HC Deb 23 July 1866 vol 184 cc1286-302

Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."

THE CHANCELLOR OF THE EXCHEQUER

Sir, the Supplementary Estimates which we have laid on the table have changed the state of the public accounts since the Financial Statement of the right hon. Gentleman (Mr. Gladstone), and I think it convenient that I should place our position exactly before the House, and state the course which, on the whole, we deem it expedient that the House should pursue in consequence. It will be recollected that when the right hon. Gentleman opposite brought forward his Financial Statement, he estimated the revenue at £67,013,000, including £500,000 which were to be obtained by New Zealand bonds; and the right hon. Gentleman estimated his expenditure at £66,727,000, including £502,500 for the creation of Terminable instead of Permanent Annuities. The result of that Estimate of revenue and expenditure left a surplus of £286,000. Now, the amount of the Supplementary Estimates which we have laid on the table is £495,000, and the House will see in a moment that the result of that has been that the surplus of £286,000 has been changed into a deficiency of £209,000. The question, therefore, is, what is the best course which, under these circumstances, Her Majesty's Government should adopt. We might in the first place, of course, propose a new tax to supply the deficiency; but I should think there would be an almost unanimous opinion in this House that that is a process to which it is not expedient to have recourse. Sir, the obvious course under ordinary circumstances would be to ask permission from the House to grant a supply to complete the service of the year, which would be raised by Exchequer bonds or Exchequer bills. But there are objections to that proceeding. In the first place, I need not remind the House that, under the circumstances which at present prevail in the monetary world, it is not very easy to place securities of that description. Secondly, it must be remembered that with these difficulties we have not yet floated our £500,000 of New Zealand bonds. And thirdly, I must remind the House that by the existing law Exchequer bills are payable for taxes, and the holders of Exchequer bills may always require payment for such securities at the termination of the current year. Of course, in times of extreme financial pressure like those which we have experienced, and which I am sorry to say we are still experiencing, it is not wonderful that the holders of Exchequer bills should have availed themselves of this privilege. At the present moment an amount of £860,000 of Exchequer bills has been discharged by balances in the Exchequer. It is very true that we have powers granted by Parliament to issue bills to a similar amount, but the difficulty to which I have alluded is an obstacle in our way; and, considering that we have not yet placed our New Zealand bonds, and that in order to square our account, we have yet to issue £860,000 Exchequer bills, the House would hardly be of opinion that it would be an expedient mode of meeting the difficulty in which we find ourselves to have recourse to new powers to be granted by Parliament for the issue of Exchequer bills or bonds. There is a third mode by which we might meet this inconvenience and bring our account into the state in which, I am sure, the House wishes that it should be brought; and that is by considering the propriety of relinquishing further progress with the Bill for the conversion of Permanent into Terminable Annuities, which has been read a second time. By that Bill there is an increased charge on our resources of something exceeding £1,000,000 a year. I think the exact sum is £1,005,000 a year, but only a moiety of that amount will come into charge in the present year—that is to say, £502,500. Now, if we did not, at least for the present year, proceed with that Bill, that sum of £502,500 would be added to the revenue, and deducting the present deficiency of £209,000, there would remain a surplus of £293,500, being almost the identical surplus contemplated by the right hon. Gentleman opposite in his Financial Statement. Under these circumstances, we are of opinion that, on the whole, it would be the wisest course not to proceed with the Bill for the conversion of Permanent into Terminable Annuities. In that way our finances will be placed in almost the iden- tical position contemplated by the right hon. Gentleman when he brought forward the Financial Statement. If this suggestion meets with the general concurrence of the House, I will, with the permission of the right hon. Gentleman, when we come to the Order of the Day for the Committee on the Terminable Annuities Bill, move that the Order be read for the purpose of being discharged.

