WAYS AND MEANS— FINANCIAL STATEMENT.

HC Deb 11 April 1870 vol 200 cc1607-86

WAYS AND MEANS consideredin Committee.

(In the Committee.)

THE CHANCELLOR OF THE EXCHEQUER

Mr. Dodson—The original Estimate of Revenue for the year 1869–70 was £72,855,000; but by an alteration, which the Committee will remember, by which the collection of the assessed taxes, the income tax, the land tax, and the house tax was anticipated and accelerated, there was added to the estimated Revenue of the year £3,350,000. These two sums together made a total of £76,205,000. The Expenditure for the year 1869–70 was estimated at the sum of £68,223,000, leaving a surplus of £7,982,000. This surplus, as the Committee will remember, it was proposed to dispose of in two way: first, to pay out of it the sum of £4,600,000 in meeting liabilities incurred on behalf of the Abyssinian Expedition; and, secondly, to appropriate £2,940,000 to the remission of taxation. The result of these appropriations was to leave on hand a surplus of £442,000. I may here, in passing, state that out of that reduction, though it consisted of items not in themselves reproductive, the principal being income tax, corn, and fire insurance, we received back on every million remitted about two-thirds of a million. After these remissions had been decided upon, we estimated the Revenue so reduced, to amount to £73,515,000. The actual Receipts have reached the sum of £75,334,000, leaving an excess of Revenue beyond the Estimate of £1,819,000, and being the largest Revenue ever raised in this country with the exception of the three last years of the French War. The Revenue of those years did not appear to be so large as this is; but it really was larger, because by some oversight the contribution of Ireland, which had then a separate Exchequer, was excluded.

The Estimated Receipts of the year 1869–70, under the several heads of Revenue, compared with the actual produce, were as follows:—Under the head of Customs the estimated Revenue was £21,650,000; the actual receipts have fallen short of that amount by a sum of £121,000. The estimated Revenue from Excise was £20,900,000; the receipts have exceeded that sum by £863,000. Stamps were estimated to produce £8,850,000; they have exceeded that Estimate by £398,000. Taxes were estimated at £4,500,000, and the receipts have exactly corresponded. Income and property tax was estimated at £9,360,000; the receipts have exceeded that sum by £684,000. The Post Office was estimated at £4,880,000; the receipts have fallen short of that Estimate by the sum of £210,000. Crown Lands were estimated to produce £375,000; the receipts have exactly corresponded with the Estimate. Miscellaneous Receipts were estimated at £3,000,000; they have exceeded that amount by the sum of £205,252. The whole Receipts in excess of Estimate amount to the sum of £1,819,000. As regards the Customs Revenue, there is, as I have said, a falling-off of £120,000. That falling off would undoubtedly have been converted into a considerable excess had it not been for an idea, which had become prevalent in the early part of this year, that it was intended to make a clean sweep of taxes on articles for the breakfast table, which has occasioned a falling - off upon the article of tea, during February and March, to the amount of £140,000 when compared with the last two months of the previous financial year, upon coffee and chicory of £10,000, and upon sugar and molasses of £153,000—making a total falling off of £303,000. I do not doubt it will be very speedily recovered after this evening. The Revenue on sugar, so far from keeping pace with the increase of population, is now £334,000 less than it was three years ago. Foreign and colonial spirits have produced £130,000 less than last year. Sugar has fallen off by £76,000, wine by £42,000, while tobacco, on the other hand, shows an increase of £121,000, and tea of £55,000.

Under the head of Excise there has been a great increase. British spirits have been gaining upon foreign spirits, for while there has been a loss on foreign and colonial spirits of £130,000, as compared with last year, there has been upon British spirits an increase of £400,000. Upon licences an increase was anticipated—that is, we supposed we should not be able to get the new licences for the assessed taxes all in the course of the year, and we estimated that of £1,200,000 we should get half, or £600,000; but the result has been very gratifying, for we have collected, in the first three months, £1,050,000. Stamps, as I have said, have brought in a large sum, considerably over the Estimate. Owing to the reduction of the fire insurance duty there has been a loss of £520,000, which fell in the last year; but this loss has been made up by an increase upon probate, legacy, and succession duty of £300,000, on deeds of £130,000, and on bills, receipts, and drafts of £37,000. In addition to these items of increase there has been a nominal gain, which is really a matter of account—that is to say, we now vote the salaries of the Courts of Chancery and Bankruptcy, and take the fees by means of stamps; and in this way there has been a nominal increase of £70,000, making, on the whole, an excess of Receipts above the Estimate of £398,000.

We anticipated an increase, under the head of Taxes, of £1,000,000, in consequence of the new mode of collection, and that anticipation has been fully realized. The Post Office has not sustained its usual character for elasticity; it has only increased by £10,000, whereas we anticipated, on the analogy of former years, an increase of £220,000. Crown Lands have realized the Estimate, and the Miscellaneous Receipts have exceeded it by £205,000. The total Revenue of 1869–70 has exceeded the Revenue of 1868–9 by £2,742,000.

It appears, then, that after considerable reductions, the Revenue is really recovering its old elasticity. One of the causes of that elasticity, I will venture to state, is the great cheapness of the principal food of the people—that is, corn. Now, I am not going to take credit on that head for the abolition of the duty on corn; because it seems to me that the fall in the price of corn, which has been confirmed, indeed, since the abolition of the duty, commenced before that duty was taken off. The price of corn was at 72s. in April, 1868, it fell to 48s. in April, 1869, and now, since the duty has been taken off, it stands this month at 42s. Therefore, we must be guarded against saying that the fall in the price has been the result of taking off the duty on corn. But, from whatever cause it arises, the cheapness of corn no doubt, has had a considerable share in giving elasticity to the Revenue by setting loose the money that would otherwise have been spent in buying the food of the people. I will mention, as it may be interesting to the Committee, the increase in the supplies of corn during the last half of 1869 compared with the last half of the preceding year. There were in the country during the last six months of 1869 10,500,000 cwt. of wheat more than in the corresponding period of last year, 4,500,000 cwt. more of Indian corn, and 2,000,000 cwt. more of flour.

This may, perhaps, be the proper place for me to give to the Committee some account of the effects produced by the very much discussed measure of last year with respect to the anticipation of the taxes.

We anticipated, as I stated to the Committee, that we should collect the licence duties which were substituted for assessed taxes within the year to the amount of £600,000. We have collected really £1,050,000; that has been done without the slightest pressure; and, notwithstanding the quantity of wholesome abuse to which we have been subjected, the fact that I have stated shows that the new system is not unpopular, or else we should not have found people so ready to pay. It has been found that the direct method of paying once for all, not for articles used a year and a-half ago, but for articles now in use, makes shorter work, and is, therefore, pleasanter. Whether that is so or not, sure I am that it has answered very well for the Revenue, for we have not collected the whole Revenue yet, and it already has exceeded our anticipations. We get the benefit now of what we lost so much before by deaths, removals, bankruptcy, and evasions, which are not so easy when a man pays for a thing he uses, instead of paying for what he used a year and a-half before. That result was achieved in a very desirable way—not by pressing hard upon those who did pay, but by making those pay who did not.

The Income Tax has exceeded the Estimate by no less than £684,000. Instead of my Estimate being correct, when I supposed that under the new mode of collection the additional amount would be £3,350,000, the fact is that the taxes so collected have yielded the additional amount of £4,484,000. Before I dismiss this subject, which is not likely to come up again, as the operation will never be repeated, unless the country should fall back into the sluggish and unsatisfactory custom of having the taxes collected a year and a-half beyond their time—in which case some one may arise to repeat the operation —let us look at the loss to the taxpayers at which this addition of £4,484,000 has been extracted. I have often shown that on the house and land tax there was no loss, because what we did was to take a mean; but in regard to the income tax, there has been a positive gain. Taking the amount of the year's income tax at £7,500,000, and allowing 5 per cent as the rate of interest—which I do not think too high for money in the pockets of private persons—the money gained by the taxpayers in interest on the October quarter's tax, respecting which forbearance was granted, amounts to £22,000. That is what is gained by the taxpayers. But then comes the much-disputed question of the licences substituted for assessed taxes. In respect of the taxes for 1869–70, persons would have been called on to pay one-half next October, and the other half in this month of next year. That would have been the ease under the old system; but now the whole amount is imposed in January of this year, so that they pay one-half of the tax three-quarters of a year, and the other half a year and a quarter sooner than they would have paid them if the change had not been made. The interest thus lost to them, calculating at 5 per cent, is £60,000 for the two years; but deducting from that the gain of £22,000 interest on the quarter's income tax, you have £38,000, which just represents the inconvenience which the country is called on to bear for the additional sum of £4,484,000 realized by the new mode of collection.

We are so satisfied with this experiment, that we are determined to carry it much further. I intend to take the opinion of the House as to whether the time has not arrived when we might put an end to the system of collecting taxes through parochial officers. We believe that under another system the income tax and the house and land taxes would be collected with greater economy, and that they would be made more productive. In fact, nothing can exceed the dissatisfaction expressed by those best able to judge of the matter, in reference to the existing system of collection. The Commissioners of Inland Revenue say that in many cases the collectors are utterly indifferent to the interests of the Exchequer; that they are opposed to those interests, and do their best to thwart the intentions of the Legislature; that many of them are illiterate, and many corrupt; that, for the purpose of restraining them from doing wrong, it is necessary to keep a large staff of officers to go over the same ground; and that, after all the precautions that can be adopted, there exists a great amount of evasion. That is the opinion of those most competent to judge. I do not see, therefore, why the principle first introduced by the right hon. Gentleman the Member for Northamptonshire (Mr. Hunt) in the case of the dog tax, and acted on by us at this time last year, should not be extended to other branches of taxation, as it has been found so effective in those to which it has been applied. I hope we shall have the right hon. Gentleman's assistance in this matter.

