know, from information, most minutely and very persistently afforded to the public, that the sum which is now in question is £4,567 1s. 3d. daily. That is the exact sum which the House of Lords last year prevented being given to the paper repealers, and reserved to be distributed to the poor. That sum is so immaterial to the middle classes that it is but a fraction of the income tax they pay according to the schedules published by all the penny papers. But £4,567 a day laid out in the reduction of the duties on tea and sugar would create an enormous addition to the comforts of the poor. A Chancellor of the Exchequer with that sum has great means of showering benefits, and he can say every day of his official life, "I have distributed among the poor no less than £4,567 to be spent by them in tea and sugar." Besides, in that form there is no difference between one year and another; if it be leap-year so much the better for the poor. At the time last year when the House of Lords rejected the repeal of the paper duty the operative classes did not know the extent of the boon which would be given them if the duties were taken off tea and sugar, or the extent of the wrong which would be done to them if the repeal were given to a class who do not require it. But light has been dawning upon them lately. As these debates advance I believe they will grow in knowledge, and by the time we come to the next general election probably their education will be completed.

If no Amendment be moved or carried upon the first and second Resolutions there is no doubt that a very serious issue will be taken on the third Resolution. It will be a very much larger issue than the mere excise on paper. As regards the paper duty, everybody that I know of is quite willing it should he repealed if it can be done wisely, safely, and justly, and if it can be vindicated upon sound principles of finance. When the repeal of that duty was moved ten years ago by the right hon. Gentleman the President of the Board of Trade, I came down on every occasion ready and anxious to support it. I was not induced by the speeches of Ministers to vote against it, as many of their supporters did; but on every occasion I was deterred from voting for it by the speeches of Chancellors of the Exchequer, who entreated the House not to agree to that repeal because the national finances would not bear it. Two of those Chancellors of the Exchequer are now seated on the Treasury bench. In the majority of those occasions was a third Member of the Cabinet, who since has also held the office of Chancellor of the Exchequer, and now they all three insist in urging upon us as a political measure that which on financial grounds they viewed with apprehension, and besought and implored the House not to pass. The proposal of this change, emanating, as we know that it does, rather from political than financial motives, gives far more serious importance to the question as to whether there is any surplus at all, and that question will have to be decided by a discussion of principles as well as of facts and figures. Upon the financial question which has been raised, as we have had the opinions of men of much more influence and authority, I shall not presume to urge any of my own; but I will venture to call attention to the grave doubts which have been expressed, and to the points upon which issue will have to be taken. The hon. Member for Huntingdon stated the first class of objections with respect to the foreign trade. "Look," he said, "to the diminished means of customers in Europe, to the disorganized state of trade in the Levant, to the gloomy prospects of trade in America, and with diminished means of employment and consumption at home, are you so sure of your revenue that you can venture to part with one of its most prolific sources?" Are those facts about the foreign trade admitted? Are the deductions from those facts sound? If so, is not the conclusion unimpeachable? Then said the hon. Gentleman, "Are you sure that you will not soon have a continental war, and how will that interfere both with your foreign trade and your home expenditure?" Was that apprehension of war farfetched? The hon. Member for Huntingdon could not have expected the corroboration which he received on Friday night, when the noble Lord in answer to a question told the House that, looking to the state of the Continent, no man could say how soon Prussia might require the aid and support of England." The hon. Member for Huntingdon then asks you, "With so critical a state of affairs both at home and abroad, if you cannot so arrange your finances as to avert the difficulties, are you right in so arranging them that you must greatly aggravate those difficulties when they do arise?" Does not that question contain in it good and sound advice? The hon. Member for Huntingdon then raised a second class of objections which were followed up by the hon. Baronet, the Member for Stamford (Sir Stafford Northcote). "How," he says, "do you begin the financial year? We have your statement rendered to the Treasury, and we find on the face of that statement three great evidences of financial irregularity or unsoundness. First," he says, "look at the balances in the Exchequer;" and he reminds the Chancellor of the Exchequer that he made a calculation as to the balances in the Exchequer in July, which in September proved erroneous by a sum of £2,500,000. But he shows that on the face of the account the balances in the Exchequer have been reduced to the extent of upwards of £1,500,000. The second proof of unsoundness in these transactions is the loan of £1,000,000 for Exchequer Bonds to renew and perpetuate a debt which we were pledged to pay and ought to have paid off last November. The perpetuation of these bonds, as the House is aware, is only another mode of reducing the deficit of last year and of assisting the surplus of the coming year. The third fact is that the excess of expenditure over income in the year ending the 31st of March, 1861, was £2,558,384. While the hon. Baronet, the Member for Stamford, was speaking, the Chancellor of the Exchequer interrupted him across the table to say that upon that point in his financial statement he had given no explanation at all.

THE CHANCELLOR OF THE EXCHEQUER

My remark referred to another matter altogether.

MR. HORSMAN

I did not take the words down at the time, but the right hon. Gentleman was so reported.

SIR STAFFORD NORTHCOTE

Perhaps I may be allowed to explain. I showed a deficiency which was not accounted for by any reduction of balances or by the creation of debt. The sum was one of £590,000, and it was that item which the right hon. Gentleman, the Chancellor of the Exchequer, said across the table he had not explained in his financial statement.

MR. HORSMAN

I have stated the three facts which the hon. Member for Huntingdon and the hon. Baronet, the Member for Stamford, have brought under the attention of the House. They do not complain that the Chancellor of the Exchequer did anything unauthorized by Parliament or by law; but they do say that the system of meeting current expenditure by reduced balances and renewed loans, showing, after all, an excess of expenditure over income to the amount of £2,500,000, is an unsound and improvident system of finance. The hon. Member for Huntingdon told us that to go on by the present Budget perpetuating that system would be neither wise, nor just, nor politic. Is there any Gentleman in this House who differs from that opinion? The facts are admitted, and the deductions from them are irresistible. I ask, therefore, whether the warning which has been addressed to us is one that we can safely disregard? The hon. Member for Honiton (Mr. Moffatt speaking the opinions of large interests in the City, added his testimony to then on-existence of a surplus. He complained that the present system of finance was to a certain extent experimental, and he proceeded to show how those experiments have been vexatious and unproductive. The hon. Member for Horsham (Mr. Seymour FitzGerald) urged another question home—the expected indemnity from China. He asked for an explanation of the £750,000 which is to be received from China, and he presented to us the following alternative—either that sum would not come to this country at all, or, if it did so, our merchants in China would not receive the indemnity which they are entitled to have. I must say, however, that I cannot think the facts are so unsusceptible of explanation as they seem to be at present; but, at the same time, there is no doubt, from the information which has been laid before us, that the question of our receiving the indemnity is extremely doubtful. The right hon. Gentleman, the President of the Board of Trade, when he rose to address us, said he would give an explanation of the indemnity from China, but it appeared to me that the readiness with which he offered an explanation was only equalled by the adroitness with which he afterwards escaped from it; because, after commencing his explanation and beating about the bush a little, he said on second thoughts he had better keep himself to his own department and leave explanations to his right hon. Colleague, the Chancellor of the Exchequer. I think the right hon. Gentleman adopted a prudent course. But before these promised explanations come I must answer them by anticipation by holding up this paper. I find there three facts—£1,500,000 of reduced balances, £1,000,000 of renewed loans, and £2,500,000 of excess of expenditure over income; and I say that these are figures which no arguments can erase, which no eloquence can dissolve, which no amount of credulity can possibly ignore. Before the right hon. Gentleman, the Chancellor of the Exchequer, rises to give his explanations I would recommend any conscientious gentleman who is really desirous of extracting the truth from this financial controversy to furnish himself with this paper. It is No. 1,751 of the Session 1861, and is signed "Frederick Peel." I would recommend him while the Chancellor of the Exchequer is speaking, to hold the paper in his hand. I would recommend him to keep it tight, lest it should also be fascinated and slip away; and when the Chancellor of the Exchequer has concluded his explanations, I would recommend the hon. Gentleman to look again at the paper and ascertain whether the figures are changed. If they have undergone a process of miraculous transfiguration, then he may go home rejoicing and dream in a paradise of surpluses without the fear of again awaking in July to find himself sinking into the fathomless abyss of an interminable deficit. But if, when the explanations are over, he looks at the paper, and finds the figures are still there; if, disregarding first appearances, he should look a second time, and they are still there; and if, rubbing his bewildered eyes to assure himself that they are not deceiving him, he peradventure should look a third time, and the figures are still there—reduced balances, perpetuated bonds, and excess of expenditure over income to the amount of £2,500,000—confronting him in all the black and dismal realities of unrelenting type, then let him make up his mind, however reluctantly, that he should believe his eyes and not his oars; and let him thank the hon. Member for Huntingdon for having awakened him to the perils of his bewildered state, and let him by a new life of financial penitence and amendment endeavour to atone for the too credulous errors of the past. But, after all, our financial condition, irregular and disorganized as it is, cannot be attributed to any one Minister. The House of Commons has lately dealt with finance in a manner that is neither creditable to Parliament nor safe to the country. There has been too much of a precarious and unsettled finance—too much of what the hon. Member for Huntingdon caled a system of shifts and expedients. And there is this, which to my mind is by far its worst aspect—in the growing indifference of Parliament to its pledges and engagements, in the contempt it is teaching itself to exhibit for the good old rule of upholding, above all things, Parliamentary faith and public credit, whether with the tax-payers or with the national creditors, and in the lax and dangerous devising of new and speculative theories of finance, whereby to cloak the most flagrant disregard of legislative obligations; by these means I say that we are giving to our finance a character of immorality even more to be dreaded than its unsoundness. I believe that if any private individual were to deal with his affairs as the country has been lately dealing with its finance, he would go to prison. I believe that if any commercial establishment were to do so, it would soon be in the Gazette. A nation cannot go to gaol or figure in the Gazette; but history tells us that there is a national retribution not less logical and inevitable, and that financial disorganization is the sure precursor of political disorder. We cannot, of course, at once right our finances; we cannot establish them in one year on sound principles; but we can at least arrest this downward course; we can relieve Parliament from the stigma of a precarious, a capricious, and, so far as it is political, a corrupt finance, and from the spell of a Minister who is hold and eloquent, ingenious, honourable, and most sincere, but of whom it is quite consistent with admiration of all his high and brilliant qualities that we should add that he has not among them that more sublunary gift, most indispensable to the department which he governs, which could alone lead him to be regarded as a safe financier. When we have passed these Resolutions—if, indeed, we should ever pass them, because I look on such an event in a Parliament that professes to regard the interests of the poor as among the greatest improbabilities of an enlightened and moral age—then we shall come to the question which has been mooted by the right hon. and learned Member for Dublin University—as last year you sent up these Resolutions to the House of Lords in two Bills, why are you going to send them up this year in one? We are told that that mode is to be adopted in order to arrive at a pacific settlement of the question. The settlement of what question? The only question it will settle will he the independence of the House of Lords, and I must say I have never yet heard that if two friends have differed, and if the one that is in the wrong, taking the other unawares, gives him a knock-down blow, that would be considered a satisfactory and pacific settlement of all differences between them. I do not know what the experience of the right hon. and learned Member for Dublin University, in the course of his varied observation of character in the sister island, may have been—though I think it is possible he may somewhere have met with a professor of such a school of logic—but I certainly never expected to hear a great moralist and logician recommend it to the friends of the Constitution in the House of Commons. Sure I am that recommendation will not be heeded, because we know well that there are some modes of pacific settlement more perilous than any contest, more damaging than any defeat, more humiliating than any submission; and I hope that there will still be found a majority in the House of Commons true to the principles which were last year all but unanimously affirmed, and both able and determined to defeat this most ill-advised attempt to make the versatility of one House of Parliament the instrument by which to destroy the independence of the other.

MR. BRIGHT

Mr. Speaker, Sir, the House will not feel surprised if I say at the beginning that I do not intend to follow the right hon. Gentleman into all the details of his somewhat discursive speech. I shall, however, make a complaint of the right hon. Gentleman, which I have had occasion to make of him before, and that is, that he indulges in a manner which is perilous to weak nerves in dangerous prophecies and prognostications—that he leaves the realm of fact in a manner which I think is hardly compatible with useful debate, for the regions of imagination. Two years ago the right hon. Gentleman alarmed the House with fearful statements in regard to the nearness of war, and especially the nearness of that greatest of all calamities—a war between England and France. Well, these forebodings were followed, not by a descent on our shores, as most people expected who believed the right hon. Gentleman, but they were followed by the concluding of an elaborate and most important commercial treaty. The conclusion of that treaty was followed almost immediately afterwards by a measure on the part of the French Government which indicated the greatest anxiety that the peoples of the two countries should comprehend each other, and comprehend their true interests—I mean the entire abolition of passports in the case of Englishmen travelling in France. But the right hon. Gentleman last year alarmed us—he chilled the souls of some of us, and he threatened to chill the bodies of our not remote posterity—by telling us that our coals were speedily about to be exhausted. However, the hon. Gentleman the Member for Glamorgan (Mr. Vivian) immediately after demonstrated, as far as science could do so, that if this country lasted as long for the future as it has lasted since that day when the dove did nut return into the ark, still the supply of coal beneath this island would not in all probability be exhausted. The right hon. Gentleman last year drew another picture of a fearful character. He wished to persuade this House that we are not to be trusted with the regulation of the finances of the country, and that it was absolutely necessary that the House of Lords should do that which for 400 years past has not been done—namely to step in and correct the well-considered conclusions of the House of Commons with regard to the supply of money to the Crown for the service of the year. And now, Sir, he has given to this question of the Budget that very political aspect which he says a Budget ought not to possess, and he has endeavoured to bring up again those questions which it is obvious the Chancellor of the Exchequer and many of the most judicious Members of the House would have wished should not be imported into the debates on this question. But the light hon. Gentleman complains as if the Chancellor of the Exchequer and the House were about to do something of a most fearful character in proposing that the Resolutions of the House, whatever they may be, should go to the other House in one Bill, and not in several Bills. I will not now go into a discussion of that matter, because it will come up—I presume that the right hon. Gentleman will bring it up probably at a future stage of our proceedings; but I venture to tell him this much, that he will find, if he chooses to look into the journals of Parliament not further back than the years 1801, 1802, and 1803—he will find that the House of Commons repeatedly, indeed almost constantly, took the very course which the Chancellor of the Exchequer recommends that the House should now take. On the 19th of February, 1801, the House of Commons ordered that "a Bill or Bills"—leaving it optional—should be brought in, pursuant to the Resolutions which had been agreed to by the House. These Resolutions were 143 in number, and they referred to duties on tea, to duties on paper, stained paper, on books, on maps, to a drawback on books exported, to excise on linens and stuffs, and to a drawback on the exportation of them, and to many other matters. And it is only necessary to go the journals of the House to find that in the course which is now recommended, the House is only asked to do that which, up to that period at any rate, it was the universal practice of this House to do. But if the right hon. Gentleman is alarmed, I may ask him to consult the right hon. Gentleman the Member for the University of Cambridge (Mr. Walpole), who, I am sorry, as I am about to quote him, is not in his place. That right hon. Gentleman was Chairman of the Precedents Committee last year. Nobody supposes, who was on that Committee, and the right hon. Gentleman the Member for Carlisle (Sir James Graham) will bear me out, but that while the right hon. Member for the University endeavoured to do what he believed to be just in the matter of the Committee, he showed no disposition to be hostile to the House of Lords. That right hon. Gentleman prepared a Report for the Committee—I speak now of the draft Report, as he offered it to the Committee—and the last two paragraphs of it were to this effect. I will give the substance only of the first, and will quote the last textually. The first of those two paragraphs stated that two circumstances have materially weakened the powers of the House in matters of supply—first, the practice of perpetuating duties in general statutes for unlimited periods of time; and, secondly, the practice of keeping back a large amount of annual taxation till near the close of the Session. The last paragraph runs thus— It should, likewise, be remembered that the powers of the House over matters of Supply and matters incident thereto is necessarily much weakened by dealing with them separately in separate bills, instead of uniting them as much as possible in one measure, so that they may form part of the financial arrangements to be made for the year. Now, although, in accordance with the decision of the Committee, which refused to give an opinion upon any matter, and gave only the catalogue of facts, these statements were left out of the Report as presented to the House, yet I will undertake to say there was not one single member of that Committee who expressed in any way his dissatisfaction with the substance of that paragraph, and, I believe it met with the unanimous approval of the Committee. That is my answer, Sir, so far as this matter is concerned.