There is one observation which I cannot refrain from making on the present occasion. I confess that it is with unaffected concern that I find that my first act as Minister of Finance should be to impose any addition to the public expenditure of the country. If, indeed, Supplementary Estimates to a much greater amount than those we have laid on the table were required by the necessities of the State, I trust that I would not, and I trust that no one occupying the position I at present fill, would shrink from the responsibility of proposing them. But, at the same time, I feel it my duty to state, in order that there may be no mistake on the subject, what are the principles, so far as public expenditure is concerned, upon which the present administration is founded. Sir, four years ago, when we were on the Benches opposite, at a time when the expenditure of this country had reached its culminating point, I felt it my duty, after as complete an investigation of the subject as could be made by any one not assisted by the advantage of official information, to call the attention of the House on repeated occasions to the necessity of a reduction, and of a considerable reduction, in our expenditure. It appeared to me that the scale it had then attained was not consistent or compatible with the conditions of national prosperity. I took that course with the entire concurrence and approbation of Lord Derby, and with the advice and assistance of many eminent persons whom I now count among my most influential Colleagues. The views which I thus on repeated occasions brought before the House having found favour with the House, the Conservative party assembled and came to the conclusion that the opinion of Parliament should be asked on the question, and that they as a party would support that reduction in our expenditure, which they felt to be necessary for the welfare of the country. In consequence of that determination a Resolution was drawn up and placed in the hands of a right hon. Friend of mine, who I am happy to say is one of my Colleagues, the Secretary of State for the Home Department. But in consequence of the declaration of Lord Palmerston that he should consider the adoption of such a Resolution as a Vote of Want of Confidence in his Administration, the Resolution was not pressed to a division; but it was met by the Government by an amended Resolution, which, so far as I interpreted it, contained a specific, and, under the circumstances, as I considered, a solemn declaration that the reduction we favoured and advised should be made in the expenditure of this country. Sir, there were some hon. Members who at the time distrusted the sincerity of Lord Palmerston on that occasion, but I am bound to say that in my opinion the pledge then given by the Government, perhaps greatly due to the wise determination of my predecessor, was sincerely and completely carried into effect to an amount which on more than one occasion I had suggested, and in the gradual and not precipitate manner in which the House wished that those reductions should be effected, and which I, for one, deemed necessary for the welfare of the country. I wish to state that, in sitting on these Benches, it is our intention in spirit and in truth to carry into effect that policy in respect to the expenditure of the country which we recommended to the late Government, when sitting on the Benches opposite. We are still of the opinion which we expressed on the Benches opposite. Though we acknowledge that the first duty of Government is to arm our soldiers with the most efficient weapon, and to make such provision for Her Majesty's seamen, that the ships in which they serve should be equal, for speed and for strength, to any vessels they might have to encounter, it is still our opinion that these results are consistent and compatible with a prudent and economical management of our finances. Sitting on these Benches we are still of the opinion we expressed on the Benches opposite that in an epoch like the present—which is an epoch of speculative armament; of discoveries, of experiments and of rapid vicissitudes of practice—foresight, scrutiny, and vigilance are qualities as valuable in a Minister as that precipitate zeal which, squandering the resources of a country, fails often in accomplishing the public end proposed. Sitting on these Benches we are still of the opinion we expressed on the Benches opposite four years ago, that one of England's principal sources of strength is her financial condition; that her financial reserve is far more important than those military reserves of which we often hear such boastful accounts; and if it be true, as has been said by the highest authority on such subjects, that there are few Powers in Europe, however fond they may be of war, who can enter upon a third campaign, it may be some consolation to England, when she is taunted for not engaging in quarrels in which she has no interest, to know that, if ever her honour is assailed or her interest attacked, her financial condition is such that if she enters into a contest she can pursue her inexorable purpose, whatever may be the number and duration of her campaigns, until her honour and her rights are vindicated. Under these circumstances, I need not assure the House that in the administration of the finances of the country we shall be guided by the principle of economy; but by that word I do not mean negligence, inefficiency, imperfection, but I mean, as I have presumed to state before from the opposite Benches, that prudence in the application of our resources, which engages in nothing but what is necessary for the public welfare, but takes care to accomplish its purpose in the most complete manner. Sir, I thought it better before we entered into Committee of Supply, when we are about to propose an increase of expenditure—a not very graceful act for a new administration—to make this statement, and I trust that the House will pardon me for making these few observations.