I now come to the Expenditure for 1869–70. The total Estimate of Expenditure for 1869–70, at the time of the Financial Statement of last year, was placed at £68,223,000; but, chiefly in consequence of the transfer of charges connected with the Courts of Chancery and Bankruptcy from the Fee Funds of those Courts to the Votes, under the Act of last Session, the amount granted under the Appropriation Act was raised to the sum of £68,408,000. The interest of Debt was estimated at £26,700,000, which has been exceeded by a sum of £353,559. The other Consolidated Fund charges were estimated at £1,700,000, which has been exceeded by £30,134. The Army was estimated at £14,230,000; but happily the actual Expenditure has been less than the Estimate by £664,600. The Navy was estimated at £9,997,000; the actual Expenditure has fallen short of that by, I am happy to say, £239,710. The Civil Services were estimated at £9,715,000; they have fallen short of that amount by £411,987. The Expenditure on the Customs and Inland Revenue Departments was estimated at £2,613,000; it has fallen short of that amount by £55,197. The Expenditure on the Post Office was estimated at £2,363,000; it has fallen short of that by £47,000. The Packet Service was estimated at £1,090,000; it has exceeded that by £131,553. The Committee will see, therefore, that, with the exception of those three items—the interest of Debt, the other Consolidated Fund charges, and the Packet Service—there has been a considerable decrease on all the items. The increase of £131,553 in the Expenditure for the Packet Service over the amount estimated is owing principally to a large claim which was made by the Peninsular and Oriental Company upon a settlement of accounts, and which, having been found to be just, was paid by the Government. The increase of £353,599 in the charge on the Public Debt arises chiefly from the measures we took to meet the objections of my hon. Friend the Governor of the Bank of England (Mr. Crawford), in respect of the rather plethoric state of our balances at one portion of the year. We obtained an Act which enabled us to throw a large amount of the charge for Terminable Annuities upon the March quarter. The increase of £30,134 on other Consolidated charges is made up of various amounts.

I need say nothing of the reductions in the estimated Expenditure for the Army and Navy. They speak for themselves, and, as the Committee will perceive, it is mainly to them we owe the financial prosperity which I hope I am not too sanguine in saying now exists. It will be satisfactory to point out that, excepting in the item under which a considerable claim was made by a company who showed that the money was due to them, and in that of services not under the control of the Government, there has been a decrease on all the items of Expenditure, and that this decrease amounts to £1,418,494 on the whole. When we deduct from this saving the three sums in excess of the Estimate—the excess on the interest of Debt and other Consolidated Fund charges, and that on the Packet Service—we have a net saving of £903,248 on the estimated Expenditure for last year. If we compare the Expenditure for this year with the Expenditure for last year, we find the reduction of Expenditure amounts to £2,468,000. Thus, the Revenue of last year exceeded the Revenue of the year before by £2,700,000, and the Expenditure of last year fell short of that of the year before by nearly £2,500,000. In the course of this year the Telegraphs have, for the first time, been brought into our accounts, and no doubt from this time they are destined to fill a considerable space in them. The receipts from Telegraphs brought to account up to the 31st of March last, have been £100,000, and the Expenditure for maintenance £60,000. Adding these sums respectively to the two sides of the account, we have a Revenue of £75,434,000, and an Expenditure of £67,564,000, leaving a surplus of £7,870,000.

We have been obliged to propose to the House a Supplementary Estimate which consists of £175,000 for certain Civil Services, £22,000 for Inland Revenue, and £130,000 for Post Office Packet Services, making a total of £327,000, which sum is included in the £67,564,000 that I stated was the total Expenditure of the year. From the surplus that we thus obtained, we have spent £4,300,000 in liquidating liabilities which were incurred for the Abyssinian Expedition, of which £3,300,000 was money we had borrowed, and £ 1,000,000 was lent from our own balances. I mention that for the sake of distinction, because we treated the balances as our creditors, not being disposed to reduce them more, and we have repaid the money. The total amount, therefore, that we have spent out of this Vote on account is £4,300,000, leaving a net surplus of £3,570,000. Out of this balance we have expended £1,000,000 in paying off Exchequer Bonds, preferring to do that to availing ourselves of the power of renewal which Parliament had given us, and thereby relieving the Unfunded Debt to that extent. We have also spent £134,000 in purchasing Exchequer Bills, so that we have reduced the Floating Debt by £1,134,000. The repayments also have exceeded the advances on account of Public Works by the sum of £464,000.

The effect of these various transactions upon the Exchequer balances has been to raise them from £4,707,258—the amount at which they stood at the commencement of the financial year—to £8,606,000, the amount at the credit of the Exchequer at the close of the year on the 31st of March, 1870. Of course, this is by no means an unmixed good, for the balances are rather larger than we should wish to see. The evil was predicted and admitted in the course of the deliberations of last year; but I think the balances have not yet assumed an unmanageable extent, nor do I think we shall have any difficulty in dealing with the subject. We have already mitigated it in some degree by transferring the payment of Terminable Annuities from a poor to a rich quarter. I observed, however, last Saturday, in a great authority on commercial questions, to which I pay the most unfeigned respect, this argument—that by paying so much money into the Bank of England now, we make money dear, because the Bank is not in a hurry to lend money. The inculpated person might say—"I shall do better for the public in the autumn, when our account with the Bank will be low." But my censors say—"That will not help us at all, because though you make money dear by paying so much money into the Bank, if you draw so much out you make the Bank poor, and that will create a panic, and everybody knows that a panic is only another name for dear money;" so that whatever I do—whether I keep the Bank full to overflowing, or reduce the amount—my fate is apparently to do mischief. The practical inference is, that as I cannot either way escape my inexorable critic, I had better go my own way; look after my affairs, and leave the moneyed interest to take care of theirs.

I have not gone into any detail about the Abyssinian Expedition, because we have it presented in this year, not in the form of Expenditure, but in the form of a debt incurred by the payment of that Expenditure; but I will make a short statement on the subject. The accounts of the Expedition are not yet closed, and some of the claims against the Indian Government on account of sales still remain unsettled; but, so far as can be gathered at present, the total net expenditure may be put at £8,800,000. To meet this Expenditure we have issued £8,300,000—£4,300,000 this year, and £4,000,000 previously—out of the Vote of Credit granted for this service, and the balance, so far as it has been paid, has been met out of the savings on Army and Navy Grants, which were legally applicable to that purpose. As soon as the matter is fairly settled—which I trust will not be very long—I will lay full accounts on the Table of the House.

Before I conclude my observations upon the transactions of the past year, I think the Committee would wish to hear something with regard to the new and very prominent item of Telegraphs. The sums awarded under the Act of last Session to the several telegraph companies amounted to £5,715,000; and other charges, including the cost of the extension of lines, raised the total estimated Expenditure to £6,750,000. Of this amount we have paid £6,327,541, and £422,459 is the balance still payable. As to the way in which the money has been raised, the Committee may remember that last year the House gave us the option of raising the money in several ways, and the mode we selected was that of creating stock. A sum of £7,000,000 of stock in Consols was created and placed in the hands of the National Debt Commissioners, who were enabled to apply balances upon public accounts to the extent of £4,000,000 to the purchase of this stock. The remainder of the stock we had to sell in the market, and by a little careful management, neither feeding the market to repletion nor yet starving it, we contrived to place very nearly the whole of the other £3,000,000 so quietly and imperceptibly that it hardly produced any effect upon the Funds, and I did not observe in the newspapers at the time a trace of consciousness that any such operation was going on. There was some speculation about the money being paid out of the surplus in some way or another, when the fact was that the means of paying it had been obtained by this process, which I think is very much to the credit of the National Debt Commissioners. It is, of course, exceedingly desirable that the Government should as much as possible avoid disturbing the money market by such transactions. It is equally desirable that we should not depress the value of the stock which we mean to sell by parading our intention before the public. Then of the £7,000,000 there has been disposed of £6,922,423, at an average rate of £92 4s. 7½d., producing £6,384,643, and we anticipate no difficulty in supplying on favourable terms the small balance which still remains due to the companies, and thus winding up the whole transaction.

Now, to pass from that subject, the funds applied to the reduction of Debt during the current year are these—We have applied £4,600,000 to meet past liabilities on account of the Abyssinian Expedition; we have paid off £1,000,000 of Exchequer Bonds and £134,600 of Exchequer Bills, and we have, by the action of Terminable Annuities, reduced the Debt by £2,150,000, the result being that, during the current year, we have paid off Debt to the amount of £7,884,600. Besides this positive reduction of Debt during the year we have obtained a surplus of Revenue over Expenditure, and we shall once more put in force an Act which enables us to apply the surplus of the year, which terminates with each quarter, to the purchase of Debt. The amount to be so applied in the current quarter is £64,000, and in the September quarter no less than £1,592,000 will be applied, and other sums, in somewhat the same proportions, on the subsequent quarters of the year. The Unfunded Debt has now fallen to £6,761,500. I believe I am right in saying that it has never been brought anything like so low; and when one considers the ability of the nation to raise a considerable sum of money at the shortest notice, which is implied in this statement, it gives us an advantage which can hardly be overestimated.

A statement has been laid upon the Table of the House from which I will make a short extract. If you take the year 1857—the year after the close of the Russian War—notwithstanding debt incurred since that date for the expenditure of nearly £9,000,000 on the Expedition to Abyssinia, of £5,755,000 on Fortifications, and of £7,000,000 for the purchase of the Telegraphs, there has been a reduction, in the total amount of Debt, of £38,000,000—in all, nearly £60,000,000 applied to Debt, beyond the ordinary Expenditure met out of Revenue in those thirteen years.