Now, to discuss the matter before us, and the charges and the fears of the right hon. Gentleman. I say that the right hon. Gentleman, with those eccentricities which I have been describing, is not a counsellor that I would take advice from on a matter of this nature. Listen to his speech to-night! There is not a horror in connection with the public affairs of Europe and the world which he has not treated you to. Has he not spoken of dangers worse Than fables yet have feigned or fear conceived,— Gorgons, and hydras, and chimeras dire. Why, Sir, if the right hon. Gentleman believes all he has told us, he ought to present a Resolution to the House condemning the Government for not entering on an expenditure of £80,000,000 instead of £70,000,000, and he should refuse utterly to consider any question of repealing any tax whatsoever. Now I will ask the House to go back to that memorable night—this night fortnight—when hon. Gentlemen were so fascinated with the eloquence of the Chancellor of the Exchequer that it took them a fortnight to find out the difficulties of this question. I have sat opposite hon. Gentlemen on the other side of the House for about eighteen years, and I have taken stock of their modes of thought—of their opinions, of the effect produced upon them by great speeches from this side; I have watched with interest the change of countenance which takes place when anything occurs which greatly moves and surprises them. Now, I must divide hon. Gentlemen opposite into two parties in the observations I am about to make. I leave out for the moment the Gentlemen who some time expect to come back into office, and take those who are the main hulk of their followers. As the Chancellor of the Exchequer proceeded with his speech, there was a feeling of individual pleasure and relief on the countenances of Gentlemen opposite. They felt that there was to be no increase of taxation. They felt there was a surplus, which they did not expect would be so large, or so clearly made out. ["Oh."] Well, I can appeal to the consciences of scores of hon. Gentlemen opposite whether what I now say is not true? But when the right hon. Gentleman the Chancellor of the Exchequer came to the reduction of 1d. on the income tax, there was a positive enthusiasm—and I said to a Gentleman near me, "How comes it that these country Gentlemen, who are said to possess properties varying from £5,000 to £20,000 and upwards a year, are more delighted with the remission of this penny than if I had opposite to me two hundred clerks of the City of London, whose average incomes were not more than £250 a year? No doubt, they were greatly delighted for the sake of their constituencies. We will put it in that way—in that way if you like—I do not want to give any improper or forced interpretation to their feelings, but it is obvious that there was great excitement and pleasure on that side of the House when the announcement in question was made. Now, when the Chancellor of the Exchequer came to the question of paper, there was a difference of expression. It was not one opposite to that of pleasure, but it seemed to me that there passed through both sides of the House a feeling that, after all, as the Chancellor of the Exchequer was able to offer a reduction of a penny in the income tax, and had also sufficient surplus to make the remission which he proposed with regard to the paper duty, the less said upon unpleasant things in the past the better, and that, perhaps, for both Houses of Parliament and for everybody concerned, it was desirable that the proposition of the Chancellor of the Exchequer should be accepted. I appeal to hon. Gentlemen opposite if it is not the fact that they did not doubt the existence of a surplus on that evening? What was said generally was this—I do not know whether it is Parliamentary to repeat it—"Gladstone is very clever and very lucky." And if a man is clever, and has luck on his side, nearly everything he does is pretty sure to succeed; and the general conviction was that this was a sensible proposition, and one which the House would be willing to adopt. I do not include the right hon. Gentleman the Member for Buckinghamshire and his friends, for I do not think that they felt all the pleasure which their followers felt. They saw before them the prospect of an opposition with nothing to oppose—an opposition out of work—a spectacle of distress far worse than the frozen-out gardeners—a condition which I am sure my right hon. Friend the President of the Poor Law Board would have no remedy for. It was necessary, therefore, to attack the surplus; and the right hon. Gentleman told us the other night, with a coolness that was charming, that that attack did not originate in the least from his bench, but from the independent party. It is delightful to know that there is an independent party on that side of the House. And it came from an hon. Member who is one of the most eminent, as well as one of the most independent members of that party. No doubt, Sir, when this surplus was to be attacked, it was desirable that somebody should be put up who has a commercial reputation and is supposed to be able to deal with figures, and the hot). Member for Huntingdon turned up by accident just in the nick of time, and nothing could be happier for the right hon. Gentleman the Member for Buckinghamshire. I do not know if the hon. Member is in his place, but he will allow me to say that I do not hold him to be an authority in these matters. I have known the hon. Gentleman in this House for eighteen years, and it has been my misfortune to have observed that he has always been wrong. Now an authority that is always wrong becomes at last to be no authority at all. Everybody knows that Moore's Almanack, which is sometimes right, is reckoned to be no authority except among the ignorant; and I say that the Member for Huntingdon, who upon these questions has been invariably wrong, cannot be a safe authority for us to follow. ["Oh, oh!"] Of course, hon. Gentleman opposite who agree very much with him are not likely to agree with me in that observation. I am only going to state that he is wrong according to the facts—it may be so much the worse for the facts—but it is clear that, if what we have been doing in this House on these subjects for the last twenty years is right—and the country believes it to be right, if you do not—that the hon. Member has for all that time being wrong. But I say that a Gentleman who is conspicuous for perpetual and invariable failure on these matters of Budgets is the last man that I should think the House of Commons would be disposed to follow in opposition to the recommendations of the Chancellor of the Exchequer. In this particular case his prognostications are altogether fanciful, and his reasons are altogether unsubstantial. In searching for reasons why the House should reject the propositions of the right hon. Gentleman, he "surveyed mankind from China to Peru;" but he could not give you a single fact; he could only give you the apprehensions and alarms of his own brain; and I am not at all certain that if the news had come to England before the hon. Gentleman made his speech as I believe it did not until afterwards, that there was a proposition for the Pope to set up his establishment in London, that he would not have brought that up as an additional reason why we should not accept this Budget. But he was not alone: there was the noble Lord who has been so lively during the speech of the right hon. Gentleman; there are twenty Members who have offered themselves as nascent or full-blown Chancellors of the Exchequer, whenever the right hon. Gentleman the Member for the University of Oxford shall have vacated that office. But I am much more modest than hon. Gentlemen opposite, and I declare it as my creed, which I hope always to hold, that if a Chancellor of the Exchequer declares there is a surplus I shall believe it. I pledge myself to that. I have believed every Chancellor of the Exchequer, whether it was Sir Robert Peel, or any of the three or four Whig Chancellors of the Exchequer we have had. I have always believed them when they have said that there was a surplus, and I have confined my criticisms to the manner in which they proposed to remit the taxes with which the surplus enabled them to deal. I have been separated from the hon. Gentlemen opposite all my life, but I have now a greater reason than ever for repudiating a party altogether which is hostile to a surplus. I take the same view that the country will take, when I say that I will have nothing to do with Gentlemen who are not willing that the Chancellor of the Exchequer should, when he is able to do so, make a fair, just, and sensible remission of taxes. So that the House will see that I am obliged to commence my argument by assuming the declared surplus to be a real one. The question I have to ask is this—are the remissions proposed judicious and fair? I mean fair to the various interests of the country. Last year what did the House do? It actually gave the Chancellor of the Exchequer a penny extra on the income tax to allow him to repeal the paper duty. What does the Chancellor of the Exchequer ask you to do now? He says, "Gentlemen, I give back the penny on the income tax, and I give you the paper duty, too." What can be more ungrateful, what can be more intolerable, what can be more indefensible, after what took place last year, than that a single man in this House, who does not like the paper duty for its own sake, should refuse the proposition which the Chancellor of the Exchequer now makes? He meets the prejudices and weaknesses of hon. Gentlemen opposite with a carefulness which must be gratifying to them, for he gives half the surplus to direct and half to indirect taxation. Each shares the gift. Now, when some Gentleman opposite gets up after me to-night, I hope he will tell us on what is based this special hostility of his party to the repeal of the paper duty; that is a point which we have not yet had fairly explained, and I think that in common honesty to the House and to the country some Gentleman on that side should explain it. When the glass duty was taken off by Sir Robert Peel it excited no emotions of this kind. Everybody knew that glass was brittle, hut that was not said in the debate, and the glass duty was abolished. When in the year 1853 the present Chancellor of the Exchequer proposed the repeal of the Excise on soap, everybody knew that if soap was sufficiently used, what has been called "the great unwashed," would be extinguished, but yet, as far as I recollect, not a single Member of the House objected to the repeal of the Excise on soap. I want to know why there is this affection for the Excise in the case of paper? Is there anything in this particular trade which deserves the fetters which you impose upon it, and the maltreatment to which you subject it? I have heard say, and I wish somebody would contradict it or admit it, that there is this great difficulty—that paper is the foundation of the manufacture of books, that it is the medium of the transmission of news, that it is the raw material of the great educating power, and that if there be cheap paper, no stamps, and a perfectly free press, power will be given to the weak, and light to them that sit in darkness. I should be sorry to accept, and until lately I did not accept, that explanation of the course pursued by hon. Gentlemen opposite; hut when I see this marked and special hostility to this particular remission—an hostility which has never before been shown to any remission of a similar character—when the light hon. Gentleman the Chancellor of the Exchequer is pursued with an opposition which is almost vindictive, merely because he proposes this single remission—then, I say, I have a right to suspect that there is more in your hostility to the repeal of this tax than a mere opposition to the repeal of such an amount of taxation. The right hon. Gentleman the Member for Bucks is in some difficulty with regard to this matter. My right hon. Friend the President of the Board of Trade appealed to him in a very powerful manner, and asked him not to be a party to the course which his friends appeared bent upon taking. I appeal to him with additional arguments, which his friends and himself will, I hope, forgive my urging upon him. In the debate in the year 1858 the right hon. Gentleman did not simply allow the Resolution of the President of the Board of Trade to pass; but he in distinct words expressed his opinion upon it, and I think it is fair to remind him of what he said. These were his words:—"I agree with the right hon. Gentleman that the maintenance of the Excise on paper as a permanent source of revenue would be impolitic." But I understand from the right hon. Gentleman who has been speaking below me (Mr. Horsman) that he does not intend the paper duty to be repealed, although he has often come down to vote for that measure, until the income tax is abolished; and I think that a great journal which is supposed to have been much interested in this question proposes in addition that it shall not be touched until the tea and sugar and some other duties have been brought down to much more moderate amounts than those at which they now stand. If that be your project you will really make it a permanent source of revenue, and that is what the right hon. Gentleman the Member for Bucks declared would be impolitic. But, further, when the right hon. Gentleman asked the President of the Board of Trade not to hamper his Government with that Resolution, he said that the Government entertained "very little difference of opinion on the topic with the right hon. Gentleman," and urged as one of the chief reasons why he could not agree to it, this very peculiar one—that there were "many duties in our Customs that really do not pay the cost of collecting and receiving them." That was quite true, then; but these very Customs' duties were all swept away last year by the Chancellor of the Exchequer, and, therefore, the main reason which he urged is gone, and I think I have this Session a fair right to ask him to vote with us upon this question. Finally—and this is important—the right hon. Gentleman said in that debate, "I am not prepared to say that the tax on paper itself is not one which requires, if not immediate, yet early consideration." That was said three years ago, and I think, if the tax required early consideration three years ago, we are not precipitate in taking it into our consideration now. But I appeal to the right hon. Gentleman on other grounds. He is himself an eminent literary character. He might have occupied—and I now speak the consciousness of his own mind—he felt that he had within him powers which would have enabled him to occupy a literary throne in this country. He gave up that in order that he might come into this arena, where he thought either that there was more opportunity of usefulness for him or that there was a greater field for the display of the genius by which he is distinguished. Now, is it worth while, when the right hon. Gentleman is so committed as a politician, as a Minister, and as a literary character, is it worth while, merely to defeat a Chancellor of the Exchequer, merely to gain a party triumph, that your books of science, of history, of biography, and of fiction, your school-books, your humble tracts, and the all-knowing and all-teaching newspapers should be subjected to a burden like this, and that these, which are universally messengers of pleasure and of profit, should go staggering under this tax, halting on their way, and hindered from doing all the good which they are capable of doing in the million homes of the people? I do not know whether the hon. Member for Lincolnshire (Mr. Banks Stanhope) is in his place, but he made a speech the other night in which he said he had a great preference for tea and sugar over paper. That is the view taken on the other side. Now, I can understand how those who do not know the precise incidence of the Excise on paper should come to that conclusion. We may be all equally interested in the poor man's breakfast table and have a different opinion of the manner in which it is to be served; and when I gave five years, the best of my life, to induce hon. Gentlemen opposite to supply the poor man's breakfast-table with untaxed bread and butter, they must forgive me if I am slow to come to the opinion that their intense preference for tea and sugar is founded upon any sympathy for the poor man over that which I myself feel. I can understand how some gentlemen connected with the City, and those interests to which the hon. Member referred, with large stocks of tea and sugar in bond, and to whom the repeal or the modification of the duties to any considerable extent would be a direct—I do not say an improper—gift of some thousands of pounds—I can understand how a gentleman in that position can have such a sympathy, but I cannot understand how those who have no such direct interests could prefer the reduction of the duty on tea and sugar to the abolition of the paper duty. Let us look calmly at a few points of contrast between them. I am as much against taxing tea and sugar as any man on that side of the House; but I will say you will do as much for the working classes in disposing of this million in the abolition of the paper duty as in lowering the duty on tea and sugar. I will show you why. It is obvious that if a million is not taken by the Chancellor of the Exchequer it remains in the pockets of the taxpayers. It remains an addition to the labour fund of the country; and, in the same way, whatever you remit of the income tax also remains in the pockets of the taxpayers. But if you remit the duty on tea and sugar it is a million given up and remains in the pockets of the consumer according to the quantity consumed. It does nothing with regard to the opening of any new or particular trade. The hon. Member for Edinburgh (Mr. Black), although no great authority on some questions upon which I have heard him speak in this House, must be admitted to be a good authority on the question of paper. He stated the other night in his short speech that when the Chancellor of the Exchequer took £1,200,000 on Excise paper duty it was a direct charge on the people of not less than £2,000,000. He told you that a man must have double capital to carry on the business. If a man sells £100 worth of paper he must charge it as £200. He must have the insurance for the extra risk he runs, and the sum he pays into the exciseman's hands. I have paid some attention to this subject, and I believe in my conscience that the total abolition of the Excise on paper will be as great a relief to the industry and trade of England as if the Chancellor of the Exchequer could take off his million on the income tax, and a million each on both tea and sugar. The other night the hon. Member for Dungarvan (Mr. Maguire) made a speech upon the paper duty—a speech I was sorry was delivered so late in the evening, when the House was not so full as it had been before; that speech, I will venture to say, was absolutely conclusive both for the facts and the arguments it presented to the House. He showed how trade was harried and worried under this system of Excise, and further, the peculiar grievance which the House of Commons will commit upon the paper manufacturers if they allow another year of embarrassment, and uncertainty, and difficulty, and ruin—as it will be to many of them—to pass over, retaining this duty of Excise on the statute book. The right hon. Gentleman below me (Mr. Horsman), in several parts of his speech, and in the statements of his case and his arguments upon thorn, was exceedingly unfair. He argued as if the £1,000,000 was to be given to the papermakers. He put it in this way—"Will you give £1,200,000 a year to a number of paper makers?" [Mr. HORSMAN: I said paper dealers.] The right hon. Gentleman says he did not mean papermakers; but when he was speaking to the working classes, and hoped they would understand the question, he should have taken care that they could not misunderstand it. The right hon. Gentleman said the amount of the tax would go into the pockets of the paper manufacturers.

MR. HORSMAN

I do not think I said the paper manufacturers. I certainly meant to say the paper dealers. What was in my mind—what I meant to say, was this—I said it over and over again last year—that there are three classes whom the remission of the duty would benefit—booksellers, papermakers, and cheap newspapers, and putting them in one category, I called them paper dealers.

MR. BRIGHT

I am glad to have had this explanation, because it only goes in confirmation of what I am arguing, for we know very well that many of the largest papermakers have not been enthusiastic for this repeal, on the ground, I presume, that their interest is opposed to the interest of the public. But if the paper dealers, booksellers, and everyone who has to do with paper in commerce or literature is benefited, I think it almost comes to the same thing, in the wide diffusion of its benefits, as if you were to make the reduction on tea or sugar. There is, however, one point which hon. Members opposite will think of some importance. It is this, that between 1838 and 1856, a period of eighteen years, the number of paper mills in England sank from 416 to 314, being an actual destruction of paper manufactories to the extent of one-fourth. In Ireland, during the same period, the number of paper mills sank from sixty to twenty-eight. As to Scotland the number was unchanged. The total reduction of mills in that period was 162. Hon. Gentlemen will say, in answer to this, that paper is made in much greater quantities now than in 1838. The paper mills have diminished, but the paper manufacture has increased. Granted. But that is one of our greatest charges against this Excise. Our charge is that you strangle all the striving little men in the trade; that you do that which excise has done in every trade—you build up the trade as a monopoly in a few great hands, and destroy that fair competition which would exist if the trade were free. The right hon. Member for Hertfordshire (Sir Bulwer Lytton) I do not see in his place. I do not think he much likes to come down to that side of the House when the paper duties are discussed; but I will quote what he said in a very brilliant speech that he made in 1855, when the Chancellor of the Exchequer proposed the repeal of the newspaper stamp. He said, in answer to an Amendment moved by the hon. Member for Kent, who objected to giving up the £200,000 raised by that duty— I cannot consent to allow the grand principle involved in this Bill to be dwarfed down to the level of a Budget. What is that principle? … that you ought not, in a free country, to lay a tax on the expression of political opinion—a tax on the diffusion of that information on public affairs which the spirit of our Constitution makes the interest and concern of every subject in the State. Still more, you should not, by means of that tax, create such an artificial necessity for capital that you secure the monopoly of thought upon the subjects that most interest the public at large to a handful of wealthy and irresponsible oligarchs."—[3 Hansard, cxxxvii, 1120–21.] I do not use the term "oligarch" to paper manufacturers or newspaper proprietors. I quote the language of the right hon. Gentleman, and I say that the influence of the Excise is just that which he condemned, that it drives all little men out of the trade—nay more, that the uncertainty of last year and of this year is rapidly driving them out, and concentrating the whole of this great manufacture in the hands of a comparatively small number of persons of great capital, whose interests, as they regard them, are clearly not the interests of the public.

The right hon. Gentleman below me (Mr. Horsman) touched upon the question of the House of Lords. Further than I have spoken upon that question I shall not refer to it except to say I am perfectly certain that that man in this House who is most anxious to have this question speedily, and without irritation, discussed and settled, is the greatest friend to the House of Lords, as he is, at the same time, the greatest friend to this House, and to what I understand to be the Constitution of the country. I must ask the hon. Member for Horsham (Mr. S. FitzGerald) to attend to me for one moment, in consequence of an observation which he made when I was not in the House, but which I read in the newspaper from which I gather much of my information. The hon. Gentleman said that this Budget of the right hon. Gentleman—and the right hon. Gentleman (Mr. Horsman) has to-night echoed that statement—was not a financial but a political Budget. He said for one thing that it was intended to conciliate me. Now, I must give the hon. Gentleman this credit, and I do it in the hearing of many of his friends, that though when he was in office I found no man more disposed consistently with duty to do everything that he could to conciliate me—he did not—he does not—ever remember that I asked him to overstep the line of his duty in anything. I am sure his colleagues will say the same. But the question is whether, in adopting a policy which I have always publicly recommended, the Chancellor of the Exchequer has gone out of the way of his duty from any condescension to me? And the hon. Member spoke, too, of "a noisy," and I do not say it was "uninfluential," or "influential," for I am told it is differently reported; it may be "a noisy and influential section" on this side of the House. The hon. Member might have heard that we are in the habit of making much clamour; but I will undertake to say that there is one description of clamour he never heard from these benches, or from any of those Gentlemen who are supposed to act frequently with me—he never heard the slightest clamour for office. If they do raise any clamour for anything it is for some object they believe calculated to promote the public good; and whether the present Chancellor of the Exchequer be in that office, or the right hon. Gentleman the Member for Buckinghamshire himself, I will undertake to say that there is no man in this House that can charge us with having swerved one hair's breadth from the straight line of the policy and principles we have always propounded, with the view of giving support to or attacking any Administration that happened to be in Power. I admit this is my Budget. I admit it. I approve it and I adopt it, and, therefore, it is mine; and in a few days it will be the Budget and the policy of the House, because they approve of and they will adopt it. More than that, I will undertake to say, whenever that reference is made which the right hon. Gentleman below me (Mr. Horsman) has spoken of, he will find out it is the policy of the country also. As to the ninety-nine out of every hundred of the people condemning it, I ask the right hon. Gentleman to go and try it amongst those friends of his he visited in the winter? I will undertake to say, if he will lay the case before them honestly and fairly, that he will be obliged to come back with a very different report. In the same sense, let the House bear in mind that the Budgets and policy of the last eighteen years have been mine, because, while that great revolution in our commercial legislation which they embodied was being brought about, I invariably gave to them my earnest, though humble support. But you have always opposed them. Am I to be ashamed of this policy? I ask hon. Gentlemen what are its fruits? An hon. Member—one of the most respected of your county Members—one who had been, I suppose, one of the most honourable but one of the most resolute opponents of our policy of free trade—said to me not long ago in the presence of several persons—"Ah! how much good you did us; but," be added, "we did not know it." Well, Sir, if this policy be so wise, I ask you what reason have I to be ashamed of it now, or what reason has the majority of Parliament to be ashamed of it? Look at the speeches of the hon. Gentleman the Member for Huntingdon (Mr. T. Baring), the right hon. Member for Stroud (Mr. Horsman), and several others. We have had speeches that have ransacked all the world to show the troubles which are afloat. Russia has troubles to face in Poland. Turkey, notwithstanding the declaration of the noble Viscount, is going fast from decrepitude to absolute ruin. Austria is bankrupt, the right hon. Gentleman says, in finance even more than in politic power; Italy is going through a great revolution, and we have the afflicting intelligence of great events—the end of which no man can see—on the other side of the Atlantic. Well, it is true that convulsions rend the air, and that there are political earthquakes in divers places; but, if you are now in the secure enjoyment of your estates, if Parliament can meet unawed by the tumult of discontent, if the Queen of England wields an undisputed sceptre over a tranquil realm, and if in the eye of the world Britain can hold her course majestically as she now does on "the unfathomed deep of time," I ask you now, in your consciences, whether much of all that is not fairly and honestly to be attributed to the policy and the Budgets of the last twenty years which I have always supported, and which you, unhappily for your reputation, have always opposed? Now, Sir, I have seen a good deal of party contest in this House. I have no objection to the greatest efforts of the greatest party, if those efforts are guided by an honest desire for the public good; but I observe that these party contests are constantly fought in a field which, as one of our own writers and poets has described it, is "a field of ambition in which truly the labourers are many but the harvest is scarcely worth the carrying away." I despise those triumphs. I scorn altogether those laurels. If I contended here for the mastery, if I looked for fame, if I desired to be remembered hereafter in connection with the great struggles on the floor of this House, it should be by associating my name directly with measures which I felt in my conscience it was wise and just in Parliament to give, and which it would be a blessing for the people to receive. Sir, I have looked at this Budget, I hope, with an impartial and an honest eye. I believe that it meets these two conditions—that it is just for Parliament to pass, and that it will be beneficent towards the people for whom it is intended, and on that ground alone I shall give it my hearty support.