MR. GLADSTONE

The observations which the right hon. Gentleman the Chancellor of the Exchequer has made contain a direct appeal to myself on the subject of a Bill for the introduction of which I am responsible. Finding himself, owing to the introduction of Supplemental Estimates, in a small deficiency of £250,000, he proposes to make good that deficiency, and to restore the balance of income and expenditure to the point at which we had left it—namely, a surplus of about £300,000, by abandoning the measure we had proposed for the reduction of the National Debt by the creation of Terminable Annuities. Were I entirely satisfied as to the nature of the Supplemental Estimates proposed by the right hon. Gentleman and his Colleagues, I do not know that I should object to his mode of meeting the case. I shall certainly offer no opposition to the discharge of the Order on that Bill. The right hon. Gentleman is therefore free, as far as I am concerned, to follow the course he has indicated; but I say this on the ground that, while I reserve my judgment in regard to a portion of these Supplemental Estimates, I feel that, in the present state of political affairs, any advantage to be gained by seriously questioning any part of them would be less than the disadvantage which might result from disturbing the proceedings of the responsible Ministers of the Crown on questions which are not, after all, of very great account, and that at a moment immediately after they have assumed the conduct of public affairs. The right hon. Gentleman, however, will, I am sure, understand me not to recede from the assertion of the policy of which that Bill was an indication; and, indeed, I am bound to say that I do not understand the speech of the right hon. Gentleman as having been intended to convey any expression of hostility to that policy. In a future Session we shall have an opportunity of considering whether what I may call the regular and stated provision which has, I think, been wisely made, but which has certainly been made with, I will say, the unanimous consent of Parliament for a long period down to 1861, for maintaining upon a certain scale a machinery for the liquidation of the debt—whether that scale of liquidation ought or ought not to be reduced. It is important that it should be recollected that, until the year 1860–1, we had for a great length of time been paying in the shape of Terminable Annuities—a very large portion of which went not to satisfy the claim of interest, but for the liquidation of the capital debt—a sum about, and sometimes above, £4,000,000 annually. In 1860–1 that amount was reduced to little more than £2,000,000. Since that period we have been endeavouring, by various measures which have received the assent of Parliament, gradually to raise it again, but by no measure so important as to the scope of its operation as that which the right hon. Gentleman now proposes to relinquish. Next year we have to contemplate the lapse of a further very considerable amount of Terminable Annuities—in round numbers about £600,000. I have heard, during the course of the present year, several Members of this House question altogether the policy of liquidating the debt by Terminable Annuities. But I must confess, I think, without at all entering on the argument on which that policy is founded, that the question is one of very great importance indeed, and one which I trust the Government will, in the course of the next Session of Parliament, bring under the full consideration of the House. If they should so submit it to the House, I shall probably consider it my duty myself to raise it; because on this depends whether there is to be any certain and unfailing machinery always in operation for the gradual liquidation of the debt over and above the application of the annual surplus from year to year, or whether we are to trust to the annual surplus alone. The right hon. Gentleman has referred to the additional charge proposed by the Government for the year, and has entered upon a discussion, slight in outline indeed, but yet full of interest and importance with regard to the principle on which his financial administration is to be conducted. With respect to the Supplemental Estimate, for about £;200,000, or perhaps something more, Her Majesty's late Government are substantially responsible. It is always a matter of very great regret to me when any Supplementary Estimate has to be proposed. I am quite certain there is nothing by which it is so easy to break down everything effected by a system of Parliamentary control as a needless or great extension of Supplementary Estimates. The control of Parliament for practical purposes rests, I will venture to say, wholly on this—that our wise usage is to bring forward once a year and as a general rule, in the absence of disturbing circumstances, once for all, an entire statement of the financial condition of the country. But as regards the charge for the Irish Constabulary, a large item in the Civil Service Supplementary Estimates—it was impossible to prepare the Estimate at so early a date as to enable my hon. Friend (Mr. Childers) to lay it before the House in the Miscellaneous Estimates of the year. Again, with regard to the expenditure arising out of the Cattle Plague, undoubtedly he might, if he had pleased, have included in the Estimate at that period so much of the expenditure as had been incurred up to the month of January; but that would have been a very small portion of the whole charge, and it would not have been satisfactory to Parliament to deal with it. But the principal item of the Supplementary Estimate is that presented to us by the War Department, with reference to the adaptation of our small arms. I do not intend to take any objection to that charge; but I must confess that I lean to the opinion that my right hon. Friend the Secretary of State for War is acting somewhat in haste in making so large an