While on the subject of Debt, I have an observation to make to the House with regard to the answer I gave an hon. Member a few days ago with respect to the debts due to this country from Spain and Portugal. I stated that there was due to this country from Spain £7,701,000 for expenses incurred in the Peninsular War, and £2,489,000 from Portugal; and I said that if former Governments had chosen to demand the payment of those debts, I saw no reason why they should not have been recovered for the benefit of the people of this country, just as France recovered for her benefit a debt of a rather more invidious nature—namely, the debt contracted on account of the expedition of the Due d'Angoulême. We have not, however, chosen to ask for those debts, and I think the time for making any serious demand has gone by and lapsed. In making these observations, I do not wish to give any offence to the Governments of either of those countries. What I said, with reference to a deputation on a former occasion, was with reference to the proposal to enter into commercial treaties with them. In considering whether we ought to sacrifice a considerable amount of Revenue for that purpose, I pointed out that, before we removed those burdens there were claims that we had not given up, of which those who urged us to surrender our Revenue ought not to lose sight. I do not wish to injure the credit of those countries, for it ought not to be affected by an outstanding debt which we have never thought fit to claim. I trust the matter will not be allowed to remain as it is, and I think it is not the proper course for the Treasury of this country to let it rest. A convention should be entered into between us and the two countries, and the sanction of Parliament should be formally taken to the renunciation of the debt. I repeat that no offence was meant.

I now come to the Expenditure for the current year. I shall first submit to the Committee the Estimate of the Expenditure for this year as compared with the total grants for the year 1869–70, including the Supplementary Vote. The estimated interest of the Debt for the present financial year amounts to £26,650,000, or £50,000 less than last year. The other charges on the Consolidated Fund are estimated at £1,820,000, being £120,000 more than last year; and I may say, in passing, that this increase is owing to the Telegraphs. The Committee are aware that the House, by the Act of last Session, enabled us to conclude the purchase of the Telegraphs and to appropriate the money that was to be derived from them in this manner—namely, the first part was to go to pay the expenses of working; another part was to pay the interest on the money borrowed; and after that the surplus was to be paid to the Consolidated Fund to extinguish the principal. It is this third part that swells the charges on the Consolidated Fund. Then the Army is estimated to cost £12,975,000, being a reduction of £1,256,000 upon the total grants of last year. The Navy is estimated to cost £9,251,000, exhibiting a reduction, on the grants of last year, of £746,000. The Civil Services are estimated to cost £9,990,000, showing an excess, over the grants of last year, of £100,000—not, I am bound to say, at first sight, a very brilliant appearance, as compared with my brethren of the Army and Navy. The charges for the Revenue Departments are estimated at £4,960,000, showing a reduction, on the grants of last year, of £38,000. The Packet Service is estimated at £1,107,000, showing a reduction of £113,000 as compared with last year. The Telegraph Service is estimated at £360,000, showing an increase of £270,000. The Committee will remember that the Expenditure we have had this year was only £60,000. The result is, that there is a total net reduction upon the Estimate below the grants of the past financial year of £1,713,000. The total amount of the estimated Expenditure is £67,113,000, and the total of the grants for last year, including the Supplementary Estimates, was £68,826,000. [An hon. MEMBER below the Gangway was here understood to ask the right hon. Gentleman to turn that way.] I am afraid I cannot give satisfaction unless I play the part sustained by the character in the Pilgrim's Progresscalled Mr. "Facing-both-ways." The grants I am speaking of include the Supplementary Estimate of the present Session, amounting to £327,000. Of course, there is no occasion to make any observations on the Estimates for the Army and Navy. They speak for themselves, and they are, I am bound to say, the very root and basis of the present prosperous state of our finance.

The Civil Service Estimates do require some observation, because they show an increase of £100,000 over the grants of last year. The amount of the Civil Service Grants, included in the Appropriation Act of last Session, was £9,715,000. To this sum must be added £175,000, the amount of the Supplementary Votes taken this Session. The total amount, therefore, of the Civil Service Grants for 1869–70 is £9,890,000; whereas the Estimate for the current year, amounting, as it does, to £9,990,000, shows an increase on the present Estimate of £100,000. But this increase, though apparent, may be very easily explained. The Civil Service Estimates may be divided into two portions. The one portion is under the control of the Treasury, and the other is not. The first part, which is not under their control, I may call the Transferred Services. They are mere matters of account, when, owing to the desire to get things into the Civil Service Estimates, and to submit them in detail to the House, and for other reasons, Services are transferred from the Consolidated Fund, or from other Departments, to the Civil Service Estimates. Now, in the course of last year, there have been under this head, for the first time, the following transfers:—The expenses of the Cadastral Survey of the Kingdom, of Military Prisoners, and of Army Examinations, formerly borne on the Army Estimates, but now transferred, for reasons with which I need not now trouble the Committee, though those reasons generally resolve themselves into greater facilities and better management of the Services. The amount of those transfers is £151,000. It is a matter of account that makes no difference to the total Estimates of this year—the only distinction being that we place the items under the head of the Civil Service instead of under the head of the Army. Then, again, there are the charges of the Courts of Chancery and Bankruptcy, that were formerly paid out of the funds of those Courts, which funds are now paid into the Exchequer by stamps. These Services are now transferred to the Voted Services, instead of being out of the jurisdiction of this House altogether—a change which everyone must admit to be a great practical improvement, though not improving the external appearance of the Civil Service Estimates, which are loaded in that way to the amount of £186,000. Then there are the expenses of the Lunacy Commission—£10,000—which were formerly charged on the Consolidated Fund; then £12,000 more has to be added for certain Consular charges formerly defrayed from fees. So that the total amount of the charges formerly paid by other Services, and now placed, for the first time, under the Civil Service Estimates —a pure matter of account—is no less than £359,000. That disposes of the £100,000 of apparent excess, and; leaves £259,000 on the other side of the account. There has, however, been the same operation, on a very small scale, applied to the Civil Services. We have got rid of the item of £8,000 for certain Post Office expenses, which has been transferred to the Post Office; thus making the net amount brought on to the Civil Service Estimates by transfers from other Departments, £351,000, which goes to swell their nominal, not their real amount.

There is another class of Services that calls for the attention of the Committee. These are not transfers from to other Departments, but they are automatic Services, if I may so term them; they take care of themselves, and increase of their own accord without its being in the power of the Departments to accelerate or retard their progress. Such are the payments for Education in Great Britain and Ireland, where the Government virtually makes offers of money for the performance of certain conditions, and when those conditions are performed they are bound to pay that money. The increase on the Service for Education amounts to no less a sum than £155,000 for this year. There is also the charge for police, metropolitan and in counties and boroughs. We pay a certain fixed proportion, according to the growth of that force, and that fixed proportion has grown this year by the sum of £52,000. In the same way we deal with prisons and reformatories, the charge for which is, of course, measured by the number of committals by magistrates, and, in fact, by the circumstances bearing on the administration of justice generally. The increase under this head amounts to £92,000, so that these self-regulating or automatic Services—if I may coin a word—have increased altogether by £299,000, and there is no reason to suppose that they will not go on increasing, like Virgil's trees, of which it is said— Ut vires habuere suas, ad sidera raptim Vi propriâ nituntur, opisque haud indiga nostræ. These items, which have grown of themselves, without our leave, together make £299,000, which, added to the total of £351,000 that has been transferred to; the Civil Service Estimates from other; Services, gives an aggregate of £650,000 as the sum that has been added to the Civil Service Estimates in the present year. I think, therefore, the wonder is, not that they exceed the grants of last year by £100,000, but that they have not been a great deal more; because if you add that £650,000 to the grants of last year, which were £9,989,000, and if you deduct from the £650,000 the £100,000 of present excess, you will find, taking the basis of last year's grants, that we must, had we left things in statu quo,have devoted to these Services the sum of £550,000. Therefore, though I am not altogether pleased to see in the Estimate—which we have taken great pains to reduce as much as we can, any increase, yet, when the matter is explained to the Committee I think they will see that as we saved on the Estimate for the Civil Service of last year £411,000 and as we have cut down the Estimate for this year £550,000 below the actual grants of last year, we have not, in a humble way, been wanting in our duty.

I now come to the estimated Revenue for the year 1870–1, as compared with the actual Revenue of 1869–70. We estimate the Customs at £21,650,000, being an increase of £121,000 upon their amount last year; and this we do on the strength of what I pointed out to the Committee before—namely, that our income from Customs has naturally been affected by the apprehensions entertained in regard to the duties on tea and sugar; and we may fairly expect some increase when those apprehensions are set at rest. The Excise we take at £21,640,000, being a decrease of £123,000. That is also on account of the very large increase we have had in spirits, which those persons who estimate these things think may probably be attended with some reaction. The Estimate for Stamps is £8,700,000, as against £9,248,000 received during the past year, being a decrease of £548,000, mainly accounted for by the loss for the remaining half-year's fire insurance duty falling on the present financial year.

It is estimated that there will be a decrease under the head of income tax of £2,444,000, the Estimate being £7,600,000, as against £10,044,000 actually received during the past year. This estimated decrease is accounted for by the fact that we collected, during the past financial year, the April quarter of the income tax, as well as many arrears that had hung fire, in addition to the whole tax for the past twelve months. The taxes are estimated to produce £2,850,000, as against £4,500,000, the amount they contributed to the Revenue last year, showing an estimated loss under this head of £1,650,000, which is mainly to be accounted for by many branches of the assessed taxes having been transferred to the Excise under the form of licences. The Committee is, of course, aware that the collection of the assessed taxes has been proceeding pari passû with the payment for licences.