SIR JAMES FERGUSSON

said, he ventured to think that the force of the eloquent speech delivered by the right hon. Member for Stroud (Mr. Horsman) had not been impaired by the strictures of the hon. Gentleman who had just sat down. The hon. Gentleman had so far recovered from the chill produced in him by his right hon. Friend's speech as to be able, with his usual warmth, and with that want of justice which had more than once distinguished him in that House, and still oftener out of doors, to assail those who differed from him, and to impute motives to them which scarcely any other Member of that House would not be ashamed to impute. Great advantage would accrue from their taking time to consider the financial scheme of the Government before going into Committee upon it, for unless they calmly inquired into the circumstances by which they were surrounded they might be hurried into legislation which on mature reflection they would have great reason to regret. Past experience showed that they could not too carefully weigh or too nicely examine the right hon. Gentleman's Budget before agreeing to it. Had they last year deliberated longer and more calmly on the right hon. Gentleman's scheme, they would not have pronounced that decision in its favour which the dwindling majority that voted for its subsequent stages proved to have been premature. If they had voted the other night in accordance with the impressions which the hon. Member for Birmingham thought he had read, but which he had read erroneously, on their countenances, they would have acted like children who gazed in admiring wonderment at the fairy palaces and gilded vistas of a stage representation, little thinking that the materials which produced the splendid illusion were mere tinsel and pasteboard. On close scrutiny, what the right hon. Gentleman held out to them as a surplus might turn out a deficiency, and what he offered as a remission might prove an imposition of taxation. The right hon. Gentleman's scheme had been considered from various points of view. Some hon. Gentlemen had looked at it commercially; others, like the right hon. Gentleman the Member for Stroud, had considered it as a statesman. He wished to look at it in the light which the Chancellor of the Exchequer himself had regarded it when proposed by one of his present colleagues. Many hon Members would recall the Budget of 1857, which at the time was thought rash and improvident, but which, compared with the proposals now before them, was mild, prudent, and temperate. In 1857 the right hon. Baronet the Home Secretary, then Chancellor of the Exchequer, had a large taxation to deal with. We had just emerged from the Russian war. The taxes levied and loans effected in 1856 had yielded a revenue of something like £78,000,000 sterling. The income tax stood 16d. in the pound, the tea duty at 1s. 9d. per lb; and, as an hon. Gentleman had somewhat inelegantly expressed it, the right hon. Baronet was so beset by eager applicants for the remission of taxation that he was like a fat ox in the hands of the butchers. The right hon. Gentleman, who was then Chancellor of the Exchequer, rejected in 1857 the proposition to repeal the paper duty, believing that it was not a tax which pressed heavily upon the ordinary purchasers of books and papers. In the same way he refused a remission of the fire-insurance duty, and he quoted the doctrine of Arthur Young, who thought that taxation was best spread over a number of articles instead of being confined to a few. The right hon. Gentleman, however, proposed to reduce the taxation by £11,000,000, of which £7,000,000 would take effect that year, reducing the war duty upon tea to 1s. 7d., the sugar duties to 13s. or 14s., and the income tax to 7d. How were those propositions received? The right hon. Gentleman, the Member for Bucks, objected to the Budget as a perspective Budget, and one that was likely to lead to a want of funds in future years, and the House could judge of themselves how far those apprehensions had been realized. But the present Chancellor of the Exchequer adopted a more violent view, and objected to the general features of the Budget, contending that the calculations were illusory, and the measures proposed were of a nature opposed to sound principles of finance, a departure from past pledges. The present Chancellor of the Exchequer denied in 1857 that the reduction of the war duties on tea and income to 1s. 5d. and 7d. respectively were reductions at all, and insisted that, on the contrary, they were increased duties, because he argued that if let alone they would have been at a lower rate, and that to put them at a higher scale was to break faith with the public. He also said that he did not believe in a surplus, because the cost of the wars in Persia and China were not sufficiently estimated, and, with an uncertainty as to the demands that would be made upon us for those wars, the Chancellor of the Exchequer had no right to have a surplus. The right hon. Gentleman further argued that there was greater probability that the expenditure would increase than that it would diminish, while the revenue might fall short, and that, in fact, they were asked to vote away £4,500,000 which belonged to 1858 to meet the exigencies of 1857; and he used the remarkable words— The total deficiency in 1861–62 will amount to £8,654,000, or very nearly what is now called the 'war ninepence.' Now, Sir, it appears to me that the real questions for the House to consider are—whether, in the first place, all the pledges which were given in 1853 and all the expectations which were then held out are now to be cast to the winds by the same persons who gave those pledges and who raised those expectations." [3 Hansard, cxlvii. 1010.] The right hon. Gentleman went on then to laud the policy of Sir Robert Peel as having been of vast advantage to the community, and he called on the House to pursue the same policy adding— If health and strength he spared me I shall invite the House to declare that whenever taxes are removed we shall not impose more duties on the tea and sugar of the working man."—[3 Hansard, cxlvii. 1016.] Now, let the House compare the policy of the right hon. Gentleman with the doctrines he enunciated in 1857. He carried out to the extreme conclusion the policy which in 1857 he denounced when it was put forth by his present colleague the Home Secretary. If it was true in 1857 that to take off 2d. only where 4d. had been promised was to put on 2d., surely the same argument must apply in the present instance, when a remission of 1d. was talked of in a tax which was entirely to have ceased and had expired. The right hon. Gentleman said that his present colleague had no right to take credit for a surplus when the country was engaged in war, and yet he himself had last year laid upon the table an estimate for the Chinese war of only £500,000, the exact sum taken by Sir Robert Peel in 1842 for a war of not one-fifth the magnitude of that which had lately terminated. The right hon. Gentleman in 1857 spoke of a delusive surplus, and yet now he claimed credit for a surplus of £400,000 or £500,000, which was contingent upon the receipt of a sum of three-quarters of a million from China, which all the evidence they had at present would lead them to believe would be swallowed up in indemnities, and that, moreover, it was possible we might have to pay a larger sum. It was the duty of the House to press upon the right hon. Gentleman the necessity of adjusting the expenditure and the revenue, and not to fall into the error of last year. The right hon. Gentleman the President of the Board of Trade had mocked at the idea of prospective finance, but did he not remember the prospective finance of his right hon. Colleague the present Chancellor of the Exchequer, who in 1852 indulged in so many prophecies which had never been fulfilled? But what, he would ask, was the tendency of the taxation which the Chancellor of the Exchequer proposed this year to reimpose? Was it a taxation which would fall more heavily on the rich than on the poor? For his own part, he should not be deterred by the imputation of interested motives, in which the hon. Member for Birmingham (Mr. Bright) had that evening so liberally dealt, from stating it in reply to that question to be his solemn conviction that scarcely any tax touched so nearly the necessaries of life of the poorer classes as those upon tea and sugar, to which on the financial scheme of the Government it was proposed the country should again be subjected. They were taxes which made themselves felt in the homes of the labouring classes, and which interfered with their comforts; and did he not think it beneath him to impute motives to hon. Gentlemen who professed seriously to advocate the interests of larger bodies of his fellow-countrymen, he might be tempted to say that there were others who might be charged with being actuated by selfish considerations beside the dealers in tea and sugar. There might be penny newspapers which did not pay their expenses, journals established in the interest of parties who might be materially benefited by the proposed change, and in whose case only the repeal of the paper duty would be attended with any advantage. For his own part, he should like to see submitted to a jury of workmen the question at issue, as between tea and paper, quite satisfied that they would laugh to scorn the man who could imagine that they would have one moment's hesitation as to the mode in which they would desire to see that problem solved. Nor ought the right hon. Gentleman the Chancellor of the Exchequer have much difficulty as to its solution, if he desired to see preserved among the poorer classes in England that patience of taxation which he had recently eulogized. The case stood thus: the taxes on tea and sugar would expire this year; the income tax had already expired, and the right hon. Gentleman might, if he pleased, reduce the duty on tea 4d. in the pound; he preferred remitting the paper duty, and a fairer issue to be raised in Committee of Supply than the justice or injustice of that proposition he could not well conceive.

With respect to the nature of the paper duty, he might perhaps, in consequence of what had fallen from the hon. Member for Birmingham (Mr. Bright) in the course of his speech that evening, be allowed to say a few words. The hon. Member had quoted an authority upon the subject which ought, no doubt, to stand high with the House—he alluded to the hon. Member for Edinburgh (Mr. Black) whose knowledge of such matters was not less extensive than the courage with which he maintained his principles, as was evinced by the manner in which he had last year braved the views and prejudices of a large portion of his constituents. There was, however, another authority whose opinions upon the point at issue were entitled to equal if not greater weight—he meant Mr. Bohn; but before referring to the statements of that Gentleman more particularly he should ask whether the repeal of the paper duty was sought with good reason upon the ground of reiterated demands upon the part of the country for its remission having been made? That question he was compelled to answer in the negative, for he was old enough to remember that the repeal of the Union with Ireland had for some years been still more perseveringly urged; that the Charter was more loudly called for, the agitation with respect to it endangering for a short time the peace of the Metropolis; that the lowering of the franchise had been as persistently advocated; that the income tax and the duty on tea had been as strongly condemned, and pledges for their abolition not less plainly given. It was, however, contended that the paper duty operated as a grievance on trade; but how, he should like to know, could that be the case, when it was found that the manufacture of paper was steadily increasing year after year? Having adverted to that he might just in passing he allowed to remark that if the duty were remitted they would be likely to lose a larger amount of revenue than the Chancellor of the Exchequer seemed to imagine, inasmuch as the right hon. Gentleman had taken the amount of the tax for the present year at £1,200,000, while he believed—estimating it in the same way as the Customs' duties were estimated—it would be found to approach nearer to £1,500,000, and to be, moreover, likely to turn out a rapidly increasing source of revenue. The right hon. Gentleman the President of the Board of Trade had, it was true, been very eloquent a few evenings before on the subject of the extension of the paper trade, which he contended must be the result of the abolition of the existing duty, and had enumerated a number of materials which must enter into the manufacture, going so far as to say that the refuse of the farmyard would be pressed into the service. Now, hon. Members had, no doubt, all heard of money having been raised by Vespasian from an unsavoury source, but that British dunghills should be converted into paper was, he thought, a proposition which could hardly have been seriously advanced. He might add that he did not think the British farmer could spare his straw for the manufacture of paper, inasmuch as he would find it more valuable when otherwise employed, while Mr. Bohn stated that it was quite idle to suppose that any other material could really take the place of rags, which—cheapness and fitness being taken into account—were much better suited than anything else to the purposes of the trade, but of which, notwithstanding all the eulogy which has been lavished on that one-sided instrument the Treaty with France, our supply was curtailed by the fact that a duty continued to be levied on their exportation from that country, while we had taken off the import duty on foreign paper. Well, but the hon. Member for Birmingham (Mr. Bright) contended that the remission of the paper duty would have the effect of bringing back the trade in that article into the hands of small manufacturers, quite regardless of the circumstance that in France one of the consequences of the abolition of the Customs' duties on paper had been to produce quite the opposite result, and that a circular had been issued by the papermakers of Auvergne and other places where there were a number of small mills, advising them strongly to concentrate their capital in the conduct of large undertakings, by which means only they would be enabled to compete successfully with the British manufacturer. He might further observe that the noble Lord at the head of the Government had, in a speech which he made last year, made the following assertion:— The paper manufacturers of England, while labouring under all the difficulties as to obtaining the raw material, are able to compete successfully and advantageously in foreign markets with the manufacturers of the very country in which it is said that the great advantage of the prohibition of the export of the raw material exists,"—[3 Hansard, clx. 808.] Now, that being the statement of the noble Lord, he was glad to find the right hon. Gentleman the President of the Board of Trade, one of his colleagues, making an appeal on behalf of the British manufacturer, on account of the inequality to which he was exposed in his competition with the foreigner. As regarded the public—which was the main point—the duty bore so small a proportion to the price of paper that he did not think the relief afforded by its repeal would be appreciable. The amount of the duty on two volumes of Lord Macaulay's History of England, which cost 36s., was only sixpence; and the amount of the duty on the Cornhill Magazine was only one halfpenny. Mr. Bohn stated that the sum he paid in the shape of duty on one of his own useful publications was only 1½d.

It was manifest that under those circumstances they could not expect that the price of books generally would be lowered by the abolition of that small charge, Each penny paper only contributed about half a farthing to the revenue; and although that was, no doubt, a loss to the proprietors, it should be remembered that the main source of profit to them was to be found in their advertisements. No one believed that the price of those prints would be reduced if the duties were repealed, but that the whole advantage would fall into the hands of the proprietors and publishers; and, as regarded the agricultural interest, the alleged boon was altogether a chimera. After the examination, which the Chancellor of the Exchequer's professed surplus had been subjected to, he did not wonder that the right hon. Gentleman had adopted an artful plan to deprive the House of Lords of its constitutional right of revision. The insult was gratuitous, for it was not to be supposed that the Lords would refuse a measure for repealing a tax deliberately sent up to them again by the House of Commons; though he would add that never was there a Budget standing more in need of careful revision. It would seem as if the whole scheme had been the work of two very different hands, one of them having framed—and very properly framed—the Estimates upon that large scale which the interests of this country demanded in the present unsettled position of Europe, while the other had calculated our income upon the supposition that we were to enjoy the most "piping times of peace." It was well to consider on what the country would have to depend if war should arise in Europe, and if, without this country being involved in it, increased expenditure should be required for the protection of British diplomacy and commerce. The duties on tea and sugar were at a war rate, and the spirit duties were a failure. The malt duty, unless there should be a good harvest, would not recover its position, and the hop duty was a dead failure. There then remained no resource but the income tax, which was a war tax now, and the reduction of which the Chancellor of the Exchequer refused, in spite of his own solemn pledges and recorded convictions. What, then, was the country to depend on in time of war? He regretted the course which the Government were taking. He thought, on the whole, the Government had rightly interpreted the feeling of the country with respect to foreign policy; and that, in reference to their Correspondence regarding Syria, to which he had paid more particular attention, they had pursued a manly course becoming English Ministers; but in this question of the Budget they had taken up a position not calculated to strengthen themselves; and he regretted that the Chancellor of the Exchequer was using his great talents, which had raised him to an eminence perhaps unequalled in the present generation, to advocate a policy opposed to his former Solemnly recorded pledges and convictions.

MR. GREGSON

It is not my intention to trouble the House with another examination of the Budget in detail. I will confine myself to two points—the prospective balance at the end of the financial year, and the two proposals of the Chancellor of the Exchequer. It is argued there will not be any surplus; still, if this should unfortunately be the case, it is better to take him at his word for three reasons:—1st. It is desirable to keep as much as possible out of his hands lest he should be tempted to spend it. 2nd. By keeping him poor he will be better able to carry out his own desire to curtail expenditure. 3rd. Because the 1d. reduction in the income tax, £1,200,000, will be fructifying in the hands of the people for at least twelve months. But anticipating a deficiency, by Gentlemen on the other side of the House, they kindly offer to take care of the Chancellor of the Exchequer, and seem to say, My good friend, you really cannot afford to give us anything, you are too generous, keep your penny and your paper duty, you will want both before the year is out. Now let us suppose, on the other hand, that the Estimate of the Chancellor of the Exchequer may be realized, no one will object to the reduction of 1d. on the income tax, an impression having prevailed that instead of any reduction we should be called upon to pay an additional 1d. income tax. The second proposal is to abolish the paper duty. It is well known that for many years I have been an advocate for the reduction of the very heavy duties on tea and sugar. In 1847, now fourteen years ago, a Committee of this House, after a patient investigation, unanimously recommended the reduction of the tea duty to 1s. per lb. when the revenue would admit of such reduction. Six years after this—namely, 1853, an Act was passed for the gradual reduction of the duty to 1s. per lb. in 1856. In 1854 another disappointment occurred owing to the Russian war. But in 1857 another Act passed reducing the duty in 1858 to 1s. per lb. Again, the duty was altered to 1s. 5d., continued in 1860 at the same rate till the 1st July, 1861. Thus it appears that we have given pledges not by one Act, hut by repeated Acts of Parliament to reduce the duty on tea to 1s. per lb. I have been greatly tempted in opposition to the cry of a "tax upon knowledge" to raise the cry of "tax upon food." Some time ago I troubled the House at length upon this subject, and from the very marked attention which the Chancellor of the Exchequer paid to my statement, I did hope he would have reduced the duty. If I thought with my Friend, the hon. Member for Huntingdon, we should not lose the Chancellor of the Exchequer and embarrass the Government, I would still move for the "teapot" against paper duty; but fearing the result I acknowledge that I unwillingly submit to the renewal of the tea and sugar duties for one year, but I do hope and trust only for one year.

MR. BAILLIE COCHRANE

said, he would not go into any examination of the Chancellor of the Exchequer's figures, which would require a more practical financier than himself to discuss. But there were certain general views and principles by which any one having ordinary historical knowledge could form an opinion. Looking at the Budget and at the past history of the country, he thought they had arrived at what the right hon. Gentleman last year called a "great epoch" in finance. The principles now acted on differed widely from those that formerly prevailed. In the last century the establishment of the Sinking Fund proved that it was then thought desirable at least to attempt to pay off some of the public debt; and it was laid down by the Chancellors of the Exchequer of that day that they had no right to impose burdens on posterity. It was shown by Mr. M'Culloch that from 1822 to 1837 there was, with the exception of one or two years, an excess of revenue over expenditure—an actual, not an anticipated and prospective surplus. In 1837 Lord Melbourne came into power, and immediately the excess began to be the other way. In that year the revenue was £50,000,000, and the expenditure £51,700,000. In 1838 the revenue was £51,000,000,theexpenditure£54,000.000. In 1839 the revenue was £52.000,000, the expenditure £54,000,000. In 1840 there was a revenue of £52,000,000 against an expenditure of £55,000,000. It was in 1837 that this excess of the expenditure began. Sir Robert Peel came into office in 1841 and found an accumulated deficit from former years of £10,000,000, and to meet the difficulty he had inherited from Lord Melbourne and the Whig Ministry he imposed the income tax for three years. Certainly, if there was ever a case in which an income tax might be imposed it was that. And, above all others, it might have been expected that the Whig Opposition of that day would have conceded the necessity for it. But, looking back at the opinions with regard to the income tax expressed at that time by the noble Lords and right hon. Gentlemen opposite, it was perfectly extraordinary that they should now not only advocate it, but propose an addition to it, for the purpose of taking off an indirect tax, the remission of which would not generally benefit the country. The speeches of the present President of the Board of Trade (Mr. Milner Gibson), the First Lord of the Treasury (Lord Palmerston), the Secretary for Foreign Affairs (Lord John Russell), and the Secretary for India (Sir Charles Wood), at that time all contained declarations against the necessity of the tax and the impolicy of imposing it in the time of peace. Holding these opinions of the income tax in 1842, how could they reconcile them with the imposition of an extra penny now for the purpose of taking off the paper duty? He wished also to know whether that duty was to he taken off in the interest of the consumers or the manufacturers? The papermakers had addressed a memorial to the noble Viscount at the head of the Government, in which they asked for protection against the importation of foreign paper; so it was evident they did not wish that the remission of the duty should benefit the consumer. Last year the duties on a great number of articles were either reduced or repealed; the revenue lost £328,000 by the remissions; but could any householder say the consumers had been benefited by a consequent reduction of prices, though the revenue had lost so much?

He now came to what he considered the most important feature of the Budget. The Chancellor of the Exchequer, in introducing his financial scheme of last year, said it was a great epoch in the financial history of the country. He would not, he said, anticipate the Budget of the following year, because he hoped in 1861 to meet a Parliament more adequately representing the requirements of the country. That observation, made by the right hon. Gentleman, was, in his opinion, one main cause of the defeat of the Reform Bill. Coupled with the speeches of the hon. Member for Birmingham, what did it indicate? That it was the intention of the right hon. Gentleman to link himself with the hon. Member for Birmingham, to adopt his views, and to replace indirect by direct taxation. If the Government Reform Bill had been carried, no doubt, there would have been an epoch in our financial history. What said the hon. Member (Mr. Bright) in 1860?— Let me tell right hon. Gentlemen who represent so much of the property of the country, henceforth it is written irrevocably that the vast expenses which you are incurring, not for the great body of the working people, for they seem very much alike in all the old countries in Europe, but if, as you suppose, for the defence of your property, then this vast expenditure must henceforward be charged to the property of the country. That expenditure and that income tax are inseparably bound up together."—[3 Hansard, clvi. 1636.] And again— The Budget is disliked because it has abolished so many sources of indirect taxation to which probably Parliament can never return, and it has tied up this grievous and apparently interminable military expenditure with the continuance of a direct tax from which the propertied classes cannot escape. These two things henceforth go together. It is written indelibly in the condition of things in this country that henceforth, if you will raise up your military expenditure from £11,000,000 to £22,000,000,andfrom£22,000,000 to £30,000,000, and it may be further than £30,000,000 next year for anything I know, that this increase must, in some shape or other, be paid by a direct tax upon property, or upon property and income combined. I think it is a most happy thing that we have brought matters to that point. The Chancellor of the Exchequer said, "We leave to the Parliament of 1861 to make provision for 1861, as we are making provision for 1860," and then the right hon. Gentleman alluded to the new class which should send to Parliament representatives more peculiarly its own. The question whether Parliament was about to base the taxation of the country on direct or indirect taxation was most important. If the Chancellor of the Exchequer would cease to demand the repeal of the paper duty, he might take off 2d. in the pound on the income tax, instead of 1d. The right hon. Gentleman's estimate for 1861–2 gave an expenditure of £69,900,000. His income, including a quarter of the ten- penny income tax, was £63,423,000. Now, an eightpenny income tax for three-quarters of a year would give the right hon. Gentleman a surplus of £323,000, which was almost as large as the surplus (£400,000) anticipated by the Chancellor of the Exchequer if his scheme were adopted.

THE CHANCELLOR OF THE EXCHEQUER

No; an eightpenny income tax would give a surplus of £185,000.

MR. BAILLIE COCHRANE

If the right hon. Gentleman admitted that, he would not deny that the question before the House was really one of direct or indirect taxation. The right hon. Gentleman was going to impose an income tax for the sake of abolishing indirect taxation. He differed from some of his hon. Friends near him in thinking that the question ought to be between reducing the taxes on tea and sugar and abolishing the paper duty. He objected to imposing a direct income tax for the sake of abolishing an indirect tax. If the income tax were to be a permanent source of revenue, it was evident, from the appointment of the Committee proposed by his hon. Friend (Mr. Hubbard), that it would be modified and graduated; and a graduated income tax was nothing more nor less than confiscation. The country had had a great escape in regard to the Reform Bill, not only in an electoral point of view, but also with respect to the system of taxation.

MR. O'BRIEN

said, there was one feature in this debate which he viewed with considerable satisfaction. In former discussions which had taken place in that House on a similar question, the discussion had been kept up chiefly by leading Members on either side; but upon that oceasion he remarked with satisfaction that hon. Gentlemen who were not so often in the habit of expressing their opinions had done so now with considerable skill and power of argument. Emboldened by the success of others he wished, too, as one of the rank and file of the House, to venture a word. It had been said that figures, like other things, could be abused as well as used for the purpose of illustrating an argument. He should not on that occasion enter at large into figures on the subject under consideration, but would place himself in the position which he might say the mass of the people occupied, who simply looked at its great leading principles, and from general considerations formed a common sense view of its principles. The question of a surplus had to be considered; and if there was a surplus, as he took it from the statement of the right hon. Gentleman there was, then the next question was as to the proper distribution of that surplus. No doubt a great deal might be advanced in favour of the ad captandum arguments so often advanced in favour of the repeal of the duties on tea; but in his opinion, bearing in mind the relative merits of the articles of paper and tea, and having regard to the fact that hon. Members had in former the years pledged themselves to the remission of the duty on the former, he thought that the Resolutions of the right hon. Gentleman the Chancellor of the Exchequer with reference to the repeal of the paper duty ought to be carried. It had been said by hon. Gentlemen on the opposite side of the House that there was a feeling on the part of those sitting on the Ministerial side to disparage the Members sitting in "another place." He entertained no such notion. He reverenced and respected the other branch of the Legislature, knowing that many Members of that branch had done well for the commonwealth, and that many who served their apprenticeships, so to speak, in the House of Commons, had thus qualified themselves for taking part in the proceedings of the Upper House. Into the question of the paper duty he should not enter at length, because it had been frequently discussed with ability. But there were two questions of prominence which presented themselves with regard to it; one was the inconvenience of having any excise duty at all upon such an article as paper, and the other the way in which that tax interfered with the dissemination of knowledge. Upon this subject he might refer to what had been said by Lord Brougham in 1854, who, when examined before a Committee of the House of Commons, said that a sound system of Government required that the people should inform themselves of the system of legislation; that they could only be well informed by having recourse to useful publications; and that the danger lay, not in the people learning too much, but in knowing too little. There was another point to which he wished to refer, and that was the spirit duties. The case of the spirit duties, indeed, was not to be compared with that of tea and sugar, or of paper, inasmuch as articles of luxury were not to be ranked with those of necessity. There was a question of morality also involved in that of the spirit duties. He must observe, however, that the right hon. Gentleman the Chancellor of the Exchequer would do well, while repeal- ing the paper duty and reducing the income tax, to bear in mind that his anticipations regarding the spirit duties in Ireland had not been realized, that illicit distillation was on the increase in many parts of that country, and that in some of the large towns great quantities of spirits were being sold at prices less than the actual revenue payable to the Exchequer. If that were so—and be believed his information upon the subject was substantially correct—then was it high time for his right hon. Friend to retrace his steps on the subject of the spirit duties. He had no desire to impute motives, but he feared there was some degree of party feeling in the opposition shown to the Budget. It was said reaction was taking place in the country; and it might be that a party division in that House had been resolved upon to see what effect would be produced upon the public mind. He (Mr. O'Brien) certainly thought that time would show the public feeling of the country to be with the right hon. Gentleman in the Budget he had brought forward, and that in the case of the paper duty the Chancellor of the Exchequer was only carrying out to their legitimate issue those great principles of free trade which had been the means of providing food for the people, and, as had been said by the hon. Member for Rochdale, of carrying plenty to the hearth of every poor cottager in the land. Subject to the remarks he had made respecting the spirit duties, he (Mr. O'Brien) should heartily support the scheme of the right hon. Gentleman.