extension of the proceeding contemplated by my right hon. Friend (the Marquess of Hartington). I am now about to state the construction of which his speech is susceptible, in order that he may, as I hope, disavow it. His plan was to spend £250,000 for the present year and £250,000 for each of the two succeeding years in the conversion of small arms, and at the end of these three years, after spending £750,000, he hoped he should be in a condition to say finally what should be the small arm to be adopted by the country. I hope that this may not be the right hon. Gentleman's meaning, because I should consider it to be a very improvident expenditure of money. It would be in a measure practising on the susceptibilities of the English people with respect to a matter which touches their safety and honour, to spend so large a sum in the process of conversion in the expectation merely at the close of that process of substituting an arm altogether new for the arm converted at such a cost. I must confess I have heard much that has just fallen from the right hon. Gentleman the Chancellor of the Exchequer with great satisfaction, particularly because I did not listen with equal satisfaction to the discussion that took place in this House on Friday night. I did recollect what we heard in 1859 with respect to the reconstruction of the navy. I did recollect the enormous and useless charge to which this country was put by the conversion of wooden line-of-battle ships. Let us be fair. I remember that the suggestion came from this side of the House, although I do not think it was participated in by many on this side; but the doctrine was laid down by the hon. Member for Tavistock, which I confess is new to me, and new, I think, to the people of this country, that it was our duty to maintain a navy equal to all the navies of all the States of Europe, and the speech of the right hon. Gentleman (Sir John Pakington), although I grant he did not in terms approve the doctrine, was yet so full of thanks to my hon. Friend the Member for Tavistock for bringing the subject forward, and the return of compliments was so great, that I did entertain some apprehension as to what might happen after the recess, which the right hon. Gentleman most judiciously announced his deter- mination to take for consideration the whole matter, instead of at once acceding to the proposal which was made behind us. I did entertain some fear of the rumination of the First Lord during the recess. I was very glad, therefore, I repeat, to hear the statement this evening of the right hon. Gentleman; but I am compelled to notice the historical portion of that statement. Though I call it the historical portion of his statement, it can never become history, for it is not, I am afraid, sufficiently founded on fact. While the right hon. Gentleman was speaking I was enabled to test the accuracy of my own recollection. I will refer to a portion of the statement, and I will likewise mention to the House how the facts really stand. The right hon. Gentleman states that in the year 1862, when the expenditure of the country, although not so high as that of 1860–1, was still very high, he was struck by its alarming state, and he has not now scrupled to adopt—I must say in the most manly manner—the proposition that it is equally our duty to practise economy as much as possible when the country is prosperous as when it is poor. The right hon. Gentleman goes on to state that at a meeting of the Conservative party it was agreed that there was a necessity for a reduction of public expenditure, and that, in consequence of that agreement, a Motion was proposed by a distinguished Friend and Colleague of his for the purpose of binding the Government and the House in a voluntary pledge to effect a reduction in the public expenditure whenever it became practicable to do so. In consequence of that Motion, as I understand the right hon. Gentleman, the Government themselves took up the matter, and invoked the House to support them in a voluntary pledge, which the right hon. Gentleman states his party subsequently fulfilled. Now, I do not so read the occurrences of that year. I do not know what meetings of the Conservative party took place, but this I do know, that independent Members of this House—one, the hon. Member for Montrose; another, the hon. Member for Halifax; and a third, the hon. Member for Bradford—did state to the Government their intention to propose a Motion in favour of the reduction of the public expenditure. Those hon. Gentlemen placed a Motion to that effect upon the paper at a time when no other Motion to the same purport stood there. It was then, I presume, that the meeting of the Conservative party was held. But into that I do not inquire. I am not now claiming credit for the late Government, but I am claiming credit for the three independent Members of this House—economists upon principle and by practice—credit which the records of the House award to them—for having been the pioneers of that movement. There was, however, a meeting of the Government upon that Resolution, and the Government determined, although they were unable to accede to it in its then form, to make a Motion upon the subject, and they accordingly proposed an Amendment on the Motion of the hon. Gentleman the Member for Halifax to this effect— That this House, deeply impressed with the necessity for economy in every Department of the State, is at the same time mindful of its obligations to provide for the security of the country at home and for the protection of her interests abroad, and it observes with satisfaction the reduction already effected in the national expenditure, and trusts that such further diminution may be made therein as a future state of things may warrant. Notice of that Amendment was given by my noble Friend, who was at that time at the head of the Government, and then it was, I think for the first time, that a voice