The income from the Post Office we estimate at £4,900,000, as against £4,670,000 actually received last year, showing an estimated increase under this head of £230,000—we being no ways intimidated by the bad estimate we made of the probable receipts under this head last year. From the Telegraphs we anticipate that we shall receive £675,000, as against £100,000, which we received under this head last year, showing an estimated increase of £575,000. The Crown Lands are estimated, to produce £385,000, as against £375,000 received last year, being an increase of £10,000. The estimated receipts under the head of Miscellaneous amount to £3,050,000, as against £3,205,000 received last year, showing an anticipated decrease of £155,000. The total estimated Revenue, therefore, will be £71,450,000, as against £75,434,000, the actual Revenue of last year, showing a net decrease of £3,984,000. Taking the anticipated Revenue for the ensuing year at £71,450,000, and the probable Expenditure at £67,113,000, we have an estimated surplus of £4,337,000.

Having shown how this estimated surplus has been arrived at, I shall now proceed to present to the Committee a plan by which a little increase may be given to that surplus. The Revenue derived from game certificates amounts to £150,000; but it has the disadvantage of not only being one difficult of collection, but of being the proceeds of a tax that is frequently evaded. By the 23 & 24 Vict. c. 90, it is enacted that if any person shall be discovered doing any act whatever, which shows an intention on his part to kill game, an officer may require him to produce his licence. Now, in the first place, under that Act an officer must wait until he sees a person doing some act showing that he is about to kill game before he can demand the production of his licence. I am happy to say that the class who have the right to kill game are not generally anxious to defraud Her Majesty's Revenue; but, to a great extent, the collection of this branch of the national income rests more upon their sense of honour than upon the operation of the law.

Having made these preliminary observations, I will venture to point out to the Committee the very serious change which the progress of mechanical science has brought about in our social relations in consequence of great improvements that have been made in modern fire-arms. By those improvements in the construction of these weapons we have undoubtedly obtained a considerable increase in our power over the brute creation and in our power to exterminate savages. On the other hand, we buy these somewhat questionable advantages exceedingly dear; because nothing is more certain to any one who has had the misfortune to live very long in this world, than that there is a retrograde practice and tone of feeling growing up among us with reference to the carrying of deadly weapons. It used to be urged in defence of boxing that it operated as an antidote to the use of the knife; but who thinks of using the knife now? A man mischievously disposed does not arm himself with a single knife but with a revolver, by the aid of which he holds six men's lives in his power. He carries a deadly weapon of this description about with him while he is drunk, or quarrelling, or bargaining, or doing anything that may rouse his wildest passions, and thus gives himself the power of carrying into effect what they may dictate in a moment of intense excitement. Look at the miserable spectacle that occurred the other day in Paris, where of three gentlemen, meeting for the purpose of arranging a cartel, two were armed with these deadly weapons, and by a singular chance the only one who was unarmed was killed. We have also been rendered familiar with the evil result of the practice of carrying revolvers in the debate upon the Irish Coercion Bill, in the course of which we found ourselves bound to make the mere act of carrying these weapons an offence to be visited with a severe punishment.

We used at one time to ridicule the scenes that occurred in the backwoods of America and in the backwoods of other newly-civilized countries; but those; scenes have lately been reproduced in Ireland, and we have felt it our duty to legislate with the view of preventing their recurrence in that country. In my school-boy days I recollect reading the boast of the Grecian historian that the Athenians were the first of the Greeks who laid aside their weapons and went unarmed among each other. We, on the contrary, seem to be reversing that process, and having formerly been an unarmed people, appear to be arming our-selves with weapons compared with which all ancient arms were mere children's toys. I may further remark upon the number of accidents that result from the indiscriminate handling of fire-arms. I hold in my hand an account which I cut out of a newspaper of a gun accident that happened only a day or two ago, in which a boy, after having presented a loaded gun at a comrade, fortunately without evil results, afterwards shattered his own skull in attempting to look down the barrel of the weapon. I may also point out that the practice of carrying a gun for the purpose of shooting small birds frequently leads men to commit the offence of poaching; and, as I know well, having had some practical acquaintance with the criminal population, a large proportion of crime results from poaching. For all these reasons, I therefore, it is that I venture to propose to institute a new Excise licence of £1 to carry fire-arms. I do not propose to put any tax upon weapons kept in the house. I merely propose to require every person carrying a gun or other fire-arm out-of-doors to produce his licence to carry arms whenever he may be requested to do so by an officer, under the risk of incurring certain penalties. Of course, it is not easy to prevent people from carrying revolvers in their pockets; but if they choose to indulge in that, practice they must pay £1, or take their chance of conviction for exercising that privilege. The financial result of this new Excise licence is estimated to produce the sum of £150,000 beyond the amount now received from game certificates. I need scarcely state that the Bill which will be brought in with the view of carrying this proposal into effect will be guarded by numerous provisoes exempting certain persons, such as Volunteers, from its operation.

Taking it that the surplus for the ensuing financial year will be £4,337,000, we must add to that sum the £150,000 to be derived from the gun tax, making together a total of £4,487,000. I must next consider the various suggestions that have been made with the view of enabling us to get rid of that surplus.

In the first place, there is the proposal of the hon. Member for Sunderland (Mr. Candlish), who had a Motion on the Paper which I regret he was unable to bring forward and to have taken the opinion of the House upon it, to the effect that we should not remit any taxation, but should allow it to go on at its present rate, with, the view of any surplus we may have now, or on any future occasion, being applied towards the reduction of the National Debt. I must say there is something in that proposition which will commend itself to the esteem of any person who has not the responsibility of carrying it out, and a variety of considerations would commend it to a Chancellor of the Exchequer. In the first place, it would save all thought and trouble; because, instead of having to weigh and consider what should be taken away and what should be left, balancing this thing and that, the whole matter would be settled, and I should have nothing to do but let things take their course. In fact, my vocation—or a great part of my vocation—would be gone. On the other hand, there are very great drawbacks to the proposal. At the present time there are a variety of interests opposed to each other, each claiming a portion of our surplus to the disparagement of all other claimants; and the only successful method of combating their claims is to balance their respective forces, and by setting one against the other, so get rid of the whole. But if the whole surplus were taken for the Debt, these claimants would unite to upset the arrangement. I also think it would lead to extravagance. One great way of keeping persons in order who ask for public money is to make themselves the judges of their demands. I may say to one who asks for a certain expenditure—"You are an advocate for a free breakfast-table; how, then, can you expect me to get a free breakfast-table if you ask me to squander public money in this way?" And he goes away rebuked. But if I were to say to him—"Don't ask me to do this; to endow your College, or whatever it is, because I want to pay the National Debt," he would answer—"Why should we pay the Debt? We didn't incur it; leave it to posterity." Really, without joking, I hope my hon. Friend may live to see the day when it shall be paid off; I am sure I shall not; and I must decline to interfere with it beyond a very limited extent.

But can we do nothing with regard to the National Debt? I admit, most distinctly, that it is our duty—a duty which we have not altogether neglected—to keep an eye on the Debt, and to go on gradually reducing it; not to starve other matters of expenditure in order to redeem it, but giving it a fair claim and share in the surplus Revenue. The only doubt one has is as to the best way of doing this. Of course, I need not go back to any question of a Sinking Fund; the Sinking Fund is an exploded idea. It has both its good and evil elements, and it seems to me that the good in it is in some danger of being thrown aside with the evil. The evil of the old Sinking Fund was, that it was founded on the flagrant absurdity that if you borrowed money you could always pay your debts with it; because you could put your money into a drawer, and on opening it after a time you would find by some bisexual process that it had multiplied at compound interest. At last, however, people discovered the valuable truth that debt could only be paid by taxation, and so the Sinking Fund went away.

But there is another sort of Sinking Fund, that of making a fund and feeding it by taxation. This, however, has a bad side also, and it is this—that it is based on the absurdity that it is better to have money to devote to paying off a debt than to pay the debt off at once—a practice as absurd as if a man, having mortgaged his property, were to come into possession unexpectedly of a sum of money, and instead of paying off his mortgage at once, were to lend it on mortgage to somebody else in order to pay off his own debt. But it has its good side: it does appropriate public money for the purpose of paying off the Debt, and the problem for the financier is how to get the good and not the evil. The evil involves, besides the absurd circumbendibus I have mentioned, the practical mischief of leaving a fund raised for one purpose a prey to a needy Chancellor of the Exchequer, who will be always tempted to devote it to another. The good side of this plan we wish to preserve, and people who have considered the subject are pretty well agreed that it can be done by means of Terminable Annuities. The worst of Terminable Annuities—a most excellent proposition for paying the Debt—is, that you cannot get people to take them, and, therefore, the proposal is in some danger of being abandoned. What, then, ought we to do? As the public will not take them, we ought to take them ourselves. The Government has functions besides those of collecting Revenue and paying the Debt; it is a great banker—it has the power of acquiring stock by undertaking the trusts for which that stock is held as security, and it can also acquire stock by purchase, and ought to do so. Therefore, it seems to me that the proper course for the Government is to lose no opportunity, by one of the two means I have suggested—either by taking up stock and discharging the trusts for which that stock is held, or by purchasing, and thus becoming proprietors of its own stock—of becoming possessed of stock, and then to convert it into Terminable Annuities, charging them on the Consolidated Fund, and then, as often as these Annuities fall in, to apply the annual charge on the Consolidated Fund to taking up other stock, to be again converted in a similar manner. This seems to me to be a safe way of dealing with the matter, and I will make no apology for troubling the Committee with this short description of it. We, therefore, propose by the power which is invested by the 29 & 30 Vict. c. 5, in the National Debt Commissioners, who are in possession of £7,000,000 of Post Office Savings Bank Stock, to convert that stock into Terminable Annuities, to end in the year 1885, the same year as the £24,000,000 of Annuities, created by my right hon. Friend the First Minister of the Crown, will end. The interest at 3 per cent now paid on this sum is £210,000 a year; and the rate of interest required for the next fifteen years to extinguish this debt of £7,000,000 will be £7 16s. per cent per annum, or £547,000. We propose that £400,000 of that sum should fall on the March quarter of this financial year, and £147,000 on the June quarter of the succeeding year. As we have already to pay £210,000 of interest on this sum of £7,000,000, and we have £400,000 to provide for this year, we must place £190,000 as a charge on the Consolidated Fund this year to meet this portion of the annuity. The result will be that in the year 1885 the then Chancellor of the Exchequer—who I hope is now listening to me—will be in possession of a surplus of £3,376,000, the amount of annuities falling in during that year, and I hope he will find some good use for it. This being now disposed of, I may subtract from my surplus of £4,487,000 £190,000, and there remains £4,297,000 at the disposal of the Committee.