MR. LIDDELL

said, in the remarks he was about to make he should not attribute improper motives to any hon. Gentleman who had spoken before him in the debate, least of all should he venture to attribute to the public servants of the Crown any other motive of action than the desire to advocate such measures as they deemed to be advantageous to the public interest. But the repeal of the paper duty had always been a favourite portion of the scheme of policy of the hon. Member for Birmingham and his party; and his main objection to the Budget was that it was framed to meet the prejudices and weaknesses of one particular section of the House, and the larger interests of the public were sacrificed to meet the views of that particular class. The right hon. Member for Stroud, in a speech of consummate ability, had that night put the question in its true light when be said he doubted as to the policy of any remission of taxes whatever. Another objection he (Mr. Liddell) had to the Budget was that it was in direct contradiction to the financial principles which the Chancellor of the Exchequer himself had on a former occasion laid down, and which the House, under his guidance, had solemnly adopted. He would ask the House to recall the speech of the right hon. Gentleman when he introduced his Budget in 1854, and to contrast the views he then held with regard to the Russian war which had just broken out with those the right hon. Gentleman now held at the conclusion of the war which had just terminated—that with China? The right hon. Gentleman in 1854 spoke in the strongest language of the impolitic, unjust, and unmanly course of handing down to posterity charges which ought to be borne by the revenue of the year, and in pursuance of that doctrine heavy burdens were laid upon the country, and the taxes upon every article of consumption were largely increased. That was a great war, the duration or extent of which no one at the time could calculate; but in July last the right hon. Gentleman presented a supplementary Budget to the House under very different circumstances. An emissary had then been sent to China in whom the Government ought to have placed great confidence, and with the finest and most perfectly equipped armament at his command that ever left these shores, they had good reason to expect an early termination of the war. But the right hon. Gentleman did not pay or attempt to pay the expenses of the China war out of the revenue of the year. He took £1,416,000 out of the balances in the Exchequer, which, otherwise, might have gone towards the reduction of the public debt. The right hon. Gentleman further obtained leave to raise £1,000,000 of Exchequer Bonds—which power, however, he exercised only to the extent of £600,000, a sum which was afterwards reduced by deductions to £461,000. By this means a sum of £1,877,000, although not de facto, was virtually made an additional part of the public debt. The hon. Baronet the Member for Stamford had shown good reason, too, to apprehend that this was not the whole of the addition. If the right hon. Gentleman had retained the paper duty he might have restored the balances; by retaining the penny income tax he might have provided for the Exchequer bonds which were falling due in the next two or three years; but by not doing so he had in both these instances added to the burdens of posterity, in violation of his own doctrines. The right hon. Gentleman complained of the extravagant expenditure of the House of Commons, and certainly £26,630,000 was a large sum for military services; but, as a member of the Cabinet and an adviser of the Crown, he must have come to the conclusion that that sum was necessary for the exigencies of the country. Under such circumstances how could the right hon. Gentleman afford to throw away a penny of permanent revenue? It was said that expediency required that the paper duty should be repealed, to put an end to the unfortunate controversy between two branches of the Legislature. But there was a great distinction, he thought, between Parliamentary expediency and political expediency. They had all heard, even from hostile authorities—it had been re-echoed on the Stock Exchange, and by that portion of the press which was supposed to be best informed in matters of finance—they all said, "This is not a time when it is desirable to weaken or reduce your finances." There were also several claims upon the country on behalf of education, harbours of refuge, home defences, and various other objects of paramount importance that rendered it still more inexpedient to sacrifice any source of revenue. The time might come when they could afford to repeal the paper duty, and when very great indirect benefits to trade would be felt from that repeal; but in the pursuit of this hobby at the present moment they would be neglecting to do that which would bring comfort to every cottage in the kingdom. Hon. Members had all read the letter of the "Dorsetshire Labourers" which had appeared in The Times. From the pungency and sound sense which that letter contained, he should be disposed to attribute it to an hon. Member whom he saw present; but, be that as it might, the arguments in it were well worthy of attention, and expressed pretty accurately the public feeling on the subject of tea and sugar. He was not disposed to argue the question of whether there was or was not a surplus, though in the course of that debate great doubt had been thrown on the accuracy of the Chancellor of the Exchequer's calculation; for, even if there was a surplus, the present was a moment when great caution was necessary in dealing with the finances of this country. He would not, however, further allude to that part of the subject beyond saying that there could be no doubt that the country during the present year would require a large importation of foreign corn, and as that would have to be paid for in gold, trade must necessarily be restricted, and that man must be sanguine, indeed, who could expect a very large increase in the consumptive power of the people. Then, the state of affairs at the other side of the Atlantic was such that they did not know what measures might become necessary for the protection of British shipping. There could be no doubt that if the war should be continued in that country there would be thousands of privateers hovering about those coasts. The South and the North were widely different as regarded their policy towards this country. The South acted on the principle of free trade, while the North still maintained a narrow minded protective policy. [Cheers from the Liberal benches.] Hon. Gentlemen opposite seemed to think that, because he sat on that (the Opposition) side of the House, he was necessarily imbued with all the prejudices which once marked the conduct of opponents of free trade. He was of those who voted in 1852 for the solemn adoption by Parliament of a "free commercial policy" and he felt proud in now congratulating the House on the success of that policy. It seemed to him absolutely impossible that they should escape from some collision with America, because English vessels would carry on trade with all the rival States, and causes of jealousy might easily arise. He would not detain the House longer than to say that he believed that if the ballot-box were introduced into that House for one night the paper duty would be retained by a very large majority. He trusted that an opportunity would be afforded to hon. Members of giving a direct vote on the subject, and he feared very little for the result. The repeal of the paper duty had been used as a rallying cry for the lately disunited ranks of the Liberals. He thought that disunion in that great party was much to be deprecated. He repeated the assertion, because such division gave the Conservative ranks an opportunity of making inopportune attacks and forming unhealthy alliances for those purposes. He had seen with regret the Conservative party coming into office in a minority, and striving to maintain that most difficult position by the concession of some long-cherished principles. He felt strongly upon the question, and if the Government, upon an adverse vote on a mere financial detail, should resign, theirs would be the responsibility. If they went to the country, they must go with a cry of large expenditure, dear tea, and cheap paper.

THE CHANCELLOR OF THE EXCHEQUER

Sir, I rise at the close of a rather long debate, not very much concentrated, but rather diffused in its purpose, to address, I am afraid, an exhausted House. ("No, no!") Well, then, it is bad under any circumstances to address them in a defensive speech. I think it my duty in the remarks which I have to make to deal principally with those statements which appear to me to be of all portions of the present discussion the most deserving of notice—I mean those statements which impugn the particular figures which I have laid before the House. There are many matters which have been imported into the debate which I shall venture to pass by. All that relates to myself personally; all that relates to the dangers which may arise in conflicts between British merchant ships and American or other privateers; all that relates to the general and vague political aspects of the question I shall pretermit, not because I presume to say or think they are insignificant, but because I feel it my duty to address myself to those points which touch more directly and more practically the matter in hand. At the same time, I cannot help observing, for a moment, upon the strange constitutional novelty of the duties which are assumed on this occasion by the Opposition. The Government, having computed the expenses and revenue for the year, ask the representatives of the people for £70,000,000 of taxes. They show that if the whole of the laws which were in force during the last financial year should be re-enacted, the produce of the taxes will probably amount to £72,000,000, and they propose to surrender out of a surplus, which in round numbers amounts to £2,000,000—they propose to surrender £1,500,000 in the repeal of taxes. Strange to say, it is against this proposal that a large number of the representatives of the people rise up in arms. According to the doctrine of the Constitution, and according, if I may presume so to speak in addressing hon. Gentlemen opposite, to the wisdom and practice of our ancestors, it is the duty of the Government to see that not too little is asked for the public service. It is the duty of those who oppose the Government and of the entire House of Commons to see that they do not grant too much. But the fear of granting too much has become a motive singularly inoperative among a large portion of the Gentlemen whom I see opposite, while on the other band they are wrought up to a state of nervous and feverish exasperation at the bare possibility of granting too little. Without entering into details, without observing further on the strangeness of the course and the difficulty there is of finding precedents to sustain it, I must confess that I think very little good under any circumstances is to be anticipated to the country from an exchange of duties between the Government and the Opposition. But, Sir, an impartial spectator cannot help having noticed a singular want of unity in the sentiments of those hon. Gentlemen on the opposite side of the House who have entered into this discussion. I grant that most of them have asserted that there is not a surplus, and if there is any one proposition in which they agree it is that. But there are most important dissentients to that proposition. The hon. Gentleman the Member for Huntingdon (Mr. T. Baring) has not asserted that there is not a surplus; but, speaking of the Estimates for the year from Excise and Customs, which admit of the greatest latitude and the largest margin for doubt, he said that, under ordinary circumstances, those Estimates are fair and moderate. My hon. Friend the Member for Stamford (Sir Stafford Northcote) said in substance the same thing. He has questioned, and with his position and his views he was justified in scrutinizing, an important item which I place on the credit side of the account. But neither of those two Gentlemen, who, without disparagement to others, are the most considerable financial authorities among those who have entered into the discussion adverse to the Government, either assert or insinuate that upon which all the rest seem agreed—namely, that there will not be a probable surplus of estimated revenue over estimated expenditure. If they are not agreed whether there is or is not a surplus, still less does any agreement appear to prevail with respect to the mode of disposing of the surplus, should it exist. Undoubtedly, among a number of rival claims, the tea duty appears to be the favourite. There are some Gentlemen of so large a generosity, and so entirely unrestrained by the laws of arithmetic, that they propose, in lieu of the paper duty, to remit the tea and sugar duties, bringing down both to what is called a peace level. It is proposed to dispose of a fund amounting to between £600,000 and £700,000 a year. Their plan of good husbandry is to lay it out in making a remission which will cost the country about £2,500,000. (" No, no!") Those Gentlemen who say "No," may not have made that particular proposal. (" Name, name.") The right hon. Gentleman the Member for Stroud. There is a name. The right hon. Gentleman asked that the sugar and tea duties should be placed in the position of the paper duty, and many others have done the same. The hon. Member for North Lincolnshire (Mr. Banks Stanhope) has made a speech, which I have great pleasure in commending, as others have done, strongly in favour of the remission of the income tax. The hon. Member for Cambridgeshire (Mr. Ball) pleads as earnestly and energetically for a remission of the malt duty, and a third forlorn hope is led on behalf of the spirit distillers by the right hon. and learned Gentleman the Member for the University of Dublin (Mr. Whiteside). Under these circumstances, it is not wonderful that there has been a certain tardiness on the part of the leaders of the powerful party opposite in embodying their views and sentiments in some positive Amendment. But I am bound to say, while I have spoken of those who differ from the Government, that more than one Gentleman on the opposite side have recognized the spirit in which the proposal of the Government was made, and have declared their opinion that it is a fair proposal, which they will support.

It is very difficult for a Minister who is principally responsible in a debate of this kind to seem to pay due respect to speeches and arguments so diverse as those which have marked the opposition to the financial plans of the Government, and, at the same time, not to weary the House. If I seem to omit any matter of importance I trust it will be believed that it is only from a desire not to render absolutely intolerable the trespass which I shall have to make on the time of the House. I shall divide what I have to say into the two main questions. First, is there a surplus? and, secondly, how shall it be used? But there are certain questions to which I shall briefly allude in the first instance, because with a comprehensiveness of view some Gentlemen opposite have referred, as if they thought it a matter of great importance, to transactions last year of a financial character, but not immediately connected with taxa- tion and expenditure. My hon. Friend the Member for Stamford (Sir Stafford Northcote) referred to the mode in which the deficiency of last year had been met. And I am bound to say that he did not fall into the egregious error which characterized the speech of the right hon. Gentleman the Member for Stroud (Mr. Horsman) who, to the perfect astonishment of all who heard him, without the slightest consciousness of what he was about, but, on the contrary, in a simple and childlike belief that he had made a great discovery, which furnished him with the means of a decisive triumph, charges the deficiency on our books twice over, first of all saying that so much was taken out of the balances, and then adding to it the whole deficiency of £2,500,000. My hon. Friend did not fall into an error such as he could not fail to discern in the right hon. Gentleman, but still dwelt with needless detail upon some points. He was very anxious about the Exchequer balances. He complained that they fell below what they were expected to fall to last September. No doubt they did. But how was it possible for me tell exactly what draughts would be made by the officers of the Government in China in order to make themselves, as they were justified in doing, strong enough in funds to bear the expenses of a great expedition? That is the history of the fall in September, and in answer to my hon. Friend's inquiries after the health of the balances, I have much pleasure in assuring him not only that they are as well as can be expected, but that they are in a state satisfactory to all their friends. And I cannot give a better illustration of that than by saying that during the whole of the four quarters of the last financial year the sum for interest on deficiency bills amounted to just £1,850, and in the quarter now passing not a single shilling has been paid on that account. My hon. Friend seemed to think that some strange trick of legerdemain had been performed by the Government in applying the repayments of advances to meet deficiencies in the revenue of the year. This is not the place nor time to enter into a consideration of the provisions of our laws, but surely my hon. Friend ought to have known that when advances are repaid they become part and parcel of the Consoldiated Fund, and when they are part of the Consolidated Fund they are part and parcel of the balances in the Exchequer. It is not in the power of the Government, and it would be illegal as well as absurd, to draw the slightest distinction between repayments of advances and any other portion of the public monies at their command. My hon. Friend said he was very sorry that I omitted to notice the fortification loan. I omitted that subject, not on the ground that my responsibility in connection with it is less than that of any other Gentleman who sits near me, for it is the common responsibility of the Government, but on the much simpler ground that the sum required to be raised upto the present time, or during the current year, was so very small that it was not necessary to call attention to it in great detail when dealing with an amount of £70,000,000. Again, my hon. Friend said he understood there was to be a further drop in the French Treaty; he shakes his head and perhaps I am mistaken. The remark was certainly made by some one, and excited much alarm on the part of the careful and provident guardians of the public revenue who sit opposite. Well, there has been no further drop in the French Treaty. The lowest of the wine duties are now in operation. The further drop that was anticipated in February last has already boon encountered, and I am happy to say that it turns out to be apparently no drop at all. Then, I have been asked how we are going to provide for the army excess of 1859–60. Everything is pressed into the service against our proposals. My answer is that we do not provide for it at all; and the reason is that it does not require to be provided for, inasmuch as it has already been paid. What we have to do is simply to apply to the House to give form and order to transactions which require to be watched because they interfere with the regularity of our financial action, but which have no bearing on the future, and do not make the Exchequer of the present year a sixpence poorer. My hon. Friend was quite right in saying that the effects of the bad harvest of 1860 are not exhausted. If they had been I should have presented a better estimate of revenue. A great part of the deficiency of the malt revenue goes into the estimate before the House. All these things have been taken fully into consideration. I do not seek in the least to depreciate the ill-effects of that harvest. I believe it is a moderate estimate to say that the reduction in the revenue of the country which it has caused is over £2,000,000. But, at the same time, I believe, and I think the experience of many will hear me out in saying this much—first, that had it not been for the powerful stimulus which freedom of trade gave to agriculture, and the great improvements which it introduced in the culture of the soil and the drainage of the land, the harvest would have been far worse than it was; and, second, that while the effect of the exceedingly bad weather during the harvest and the following season, and the early months of this year, has been to make us, for the time, dependent in a very unusual degree on the supplies of foreign corn, the quantity of English corn in the country remaining over from the last harvest is much more considerable than usual. Under the operation of the present weather it is gradually improving, and affords a better store for the future than in an ordinary year we could at the same period expect. Well, my hon. Friend referred again to 1862–3. Really I am not very willing to weary the House with discussing matters that are hardly before it; but at the same time, considering the influence that remarks of this kind have on some minds, I venture to say a few words. Upon what depends the whole case of my hon. Friend in showing improvidence with regard to 1862–3 in our financial arrangements? It, surely, does not rest upon the probable income and expenditure of the two years as ordinarily calculated, because, though we throw upon 1862–3 about three-quarters of a million as the residue of what will be lost by the reduction of the income tax and the remission of the paper duty, yet the extra cost of the China armament, which we have every reason to believe will he repaid before the year is over, amounts to a much larger sum. The whole case of my hon. Friend seems, then, to rest upon the fact that there are £1,000,000 of Exchequer-bonds which fall due in 1862–3. If my hon. Friend thinks that on that account it is my duty to ask, or the duty of the House of Commons to grant, £1,000,000 of additional taxation for the year 1861–2, he has not, in my opinion, yet mastered the principles on which the finances of this country ought to be regulated. Not only is the doctrine of my hon. Friend strange in itself, but I am astonished at the source from which it conies. If Exchequer bonds are to be regularly put by, from whom did we learn that lesson? From the right hon. Gentleman the Member for Bucks. In 1858 the right hon. Gentleman had not, like me, £70,000,000 to provide. He provided Estimates amounting to£63,500,000, and, having got a loan and having £2,000,000 of Exchequer bonds to meet, he put them aside, and made no provision for them. And, Sir, I must confess, though I said at that time that I should have been very glad if the right hon. Gentleman had made an effort to provide for those bonds, I did not think he was liable to any very severe censure on that score. It is quite clear that, whatever Exchequer bonds may have been originally, they are now part and parcel of the public debt, and must be dealt with as such, paid off if there is a surplus, or renewed if that would be more profitable. But, whatever other doctrine might be held on the subject of these bonds, I must say it ought not to come from the hon. Member for Stamford, at least, till he has refreshed his memory by the perusal of the financial statement of 1858. I will not now go into a discussion of the original issue, or the expectations which were then formed. When they were first issued they were issued in anticipation of the income tax, and my opinion was that the half year's income tax at the end of the war should be applied to redeem the bonds. Neither the House of Commons nor the Government would adopt that view in 1857, and as neither the Government nor the House of Commons adopted it, the matter is at an end. It is the grossest of all possible errors to suppose that there was any pledge of good faith to redeem them. They are not in the hands of the public. They have become merely financial instruments passing between the Government, the Bank of England, and the National Debt Commissioners, and it is simply a matter of financial convenience in what way they shall be dealt with. But, even if it were our duty to redeem them in 1862–3, I say it would not be my duty to ask the House of Commons to grant £1,000,000 of taxes beyond the service of the present year.

I come now, Sir, to the question of the surplus, and I am glad to see my hon. Friend the Member for Honiton (Mr. Moffatt) in his place, as I intend to make him the hero of this part of the discussion. It is assumed by some that I myself in particular, and in some degree my colleagues, have an interest in making out a surplus. That may be true. It is, no doubt, satisfactory to a Government and to a Chancellor of the Exchequer to be able not only to avoid the imposition of fresh burdens on the people but to remit some of the existing taxes. I might admit further that on this particular occasion I have a special interest on that point. But, Sir, I am not the only one who has an interest in the matter. If I have an interest in showing that there is a surplus, there are others who have an interest in showing that there is none. There are all the prophets of last year, and all the friends of the prophets, who are as much committed to the proof of the negative as I can be to the proof of the affirmative. Those prophecies must not be altogether forgotten. If an Opposition will assume the duties of Government, by all means let them also assume the responsibilities of Government; at any rate, the responsibility of being reminded of what their great organs have said. My hon. Friend the Member for Stamford (Sir Stafford Northcote) endeavoured to get rid very easily of this subject, and said that the prophecies with regard to a deficiency were altogether got rid of when we retained the paper and imposed the spirit duties. But when I spoke of prophets, and when I ventured to refer to a dismal crash, I was flying at still higher game than the hon. Member for Stamford—I had in view the great authorities of the party, who, in their high stations, have not scrupled to declare prospects of deficiencies far other than those which have been got rid of by retaining the paper duty and imposing the spirit duty. What was the language of Lord Monteagle? Taking the whole of these circumstances into account, and assuming the ordinary expenditure to be the same as that in 1860, there can hardly fail to be a clear deficiency, for the next year, of from £11,000,000 to £12,000,000."—[3 Hansard, clviii. 1188.] I apprehended that of this amount the sum received for paper duties was £700,000 or £800,000. The language of the Earl of Derby was much more cautious. He simply said— I have shown you the deficiency must be £2,700,000, and will probably be much more."—[3 Hansard, clviii. 1536.] That £2,700,000 was entirely independent of the further increase of the Estimate for the Chinese war. We have met the Chinese expenses, and consequently that deficiency must, according to the noble Lord's calculation, be above £3,000,000. But, instead, we have a surplus of nearly £2,000,000. Those are the prophets of whom I speak.

SIB STAFFORD NORTHCOTE

—There is a deficiency now of £8,500,000.