proceeded from the Opposition of that day. The right hon. Gentleman the Secretary of State for the Home Department proposed an Amendment upon Lord Palmerston's Amendment, in the event of that Amendment becoming a substantive Motion, in these words— That this House trusts that the attention of Government will be earnestly directed to the accomplishment of such future reduction—due regard being had to the condition of the defences of the country—as may not only equalize the revenue and expenditure, but will also afford the means of lessening the burden of those taxes which are confessedly of a temporary and exceptional character. When the debate took place my noble Friend at the head of the late Government said he should regard the carrying of the Amendment of the right hon. Gentleman as tantamount to a Vote of Want of Confidence, and the Amendment of the right hon. Gentleman, after it had been made the subject of discussion, was withdrawn. The right hon. Gentleman the Chancellor of the Exchequer delivered a speech on that occasion which is still fresh in my recollection, and of which I must say now, as I thought at the moment, that I never heard a more courageous speech delivered in this House under more disadvantageous circum- stances. I most sincerely and cordially pay that compliment to the fortitude of the right hon. Gentleman under difficulties. I, however, entirely differ from the historical portion of his statement to-night. If I am correct—and I have endeavoured to support my statement by documents—I think I have shown to the House that the memory of the right hon. Gentleman has entirely deceived him. The proposal made for the reduction of the public expenditure was a proposal made by independent Members, supporters of the Government. The Government themselves considered and adopted that proposal in a modified form, and the proposal of the right hon. Gentleman the Home Secretary was posterior, if not, as I think, to the second, certainly to the first of these two proposals, and was, therefore, the result and not the source of these propositions. If the time has now arrived when hon. Gentlemen on the Benches on this and on the other side of the House are disposed to enter into an honourable rivalry in the work of reducing the public expenditure, treating the matter prospectively, the first and main observation I have to make is this—that I congratulate the country upon that state of things. I know of no monopoly which the Liberal party possesses with respect to reductions of public expenditure. I may indeed say that justice would claim in their behalf that they have been the principal instruments in giving effect to those reductions, but I record this fact with pleasure—that when the history of retrenching Administrations and of the commencement of true retrenchment in this country comes to be written, the just historian must, in my opinion, give to the Government of the Duke of Wellington from 1828 to 1830 the honour of having first taken the matter in hand with earnestness of purpose. Therefore, Sir, this field is open enough, and there is enough in it for us all to do. I heartily rejoice that the right hon. Gentleman has delivered the opinion which has now proceeded from him. If I understand him, he means this—not that he considers that this proposed operation of the Conservative party in 1862 does them great honour, and was intended to accomplish the purpose which now having been fulfilled, we need think no more about—that, I trust, is not his meaning; but I construe his declaration to be this, that he thinks the expenditure of the country to be still susceptible of further reduction. I also entertain that opinion. I am not very proud of what we—the late Government—have been able to effect, but I may say that the expenditure of the country for the last five or six years has moved downward in each succeeding year, and I hope it will still continue so to do. The expression of the right hon. Gentleman, however, seems to me to be a little indeterminate, and I am anxious at least to take this opportunity of saying that, knowing myself the difficulties he has to encounter, and that there are many demands on the public service which are of real and of legitimate growth, and which must, I fear increase from year to year, I form no exaggerated expectations of what can be done with regard to retrenchment, and I trust that no portion of the House will call upon the right hon. Gentleman to work wonders in that respect. But I cannot help believing that I am speaking according to his own true convictions and inclinations, and those of many of his Colleagues when I say that it is the opinion of the country that there is yet room for progressive reduction in its expenditure, and that a diminution and not an increase of Estimates from year to year is that to which under favourable circumstances it will be disposed to look. I have nothing more to say with which I need trouble the House. The statement I have made with regard to the circumstances of former years I have endeavoured to found on a reference to documents made much more hastily than it otherwise would have been had I been aware that the right hon. Gentleman was about to introduce the subject in a retrospective sense. If I am incorrect, I shall no doubt be corrected by the more prepared knowledge of hon. Gentlemen around me. The really important question, however, is the prospect which the right hon. Gentleman the Chancellor of the Exchequer has held out of progress in the reduction of the public expenditure under the present favourable circumstances of the country. That statement of his I am anxious, on the first moment that offers, to hail joyfully and truly, and I can say that none of those who sit on the Opposition side of the House will for one moment grudge him the well deserved honour he will obtain by proving himself a vigilant and a frugal steward of the resources of the country.