Now, I must call attention to another claim on the public Revenue—a claim which I have very anxiously considered, and which I heartily wish I could comply with. I refer to the claim put forward by persons connected with the great interest of Beer. I have received numerous very urgent applications from the brewers in different parts of the country, and deputations in London, on the question of the brewers' licence, and they urge that it is an unjust and unfair burden, and that it is my duty to relieve them. I have promised to give the matter my full consideration, and do my best.

This is the result I have arrived at. They state that they are unable to charge the amount of this licence upon the consumer; for, although the licence is large in amount, they cannot make the consumer pay. I confess I heard that declaration with the very greatest doubt. It seems to me unaccountable that a man having somebody taking money from him on the one hand that he cannot help paying, and others paying him money on the other for things they must have—it seems to me very extraordinary that the concentrated ingenuity of the brewers has, under such circumstances, not been able to hit upon some means of making the consumer bear the burden. It is very easy to show that any reduction we may make will be almost imperceptible in a barrel of beer; but still I cannot help thinking there are certain means of dealing with the quality of the article, and I have no doubt that if the question is reconsidered some means may be found by which the difficulty can be overcome. At present, we have little experience on the subject. The evidence, however, which was taken by a Committee which investigated the licensing system many years ago, points to the fact that the brewing trade differs, in some respects, from other trades. And why? It is a custom in that trade—a custom which, in my opinion, is more honoured in the breach than the observance—that it should purchase public-houses and deal with its own tenants; and, of course, a man dealing with his own tenants has greater power of fixing the price of his beer than if he were dealing with the public at large. Before the Committee, of which I had the honour of being a member, one publican complained that his landlord and brewer sold him beer at the price at which he was expected to retail it. I asked him—"How do you retail it?" "Why, Sir," he replied, with a very solemn look, "we dash it." I said—"What do you mean by 'dashing it?'" He answered—"We turns the New River into it." However, I will take the fact as it was stated to me, and assume that the brewers find it impossible to make any difference in their charges, so as to get this licence paid by the consumer in the first instance. But what does this come to? It comes to this—that a very heavy duty is placed on the general body of brewers, and they say that their trade is very heavily taxed, and that they have no opportunity of recouping themselves from the consumers. Well, what inference ought to be drawn from that? That the competition in the trade must be diminished, because people do not go into a trade—except it be the brewing trade—unless they expect to get money by it. If, therefore, a fair rate of profit cannot be kept up in the trade, people will not embark in it. Consequently, the existing system must act so as to give them a qualified monopoly, by discouraging competition. The trade would not go on unless its profits are equal to those of other trades. If the licence were taken off it would only stimulate competition, which would not cease till profits were again reduced to the ordinary level. Having carefully considered this matter, and having received information from those who are best acquainted with it, I have come to the conclusion that I ought to leave it as it stands.

The next subject I undertook to consider was the extension of the Licence Duty. Public attention has been greatly-excited on the subject, and I shall, therefore, give as full an answer as is necessary to the questions which have caused so much anxiety. The extension of the licence duty was proposed by the hon. and gallant Member for West Sussex (Colonel Barttelot). I undertook to consider it; and after very careful investigation I find I can make nothing of it, and for this reason—it would violate one of the first rules of taxation—namely, the rule that taxation ought, as far as possible, to leave things as it finds them, and not give people inducements to alter their method of trade and do things which do not tend to the improvement of the Revenue. If we taxed every barrel so much, it is evident we should give the brewers the strongest inducement to brew the strongest beer possible and to dilute it afterwards. Why, that is what they would naturally do. On each cask they would pay duty irrespective of the strength of the beer, and afterwards they would make several casks of it. And this also might be done. A man might brew a cask of very strong ale, and after paying the duty make it into three or four casks; he might then export these three or four casks and claim the drawback upon each of them. There would be no possible way of protecting ourselves against such a proceeding. There is, besides, another objection. Without counting brewers who are only brewers, there are about 20,000 publicans and 10,000 beerhouse-keepers who brew their own beer. Now, the proposal is to tax each cask; but in many instances the cask would have gone down the people's throats, and we should never be able to collect the tax. When the Exciseman asked how much beer was brewed, he would be shown a cask or two, and the remainder would be consumed on the premises and would pay no duty. For these reasons I am unable to act upon the ingenious suggestion of the hon. and gallant Member for West Sussex.

Another suggestion, made by yourself, Sir, was that we should return in some degree, though with some modification and improvement, to the old beer tax, which was done away with in the year 1830. Now, I think nobody could recommend that as a fiscal operation. In the first place, it is very difficult to deal with private brewers; but, putting this difficulty aside, we should have to pay £1,000,000 to refund duty which had been paid, while the increase in the expense of collecting the Revenue would be very great. Instead of visiting 9,000 maltsters, as we do now, it would become necessary to visit, in round numbers, about 32,500 brewers, and the expense of it is moderately estimated at £175,000 a year. Therefore, without denying, Sir, that the proposal has many recommendations, and while admitting that it could be carried out, I am not prepared at the present time to make such a sacrifice.

Can there, then, be nothing done in this matter? I think there can, in the way of giving the facility which has been long asked for, and which I sincerely hope will give satisfaction. One class of those who oppose the Malt Tax have a real grievance, and we desire to show that we sympathize with them even when we cannot grant them all they ask. It is put forward as a grievance that by taking the duty on malt instead of on beer, we deprive the agriculturist of very valuable food for cattle, or rather discourage the use of such food for his cattle. It has always been difficult to devise a means by which farmers might be allowed to use malt for their cattle without interfering with the Revenue, and I believe all that ingenuity could do in regard to this subject was done, when my right hon. Friend the present Prime Minister suggested the mixing of the malt with linseed. I think, however, that the problem to be solved was not properly stated. It ought to have been put, not, "How can we allow the agriculturist to feed his cattle upon malt," but, "How can we allow him to feed his cattle on barley which has arrived at that stage which is best suited for the feeding of cattle?" One process which barley undergoes in the manufacture of malt leads to the germination and generation of the saccharine matter, and the second is the kiln-drying, which has no tendency whatever, as I am told, to improve the malt for the purpose of feeding cattle. On the contrary, it is prior to the kiln-drying, when it is not parched up, that the barley is best suited to that purpose. What I propose, then, to the Committee is, that we should permit farmers to steep their own barley and feed their cattle with it. The only precaution necessary to take will be, in addition to the ordinary Excise precaution of liberty to visit the premises, to provide that there shall be no kiln on the premises, or within a reasonable distance of them—say a quarter of a mile—so that we may have a reasonable assurance that the barley is really intended to be used for feeding cattle. I understand that when barley is in such a state that it is ready to be kiln-dried, it is most suited to the feeding of cattle; and the Inland Revenue Department think we can make this concession to the farmer without putting the public to the great loss and injury which would result from transferring the incidence of the tax from malt to beer.

Having disposed of these claims on the surplus, I now come to the Taxes the remission of which I intend to propose.

The first is one which presses heavily on the poor in a double way. I allude to the foot-hawkers' licences. Before a man is allowed to become a foot-hawker he is obliged to take out a £2 licence. Now, this is a hard tax on the man. It is a kind of trade which a man does not usually take up until after he has tried and failed in many others, and this licence duty is a dreadful obstacle to place in his way; and, besides, his poor customers have, in consequence, to pay increased prices for the articles he vends. The whole of the tax is £31,000, and it is one exceedingly difficult and painful to collect, because these people are constantly found to be unable to pay. They are consequently put in prison, and a great deal of misery and uncomfortableness occurs, which any Government would gladly get rid of. Considering the unpopularity of this tax and the difficulty of collecting it, I heartily recommend its abolition on the 1st of October next.

Then there is a certain small licence duty, which I submit to the Committee ought to be abolished—namely, that on still-makers. It is not enforced in England, and it only yields £9 19s. 6d. per annum. It was originally imposed, I believe, with the view of preventing smuggling; but smugglers do not use manufactured stills, for I have known people who did good execution with a teakettle, a gun-barrel, and a bucket of water, and I fancy that a machine a little more complicated than that would suffice to do a great deal. I propose, therefore, to do away with this licence duty.

The next I come to is the licence on sellers of playing cards. It is an expensive duty to collect, and it prevents the sale of stamped cards, and, therefore, the Inland Revenue propose that it should be abolished. The amount of the tax is £1,110.

Next comes the soap-maker. We have abolished the tax on soap, and soap has become like the Ulster custom—there is no legal definition of it. There being no legal definition of it, it is exceedingly difficult to say who is a soap-maker. There are all sorts of abstergent compounds which are on the verge of soap, and it having been the policy of the Legislature to abolish the tax on the article itself, it naturally follows that it would be well to abolish, the duty on the soap-maker, which amounts to £1,300, and the collection of which is very troublesome. If the one duty be a tax on cleanliness, the other must be so too.

The next case is that of the paper-makers, to which the same considerations apply. We have abolished the paper duty, and that on the paper-maker may, I think, very properly follow.