THE CHANCELLOR OF THE EXCHEQUER

My hon. Friend should not play on words. There is not a deficiency of £8,500,000; the observations which I have read had no reference to the renewal of the income tax. I must say that is merely flinching and flying from the question. If I can understand the words he used the Earl of Derby's computation was based on the assumption that the income tax would be renewed. It is only fair that we should examine that question, but do not let us rest on that. Is it not a fact, I ask, that down to the latest moment every organ of the late Government prophesied a deficiency? Is it not a fact that, during the earlier part of the Session, whenever any body in the course of our financial discussions referred to the possibility of a surplus for the coming year, a titter ran through every bench? The right hon. and learned Gentleman the Member for the University of Dublin, in opening his speech, addressed to me the question, "What is a Budget?" In homely and common phrase one might say it was an Estimate of comparative revenue and expenditure for the coming year; but a Budget relatively to certain persons is something else besides, and on this occasion I certainly must say that there were those to whom the Budget, and still more the prospect of a surplus, was a serious disappointment? My hon. Friend the Member for Honiton has, I think, summed up all that could be said on the subject of this surplus. He has referred to all the items, and he has dealt with all the figures in the financial statement which could be questioned. I feel obliged and indebted to my hon. Friend for having brought out all these points. He certainly performed his work with zeal; there was nothing too great for him, and nothing too small; he reminded me of a nation of antiquity, of whom it was said that they worked with the strength of giants and the fineness and nicety of jewellers. Sometimes my hon. Friend was handling my great items roughly—"£600,000 for paper, you will get none of that; £750,000 for the Chinese indemnity, you may get £100,000 of that." Sometimes he was pressing me into the very nooks and crannies of the financial statement, and trying to catch me tripping with regard to items of £1,500 and £2,000. I will divide his great and little statements, and I will take whatever he pleases, though, perhaps, it may be convenient that I should begin with the smaller sums. My hon. Friend strengthened his case, as he was entitled to do, after the manner of a skilful advocate, by attacking the credit of wit- nesses on the other side. He altogether impugned the accuracy of my former Estimates; but had he been a Member of this House last year, I do not think he would have done so. He has quoted from my statement of the 10th of February with regard to a great number of minute charges, and the Estimates I submitted in their original form relating to them; whereas in the progress of the discussion those charges were greatly reduced and modified, and the Estimates were reduced and modified in proportion. On this day fortnight I ventured to state that the yield of these charges has been very nearly what was expected according to the reduced scale, and on those diminished Estimates the finance and balance for last year was founded. He says, I estimated the produce of dock warrants at £100,000, and they only yielded £12,000; but with these were included what are termed delivery orders, and their joint produce has been not £12,000, but about £80,000. Then he said contract notes were estimated to yield £100,000, and had only brought in a few thousands. That is perfectly true; but it is no less true that in consequence of objections taken—and I must say on the whole justly taken by the right hon. Member for Buckinghamshire and others, the original plan for the tax on contract notes was abandoned. Again, with regard to bonded charges, these as originally projected would have yielded £120,000; but it was proved that this rate was more than they would bear, and another plan was, therefore, adopted which was never expected to produce half that amount, and which has returned about what was estimated. I do not in the least object to the rigour of the hon. Member's examination. Now that we are in for it on the question of surplus, I trust the House will excuse me if, without unnecessarily trespassing on their patience, I endeavour to exhaust the subject. My hon. Friend has assailed me on the subject of chicory, from the duty on which, together with that on coffee, he says I anticipated a revenue of £90,000, and that instead I have only received £25,000. [Mr. MOFFATT: £22,000.] About £22,000 or £23,000. Well, Sir, here I am bound to say that he is not very far from the mark. But what is the case? The trade in chicory happens to be in very few hands. We had no means, as he knows perfectly well, of ascertaining what quantity of chicory was in the country when we made these Estimates. It happened that the persons who chiefly import this article were in possession of a large free stock when this proposal was made, and in consequence scarcely any duty on chicory has been paid for the last twelve months. There is the whole explanation of his statement, and in point of fact we are now starting fresh with the question of chicory. From the middle of February last year to the 1st of February in the present year, which I call roughly twelve months, the total amount received on account of chicory was £2,875. But in February and March last the duty paid was £9,365, and if the same rate should continue now that the duty-paid stock is exhausted, a revenue of £56,000 would accrue from chicory, which is more than I anticipated. But my hon. Friend is much too well acquainted with these matters not to know that it is impossible to form minute estimates on minute questions, and we must be content to take items of this kind lumped together. It is by the general result and not by the result of every minor detail that the financier is to be judged. But I was so much struck with the defective evidence which we possess on this particular subject that, although the receipts for two months have been at the rate of £56,000 per annum, in proposing to double the duty on chicory I have only taken credit for £15,000, which I hope the House will think a moderate estimate. Then my hon. Friend went through another subject, on which I confess my surprise that he should have dwelt—the Customs' duty on paper. My hon. Friend said that I had only debited myself with £15,000 on account of the loss of the Customs duty on paper, that the last quarter's receipt was nearly £14,000, and, therefore, that the total would be £56,000 in the year. I cheered my hon. Friend in his statement, and I assure him that cheer was meant in a friendly sense, as one might call aloud, and rather unceremoniously, to a man skating whom one saw going on very dangerous ice. It is perfectly true that in two quarters of last year I received £26,000 for Customs duty on paper, though in the first two quarters I only received £14,000. The two first quarters, with a fractional exception, were under the old system—the latter under the open system. What I have done appears to me to be perfectly just. Having two quarters of close trade and two quarters of open trade, I have guided myself by the receipts of last year, and I have debited myself ac- cordingly. Perhaps ray hon. Friend is still sceptical, but I can inform him that we are receiving duty, and have, since the 1st of April, received it at a rate which will amount to between £40,000 and £50,000 a year. I hope, therefore, that he will see that I am right, or that my only mistake is in debiting myself £15,000, whereas it ought to be only £14,000. These are small matters, and I only refer to them because my hon. Friend is an authority upon these subjects, and in order that he may see that they have not been overlooked. I must say, however, that he dealt fairly with the Budget, because he attacked the main heads of the revenue, at which it is that we must look on these occasions, and he presented what I may call an anti-Budget, or a counter-Budget to mine. I had shown a surplus of £1,923,000. My hon. Friend boldly grappled with that surplus; on the Customs he questioned £300,000; on the inland revenue, £300,000; the China indemnity, £750,000, he struck out; of the paper duty, £600,000, he said we should not get a penny; these items amount to £1,950,000, and, therefore, instead of our having a surplus, he lauded us in a deficiency of £27,000. [Mr. MOFFATT made an observation.] I understand my hon. Friend to say that he did not state an actual deficiency, but that £1,350,000 was certain to be lost, and that £600,000 was doubtful. As this is a matter upon which a good deal turns, I will refer to each of these four items. I will begin with the Excise revenue upon paper. My hon. Friend says that we shall not get £600,000—on the contrary, that we shall not get a penny from that source; that, as the trade is to be opened in October, it will stagnate in the meantime, and no duty will be paid. My hon. Friend has not that intimate acquaintance with the paper trade and with the laws of Excise, especially as to the system of drawbacks, which he would have if this subject lay within the scope of his own business. Is it not rather odd that during the whole of last year, although we were debating the question of the paper duty with sufficient intensity for a matter of six months, it never occurred to any one to question the Estimate upon this ground? The repeal of the duty then proposed was prospective, in the same manner as it is now, the only difference being that it was then to be repealed on the 15th of August, and is now to continue till the 1st of October.

The truth is that by means of the drawback which is granted, taken in conjunction with the nature of the trade, we shall secure nearly, if not quite—for I do not mean to say that an estimate of this kind can be minutely accurate—the full payment of the duty until the moment of its repeal. I will give my hon. Friend this proof. We are now at the end of April, and, as I am informed, nearly £200,000 of the £600,000 has already been received. I next go to the China indemnity, and from that source my hon. Friend says that, instead of £750,000, we shall get nothing at all. As this is a question upon which considerable interest is evidently felt, I must here remind the House of the few words with which I accompanied my original statement with regard to the indemnity. I said then that it was quite impossible to give a charge of this kind with minute precision. It is not susceptible of being so treated, but I will state to the House the principle upon which the charge has been framed in the Treasury, and accepted by me. This is a year in which we have to meet a very heavy expenditure for China. I propose to ask the House to supply me with a million from the taxes of the year to meet the charge under the Vote of Credit. Besides that, we have charges for China upon the Naval and Military Estimates, which I cannot state with precision, but which I believe may amount to from half a million to a million more. All that expenditure you are asked to supply from the taxes which you are to impose upon the people. That expenditure has been liberally and largely estimated, and am I to be told that, when I was asking the House to give me from a million and a half to two millions out of the taxes of the year for China, I ought to have kept back how much we were to receive from China during the same period, under the title of indemnity? On the contrary, it was my duty to estimate, and to estimate liberally, the sum which we were to receive from China as indemnity, as well as to estimate liberally the sum which we were likely to have to pay in respect of that country. And although, as I have said, there are estimates both on the one side and on the other, which must from their very nature be treated with some indulgence, I say that the Estimate is a sound and true one, and I shall be very much disappointed if at the close of the year the balance against us is more unfavourable than the quarter of a million at which, comparing the £750,000 with the million for which I ask you, I have placed it. My hon. Friend says that the merchants must be paid first. I demur to that position. That is not the view of the Government, and I am not aware of any principle upon which it can be established. I fully admit that the case of persons whose property has been taken for military purposes is a case by itself; but if it be the case that certain persons have suffered by the acts of the Chinese Government, and that the people of England have had to pay £5,000,000, £6,000,000, or £8,000,000, in order to replace their property in full, and if the people of England are to recover, perhaps, half-a-crown in the pound of their expenses, it does seem to me to be a little too much to say that all the money due to the merchants is to be paid before the people of England are to receive a shilling. The view of the Government has been that the payments should be pro rata. The sums are separated in the treaty. The British Government is to have 6,000,000 and the merchants 2,000,000 taels; and our view is—and we are not aware that anything has been done in China to interfere with the adoption of that course—that the payments should be made pro ratâ. The state of the case will then be this:—The probable gross receipt in China before the 31st of March, 1862, will, after deducting £100,000, payable to the prisoners and to the families of those who unhappily lost their lives, be about £950,000. The total indemnity payable to the merchants will be about £650,000, and, therefore, even upon the showing of my hon. Friend there would remain for the Government about £300,000,—an amount very different from what I anticipate, but equally different from his exaggerated statement, according to which nothing would remain to the Government. The payment to the merchants pro ratâ—that is to say, they getting the same proportion of their 2,000,000 taels as the people of England get of their 6.000,000—will be about £200.000, leaving for the Government about £750,000. That is the basis of the computation which has been made, and with respect to the sum of £950,000, if I am told by the hon. Gentleman opposite, the Member for Horsham (Mr. Seymour FitzGerald), that he has looked at the receipts of certain ports, and obtained information as to the receipts of 1858, in his most extraordinary zeal and heat overlooking such trifling differences as that new ports are to be added to the old ones, and that 1858 was a year of war, whereas the payments are to be made in time of peace, I can only gay that to statements of that kind I greatly prefer the responsible reports of the French and English Ambassadors, who, with the aid of their officers on the spot, have made such computations that we expect that these payments will be completed in four years, of which a year and a half's receipts will have come to our credit in the course of the present financial year. I do not deny, if we look at the unfavourable side of this matter, that it is possible that we may fall short of the amount estimated by £100,000 or £200,000, but it is just as possible that we may exceed it by a like sum. All I can say in addition is that plans have been suggested which have every appearance of being feasible, and which, if they are feasible, will be extremely beneficial, for anticipating these payments through an arrangement with the merchants, and thereby shortening the term of the necessary military occuption in China. I have only glanced at this part of the subject, because these are matters which do not admit of precise statement, but I think I have shown my hon. Friend that as far as the Estimate is concerned it is a liberal, a just, and a reasonable Estimate, and I am bound to say that, while on the one hand, I think that it is possible that under certain circumstances we may fall somewhat short of £750,000; it is on the other, at least, as likely that we shall fall short of the large sum of £1,000,000 which I have ventured to ask the House of Commons to provide out of the taxes for meeting the military expenditure in China.

My hon. Friend having swept away these two items, amounting to £1,350.000, then went to the inland revenue and said, "I question £300,000" on account, if I understood him aright, of the probable diminution in the receipts of the income tax. I must confess that I am a little surprised at that statement, but I am not at all sorry that my hon. Friend has given me the opportunity of referring to the manner in which these Estimates are framed. I only wish that it had been in my power to place my hon. Friend and any other Member of this House who had any curiosity upon the subject on the outside of a glass beehive, inside of which he might have seen the Chancellor of the Exchequer, with the excellent men who are at the head of the revenue departments, and, besides seeing, might have heard everything that passed between them on the subject of every part and parcel of these Estimates; because, as I have said, if I have an interest in making a surplus, there are others who have an interest in unmaking it—not my hon. Friend, that is true—but it is also true that we do not meet upon equal terms. In making my surplus I am subject to the check of the advice and authority of the most experienced servants of the Crown, and never was the Crown better served than it is now in the offices which are held by the gentlemen to whom I am referring; and great, indeed, would be the responsibility of that Chancellor of the Exchequer who, for any political object whatever, should venture to place his opinion in conflict with theirs. Never that I recollect, except upon one occasion, have I presumed to submit to the House an Estimate, small or great, that had not their sanction. That was the case of a tax which was perfectly new—namely, the imposition of the income tax upon incomes between £100 and £150 per annum. They estimated the produce of that tax at £210,000 per annum. That appeared to me to be an overprudent Estimate. I placed it at £250,000, and the real produce was between £300,000 and £400,000. The difference between those who make Budgets and those who unmake them is that those who unmake them deal with the figures as they please and. are wholly irresponsible, whereas the Chancellors of the Exchequer who present them to the House, though they may he rash, wild, improvident, profligate—for that is the word sometimes used—cannot move except either in concurrence with the Gentlemen to whom I have referred, or else, if they pursue a different course, by incurring a responsibility which no Finance Minister I have ever known or heard of would venture to assume. Let me, then, suppose my hon. Friend at the outside of the glass beehive, and, perhaps, if I give him information as to what takes place in the private room of a Minister, it will be better and more accurate than the agreeable gossip picked up by the right hon. Member for Stroud, and retailed to the House to-night as an authentic account of transactions, conversations, and divisions in the Cabinet on the subject. The income tax may be said to be in course of varying, but still not very irregular, and progressive increase. My hon. Friend thinks that last year was such a bad year for importers that, in all probability, the income tax will not produce in the present year, by £300,000, the sum which is anticipated. I am glad to say that schedules A and B are progressive. So is schedule E, and schedule C remains about stationary; but schedule D does not depend entirely or mainly upon importers. It depends upon the whole mass of trades, professions, and commercial dealings of every kind, and so far from admitting that it is likely to present a diminution, I submit to the House that there is every probability—nay, that, excepting in the extremest circumstances, there is almost a certainty—that it will present a considerable increase at the end of the present financial year. Schedule D in 1860 was paid upon the basis of an assessment beginning in April, 1855, and ending in April, 1858. The year 1855–6 was a year of war; 1856–7 was a year of war expenditure; 1857–8 witnessed a great commercial crisis, and it was upon an average of those years that Schedule D was paid in 1860. In the present year we shall have a new assessment. We shall drop the three years I have mentioned, and we shall take in the 1858–9, a most flourishing year; we shall take in 1859–60, which was also a flourishing year for trade and manufactures; and we shall take in 1860–1, which, although it may have been a bad year for importers, has, upon the whole, been a year of great business to the country. It was more so, I admit, at its commencement than at its close, but there can be no doubt, taking into view the regular progress of the country, that the new assessment will cause a considerable increase in the produce of the income tax. But I want to show my hon. Friend, since he has questioned it, how my surplus has been obtained. I asked the Chairman of the Board of Inland Revenue whether he had allowed for the increase in Schedule D, which was to take place from the new assessment? He said "No." "Why not?" I asked, "Do you not expect an increase?" "Yes, I do," was the reply. Then he told me that it had not been allowed for because of the probability—the bare probability—that there would be war in America and Europe, and almost universal convulsion. Such is an example of the extreme caution with which the Estimates of revenue have been framed. So far, however, from anticipating a diminution, unless this year be a year of general convulsion, I have no doubt my hon. Friend will see at the end of the year a considerable increase in the payments under Schedule D.

MR. MOFFATT

I only doubted the excess which you expect over last year.

THE CHANCELLOR OF THE EXCHEQUER

The hon. Member took £300,000 from my Estimate in that anti-Budget in which he made such havoc with my surplus. He then proceeded to question the Customs, and here he brought under his ban £300,000, the extra revenue from corn. All I can say is—and I say it from the bottom of my heart—that I hope my hon. Friend is right. I trust we shall lose that revenue from corn. I hope, too, we shall lose the revenue from hops. I cannot wish my hon. Friend the Member for West Sussex (Mr. Dodson) a good crop, for that he would consider the cruelest wrong I could inflict upon him; but I may wish him such a good crop as may prevent the importation of supplies from abroad. The fact is, if we lose the extra revenue from corn, it will be a certain pledge and proof of a much larger revenue from other sources. There is not a pound we can lose in that shape which will not come back to us doubled or trebled in other shapes, and, therefore, my hon. Friend, instead of suggesting a source of danger and deficiency, is suggesting to me a topic of hope and consolation and the probability of an excess of revenue. But the Customs' revenue was also questioned by the hon. Member for Stirlingshire, who said that the Estimate is £270,000 more for the coining year than the actual yield in the past year. It is easy to account for that increase. The main reason of the difference is that the increased duty upon foreign spirits, which yielded a considerable sum in the year just expired, was in operation for only a part of that year, whereas it will be in operation during the whole of the present year. I do not think, therefore, we can be blamed for taking credit for a moderate increase. But the hon. Member for Huntingdon (Mr. T. Baring) was even facetious on the subject of the remarks I had made, perhaps in an excess of anxiety to continue my crude explanations to the House, about Good Friday and Easter Sunday. He said that people eat on Good Fridays and Sundays as well as on other days; but the hon. Gentleman entirely misunderstood my statement, which was this—that the last three days of the financial year had been days on which business was suspended, and that the consequence had been, not that there was nothing needed for consumption upon those days, but that what was brought into the country upon those days could not be cleared, and that the revenue arising from it fell upon the first days of the present year. In the glass beehive we discussed this question among others. I said to my respected friend the Chairman of Customs, "Having suffered from the shortness of 1860–1 to the extent of £300,000, have you added anything on that account to the revenue of the coming year?" He said he had not, but added that £100,000 might be added upon that score, and £100,000 was accordingly added to the Customs' revenue. Perhaps that may be called unreasonable; but I hold in my hand a statement of the payments into the Exchequer from the 1st to the 28th of April, 1860, and from the 1st to the 27th of April, 1861, and I find that the twenty-seven days of the present month have yielded more than the twenty-eight days of April, 1860, by £114,000. The House has heard with great patience my explanations upon minute points of detail, and I do not intend to pursue them further; hut, before concluding my remarks upon this part of the subject, I must say that it is not the business of the Chancellor of the Exchequer to frame his Estimates with reference to extraordinary circumstances that have not occurred. He is bound to frame them according to the circumstances in which he stands. It would have been wrong if the Estimates of last year bad been so framed as to meet the pressure of a harvest unequalled in its badness for half a century. It would have been a departure from the principles on which English finance is founded, and upon which finance Ministers invariably act. The Estimates which have now been presented to the House are based upon the expectation of an ordinary season. This is the fifth time I have had to present Estimates to the House of Commons, and I have no hesitation in saying that I never presented Estimates with a stronger conviction that in anything like ordinary circumstances they would be more likely to be followed by an excess of revenue.

Another question still remains—though this, perhaps, is not the time for discussing it in detail—if there is a surplus how are we to dispose of it? The Government say that it should be disposed of by repealing the paper duty from the 1st of October next. There are many points which, if this subject is debated in Committee, it will be necessary to deal with at length. Apart from the position into which the whole subject has been brought by the operations of last year—apart from the political considerations connected with it, although these considerations in my opinion are very important—there are a number of social and economical questions which cannot and will not be overlooked. In the first place, it is commonly assumed that the paper duty is a rapidly increasing duty; but that is not quite the case. I do not think the increase of the paper duty up to last year was at all remarkable when we consider what a vast expansion of the general trade of the country has taken place in the last twenty years, and what immense sacrifices of revenue have been made by Parliament, as, for instance, in the abolition of the newspaper stamp—the direct tendency of which must have been largely to increase the consumption of paper. In the financial year ending March, 1859, the produce of the paper duty was £1,142,000; in 1860, £1,291,000; and in 1861, as near as may be, £1,305,000. So that, whether from the influence of foreign competition, or that paralysis which attends the expectations founded on the votes and proceedings of this House I know not, the fact is before you, the paper duty has lost its spring and elasticity, and I doubt whether any efforts can ever restore it. Now, that fact is not altogether without its bearing on the previous question of surplus. It is complained that there is a very scanty surplus; but at the same time it is said, "Don't reduce the duty on paper, which amounts to £655,000, but reduce the duty on tea, which costs £800,000," and so with regard to 1862; the end of all this prudence and circumspection being, that £195,000 more is to be taken from the revenue of the two years, and £135,000 from the revenue of the present year, than is recommended by the Government. Then, as regards the consumer, I have been astonished to hear the manner in which it has been assumed that whatever you give away on tea or sugar is certain to reach the consumer, and whatever you give away on paper is certain not to reach the consumer. How does this matter stand? The wholesale price of tea is on an average 2s. 8d. per lb. You are, if you can be persuaded to do it, to make a remission of 3d. per lb., which is about 9½ per cent of the average value. The value of paper is from 3d. to 1s. per lb. I believe the average value, from the predominance of the coarser sorts, would be about 6d. per lb. The duty is 1½d. per lb. I admit it to be a capital object of anxiety when remitting taxes to remit them in such amounts as will afford the greatest security of their reaching the consumer; but when you can relieve an article from 25 per cent of the value you are much more certain of accomplishing that object than if you remit only 9½ per cent. In fact, that is an understatement of the case, because, as was truly said by the hon. Member for Brighton (Mr. White) it does not appear that the original remission on tea has ever yet fully reached the consumer, whereas in the duty on paper, from the peculiar operation of the Excise in restricting it, and the sudden effect of competition from half a dozen places, the remission is certain to reach the consumer.