SIR STAFFORD NORTHCOTE

I was not aware that my right hon. Friend the Chancellor of the Exchequer was about to refer to what took place during the year 1862, and therefore what I am going now to state is not the result of special preparation. I am satisfied that the intention of my right hon. Friend has been misunderstood by the right hon. Gentleman who has just sat down. It was not the intention of the Chancellor of the Exchequer to throw any reproach upon the Government which preceded the present Administration, nor to claim for ourselves any exclusive title to the name of economical Reformers, and most assuredly my right hon. Friend had no intention of ignoring the part which the hon. Gentleman the Member for Halifax and others took in the debate referred to. My right hon. Friend the Member for South Lancashire has not quite understood, or, at all events, he has not quite correctly represented, what took place in 1862. The Motion of the hon. Member for Halifax, although it preceded the Amendment of my right hon. Friend the Secretary of State for the Home Department, was not the beginning of the discussion that took place upon this subject. The origin of the discussion with regard to the necessity for some retrenchment in the public expenditure may be traced to the debate that took place upon the second reading of the Customs and Inland Revenue Bill on the 8th of May, 1862. I may mention that I took part in that debate advisedly and with the concurrence of the right hon. Gentleman the Chancellor of the Exchequer, and at his request, I called attention to the large amount of the expenditure of the country, and urged upon the then Government the necessity for some considerable reduction in the amount of the Estimates. The right hon. Gentleman opposite followed me, and the present Chancellor of the Exchequer then made a speech which attracted considerable attention at the time, in which he urged the importance of some reduction in the expenditure, and especially in that part of it incurred for the support of the army and the navy. Lord Palmerston replied to that speech of my right hon. Friend, and I recollect very well that it was remarked in the House, at first privately and afterwards publicly, that the hon. Member for Halifax had stated subsequently that he would bring forward a Motion on the subject in order to test the sincerity of the expressions of which my right hon. Friend had made use. I am not sure that the hon. Member for Brighton (Mr. White) was not one of those who said publicly that he would be glad to test the sincerity of my right hon. Friend's expressions. All I will say now is that I am quite sure that the mo- tive of my right hon. Friend in what he has said this evening was this: he wished simply to state that the policy which we had adopted and announced in Opposition we were now anxious to pursue as a Government. That was the point of his observations, and he would be very sorry that what he said should be taken to mean that he claimed any exclusive credit for himself or us on this point. We sympathize with many hon. Gentlemen opposite on the subject of retrenchment, and we wish to state that our own opinions have not been taken up recently, nor since we have sat on this side of the House, but are those which we stated four years ago that we had deliberately formed, and which we have ever since acted upon.

SIR JOHN PAKINGTON

I desire to say a few words in consequence of the unexpected reference—of which I think I have reason to complain—which has been made by the right hon. Gentleman the Member for South Lancashire to the Navy Estimates of 1859. I think his words were "the enormous waste of money in the conversion of wooden ships in 1859." I did not take the exact words of the right hon. Gentleman, but, at all events, he spoke of the waste of money in 1859 in the conversion and creation of wooden ships. The right hon. Gentleman complained of want of memory on the part of my right hon. Friend the Chancellor of the Exchequer; but I think I may retort that charge, and accuse him of shortness of memory with regard to the circumstances of 1859, otherwise I do not think he would have brought forward the charge which he has done against me. The right hon. Gentleman talked of the great amount of the Navy Estimates in 1859; but a reference to the papers will show that the Navy Estimates when the right hon. Gentleman was Chancellor of the Exchequer were for several years after 1859 as high, or nearly so, as those which I had the honour to propose in that year. I make no complaint and no charge on that account, because it is well known to the House and the country that during those years the Admiralty were engaged in creating that iron-clad navy which we now possess. But what, let me remind the right hon. Gentleman and the House, was the state of circumstances in 1859? In 1859, neither England nor any other Power possessed a sea-going iron-clad ship. In that year there was no man, whether shipbuilder or naval officer, who could have ventured to predict with certainty the success of an iron-clad sea-going man-of-war. It was in that year that the first commencement was made, and I had the honour of making it, of an iron-clad fleet. But I say up to that moment we had no certainty that that naval experiment would have been successful. It is very easy, as we all know, according to the old proverb, of which I would remind the right hon. Gentleman, to be wise after the event, and it is all very well now in 1866, when the experiment has been successfully made, and every State is in possession of an iron-clad navy, to talk of the improvidence of building wooden ships. But in 1859 no country had any ships but wooden ships. After the attack which the right hon. Gentleman has made upon me I must be allowed to tell him that, foreseeing the possibility of the success of iron-clad ships, and knowing that an experiment was about to be commenced, the Board of Admiralty, of which I had the honour to be at the head, did abstain from beginning any wooden men-of-war. We did so for reasons then approved of, and of which the right hon. Gentleman could then make no complaint. The only way in which we could providently and economically provide a navy for this country at that time was by converting wooden sailing vessels into steamships. It was in this way we were enabled, at a comparatively small cost, to give England a powerful navy of steamships—the only steam navy then known. The right hon. Gentleman may recollect the political circumstances of 1859—that it then became the duty of Lord Derby's Government to fit out a powerful fleet and send it to the Mediterranean. We could not have fitted out that fleet if we had not taken the precaution of converting sailing into steam ships. Sir, I think it hardly fair of the right hon. Gentleman to make these charges. If he had only borne in mind the facts to which I have recalled his recollection, he would have abstained from making accusations altogether unfounded, for I entirely deny, on the part of Lord Derby's Government in 1859, that there was any wasteful expenditure as described by the right hon. Gentleman.