Then comes the watch-case maker, who complains of having to take out a licence for working in gold and silver, and then selling it to the wholesale dealer, who himself must be licenced, to buy from those who have taken out a licence. We propose, therefore, to remit the licence in the case of persons manufacturing less than two ounces of gold and a corresponding quantity of silver, and the result of this remission will be a loss of £1,500 to the Revenue. These licence taxes amount altogether to £6,000.

The next head to which I come is that of Stamps. The Stamp Laws, as the Committee are aware, commence in the reign of William III., and are spread over an enormous number of Acts, so that even those most expert in such things have great difficulty in finding out the various instruments to which the law applies. The Board of Inland Revenue, however, are now engaged in preparing a measure for reducing the whole law with respect to stamps into a single Act. This is to be mainly a Consolidation Act. It does not profess to deal in any philosophic or scientific manner with this most complicated and most difficult subject; but if the House will be satisfied to accept it as a consolidation, carefully executed, of the existing law, and will abstain—that most difficult abstention—from entering into the merits of all the stamps which are in operation, it may be possible to pass the measure in the course of the next few months. It will make certain changes in the Stamp Laws, which will be carefully explained to the House when the Bill is under its consideration; and if the House will only exercise a little forbearance, and allow it to pass in this way, I do not despair, as I have just intimated, of its becoming law before the close of the present Session. In order to induce the House to exercise that forbearance several changes will be proposed in the Stamp Laws, one or two of which I may mention; I cannot state them all on the present occasion. There is, in the first place, what is called the progressive duty. That is, speaking roughly, a duty of 10s. on every 1,080 words, except the first, and I can scarcely imagine any operation in which the human intellect can be more unprofitably employed than in counting those 1,080 words. The importance of a deed does not at all depend on its length, and deeds not of the first importance, such as leases, for instance, are frequently long, so that the present system very often works very oppressively. This progressive duty it is proposed to abolish, involving a loss to the Revenue of £60,000. Then it is proposed to reduce the duty of 35s. on every deed where there is not an ad valorem stamp, as well as the 30s. duty on letters of attorney to 10s. each. In the case of copyhold there is a great hardship. Instead of getting into a copyhold by a single conveyance you are obliged, as everybody knows, to have two conveyances—one of surrender and one of admittance. It has been hitherto the practice to tax both; but we propose for the future to place the tax on the surrender, which will involve a loss of about £20,000. There will be a total remission of £200,000 on stamps, £50,000 of which will fall on this year, as the Act will not come into force till the 1st of January next; but that is only to be got through the forbearance of the House. If the House should go into every detail, it will be impossible to pass the Bill to which I have referred, and if the Bill be not passed we cannot very well get rid of the tax.

Then there are some small stamp duties on insurances. My hon. Friend the Member for South Norfolk (Mr. C. S. Read) has called my attention to the duties on hailstorm, cattle, boiler, and plate-glass insurances, amounting to £1,000. These duties we propose to abolish. They seem to us not to be worth the trouble and cost of collection.

The next point which invites attention is that involved in the proposals of the hon. Member for Liverpool (Mr. Graves) with respect to the Remission of Postage. It is now my duty to make good the undertaking which the hon. Gentleman received on that subject from my right hon. Friend at the head of the Government the other evening. A newspaper with an impressed stamp circulates free for fifteen days. It is the last relic of the old taxes on knowledge. The law is complicated and leads to fraud by the abuse of free transmission. An unstamped newspaper now goes at the rate of 1d. for every four ounces, and every fraction of four ounces. About 35,000,000 newspapers pass through the Post Office annually with an impressed stamp, and about the same number without. What we propose to do is to abolish the impressed stamp altogether, at a loss to the Revenue of £120,000; but the remission will not come into effect until the 1st of October next, so that the loss for the present year will be only £60,000. Then we propose to carry all newspapers which weigh less than six ounces for a halfpenny. That will be limited to bonâ fide newspapers; but we propose, instead of 1d. for every four ounces and fraction of four ounces, to charge one halfpenny for every two ounces and every fraction of two ounces of other printed matter. There will in this way be a loss to the Post Office, over and above that incurred by the abolition of the impressed stamp, of £250,000, of which £125,000 will fall upon the present financial year. There may be besides some additional expense in connection with building and the increase in the number of persons to be employed; but this has not been estimated for, and the amount cannot be very large. I think, then, that in making this proposal, we have completely redeemed the pledge which my right hon. Friend at the head of the Government gave the hon. Member for Liverpool on this subject.

I now turn to the subject of Railways, from which a considerable Revenue, amounting to £495,000, is derived. Being a means of locomotion, they have some right that their claims should be placed, in some degree, on a level with those other interests connected with locomotion in whose case taxation was remitted last year. I cannot consent that they should be entirely put on the same level, because they enjoy a certain qualified kind of monopoly. The tax levied on railways is 5 per cent on passengers; there being an exemption in favour of third-class passengers who are conveyed in trains approved by the Board of Trade, running once a day, and stopping at every station. This is a duty which it is exceedingly difficult to collect. I find that the gross receipts from all the railways in England for the year 1869 was a little more than £38,000,000. This was divided into £23,000,000 for passengers, and £15,000,000 for goods. Now, it seems to me to be unjust in taxing railways to pick out a particular class of traffic. I do not see why a tax should be put on passengers, except to enforce the regulations of the Board of Trade, and I think it would be better to tax the traffic as a whole. We propose, therefore, to abolish the 5 per cent duty and the exemption, leaving the Act to be enforced by the Board of Trade. The matter will require a good deal of consideration, for I regret to say there is already a litigation between the Inland Revenue Department and the railways as to their compliance with that Act. But the effect of taxing the whole gross traffic by railway, putting on 1 per cent, would be that I should receive, instead of £494,000, as I do now, a Revenue of £387,000, being a remission of £107,000. This remission will, of course, act differently upon different railways, according as their principal traffic consists of passengers or of goods. The greater number of railways would be benefited. Taking the railways whose receipts annually exceed £1,000,000, I find that the Great Eastern, the Great Western, the North Western, the South Eastern, and the London and Brighton would be among those which would be benefited, while the Caledonian, the Midland, and the North Eastern would lose something by the change. On the whole, I believe it would be a fair way of collecting the tax, and it is only just to do something towards remitting the taxation on railways, and placing them on a level with other locomotive interests. [An hon. MEMBER: Will this change be immediate?] Yes, I should think so. I still have a considerable portion of the surplus to deal with. [An hon. MEMBER: How much is left?] Between £3,000,000 and £4,000,000, and the question is, what shall I do with it? The answer to the question depends upon the view one takes of taxation, and, if the Committee will allow me, I will say a few words on that subject. People argue between direct and indirect taxation, until the advocates of each seem to forget the nature of taxation altogether. At the best, taxation is a great misery; but some persons become so enamoured of the particular side they take in this controversy, that they argue as though what is a positive evil may become a positive good. One set of economists says all taxation should be direct. Another says all taxation should be indirect. I can agree with neither. There is good and evil in almost any tax. Direct taxation is an immense advantage, for it takes less out of the pockets of the ratepayer than indirect taxation takes; but it has a dreadful disadvantage, for it is compulsory, and, although it is more economical, you force a man to pay at a time when payment may be ruin. Indirect taxation, again, is more extravagant than direct taxation, giving less money to the Exchequer in proportion to that which is taken from the taxpayer. On the other hand, it is optional, and with a little self-denial a man may in this country absolutely exempt himself from the payment of indirect taxes. I cannot, therefore, go with either party in this matter. It seems to me that the worse tax in the world is better than none at all when there is money which must be raised; and good sense should teach us not to be too theoretical, but try to bear with the taxes we have rather than narrow too much the basis of taxation.

I will not pursue this matter further, but I may state what I believe is the true principle of taxation. I will illustrate it in this way—In Dr. Carpenter's account of his recent researches in the Arctic Ocean, he tells us that the results of dredging were to show the existence of little animals at the bottom of the ocean under a pressure of three tons to the square inch. How do they contrive to live under such conditions? Because the pressure is equalized; and that should be the principle of taxation. The Chancellor of the Exchequer is a man whose duties make him more or less of a taxing machine. He is intrusted with a certain amount of misery which it is his duty to distribute as fairly as he can. Now, suppose, instead of pecuniary misery, it was physical pain which he had to distribute. How would he distribute it? According to the advocates of these different schools, he would pick out a certain number of persons, drive them raving mad with tic-doloureux or gout, and exempt all the rest of the community. That is not just. He should just contrive to make everybody a little uneasy, so that life, if not enjoyable, should be at any rate tolerable. That is my notion of the true theory of taxation. Do not trust everything to a few great branches of Revenue, or trample down particular interests because you may have a sentimental dislike to certain modes of raising money for public service; but consider the worst tax that which is strained to the utmost, and remember that the strain of taxation may be made most tolerable by spreading it over a number of articles. If each tax is moderate in amount, the whole aggregate of taxation will be felt as light; whereas, if you have likes and dislikes, and indulge your theories, you may put an intolerable pressure on one class, or give undeserved ease to another.

These are the views which I entertain with regard to taxation, and therefore I am not willing, as far as my opinion may have any weight with the Committee, to let go any great branch of Revenue that is levied with tolerable ease and without any grievous pressure.

I have received many deputations respecting the income tax, and I concede that a good deal may be said against this tax; but, as I am not prepared with a substitute for it, I must continue the tax at such a moderate rate as will make it tolerable to those who pay it, preferring to give them a little uneasiness and discomfort, than to strike out so great and useful a branch of Revenue.