But there is one topic on which I must address the House for a few moments in connection with the removal of the duty on paper, because a very high doctrine of philanthropy is preached on the other side of the House—great regard for the labouring classes placed in invidious contrast, forsooth, with the papermakers or dealers, I care not which it be, who desire to remove the duty of Excise. It is a matter that requires a little consideration from this House. As respects the general principle of the removal of the paper duty it was truly and moderately stated by the right hon. Gentleman the Member for Bucks—I will not quote from the more oratorical parts of his speech—when he said the paper duty was different from that on advertisements in newspapers. That was merely a financial question; but in the instance of paper the evil of an Excise duty was aggravated because to the fiscal a degree of moral disadvantage was added. The right hon. Gentleman supported the expression of that sentiment by the vote he gave when the duty on tea was not 1s. 5d. but 2s. 1d. per lb. But to part with the duty on tea goes rather deeper than may be supposed into the great principles on which this House have been engaged for the last twenty years in reforming the commercial law of the country. We are told now that the first obligation of the House is to reduce those taxes which are levied for the purpose of revenue upon articles of popular consumption. I can only say, if that be true, it is not the principle upon which former Parliaments or the present Parliament have acted with regard to commercial reforms. It was not the principle of the proposals made in 1841 by the Government of Lord Melbourne; it was not the principle of the proposals made and carried by Sir Robert Peel in 1842. The reduction of duties on articles of extensive popular consumption was not the first but the last in order of the objects had in view; and because he knew, because Parliament that supported him knew, that in point of fact the true secret of improving the condition of the people was not the mere reduction of price in this or that article, but the liberation and extension of trade and the increase in the demand for articles of consumption which necessarily resulted therefrom. That is the principle which lay at the root of all those great measures which have done so much to make this House famous and give an honourable immortality to some of our ablest statesmen. When the income tax was proposed in 1842, in order to carry out that scheme, Sir Robert Peel declared the principles on which he proceeded. They were enunciated in plain and simple language. See if you can find me in them the principle of levying duties only for fiscal purposes. On the contrary those principles were to diminish or abolish protection, to do away with prohibition, to prevent smuggling, to liberate trade from fiscal fetters, and I maintain that the mere reduction in price of articles of consumption, although a proper and beneficial object is far behind in importance the objects Sir Robert Peel then had in view. In that very year, 1842, there was a sacrifice of £1,600,000 of revenue, nearly the whole of that consisted in the abolition of differential duties. Of that £600,000 represented differential duties on raw materials—timber and woods. But then it is said to be improvident to take away the whole tax, because the proceeding is not recuperative. In 1845 a still larger sum was given away. And here, again, it is to be observed that not on a single article was a sacrifice made with a view to the mere cheapening of articles of consumption. The duty on sugar was reduced, but that was a differential duty, not a mere fiscal exaction. £700,000 were given away on cotton—a measure not in the least recuperative. That is the new wisdom, forsooth, dinned into our ears. Now, that protection is gone and can no longer be openly recommended or defended substitutes are invented and—poor substitutes they are—palmed off upon us, and we are told not to abolish the paper duty because the proceeding is not recuperative. In that very same year two other measures were taken, equally abominable in the view of these modern philosophers—the glass duty and the duty on auctions were abolished. I know not how many hundreds of duties were abolished in the Customs'tariff which then presented so goodly an array. In 1846 £1,146,000 was given away, not in cheapening the articles of consumption at the cost of the revenue, but entirely for the liberation of trade, the removal of differential duties, and the taxes on raw materials used in manufactures. In fact, the same principles governed every Budget that has proposed extensive changes in our fiscal system with one exception—that of the Budget of the right hon. Gentleman the Member for Bucks in 1852. He acted, I grant, on a different principle. He adopted the principle of what he called unrestricted competition, but he did not touch the remaining differential duties. The sacred relicts were still respected and regarded. What he did was—he proposed a very large remission of duty on tea; what others with the sanction of Parliament put last he put first; and again, with respect to the Excise, he merely proposed to give away £2,000,000 of malt duty by taking off half of the Excise. He deprived the Treasury of the benefit of that £2,000,000, but left the restraints on trade in full operation. That is the only exception. I am not complaining of the right hon. Gentleman, or of those who are attached to him, for pursuing that principle in opposition to that acted upon by Sir Robert Peel, and which guided my noble and right hon. Friends who sit near me. I cannot object or complain; only let it be understood who are the innovators; because, when we are told the measure we propose is rash and desperate, I maintain it is founded on the principle which has made the name of the English Parliament, I might also venture to say, more than ever famous through the world for the wisdom of the great and blessed steps it has taken for the purpose of setting free the trade and industry of the country. I do not claim for myself the slightest originality. I do not pretend to be the parent or author of this principle. I began as an humble labourer by the side of Sir Robert Peel; my desire is to end by applying the principles upon which he acted. And I say now, that in adhering to the rule that the liberation of trade and industry from fiscal fetters is the first principle for us to follow, I am adhering to that which has been the foundation stone of all British finance as approved and accepted by Parliament during the course of the last twenty years.

When the Government made the proposal which they have submitted, asking for a penny in the pound less of income tax than was levied last year, and accompanying that demand with a measure for the repeal of the duties on paper, I think there are those in this House who know and feel that we had some right to believe, at any rate to hope, that we were offering to the minority of last year a measure of conciliation. It does not depend upon us to say what shall be comprehended or what shall be accepted by others as a measure of conciliation. But it does depend upon us to frame our plans in such a spirit as we conscientiously believed to be entitled to that interpretation. Sir, it was not by a champion from this, but from the opposite, side that the issue of last year was distinctly raised, and the combat challenged upon this point—namely, whether the House would consent to remit the paper duty, or would, on the other hand, forego the tenth penny of the income tax. My hon. Friend the Member for Somersetshire (Sir William Miles), whom I regret not to have seen during this debate, then moved this Resolution, which expressed, I presume, the language of his party— That, as it appears that the repeal of the duties on paper will necessitate an addition of 1d. in the pound to the property and income tax, it is the opinion of this House that such repeal is, under such circumstances, at the present moment inexpedient. We understood these words with the simplicity and the plainness with which they are expressed. It was not unnatural, I think, that when my hon. Friend the Member for Somersetshire had himself framed a Resolution setting forth his opinions and those of his friends, we should have believed that those opinions were there expressed; and the opinion there declared is not that the repeal of the paper duties should be indefinitely postponed. It does not go to hint or suggest a doubt or suspicion as to the expediency of that measure, excepting on the single ground of the price at which it was to be had—namely, the imposition of an addition to the income tax. And surely, therefore, there could be nothing more natural, nothing more legitimate, than that, when we found ourselves in a position to maintain the connection between these two subjects which, not we, but hon. Gentlemen opposite had established, we should again propose them to- gether to the House, and, removing as far as we were concerned the body and material of the dispute, should invite their concurrence in a proposal which I repeat we did believe, and I think might reasonably believe, to be couched in the spirit of conciliation. Sir, in asking the House to vote that which may close the controversy of 1860, and not to vote that which is to hand it on from year to year, to be taken up again, perhaps, in circumstances of greater pain, greater doubt, and greater danger, I think we have done that which will be felt—I do not say by those who direct the machinery of party, but by those who bring a candid mind and an independent view to the consideration of the question submitted to this House—to have been our clear duty. I know not whether there is to be one division or many divisions on the subject of these financial proposals. We thought them, when we submitted them, to be very simple. But, although we thought them very simple, more than a fortnight has now elapsed and we have not yet been permitted to take a single step. I hope, if hon. Gentlemen really entertain the feelings which have been described, that we shall have some mode of ascertaining the sentiment of the House. Quite apart from the interest of any Government or any party, I do not believe that these long-drawn and aimless debates, with intervals of three or four nights between the times when they are resumed—supported, indeed, by men of great name, but hardly any two of them agreeing in the course of their argument, and none of them willing to submit a distinct proposition to the House—I do not believe, I say, that that method of conducting the public business is favourable to that which we should all desire to maintain—namely, the credit of Parliament with the country. But I am quite sure that if that opinion is challenged we shall see that the spirit in which this proposal has been conceived will find those upon the other side of the House as well as upon this who are ready to acknowledge it, and who will take a wise and comprehensive view of the important considerations that are involved in our decision over and above those commercial and financial grounds, which of themselves, in my mind, give it a sufficient and conclusive sanction. And, further, I am convinced that when this House examines in full—and examine in full I trust it will if it examines at all—the whole of the motives and arguments that bear on the proposition which we now make, for liberating this last article of British manufacture from the fetters of the Excise, they will see that in making that proposition we are following in the steps of those who have on former occasions given wise advice to Parliament, and the adoption of whose recommendations at various intervals during the course of the long period of twenty years has done so much to extend the fame and credit of this nation in foreign lands, and to establish the Parliament and the Crown of this country in the affections of the people.

MR. DISRAELI

Sir, I must repeat the surprise which on the first night of this debate I ventured to express at the impatience which the Government have evinced at this House discussing the important measures they have brought before us. It is easy for the right hon. Gentleman the Chancellor of the Exchequer to describe our discussions as aimless and uninteresting; but I ask the Government—What other mode was there for this House to express its opinion on the general scope and tendency of the policy of the Ministry, and to obtain that information and those explanations necessary for us before we could go with any profit into Committee to consider the propriety of passing the particular Resolutions then to be submitted to us? When we reflect, Sir, what an elaborate, lengthened, and complicated performance a financial statement, especially in these days, necessarily is, it is impossible that the Government can suppose that on the first night of such a statement being made the House can arrive at a result upon the multifarious projects which solicit its consideration. The Government must feel that for us to enter in that manner, without thought or examination, into Committee of Ways and Means, and devote our attention to the particular Resolutions, must lead to the most desultory and immature discussion, and, perhaps, to rash and precipitate conclusions which both the House and Government may afterwards have cause to regret. As a general principle, therefore, I say it is expedient that when a Budget has been introduced to our notice, before we go into Committee of Ways and Means, there should he a discussion on its general scope and tendency. But, Sir, I think there are particular reasons with reference to this question, and with reference also to the present Government, which render such a course in the highest degree necessary; because I say that upon this subject last Session the House of Commons was kept in the dark. The House of Commons last year was summoned at an earlier date than its usual period for assembling. Very extensive financial propositions were then brought before it. Those propositions were pressed upon our attention by cogent circumstances connected with treaties with foreign Powers. And when the House expressed, on more than one important subject, the necessity of more information than the Government were prepared to give, on both occasions the House was not, in my opinion, treated with the candour which it should at all times receive at the hands of a Minister of the Crown. I do not want now to make a grave charge, but rather to illustrate the view I wish to press upon the House. I would refer to that China Vote, the subject of so much discussion in this debate. When last year the right hon. Gentleman brought forward his proposals under such extraordinary circumstances of pressure the attention of the House was naturally called to the Vote he then proposed, amounting, I believe to £500,000 for carrying on the war with China. A great many Gentlemen on both sides of the House expressed their apprehension that that was not an adequate provision for such a purpose. There was considerable incredulity felt upon both sides, but what was the reply of the right hon. Gentleman? He scoffed at that incredulity and those apprehensions, and he said that the expense of the Chinese war was not to be measured by that single Vote, but by the proportionate increase that would be found in the Naval and Military Estimates of the country, and on that representation the proposals of the right hon. Gentleman were passed. Well, what happened? A few months afterwards the same Minister came down to this House and proposed a Vote of almost as many millions as at the beginning of the year he had proposed hundreds of thousands of pounds to carry on that war. At this moment no one has ever shown, and no one can suppose, that the right hon. Gentlemen in February was not as fully aware of the probable occasion and necessity for that Vote as in May, Therefore it proves that the House should not be hurried into coming to a decision upon financial subjects. Take another instance. When the House met last year, and the financial propositions were put before us, there was a great expectation in the country that a proposal would be made by the Government to provide for the erection of considerable fortifications for the defence of these realms; and there were inquiries made from both sides of the House as to whether any such proposal was contemplated by the Government. The right hon. Gentleman scoffed at all inquiries. He rose and said that no proposal of the kind had been before the Cabinet, and he would not listen to such a suggestion. [The CHANCELLOR of the EXCHEQUER made an observation.] I beg the right hon. Gentleman's pardon, I heard him, I fully believe, make that observation. The consequence was that the whole of the financial propositions were passed; yet, a few months afterwards, the Ministry brought forward a most extensive scheme for erecting these fortifications to the amount of some millions, and then it turned out that these fortifications had been resolved upon by the Government in consequence of a Report made by the Royal Commissioners, which was dated, I believe, before the meeting of Parliament, and certainly was in the possession of the Government when the Budget was brought forward. Therefore, I say under these circumstances it becomes the House very cautiously to proceed when they are dealing with financial measures in the present day, and especially when those financial measures are brought forward by the right hon. Gentleman.

What has been the consequence of the haste and precipitation of the House in passing the Budget of the right hon. Gentleman last year? The consequence has been that there is a great deficiency. I ask the House to consider how that deficiency has been supplied. It has been supplied by aggravating the liabilities and diminishing the resources of the country—by reducing the balances in the Exchequer and by increasing the debt. To this moment, although I have listened with the utmost attention to the statement of the right hon. Gentleman, I can make out no answer to the statement of my hon. Friend the Member for Stamford (Sir Stafford Northcote), as to the mode by which the deficiency of last year has been supplied. Is there a Gentleman in the House who has a clear conception of it? There was a sum of £1,440,000 taken from the balances in the Exchequer and an increase of the debt by the issue of Exchequer bonds, which last ultimately arrived at the amount of £440,000; but there is an item of £620,000 more of a very peculiar and suspicious character, which in the figures in the official papers recently laid upon the table appears as repayments of advances, and my hon. Friend the Member for Stamford naturally wished for some explanation. He could not understand exactly how repayments of advances paid into the Exchequer to be re-issued could become revenue raised within the year for the service of the year. But what has been the answer of the right hon. Gentleman? He says the repayments for advances being due to the Consolidated Fund, he did not take them for the service of the year, but, being due to the Consolidated Fund, they became part of the balances of the Exchequer, and then he took them from the balances in the Exchequer. If they were due to the Consolidated Fund, and paid into the Exchequer, they should be reissued in answer to fresh demands, and it is quite clear that the right hon. Gentleman has availed himself of the repayment of monies not raised in the year for the service of the year in order to contribute to the supply of his deficiency, and, therefore, according to his own statement, he has been taking out from the balances not £1,440,000, but more than £2,000,000, and part of this sum repayments which ought again to be lent for the public service. I do not wish now to dwell much upon this topic as I have to call attention to more important points, but it is a curious thing, remembering 1852, when one of the predecessors of the right hon. Gentleman proposed, as part of a scheme of administrative reform, to take repayments of £400,000 as balances in the Exchequer, the right hon. Gentleman then rose and made that the chief ground for a celebrated attack, and in the name of outraged finance called upon Parliament to terminate the existence of a Government who would be guilty of such acts, the only difference between the Government of 1852 and that of 1861 being that we ventured to propose to do it with the consent of Parliament, and the right hon. Gentleman has done it without the consent of Parliament.

I only touch for one moment upon the next question—the Chinese indemnity. I take it for granted that in some way or other the right hon. Gentleman will obtain that sum of money from China, probably at the expense of our merchants, for that seems to be not only acknowledged but vindicated. All I would say in passing upon this topic, which is, no doubt, susceptible of much controversy for which at this moment we have not time, is this, I do not clearly understand upon what principle of finance this financial purist proposes to take this year and a half of indemnity, pledged to the Consolidated Fund, to occupy the place of the balances which had already been abstracted—upon what principle of finance he applies this year and a half of the indemnity to the service of the year. It is not money raised within the year for the service of the year, which the right hon. Gentleman has told us is the only legitimate source of revenue. However, that is not a point upon which it is necessary for me to dwell at present.