MR. GLADSTONE

I never said a syllable in complaint of what the right hon. Gentleman did or did not do with respect to iron-clad ships. I quite agree with what he has said, and I think he deserves great credit for what he did with respect to the Warrior.

MR. SAMUDA

wished to say one word with reference to the observations of the right hon. Member for South Lancashire on what fell from him the other night as to the comparative force which the fleet of this country ought to bear to those of the other nations of Europe. He would have expected from the great knowledge which his right hon. Friend possessed, that he would have followed up his objections with some reasons for holding that what had been then stated was so unreasonable. But as the right hon. Gentleman had failed to take that course, he begged leave to observe that for a number of years before the conversion of the navy the fleet of this country was considerably greater than that of all the nations of Europe, and when the reconstruction with steam did take place in its early days, the number of our vessels were equal, if not superior, to that of all the rest of Europe. Such being the case, why were the relative strengths to be changed now—our necessity for additional increase was much greater than any other country in Europe could show, for he held that as there was no country in the world which had so increased its Colonial Empire, or was so much under the necessity of having efficient vessels on foreign service, at least the same proportion should be maintained in the strength of our fleet, when compared with theirs, as had prevailed in former periods.

MR. WHITE

said, he well remembered expressing the satisfaction which he felt at the announcement which was made by the right hon. Gentleman now Chancellor of the Exchequer four years ago on the necessity for a great reduction in what he then characterized as the excessive expenditure of the country. The House would recollect that upon the occasion to which he referred the right hon. Gentleman denounced the enormous expenditure that was taking place, the apprehension that was felt of a powerful neighbour, and the rivalry in armaments which was carried on, and which he designated as "swollen and bloated armaments." He recollected well that he appreciated so highly what had been said by the right hon. Gentleman that he rose from his seat and complimented him on having appeared in the character of an economical reformer, and tendered the right hon. Gentleman on his own behalf and on behalf of some hon. Friends below the gangway their cordial support if he would only press on the Go- vernment the necessity for a reduction of expenditure. He regretted, however, to have to observe that while the right hon. Gentleman expressed his opinions so strongly, the announcement which he made was received very coldly from his own side of the House, and the ominous silence which was preserved by the party of which he was the distinguished leader convinced many hon. Members that the right hon. Gentleman and his followers were not thoroughly in accord upon that question. It would have been well for the Gentlemen of the Conservative party if they had then appreciated the sagacity of their leader and had supported him in urging on the Government a reduction of the public expenditure. If they had done so, he believed that what had recently happened might have taken place some years ago, and the right hon. Gentleman would before now have been in his present place. He wished to express his hearty thanks to the Chancellor of the Exchequer for the declaration of economical policy he had made that day. He could assure the right hon. Gentleman that many Gentlemen now sitting on the Opposition side below the gangway would be only too happy to cooperate with him in his attempts to reduce expenditure, and he would earn a title to the gratitude of the country if he would only carry into effect what no doubt were his own sincere opinions.

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