Then I am told of the expediency of remitting duties on the cups which cheer and do not inebriate, with their concomitants. I do not wonder that such a remission commends itself to many people. But if I take off these taxes, I must put a heavy pressure elsewhere. Besides this, I hold that everybody should contribute, however small his contribution, to the Revenue. We must also look to taxation, not as with reference to this moment, but to the future. At present we are prosperous and at peace; but the indiscretion of a subordinate official—half-a-dozen glasses of wine too much, drunk by somebody in a responsible situation—the merest accident, may involve us in trouble, from which there is no refuge except in enormous outlay. We must look at this, not merely in the light of the present— Metuensque futuri, In pace, ut sapiens, aptârit idonea bello. The strength of this country lies mainly in the facility she possesses for raising, at any time, as much money as she requires, and in her power of borrowing at a lower rate than any other Power, which no envy or detraction can explain away, and which confronts all her detractors. Without wishing to disparage the work of my right hon. Friends, I hold that her power of borrowing as much as she requires, and of raising any Revenue which may be required, gives more strength to the country than the aggregate amount of our fleets and armies at any given moment. It is her latent strength, not what you see, but what you do not see, that is chiefly formidable. I am most anxious to husband and watch over these latent resources; and therefore, while reducing the burdens of the people to the very lowest possible amount, I shall not willingly let go altogether any branch of Revenue which I think can be collected without imposing great suffering upon the community. Acting on these principles, I propose to reduce the income tax to the point at which it stood before the Abyssinian War. That will take 1d. off. [An hon. MEMBER: How much will it stand at?] I am glad that some hon. Gentlemen do not seem to be aware of the present amount of the tax; it will now be reduced to 4d. in the pound. I also propose—though it is a small matter—that wherever we can find large employers of labour, especially companies, but occasionally private persons, we should extend to them the principles of Schedules B and E, requiring them to return the persons in their employment receiving salaries, and probably treating the income tax in this case in the same way as in the case of a farmer, under Schedule B. This reduction in the rate of the income tax will absorb £1,250,000 of the surplus.

The Committee will be pleased to hear that I come now to the last, and also the greatest of my reductions. There is no occasion for me to expatiate upon the qualities of the article with which I am about to deal, for it is one which has taxed to the utmost the eloquence of almost every Chancellor of the Exchequer—I allude to the great article of Sugar. Sugar is not a stimulant, but it is, in the highest degree, a nutritive. It enters not merely into that morning meal which is now so much regarded, but also penetrates into the regions of dinner, and appears occasionally at supper, and sometimes even after supper. Anyone who watches the course of events in this world will know that it is an article of the utmost interest. The state of tropical agriculture is one of revolution. Slavery is nearly abolished, and we know not exactly what is to take its place. I cannot doubt that we shall do something towards facilitating the arrangements which are destined to replace slavery, whatever those arrangements may be. The Chinese race seems to be bringing this about, and will possibly be found the great growers of sugar in the future. Singularly enough, in Australia, between the 30th and 26th degrees of South Latitude, a sugar-growing industry has arisen among the smaller settlers, possessing their 100 acres of land, and has been very successful. Of course, we know that the beetroot industry of the Continent seems to have got over its difficulties, and to be spreading very widely. There is also the prospect of the growth of beetroot, with this object, in our own country; and if we could hope for anything so good as that it should be introduced with success into the South of Ireland, it would be one of the greatest blessings that could possibly befall that country. The duty collected on sugar during last year was £5,507,000. The rate of the duty was reduced by one-third by the present First Minister of the Crown in 1864, when the quantity consumed in the kingdom was 10,754,000 cwt. Last year the consumption was 11,796,000 cwt, and these figures show the moderate progress of 9 per cent. I do not think it would be an advisable course to dally and trifle with such a consumption as this; the trade would suffer from such treatment, as it has suffered in past years from anticipations of change. In accordance with the principle I have already laid down, I think the best plan is to make a good sweeping change once for all, and let sugar have rest.

The change I propose to make is to reduce the duty on sugar one-half. That will involve a sacrifice of £2,350,000. I wish it to be clearly understood that, in making this proposal, I am not preparing the way for either further reduction or for abolition, but that I have gone as far as I intend, and make this declaration in order to give stability to the trade, and free it from periodical annoyance, owing to apprehensions of change. The question arises—what arrangements are to be made for giving effect to the reduction of duty? In 1864, when the duty on raw sugar was reduced, unrefined sugar was admitted after a delay of six days, after which three weeks were allowed to refiners, during which no refined sugar was allowed to be imported. I do not propose to allow the six days in the present instance; but I propose that the duty upon raw sugar shall be reduced one-half immediately upon the reporting of the Resolution to the House, and that the duty on fine sugar shall be maintained for three weeks, with the object of enabling refiners to work off their present stocks or to export them for the purpose of obtaining the drawback.

The delay with regard to "pieces" which occurred in 1864 would be out of place now; its object then was to enable existing stocks to be worked off; but the process of manufacture is now so much accelerated, that were a similar period now allowed, the sugar which has paid the lower duty could be imported, manufactured and the drawback claimed. Therefore, the proposal we make is, that from and after the passing of the Resolution we shall remit the duty as regards all sugars except refined sugar, the remission upon which will take effect in three weeks. The matter has been very carefully considered, and although our plan may not operate wholly without hardship, I hope the Committee may be induced to acquiesce in it, for I can hold out no hope of its being altered. I am afraid there will be hardship somewhere; but the idea that something of this sort would be done has so much limited the delivery of sugar from bonded warehouses during the last three months that I believe the stocks of duty-paid sugar are very low, and the loss will be inconsiderable. [An hon. MEMBER: Are the duties to be equalized?] No, certainly not. I will state exactly what the duties will be. We are under treaty not to equalize them, but to reduce them all in the same proportion. The new ditties will be as follow:—On refined sugar 6s.; on first class, 5s. 8d.; on second class, 5s. 3d.; on third class, 4s. 9d.; on fourth class, 4s.; and on fifth class, or molasses, 1s. 9d.

I have omitted one explanation with regard to sugar. The law at present is that the duty is paid when sugar is taken out of the warehouse and not upon its landing, and the consequence is that there is a re-weighing of it when the sugar is going away. This does not apply to sugar in bags. I propose to charge the duty henceforth on the landing weight, not on the weight when sugar is taken out of bond. As so large a reduction in the duty has been made it is not unreasonable to make this change. The present system allows a small reduction in the weight upon which duty is charged, which was never much above 4 per cent, and generally did not exceed 2 per cent; but still it is a reduction, and has to be accounted for. Now, this is just an instance in which you give only a small benefit but where a great public expense is incurred. As we reduce the tax so much it is not unreasonable to demand that in future the law should be altered, and that sugar should be paid for upon the weight on landing. I believe that the difference will hardly ever amount to 2d. per cwt., and that only upon a particular class—namely, moist sugar. It has, however, added very seriously to the expense in collecting the Revenue, and it is our duty, and is therefore our intention, to repeal that section of the Act, and to ask that the duty may be paid in future on landing, and not on leaving the warehouse.

I will now recapitulate the proposed remissions of duties, which are as follow:—The licences for foot-hawkers, which are abolished from the 1st of October, will cost us £16,000 this year; the abolition of licences for paper-makers, soap-makers, watch-ease-makers, still-makers, and playing-card dealers involves a remission of £6,000; the abolition of stamps on hailstorm, cattle, boiler, and plate-glass insurance from the 1st of July involves a remission of £1,000. The revision of duties under the Stamps Consolidation Bill, which is to take effect from the 1st of January, 1871, will involve a remission of £50,000; in impressed stamps for postage on printed matter abolished from the 1st of October we remit £60,000; in the rate of postage on printed matter and newspapers, which is reduced one-half from the 1st of October, we remit £125,000; by the alteration of the duty on railways we remit £108,000; by taking a 1d. in the pound off the income tax we remit £1,250,000; and by reducing one-half the duty on sugar and molasses we take off £2,350,000. The surplus we have to deal with being £4,297,000, and the remissions amounting to £3,966,000, there will remain a net surplus of £331,000.

I think there is much in the statement I have made that must be subject of congratulation to all. It is very gratifying to us that the Revenue is becoming once more elastic; it is gratifying to us to be able to pay off so much of the Debt in the year, and to see our way to paying off several millions more by the working of the quarterly surplus; it is gratifying that we have been able to secure, without loss, a sum so large as £4,480,000; and it is gratifying, after all charges are met, that we have so considerable a surplus. The secret of all this success is the simplest in the world—it is nothing on earth but economy. I see no reason why the House should not give us encouragement to proceed in the course upon which we have entered; and I see no reason why we should desist from operations which have been attended with so satisfactory a result.

I can assure hon. Members we cannot better discharge the trust reposed in us than by lightening the burdens on our fellow-subjects; and I trust they will consider it is not merely by talking about economy that these things are done, but that something is required from them as well as from those intrusted with the public expenditure. Lay down for yourselves clearly and distinctly what is the real and legitimate province of the Government, and make it a rule never to press upon the Government anything beyond that province; for such a course will give more power and strength to the Government, and reflect more honour on this House, than many more brilliant efforts of oratory or legislation.

I now place in the hands of the Chairman the first Resolution, which I hope the House will have the goodness to pass to-night, in order that it may be reported to-morrow, because it is of much consequence that the matter should be settled immediately.

Motion made, and Question proposed, (1). "That, towards raising the Supply granted to Her Majesty, on and after the under-mentioned dates, in lieu of the Duties of Customs now charged on the articles under-mentioned, the following Duties of Customs shall be charged thereon, on importation into Great Britain or Ireland, viz.: On and after the second day of May, one thousand eight hundred and seventy,—

Sugar, viz.:—	£	s.	d.
Candy, Brown or White, Refined Sugar, or Sugar rendered by any process equal in quality thereto, and manufactures of Refined Sugar the cwt.	0	6	0

On and after the thirteenth day of April, one thousand eight hundred and seventy,—

Sugar not equal to refined:—

First Class	the cwt.	0	5	8
Second Class	the cwt.	0	5	3
Third Class	the cwt.	0	4	9
Fourth Class, including Cane Juice	the cwt.	0	4	0
Molasses	the cwt.	0	1	9
Almonds, paste of	the cwt.	0	4	8
Cherries, dried	the cwt.	0	4	8
Comfits, dry	the cwt.	0	4	8
Confectionery, not otherwise enumerated	the cwt.	0	4	8
Ginger, preserved	the cwt.	0	4	8
Marmalade	the cwt.	0	4	8
Suceades, including all Fruits and Vegetables preserved in Sugar, not otherwise enumerated	the cwt.	0	4	8

And that the said Duties shall be paid on the weights ascertained at landing."