I come to the question of a surplus. The right hon. Gentleman is surprised that anybody should doubt that he is in possession of a surplus. I admit the indignation of the right hon. Gentleman has some foundation. I cannot believe that any person occupying the position which he does could, under any conceivable circumstances, offer to the House Estimates of the great branches of our revenue not perfectly sound, well matured, and founded upon the deepest investigation and deliberation. I entirely agree in the opinion of the right hon. Gentleman of the high character of those individuals to whom the right hon. Gentleman and all who have at any time occupied the post he now fills must feel indebted for invaluable services—I mean the heads of the revenue branches and the heads of departments of the Treasury connected with finance, which have been at all times represented by men of adequate ability, and which are represented at the present day in a manner never before excelled, or perhaps equalled, in knowledge of their duties and faithful and sagacious discharge of those duties. But I may he allowed to say I cannot but regret that the right hon. Gentleman tonight, and the President of the Board of Trade, on a former evening, have thought fit to draw the names and authority of those distinguished authorities into our discussions in the House of Commons. Whatever may be their abilities, whatever their character, however great may be the debt which the country owes to them, it is the right hon. Gentleman and Her Majesty's Ministers who are responsible for all these Estimates; and although I freely and entirely acquit the right hon. Gentleman of having any intention of diminishing that responsibility, as I am sure he is the last man to seek to do so, yet every one must feel that the inevitable tendency of bringing the names and authority of those gentlemen into this House is to diminish that responsibility, to make Parliament look to the permanent heads of departments, and also has the tendency of diminishing the freedom and manly independence with which those distinguished men now perform their important duties. "But," says the right hon. Gentleman, "I am met in a most unusual and improper manner by the Opposition. Last year they prophesied an immense deficiency, and now this profligate Opposition "—profligate is, I believe, the favourite epithet of the day—"they deny a surplus." Whereupon the right hon. Gentleman, with all that power of ratiocination of which he is master, proceeds to demolish the Opposition which had prophesied a deficiency and denies a surplus. How does he do it? First, he said, my hon. Friend, the Member for Huntingdon (Mr. T. Baring), who, in a manner which has commanded public attention, and which has so deservedly obtained public confidence, introduced the subject to the House, "he and the hon. Member for Stamford"(Sir Stafford Northcote), said the Chancellor of the Exchequer, "are the two most important members of the Opposition who have as yet taken part in the debate; they are great financial authorities, and they do not deny a surplus." That is the way in which the right hon. Gentleman proceeded to fix upon those who sit upon these benches the crime of denying the existence of a surplus. But then he said, pointing to his own Friend, the Member for Honiton (Mr. Moffatt), "There is the culprit," and he went on to destroy the details of the statement which that hon. Member made; that being the mode in which he thought proper to demolish the charges brought against his financial scheme by a Tory Opposition. Having proved that we acknowledged that there was a surplus, he then proceeded to show how completely a Tory Opposition had failed in their prophecies with respect to a deficiency, and for that purpose he read an extract from a speech of—Lord Monteagle! Seeing the ridiculous point to which he had brought his argument, he followed it up by quoting a passage from a speech of the Earl of Derby, which has been literally and accurately fulfilled. Now, for my own part, I quite agree with my hon. Friends, the Members for Huntingdon and Stamford, and even with the hon. Member for Birmingham (Mr. Bright), in supposing that the Chancellor of the Exchequer would scarcely announce a surplus which it would be our interest to look upon as fallacious. That surplus is, no doubt, founded upon a calculation of the great branches of our revenue, and if there be any documents placed before this House which are more than others entitled to credit, they are, in my opinion, the Estimates of the great branches of revenue, because they have brought to bear upon them not only that extensive information, that sagacity, and that peculiar experience to which the right hon. Gentleman has to-night so justly, as though it appears to me so improperly, referred, but they are subjected to the judgment of the Cabinet, which in the present instance, as in the case of all Cabinets, consists, I suppose, of statesmen of high reputation, capable of dealing with such questions as the political contingencies of the year. If, therefore, I doubted these Estimates, if I thought they were drawn up in an inadequate manner and in a spirit which did not appreciate the events which were likely to occur within the year for which they were framed, I should, instead of discussing their merits on the Motion for going into Committee of Ways and Means, feel that they furnished a basis on which a vote of want of confidence in the Government might fairly be grounded. I am not, however, prepared to make such a proposition, or indeed to question in any degree the accuracy of those great Estimates. I may, however, observe, with respect to the minor point of the Chinese indemnity, that although a portion of that amount may not to my mind appear altogether legitimate, yet I cannot doubt that the Chancellor of the Exchequer will, by some means or other, obtain that sum, and that we shall, therefore, have to deal with a surplus. I take that surplus, then, at the amount at which the right hon. Gentleman has stated it, and shall at once address myself to the mode in which I think it is expedient it should be distributed. Now, with respect to the character of that surplus, I must say that the way in which it is arrived at seems to me to be somewhat peculiar. It appears to me, in the first place, to be based on a false assumption. The Chancellor of the Exchequer found himself in this position—there are several taxes which have expired or are about to expire. Of these a great number are avowedly war taxes. The right hon. Gentleman would, therefore, find that he had an immense deficit to make good. He has to maintain the public credit of the country; he has to take care that provision is made for duly sustaining her armaments, as well as for upholding the efficiency of the civil service, and for carrying out these objects he is aware that, whatever may be his deficiency, he can appeal with confidence to the House of Commons. But has he, let me ask, under those circumstances, a right to appeal to this House for anything more? He has a right to ask, and he may with confidence, however great the number of expired or expiring taxes may be, ask us to renew them to such an extent as is expedient for the great purposes of State to which I have referred. But the right hon. Gentleman goes beyond these limits. He assumes he has a right to ask, and that he may confidently calculate, that this great mass of taxation, consisting, as I have said, mainly of war taxes, will be renewed, not merely for the maintenance of the credit of the country, and with a view to upholding the efficiency of her services, but in order to make a financial experiment. Now, I leave to hon. Members to say whether I have not fairly stated the case. I do not wish to misrepresent the position in which the right hon. Gentleman is placed. Well, and what is the scheme which, under those circumstances, he proposes? Why, the repeal of the Excise duty on paper. That being so I have been very curious to ascertain what has been the history of this tax in connection with the proceedings of the House of Commons. So far as the Government is concerned, their connection with this question is of very recent date. Last year the right hon. Gentleman the Chancellor of the Exchequer, in his financial statement, which was made, as I have already shown the House, with too much precipitation gave expression to this astounding—I will say, even enormous declaration. He said that a general understanding prevailed throughout the country that there would in 1860 be a considerable diminution of indirect taxation, and he, therefore, proposed, among other things, the repeal of the duty on paper. Now, that there was throughout the country a very general impression that there would in 1860 be a considerable diminution of direct taxation, I believe, no one on either side of the House will deny, and the Chancellor of the Exchequer would, I think, be the last person to challenge in debate the justice of this statement, inasmuch as the expectation was founded on his own legislation, to which this House adhered under other Governments with his entire assent and complete sympathy. But if the right hon. Gentleman could do or say anything which could astonish me—which he cannot—I must admit that that which would be most likely to produce that effect was the ingenious invention of his soaring imagination, by means of which he sought to impress us with the idea that the pivot on which the whole financial campaign of last year was to turn was a general impression in the mind of the British public, that there would in 1860 be a great diminution of indirect taxation. Proceeding on that assumption, he recommended to us the repeal of the paper duty. He did not, however, rest there, but laid down the doctrine that the House was pledged to a remission of the tax. I will now point out to the House the astounding pedigree of this celebrated public question; and, in doing so, I shall have occasion to allude especially to the right hon. Gentleman the President of the Board of Trade, who, in his speech a few evenings ago, made a statement with respect to myself which I cannot help thinking—although it was repeated by his colleague the Chancellor of the Exchequer to-night—was singularly infelicitous and indiscreet. I cannot, in passing, help remarking that this mysterious pledge in reference to the repeal of the paper duty seems somehow or another to enter into our debates, as if there were an undertaking on the part of the principal Members of the Opposition to carry out that object, and it appears to me, I must confess, a somewhat new dogma in Parliamentary practice that the opinions expressed upon a particular proposition by the leaders of Opposition should turn out to be an irresistible reason why Her Majesty's Ministers should carry that proposition into effect. Now, what took place upon this question, in alluding to which the right hon. Gentleman the President of the Board of Trade read the other evening a garbled extract from a speech which I some time ago made? The right hon. Gentleman told us that he brought forward a measure inviting the House to repeal the paper duty, and that I spoke in favour of the Motion. He did nothing of the kind. He was, on the occasion to which I am referring, connected with a powerful interest, known in common parlance as the Associa- tion for the Repeal of the Taxes on Knowledge. In 1850 he brought forward a Motion for the repeal of those taxes, and they were described by the right hon. Gentleman in four Resolutions; but as every Resolution was obliged to be put separately, and as the first, in favour of the repeal of the paper duty, Was not carried, the other Resolutions were withdrawn, though they more directly concerned the avowed object of the right hon. Gentleman—namely, to free the public press from the shackles by which its legitimate progress was impeded. I entirely agreed with the right hon. Gentleman in that respect, and have taken every step in my power to carry that object. I thought, then, that the press of this country was most unwisely and impoliticly shackled. I knew that in the then condition of the law the cheap press in this country sent forth an unlimited supply of all those opinions most detrimental to a State, and I believed that an unshackled press would instruct the public mind; and instead of objectionable elements be filled with sound information, and guided by intelligence and moderate views. The result has shown that I have not been disappointed in these expectations. The right hon. Gentleman failed in carrying in his measure in 1850; but every measure, the direct object of which was to free the press and to destroy those shackles that prevented its beneficial development, has been passed. What was at that time the second Resolution of the right hon. Gentleman? It was to put an end to the stamp on newspapers. That has been passed, and I voted for it. The third Resolution for putting an end to the advertisement duty was, likewise, passed. I do not recollect the fourth Resolution. Probably it was not of such great importance as the others; but I know that it has also been passed, and what is the consequence? The object of the measure of 1850 to free the press and take off the taxes on knowledge has been attained. We have penny newspapers. The great object of those Motions was to have penny newspapers. You have them now swarming over the country, and when a new newspaper is set up it takes that form. And has the existence of these newspapers disappointed the expectations of those who were opposed to the shackles of the press? Where can be found better writing, more fresh and authentic intelligence, or a more manly and patriotic tone—though, of course, each newspaper sup- ports its own party? Have these penny newspapers realized or not the expectation of my right hon. Friend the Member for Hertfordshire (Sir Bulwer Lytton) that their tendency would be Conservative? There never were more penny newspapers, and never were Conservative opinions more popular! The right hon. Gentleman the Chancellor of the Exchequer has quoted to-night another expression of mine delivered on one of those Motions which I supported in 1853. But what was the Motion? In 1853 the same subject was brought before the House. I then voted for taking off the newspaper advertisement duty, and I stated—having in the interval been in a responsible position—that it was the intention of the Earl of Derby's Government of 1852 to repeal the duty upon advertisements and the stamp duty upon newspapers. The measure was actually prepared, and in 1853, on the paper duty discussion, I said that we had had to consider the course we should pursue with respect to the three taxes then brought under discussion. I said, "I had on that occasion to consult my colleagues, and the Earl of Derby in particular; and it certainly was the opinion of the late Government, objectionable as they thought the Excise on paper, that on the whole it could be considered only as an Excise duty, and that they could not pretend to allow any other consideration to influence their opinion." I further stated, that with the repeal of the duty on advertisements and of the stamp on newspapers we conceived that the great object which the right hon. Gentleman the President of the Board of Trade sought to accomplish would be effected, as it is practically proved to be so by the great change in respect to newspapers; and that we then looked on the question of the Excise on paper merely as a fiscal question. The right hon. Gentleman the Chancellor of the Exchequer made, I think, in his reference to what I said in 1850, an observation almost as unfortunate as the right hon. Gentleman the President of the Board of Trade, for he stated that we were then prepared to take off the tax on paper while the tea duty was 2s. 2d. per lb. Where is the analogy between the tea duty then and the tea duty at present? There were then no war duties on tea, and the Government consequently had entered into no engagement with respect to war duties. And I want to know with our two-thirds of a million surplus, what possible effect could we have produced on the tea duty, then at 2s. 2d. per lb. The tea duty at that rate had been a stumbling block to every financier, and no Government had ventured on grappling with it, but when we had the opportunity the first thing we did was to grapple with the tea duty, and we proposed a measure which, after some gradual declines, would have left the tea duty at 1s. per lb. We believed that that measure would not only have contributed immensely to the comfort of the great body of the community, but would have given a great stimulus to our Eastern trade. Though the Parliament to which that policy was recommended did not choose to support the Ministers who proposed it, still it is a fact that the party which voted against us made it one of the conditions for supporting our successors that our policy respecting the tea duty should be adopted. The right hon. Gentleman then pretends to found his policy of repealing the paper duty on what he calls a pledge of the House contained in the Resolution of 1858. I have shown the House that the assumption of the right hon. Gentleman, that in 1860 there was a general expectation of great diminution of indirect taxation, had no foundation; and I have shown that what was said by the right hon. Gentleman the President of the Board of Trade, and repeated by the Chancellor of the Exchequer to-night, that I was bound to a repeal of the paper duty, is unfounded, and must "vanish into thin air." What I was bound to support was the repeal of the "taxes on knowledge" that the newspaper press might be free; that has been accomplished, and further, the amount of the paper duty was then only £730,000, and now it is £1,300,000. Now as to the pledge given in 1858. I will show the House that no pledge at all was given, and that the Resolution of the President of the Board of Trade was not carried, the House only expressing an opinion that the paper duty was one which, under favourable circumstances, ought to be remitted. Lot me remind the House under what circumstances the Motion of the right hon. Gentleman the President of the Board of Trade was brought forward. It was made two days after the financial statement. The right hon. Gentleman has taunted me to-night with my conduct on that occasion. On that occasion I found a very large deficiency at the end of the financial year—somewhere about £3,500,000. It was a deficiency of a peculiar nature, not occa- sioned by our expenditure exceeding our revenue, but by unwise and improvident engagements, into which the country had entered by establishing an artificial sinking fund, which the right hon. Gentleman supported me in opposing, and £2,000,000 of Exchequer Bonds, which represented a war expenditure during the Russian campaign. Now, observe, the revenue of the country was equal to the expenditure. But what was the state of the country in 1857 and 1858? There was a monetary crisis, panic, commercial embarrassment; the minimum rate of discount stood at 10 per cent when Parliament met—at 8 per cent when the Budget was brought in. Was that a time to lay on new taxes in order to maintain an artificial sinking fund? Why, there could be no question as to the right conduct to pursue; hut, whether it was right or whether it was wrong, it was unanimously adopted by the House; and men of high financial authority—the right hon. Gentleman himself and the right hon. Member for Portsmouth (Sir Francis Baring)—spoke in praise of that policy and supported it. But we did something more on that occasion than provide for the deficit artificially created. We laid down the principles that, in our opinion, ought to guide the House in the remission of taxation. What were those principles? First, that the engagement made by the right hon. Gentleman with regard to the diminution and the ultimate remission of the income tax should be carried out in its spirit. Next, that if an opportunity occurred we ought to fulfil the engagement of the Government with the people to terminate the war duties on tea and sugar, which they had been called on to pay in order to carry on the Crimean war. The House entirely approved this principle, and I will show how completely it sanctioned and adopted our financial policy by what occurred only two days after, when this celebrated Resolution on the paper duty was proposed. Two members of the present Government were then sitting on these benches—the noble Lord the Secretary for Foreign Affairs and the right hon. Gentleman the Secretary for the Home Department—one a great authority on finance, the other a distinguished statesman, The noble Lord (Lord John Russell) spoke in support of a remission of the paper duty when circumstances should be favourable, but he said the first thing the House had to consider was the duty on tea and sugar. What said the right hon. Gentleman the Secretary for the Home Department? He was chary of his approbation of a repeal of the paper duty under any circumstances, but one thing was quite clear to him that it could not be thought of till the income tax was disposed of. This shows exactly what was the policy the House of Commons at that time adopted, in a very full House of 500 or 600 Members, while the Resolution with regard to the paper duty was carried in so thin a House that it was impossible for the Government to divide against it. Who can doubt, then, what is the engagement of the House of Commons if its decision on a question of finance has any consequence or power? That was the recognized policy of the Government, and I believe it is still the popular wish of the country.

Now, with regard to the income tax, there are two points that deserve special consideration; one is the effect of a remission in a financial, the other in a political, view. In 1857, the House will recollect, there was a great agitation in the financial mind of the country with respect to a remission of the 9d. war income tax. It was well understood that the Government, availing itself of the technical language of the Act of Parliament, intended to levy the additional 9d. war tax—representing a sum of more than £9,000,000—on the country for the year after the war terminated. I gave notice of a Motion challenging that policy; the opinion of the House was so strong and the feeling in the country so irresistible that the Government gave up the 9d.; it gave up the resource it by law possessed of raising £9,000,000 of money, and an Act was passed repealing the existing law. What was the effect of that? In the latter end of 1857 and the commencement of 1858 we had the commercial and monetary crisis to which I have referred. There was great embarrassment in the country; yet during it all the revenue of the country sustained itself. And why? Because the consumption of the country was stimulated by this immense remission of direct taxation. And if the right hon. Gentleman will enter that beehive he has so picturesquely described to us, he will find the working bees all agreeing that such was the effect of the remission. But now as to the remission from the political point of view. There is nothing influences the opinion of foreign States with regard to this country more than the consciousness that such is its wealth that our Sovereign can, by appealing to one single tax, raise annually an amount that other Governments can only occasionally acquire by costly loans, raised at a rate of interest that leaves those countries in a proportionately exhausted condition. If the income tax were what the right hon. Gentleman in such glowing terms, and with such frequent eloquence, has contended it ought to be—a weapon adapted only to the purposes of war, nothing can have such influence, looking at it politically and morally, as the knowledge that this country can raise twenty millions as a special annual revenue, while potentates who might threaten the peace of Europe can only raise such a sum by loans at such a rate of interest as must impoverish the coffers of the State and exhaust the industry of the country. Such an engnie as the income tax is to a Minister of this country more powerful than any armament that can be devised; more powerful than fleets and armies. It is, therefore, worse than madness in time of peace to throw the whole weight of our financial system upon it. It was for this reason, and from a general sense of the inquisitorial, unjust and unequal character of the tax, that made us in 1858 declare that it was our policy to carry out the engagement of the right hon. Gentleman for its final abolition. The House accepted that policy unanimously, and the right hon. Gentleman supported it. And when the income tax fell to 5d. I, for one, did not even then consider the occasion favourable for a repeal of the duty on paper.

I would now touch on the position in which we are placed with regard to the war duties on tea and sugar, the other cardinal points of our financial policy in 1858. And it was with the deepest regret I listened to the right hon. Gentleman to-night when he spoke on the subject of remitting duties on articles that enter largely into the consumption of the people. I think I never heard a case more sophistically argued, or more fallaciously placed before the House. The right hon. Gentleman spoke as if it was maintained in some quarters as an abstract principle that the duties on those articles ought to be abolished. Now, if such a principle were adopted, I do not see how it would be possible to raise the required annual revenue in this country. The question is not whether we shall reduce or remit duties on articles of general consumption, but whether Government and Parliament have entered into an engagement with the consumers of those articles to remit the special taxes that were im- posed on an emergency, and which aggravate the coat of those articles. It is sound policy never to enter into any engagement with the great body of the people as to duties on articles of general consumption that, if unfulfilled, may make them feel that they smart under an act of injustice. I want to know, if we leave war taxes—and war taxes of recent imposition—pressing on the people in time of peace, with what prospects of success we can appeal to them, should war again occur, to come forward and hear their share of the public burdens? That is a consideration of high public policy, and not an abstract principle about raising a revenue by duties on articles of general consumption. You may defend generally duties on tea and sugar, but you cannot defend on these abstract principles the violation of public faith, or the disappointment and distrust you will create in the country. I must do the right hon. Gentleman the justice to say that on other occasions, when he has himself so strongly and so passionately advocated the remission of these war duties—when he has described the increased happiness their remission would confer on millions of homes—he was influenced by sincere and proper feelings. To-night, however, he has taken refuge in sophistical evasions. He has, intimated to us that there is a mode by which the war duties on tea and sugar may be remitted. "You may retrench," says the right hon. Gentleman, "your expenditure." This country, as we were told by an hon. Member, a supporter of the Government, the other night, is suffering from profligate expenditure, and if the right hon. Gentleman did not himself use the phrase he cheered the epithet, and afterwards, in his reply, enlarged and expatiated on the sentiment. Now on this subject I think the House has a right to ask for a frank declaration from the right hon. Gentleman. We heard a great deal last year about "a gigantic innovation," but to my mind there is no innovation so gigantic as a Chancellor of the Exchequer denouncing as profligate the expenditure for which he is supplying at the same time the Ways and Means. I think the Chancellor of the Exchequer owes to the House on this subject an explanation which he has avoided giving to-night. If he believes the expenditure to be impolitic, to use the mildest term, on what principle can he vindicate his sitting on that bench? I have asked men of all parties, simple and plain, as well as refined intelligence, for an explanation, but they have all been perplexed by a mystery of conduct that is unparalleled in the history of this country. But the right hon. Gentleman does more. He insinuates that the Government, as well as himself, are recommending and pursuing an expenditure that is contrary to their conviction of public necessity. It is some one or other, some unknown but irresistible force, that urges them on. Sometimes it appears to be the country, sometimes the House, but never the Ministry. Now, is it the fact that the country is ungovernable and irrational on this point? The right hon. Gentleman the Chancellor of the Exchequer has given this explanation more than once. He wrote some time ago to a poor clergyman who complained to him of the income tax, and said "It is your own fault. You go about agitating the country, and you must pay for it." Now, is that true? Are there any public meetings in favour of expenditure? I believe there is in the country a calm confidence and conviction that any Government which calls upon the country for sacrifices ought to be supported. Perhaps the right hon. Gentleman may refer to the Volunteer movement as an evidence of the national irrationality. I should, however, draw from that noble ebullition of patriotism an indication of a very different character. I should recognize in that movement a desire on their part to assist the Government in placing the country in the commanding position it ought to occupy with as little cost and pressure upon the industrious part of the community as possible. It is neither just nor true, therefore, to say that it is an irrational country that has forced on this expenditure. Well, is it, the House? Let us look to the facts. At the end of the year 1859 the right hon. Gentleman the Member for Stroud (Mr. Horsman), who has addressed us to-night with such sustained and varied ability on the whole of this financial question, brought before the House a proposition for an address to the Crown, that considerable sums should be laid out in providing for the necessary defence of the country. The Government disapproved that proposition, and on a division defeated the right hon. Gentleman, and what I suppose I may call the House, by a large majority. Next year the Government, after more extended observation, arrived at the conclusion that the right hon. Gentleman was right, and they brought forward a proposal for forti- fications on a large scale. That proposal was opposed by some independent Members but the Government then carried the scheme that they had rejected the year before by a majority. Well, then, it is not the country or the House that forces on this profligate expenditure. Who is it, then? It is not difficult to point out the author of the expenditure, and I believe that in acting as he has done he has been governed by a high sense of duty, and that he does not shrink from the responsibility of the course he has pursued. No doubt it is the Prime Minister of England. In repeated speeches in this House, and in addresses to his countrymen out of doors, he has never concealed his opinion that the present position of public affairs was such that it was his duty as the Chief Minister of the Crown, and Chief Adviser of Her Majesty, to call on the country to make those exertions and endure those sacrifices. But the right hon. Gentleman the Chancellor of the Exchequer, indulging in one of those unwise taunts which he sometimes conveys, talked about the idle gossip in the speech of the right hon. Gentleman (Mr. Horsman) on the subject of Cabinet divisions. Lord! Sir, we need not maunder in ante-chambers to discover differences in the Cabinet, when we have a patriotic Prime Minister appealing to the spirit of the country, telling it that it must be prepared to defend itself against aggressive ambition, and to show Europe that we are determined to maintain our rights, and when, at the same time, we find his Chancellor of the Exchequer, whose duty it is to supply the Ways and Means by which those exertions are to be supported, proposing Votes with inuendo, and recommending expenditure in a whispered invective. Do not tell me that there are not misunderstandings in the Cabinet—that the right hon. Gentlemen and noble Lords who compose it are all of the same opinion—when on that most important subject, the expenditure of the country, which affects every branch of policy, there is between two of the most eminent Ministers of the Crown—one the First Lord of the Treasury and the other the Chancellor of the Exchequer—such difference and such discordancy.

There is only one other point I will touch upon before I state the course which I think it will be wise for the House to pursue, and that is a subject which I think of late years has been somewhat unnecessarily introduced into our debates; but still it has been introduced, and I know enough of the House of Commons to be convinced that, when a subject has been introduced and touched upon by men of great influence and authority, and when it fills the public mind, it is worse than useless to attempt to avoid it. That subject is the influence upon the condition of the Government which any vote in Committee of Ways and Means may produce if contrary to some details of the measures which they now have introduced to us. I think this is a subject upon which it becomes the House of Commons to acquire as accurate and as clear a conception of the public duty of public men as they well can. Power is a possession which ought not to be lightly accepted, nor lightly relinquished. To accept or to relinquish power involves the fulfilment of a grave duty to our Sovereign, whom we may embarrass by such conduct, and to our country, whose condition must always to a certain degree be affected in such a case. If, indeed, the House of Commons, directly or indirectly, expresses a want of confidence in an Administration, my opinion is the sooner they quit the helm of affairs the better, for though, under certain circumstances, that may entail great public inconvenience, there is no public inconvenience, as there can be no public injury, equal to their continuing in a responsible position when they have lost the confidence of those to whom they are responsible. But, generally speaking, a Minister should deeply reflect before he relinquishes the trust which he has accepted. Nothing can be more unwise, nothing more pernicious to himself—if that limited consideration is to have any influence—nothing more generally injurious to public men than that their country should find that in either the acceptance or the abdication of power they are animated by private and personal motives, but particularly by personal pique. When a Minister finds that in a time of great public distraction and anxiety his foreign policy has not been challenged or criticised—certainly not by the Opposition; when he finds that with regard to our internal affairs large claims have been made upon the confidence of the representatives of the people, and that they have not hesitated cordially and generously to vote every Supply, though of an unprecedented amount in time of peace, which they have been asked to grant to the Crown; when that Minister cannot lay his fingers upon a single public Act of this Session in which any principle of importance is involved which the House and those who formally oppose him here have successfully resisted,—it would be a very strange thing that a Minister so favoured and supported should come forward to challenge the most precious privilege of the House of Commons. For when a Minister is prepared to make a remission of taxation, it has ever been held to be the most precious privilege of the House of Commons to give their advice as to the mode in which that remission should be distributed. To say that a Minister should, because the House of Commons differed from him on a point involving the distribution of a surplus for the relief of their constituents and the great body of the people—for him to take such an occasion to quarrel with the House, or even to desert the service of the Sovereign, is, in my mind, a highly unconstitutional proceeding. It has always been laid down by the most eminent writers, it has always been held by our most eminent statesmen and orators, that if there be an unquestioned privilege in this House it is that of advising the Minister with impunity as to the distribution of any remission of taxes. We heard last year a great deal of an assault upon the privileges of the House of Commons upon which I will not now dwell, because there will be other opportunities to treat that subject if necessary. But there never was, under these circumstances, an assault upon the privileges of the House of Commons so great as would be perpetrated by that Minister who denied to us the privilege of advising how the surplus of taxation should be distributed. But it way be said, "This, perhaps, is an unfortunate occasion on which to found the change either of a Ministry or of a Parliament; but it may be an opportunity which a Minister is justified in taking if he finds himself embarrassed by a powerful and aggressive Opposition." But is that the position of the noble Lord? I do not mean to say that we who sit on this side of the table may not have our own private opinion of the manner in which we were expelled from those (the Ministerial) benches. But no one has ever heard a single murmur from us on the subject. No one has ever found us whimpering here over our personal losses and grievances. On the contrary, I know very well—for I ventured to predict it—that when the noble Lord the Secretary of State moved the Resolution which has been described but recently by one of the most eminent and influential supporters of the Government as a great mistake, it would lead him and his friends into a position of embarrassment and humiliation. I never hesitated for a moment, however, in giving to the noble Lord when he took that course, credit for honourable feelings. I thought that he mistook the temper of the country, and would find out that he had mistaken it; but I had no doubt that in bringing forward his Resolution he acted in all sincerity and in no other spirit than that of a noble and justifiable ambition. When the same noble Lord next Session had to relinquish his Bill, no taunt reached him from these benches, because I thought that noble Lord and the Government in taking the course were actuated by sentiments equally honourable. This year the question, which once was embodied in a Resolution, but is now recognized as a great mistake—the question of Parliamentary Reform, became definitively shelved; and from that moment there was no doubt great irritation conscientiously felt by Gentlemen below the gangway in consequence of the conduct of the Government. That irritation was not concealed. Every invitation that was Parliamentary and legitimate was given to us to embarrass the Government. Did we avail ourselves of those opportunities? On the contrary, we gave the Ministers credit, as before, for being actuated in the course which they took by those sentiments of honour and by those convictions of public duty which I believe always animate Gentlemen in their position. What has been the course pursued by the Opposition during the present Session? I will not refer to it in detail. because many of the instances which I might adduce might be painful to hon. Gentlemen opposite. But I will take one case of a financial character to show the temper of this Opposition, which some suppose to be so aggressive. A Motion for the repeal of the hop duty was brought before the House immediately before the right hon. Gentleman had to propose his Budget. Having last year objected to repeal another Excise duty—that on paper, because it put an end to a complete branch of our revenue, I thought it would be inconsistent to be precipitated into supporting the repeal of the hop duty, though unquestionably it is, both in amount and in its character, very different from the paper duty. In supporting the Government, and, I believe I may say, in obtaining for them a majority upon the question, I placed myself in a painful position towards many friends whom I greatly regard, and towards an interest with which I deeply sympathize, as I proved by a measure which, when Chancellor of the Exchequer, I submitted to the House. There are other occasions fresh in the recollection of hon. Gentlemen, when it is well-known that on this side of the House there was an anxious and a very prompt determination to support the Government of the Queen; and even since this unfortunate, this ill-advised, and unhappy Budget was produced the Government have three times, in Committee of Supply, been sustained from defeat by the Opposition. Then I think I have shown that there are no special circumstances arising from the existence of a powerful, menacing, and aggressive Opposition that could give any colour to violent and rash conduct on the part of the noble Lord. From this House, and from those who, because they sit opposite to him, bear the constitutional and formal name of Opposition, the noble Lord since he has accepted office has received upon the whole a sincere and cordial support. Sir, no one grudges the noble Lord the position which he occupies. He has for long years served his country and his Sovereign, often with great advantage, and, though we may sometimes have questioned the prudence or propriety of some particular course that he has taken, we never doubt his ardent wish to maintain the honour and interests of his country. The noble Lord has on all occasions expressed himself in a manner upon the important subjects of the defences of the country which has obtained from this side of the House an echo sincere and stedfast. The general policy of the noble Lord has been well received and countenanced on this side of the House; and on this very question of finance, on this question of the paper duties, if it is possible to understand language and interpret conduct aright, no one who sat in this House last year can suppose that there is any serious difference between the Gentlemen on this side and the noble Lord. Then is this Minister, who in difficult circumstances has been so supported—is this Minister whose policy in these eventful times has not been challenged by the Opposition—is this Minister, who has come forward to make unprecedented demands on the finances of the country, to ask an amount of taxation for which he has never applied in vain—is this Minister, who never has brought forward one great measure that has been defeated by the Opposition (for I maintained before, and I maintain now, that the measure of Parliamentary Reform was mainly defeated by his own friends); is this Minister who, after a career so long and experience so great, after having lived so long in the House of Commons and loved it so well, is he the man who will grudge to the House the enjoyment and exercise of its dearest privilege—the privilege of considering how a remission of taxes may be effected most advantageously for the interests of the country? I can never believe that the noble Lord, towards the end of so illustrious a career, will commit so great a political mistake. He knows the House of Commons better. He knows England better. Such a course might become a man of violent passions. It might become a man who has a secret understanding and carries on the business of the State in such a mysterious manner as to confound all speculation. But such is not the course that becomes the manly character of the Prime Minister of England.

Convinced, then, that in asserting this dearest privilege and fulfilling this most important of our duties we shall arrive, whatever may be the decision of the Committee, at no result but what will be for the advantage of the country, I shall now indicate the course which I would recommend the House to follow when it goes into a Committee of Ways and Means. Sir, I shall offer no opposition to the first Resolution which is to be submitted to our consideration, and which stands second on the list, the first Resolution having been already agreed to. I retain—and strongly retain—all those opinions which I have so frequently expressed respecting the policy we should pursue with regard to the income tax; but, considering the circumstances in which we are placed, considering that a Committee is now sitting on the subject, and that it is desirable, if possible, when there is a remission of taxes that there should be a remission of both direct and indirect taxes, I shall offer no opposition to the Resolution. When we approach the second Resolution that will come under our notice, and which proposes to renew not only the old duties on tea and sugar, but the war duties also, I think the House will have gravely to consider whether it is wise to pass that Resolution entire. We ought to consider whether, if there is to be a remission of indirect taxation—which I should be prepared to approve—we should not find it more expe- dient and advantageous that that remission should take place on this third Resolution. Of course it does not require a Chancellor of the Exchequer to inform us that that Gentleman made a great mistake who proposed to remit all the war duties, though no proposal of that sort has met my ear during the debate, and it will become a matter of grave consideration to what amount and to what articles that remission should be directed. There are two great considerations to be looked to. In the first place we ought to look to the immediate and general advantage of the community, and we ought to take care that if we remit taxation it shall be remitted in such a manner that the whole advantage shall go into the pockets of the community. So much for the immediate advantage of the community; but there is another consideration in my mind not less important than that—we ought to consider how the remission of indirect taxation may at the same time stimulate the industry of the country. I have not the slightest doubt that if you take off the Excise duty on paper, or on anything else, you will, to a certain degree and in a limited sense, stimulate the industry of the country. I do not use those words to depreciate the remission of any Excise duty, but it must necessarily be in a limited sense. There are indirect taxes, however, which you may remit which would give a much more extensive stimulus to the occupations of the people, and which would contribute to much greater results than the remission of the Excise on any particular article. You must look to the state of our markets. The state of our markets, though it may he, and, I have no doubt, has been, duly taken into consideration by the Minister in the Estimate laid before us, is a subject to which the House of Commons cannot be blind. We have our great American trade already embarrassed, and though one still cherishes the lingering hope that the dissensions may terminate among those to whom we are bound, not more by blood than by the sympathy of a thousand sentiments, still be would be a sanguine man who can suppose that, under any circumstances, the trade of the chief American nation will be for some time that which it has been. Our Levantine trade is only just escaping—I can hardly say escaped—but is only just terminating a convulsion greater than has happened in our time. India is suffering, and the whole of the Continent of Europe is either in a state of confusion, or its general industry is depressed and destroyed by military preparations or military expenditure. It, is clear, therefore, that the prospects of those chief markets are by no means auspicious; but there is a great trade, an increasing trade in the far East, which offers at this moment a remarkable opening for the enterprise and the capital of England. The Earl of Elgin, who has just returned to this country—it is not in a blue book, but the House may depend upon it it is perfectly authentic—says that while in China he took especial pains to ascertain what was the amount of the population of that country—whether those traditions which had long prevailed on that point were mythical or founded on fact; and, having given great pains and industry to ascertain the truth, it is the opinion of the noble Earl that the real population of China, taken by census, is not less than 400,000,000 human beings. It is impossible, therefore, not to see that that is the point of the world which ought now to be watched with the greatest anxiety and interest. We have another country in the vicinity of China which, though not so extensive, has a refined civilization and a population of many wants—I mean Japan. Have we, then, an opportunity at this moment, by remitting wisely and boldly the duty on one great article of general consumption, not only of adding to the happiness of a million homes—to use the Chancellor of the Exchequer's language—but of giving a great and sustaining stimulus to the commerce of this country? I think that remission ought not to be frittered away between the articles of tea and sugar. I think we should concentrate our efforts on one of them. It is the war tax on tea on which we should concentrate our efforts, and I believe that, if we do so in a manner to consult the interests of the revenue, and to secure that the whole advantage of the remission shall reach the pockets of the consumer, the result will be one highly beneficial to the country. I think I may further state that an hon. Friend of mine, representing one of the greatest constituencies—my hon. Friend the Member for Liverpool (Mr. Horsfall)—will in Committee take our opinion on that course. I thought it fair to the Government and frank to the House that I should state the course which we propose to take. There are points which may afterwards arise, and upon which it may be necessary for the Committee to consider; but it is not necessary for me at present to go beyond the statement which I have made. I apprehend, Sir, that we shall go into Committee of Ways and Means on Thursday. The House, therefore, will not have been taken by surprise, and the Government and the Committee will have had time to consider the course which they will take in reference to the notice which I presume my hon. Friend will put upon the paper to-night. I earnestly trust that the decision which the House may come to in Committee of Ways and Means will be the one most conducive to the interests of the people, and to the maintenance of the commerce of the country. I cannot doubt that if the House be animated by sentiments which will make them desire such a result, those sentiments will prevail and find an echo in the country; and that no man will more sincerely respect your decision—whatever that decision may be—than the noble Viscount the Prime Minister of England.

VISCOUNT PALMERSTON

Sir, it is not my intention at this late hour of the night to enter into those controversial discussions which have occupied so much of the time of the House; but I am bound to say, that although we have spent a great deal of time in this preliminary discussion, and although a great variety of opinions have been expressed, yet I do not complain that we have lost or improvidently consumed the time of the House; because, in a matter involving so many comparative points, it was natural that a great number of varieties of opinions should arise, and it was desirable that those different subjects should be freely canvassed and discussed, in order that the House might come to some final decision on the Course which it should be disposed to take. We have made progress, because, though in the earlier discussions there appeared to be doubts in the minds of some hon. Members as to whether there was or was not an available surplus, the right hon. Gentleman who has just sat down has fairly admitted that a surplus there is. The only question, therefore, for the House to consider is in what manner that surplus should be disposed of. I am glad that the right hon. Gentleman has stated that with regard to the proposal which the Government have made with respect to the income tax no opposition is intended to be offered. I should hope that, that being the case, we may be allowed, late as the hour is, to go into Committee to pass the Resolution to which there is no opposition, and clear the way for that discussion which will take place on Thursday in respect to those pro- positions on which there is a difference of opinion. Now, I admit that the issue which the right hon. Gentleman has stated it to be his intention to propose is a perfectly fair one to be submitted to the House. There are many considerations which would lead the House to prefer the remission of the duty on tea to the abolition of the paper duty. I think it is a misnomer to call it a war duty; because, the war duty on tea was 1s. 9d., and since the war the duty has been reduced to 1s. 5d. I believe the duty is now lower than ever it was at any former time; but, at all events, the higher duty put on during the war has ceased, and the duty now, instead of being 1s. 9d., is only 1s. 5d. I mention this in order that the House may clearly understand the point on which its decision will be required. Sir, I freely admit that it is a very legitimate proposal to make to substitute the repeal of the duty on tea for the repeal of the duty on paper. I prefer remission of the duty on paper. I think there are good and valid reasons why the abolition of that tax should accompany the reduction of the income tax, and that economical and commercial reasons have been stated in favour of the remission proposed by the Government. Whether a pledge has been given or not, whether we are bound by resolutions or not, I think no man can deny that, at all events, we are in that position with regard to the paper duty (not only with respect to this House itself but with respect to the other House of Parliament) that it is highly desirable on the gravest political ground that we should take this opportunity of repealing the duty, especially if we can do it in a manner which will render it less disagreeable than it otherwise would be for the other House to concur in its repeal. I think it is clear that if we do not repeal that tax this year we shall be urged to take the earliest opportunity to repeal it which the state of our finances will permit. We shall then, perhaps, have to send up that Bill singly, and I put it to any one whether it will not be more easy for the House of Lords to consider the proposal, when we accompany the repeal of the Excise duty on paper with a popular measure for the diminution of the income tax, and whether it will not greatly facilitate a good understanding and accord between the two Houses that we should send up the two measures together rather than send up singly and nakedly a Bill for the repeal of the duty to which last year the House of Lords refused to accede? In my opinion it is impossible to exaggerate the value of a settlement of a question which has created ill feeling and misunderstanding between the two Houses. I do not mean now to argue the question fully; it will he argued at length when it comes more properly under our consideration; but I wish to state that I retain the opinion on which the Government have acted in proposing the arrangement which has been laid before the House. Both on the ground of the intrinsic value of that repeal and on the higher and more important ground of its bearing on the relations of the two Houses to each other, I attach great value to maintaining the repeal of the paper duty in preference to a diminution of the duty on tea. It would be quite misplaced at this time of night to go further into that argument. I merely state, therefore, that notwithstanding the reasons which the right hon. Gentleman has stated he is prepared to allege in favour of the diminution of the tea duty, Her Majesty's Government will certainly maintain the proposal which they have made for the repeal of the Excise duty on paper.

Question put, and agreed to.

House in Committee.

Mr. MASSEY

. in the Chair.

(In the Committee.)

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the 6th day of April, 1861, for and in respect of all property, profits, and gains mentioned or described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on profits arising from property, professions, trades, and offices, the following Rates and Duties (that is to say): For every twenty shillings of the annual value or amount of all such property, profits, and gains (except those chargeable under Schedule (B) of the said Act), the Rate or duty of 9d. And for or in respect of the occupation of lands, tenements, hereditaments, and heritages chargeable under Schedule (15) of the said Act, for every twenty shillings of the annual value thereof, In England the Rate or Duty of 4½d. And in Scotland and Ireland respectively the Rate or Duty of 3d. Subject to the provisions contained in the said Act 16th and 17th Victoria, chapter 34, section 28, for the relief of persons whose incomes are under.£150 a year respectively, from so much of the said Duties as shall exceed the rate of sixpence for every twenty shillings of their respective profits and gains, computed as in the said enactment is mentioned; and subject also to the provision therein contained for the exemption of persons whose whole incomes from every source shall be less than £100 a year respectively.

MR. T. BARING

said, he objected to the arrangement proposed to he adopted. He thought it was desirable to defer the resolution for the remission of the income tax until they had ascertained whether it was the pleasure of the House to adopt the Resolution for repealing of the paper duty. His own impression was, that if the paper duty was to be abolished, they ought not to have a remission of the income tax, because whilst a remission of a productive duty like that on tea would still enable the Government to recover its income, a positive income would be lost by the repeal of the paper duty. With this feeling as to the unsatisfactory state of the finances then, he was not prepared to vote for the remission of any portion of the income tax unless he could feel quite assured that the paper duty would not be abolished. He did not wish to give a notice to that effect, but his impression was that he should move on Thursday that the Resolution be postponed until the decision of the House upon the paper duty. He would, therefore, move that the Chairman should report progress.

Motion made, and Question proposed, "That the Chairman do now report Progress."

THE CHANCELLOR OF THE EXCHEQUER

said, he must confess he was disappointed in the interest of hon. Gentlemen opposite at the course taken by the hon. Member. He had thought with his noble Friend that the House had arrived at a stage where there was to be some unity of plan and proceeding. The House had learnt from the right hon. Gentleman (Mr. Disraeli) in distinct terms, that so far as he was aware there would be no objection to passing the Resolution relating to the income tax that night: but the hon. Member for Huntingdon had now moved the postponement of that Resolution. Of course that was a Motion which the Government must resist. The order of the Resolutions was not a mere matter of form and ceremony, and it was the invariable course of proceeding to submit to the House those Resolutions which imposed taxation before those which repealed taxation.

MR. T. BARING

said, he had no communication with his right hon. Friend, and was therefore unaware of the course which it was intended to pursue. But entertaining the strong objections which he felt to a positive throwing away of revenue which there was no means of replacing, he should simply move that the Resolution do not pass, reserving to himself the right of opposing it on a future occasion.

MR. SOTHERON ESTCOURT

observed, that they must act in accordance with the ordinary course of Parliamentary proceedings. He thought the object his hon. Friend the Member for Huntingdon had in view would be marred by the course which he proposed to take, which would have the effect of raising a false issue instead of that between tea and paper, on which the House was anxious to divide.

THE CHANCELLOR OF THE EXCHEQUER

said, he wished to submit to the hon. Gentleman in the Chair, Whether it was in the power of the hon. Member to move the postponement of the Resolution?

THE CHAIRMAN

stated, that it was a well-established rule in Committee of Supply or of Ways and Means that a Resolution could not be postponed, unlike a Bill where the clauses might be taken in whatever order was considered most convenient.

MR. DISRAELI

explained that when he stated he did not intend to oppose the Resolution on the income tax he had no wish to preclude any Gentleman from discussing it. He bad only indicated what his own course would be. With regard to postponing the Resolution, that was a question which he had had under his own consideration, and so far as he could form an opinion from precedent and practice, it did not appear to be in the power of the Committee to follow that course; but if his hon. Friend wished that there should be a discussion on the first Resolution, he trusted the Government would not press the Resolution to-night.

MR. BRIGHT

said, he understood the meaning of the hon. Gentleman to be that he would not consent to the reduction of the income tax if the paper duty were to he repealed; and he would not consent to the reduction of the tea duty unless he was sure that the income tax would be retained at its present rate. When the hon. Member for Liverpool, however, proposed that there should be a reduction in the duty on tea, he would be at liberty to oppose it. The only course for the hon. Gentleman to take was to negative the proposal with regard to tea, and then to negative the proposal with regard to paper, and then he would have the finances of the country in a state satisfactory to his mind.

VISCOUNT PALMERSTON

said, he thought the hon. Member for Huntingdon would perceive that it was not necessary for his purpose to object to the passing of the Resolution, which must he adopted or negatived then, or on some future occasion, as it could not be postponed. The Resolutions were merely the foundation of that which was to give effect to them, and many future opportunities would necessarily be afforded to those who objected to the reduction of the income tax to negative that portion of the financial scheme, in case they thought proper to do so.

MR. COLLINS

said, he should support the Amendment for reporting progress.

MR. WALPOLE

pointed out that the question which they were considering was whether the income tax should be reimposed at 9d. or at 10d. He was not aware that any one wished it to be fixed at the latter amount; but, of course, if the hon. Gentleman wished to discuss the question, he ought to have the opportunity.

MR. MALINS

said, he hoped the hon. Gentleman would throw no impediment in the way of a proposition which was unanimously approved by the country.

MR. T. BARING

said, he thought it not unreasonable that at such an hour they should not proceed with the discussion, but report progress. It had been doubted by several hon. Members whether there was really a surplus.

VISCOUNT PALMERSTON

said, that the hon. Member could only negative the Resolution, and the effect of that would be to negative the reimposition of any part of the income tax. The hon. Gentleman doubted whether there was any surplus to entitle them to remit any portion of taxation, and yet he was calling upon the House to determine that the income tax should cease. That would be the effect of the course the hon. Member proposed.

MR. T. BARING

said, that if the Government wished to pass the Resolution at that hour he would not interfere. He begged to withdraw his Motion.

Motion, by leave, withdrawn.

MR. CONINGHAM

said, he hoped it was understood that the proposition virtually before them was a Vote of Confidence in the Government.

Original Question put, and agreed to.

Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the 6th day of April, 1861, for and in respect of all property, profits, and gains mentioned or described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on profits arising from property, professions, trades, and offices, the following Rates and Duties (that is to say); For every twenty shillings of the annual value or amount of all such property, profits, and gains (except those chargeable under Schedule (B) of the said Act), the Rate or Duty of yd. And for or in respect of the occupation of lands, tenements, hereditaments, and heritages chargeable under Schedule (B) of the said Act, for every twenty shillings of the annual value thereof, In England the Rate or Duty of 4½d. And in Scotland and Ireland respectively the Rate or Duty of 3d. Subject to the provision contained in the said Act 10th and 17th Victoria, chapter 34, section 28, for the relief of persons whose incomes are under £150 a year respectively, from so much of the said Duties as shall exceed the rate of sixpence for every twenty shillings of their respective profits and gains, computed as in the said enactment is mentioned; and subject also to the provision therein contained for the exemption of persons whose whole incomes from every source shall be less than £100 a year respectively.

House resumed.

Committee report Progress; to sit again on Wednesday.

House adjourned at Two o'clock,