MR. WHITE

said that, looking at the magnitude of the surplus, which was, however, he thought under-estimated by about £2,000,000, he was much disappointed to find so little done in the remission of indirect taxation. While the Chancellor of the Exchequer was under no necessity, for party objects, to make reductions that would impair the future efficiency of the Revenue, it would appear that he had no ambition to earn the gratitude of the people, like Lady Godiva, who— Took the tax away And built herself an everlasting name. He must say, after having watched the career and studied the idiosyncracy of the Chancellor of the Exchequer, that the right hon. Gentleman seemed to him to be imbued with a morbid horror of popularity; and, if that were so, he would feel supreme satisfaction in having extracted from the pockets of the people in the year ending March last, an amount greater than was ever before levied in the course of one year in any European nation, either in a time of war or peace. Contemporaneously with this vast draft on the resources of the people, there was a large increase in local taxation. Imperial and local taxation for the past year had together reached the stupendous and unprecedented total of quite £95,000,000. Hence, deducting paupers—now about 1,500,000—soldiers, sailors, women, and children, who did not contribute to the Revenue, the 10,000,000 of rich and poor who did contribute would have last year, on the average, paid £9 10s. per head. The immense sum of £75,500,000, raised by Imperial taxation in the year ending on the 31st of March last, was greater by £3,000,000 than the amount raised during the height of the Crimean War. The right hon. Gentleman had indulged in exultation at the financial prosperity of the country, although it was notorious that, during the last 12 months, the country was still writhing under the great monetary crisis of 1866. If, at the present time, they inquired into the state of pauperism, they would find that one in 20 of the population was a pauper. It had been truly said that pauperism was a growing and wasting cancer in our body politic. It had been described by a Commission, appointed by the National Assembly to inquire respecting the poor in rance, as "la plaie politique la plus dévorante de 1' Angleterre." The paupers relieved in the metropolis in the last week of March last numbered 163,677, as against 151,803 in the last week of March, 1869. Taking the whole of England and Wales, the number of paupers relieved in the first week of January, 1870, was 1,024, 683, as against 991,537 in 1869. He knew that it was said that the great amount of pauperism was concentrated in large cities and manufacturing towns, and that there did not exist the same amount of distress in country districts. All he could say was, that in the eastern division of the county with which he was connected the number of vagrants relieved during the last year was 45,236, as against 20,942 in 1866. He ventured to think that this growth of pauperism was mainly due to the heavy exactions of our fiscal system, and that, as the Premier had once stated, the savings of the people were largely absorbed by the vast national expenditure which of late years had been indulged in. The President of the Board of Trade, whose enforced absence from their deliberations he most deeply deplored, said to his constituents, on being re-elected after accepting Office— Rely upon it that so long as Parliament exacts from the industry of this people £70,000,000 a year, there is no power on earth can raise your poorer and suffering population from its present position. In the present year, the same right hon. Gentleman, addressing his constituents, observed— I tell you no Government deserves the confidence and support of the people of this country, which cannot carry on the administration in a manner consistent with the dignity and security of the nation for a smaller sum than £70,000,000. Nevertheless, during the last year, a larger sum by £5,500,000 had been drawn by taxation from the industrial resources of the country, at a time, too, of general distrust and privation, owing to the collapse of railroad and other joint-stock enterprizes. Although the present Government had done something in the way of economy, they had not satisfied him or the public at large. In fact, it seemed a very difficult thing for any Government to give up the habits of profusion engendered by former wars, and its own inherent tendency to extravagance. The present Government required £67,100,000 for the services of the year. Now, 20 years ago, when Government asked for only £54,000,000, Mr. Cobden moved a Resolution that that demand was excessive, and should be reduced to £44,000,000. Mr. Cobden very wisely recommended that, instead of attacking items in detail, they should attack them in the gross; and he himself had always held that, when the Chancellor of the Exchequer brought forward his Budget, the condition-of-England question ought to be discussed. The sum of £67,113,000 required by the Chancellor of the Exchequer was £13,000,000 in excess of what, on the average, sufficed during the 10 years previous to the Crimean War. The sum then required was £54,000,000. On a former occasion, when he said something of this sort, his figures were questioned; but they had since been carefully collated, and verified. Then, he would remark, the Chancellor of the Exchequer, in his estimate of the surplus for the coming year, had understated it considerably. Such, indeed, was, of late years, the ordinary habit of Chancellors of the Exchequer, in order to restrict importunate demands for remissions of taxation, they estimated the return of the Revenue at a much lower figure than it produced when the year had expired. That was especially the case with the Premier when he was Chancellor of the Exchequer, and the income during last year had considerably exceeded the original estimate of the present incumbent of that office. With taxation on its present basis, the income of the Chancellor of the Exchequer for next year—assuming low prices for corn, and increasing supplies of cotton—would certainly be £73,000,000, and, therefore, he would have a surplus of £6,000,000 to dispose of. He complained of our present fiscal system, under which property paid too little, and poverty too much. On the £67,113,000 required for the service of the year, not more than £17,000,000 could fall directly on the propertied class; the remainder would have to be made up by those who earned their income either by the exercise of their brain or the labour of their hands. Talking of the Government expenditure, it would not be inopportune to quote what the Prime Minister had told them in 1863. He said— It must be always borne in mind that when we speak of the expenditure of the Government, we speak of that which is taken in great measure out of the earnings of the people, and which forms, in no small degree, a deduction from a scanty store which is necessary to secure them a sufficiency. I do not say of the comforts of life, but even of the prime necessaries of clothing, or shelter, and of fuel. The Chancellor of the Exchequer informed them, that in the year ending March 31, 1871, he estimated that they would raise—from Customs, £21,650,000; and from Excise, £21,640,000; being together £43,290,000, three-fourths of which were raised from the working classes who, as the Prime Minister once told them— Were so poor" (and their condition had not since improved) "that the great majority were compelled to expend all their earnings on the bare necessaries of life. And the President of the Board of Trade said in November, 1868— The amount which they (the working classes) contributed in proportion to their means and income was very much larger than the amount which was contributed by other and richer sections of society. For himself, he must say he did not hold that the supreme art of Government consisted in extracting from the pockets of the people the largest possible amount of money without their knowing it, or even in taking money out of one pocket to put it into the other. Mr. Dudley Baxter, the Conservative statistician, in his work, The Taxation of the United Kingdom, pointed out that in the year 1868 the taxes on alcoholic liquors and tobacco contributed, through the medium of the retailer, in hard cash the sum of £29,120,000, which sum he estimated to amount— To an income of 10d. in the pound on the gross income of every man, woman, and child in the United Kingdom. He regretted that the Chancellor of the Exchequer had not directed his analytical and powerful mind to our whole system of taxation, instead of merely glancing at it, and if he did so, he did not think the result would be so eminently satisfactory as he seemed now to think. The late Sir George Lewis, when Chancellor of the Exchequer, laid on the Table an account of the consumption of tea and sugar by the working classes, in which it was stated that the working classes spent one-eighth of their earnings in tea and sugar. That such an inquiry as he had suggested was not wholly alien from the taste of the Chancellor of the Exchequer he inferred, because in his last Budget speech the right hon. Gentleman, when recommending the abolition of the 3d. per cwt. duty on corn, said— It was computed that if a man and his family ate nothing but bread, that (at the then duty of 3d. per cwt. on corn) would be equal to something like an income tax of 1½ per cent. A Return which had recently been issued by the Poor Law Board, of the average rate of weekly earnings of agricultural labourers in the Unions of England and Wales, for the quarter ending Michaelmas, 1869, enabled him to calculate the proportion which that class contributed to the taxation of the country. Taking their average earnings at the rate of 12s. 6d. a week, and assuming that each man consumed a pint of beer daily, and 2 oz. of tea, and 1 lb. of sugar weekly, this would represent a contribution equivalent to an income tax of 7d. in the pound on his earnings. The pressure of taxation of this kind upon the humbler classes was still more clearly seen in the case of spirits. Of the price of every pint of beer a farthing went into the Exchequer; but the duty chargeable upon spirits was nearly ten times heavier; every man, accordingly, who, desiring a Little alcoholic stimulant, had a quartern of gin, paid 3d. to the Chancellor of the Exchequer. But if an hon. Member, wishing for similar alcoholic excitement, drank a bottle of Châateau Margaux—though this was 20 times the price of the gin—his contribution to the Chancellor of the Exchequer would be only 2d. Then, with regard to tobacco, which yielded £6,500,000 to the Customs duties, an hon. Member who smoked his regalias paid only 5s. a pound duty, or about 12½ per cent on the retail price; but upon a poor man smoking his pipe of tobacco, taxation was at the rate of 75 per cent of the retail price, or more than six times as much as the rich man, would pay. With rare exceptions and partial alleviations, the whole tenour of our recent fiscal policy had been, if not to make the poor man poorer, but unquestionably to make the rich man richer. Upon almost every article which could minister to a cultivated taste or enhance a refined luxury the duties had been taken off; wine that was worth 50s. per gallon paid no more than wine that was worth 1s. a gallon, unless it contained a greater proportion of alcohol; but on articles affecting the poorer classes no corresponding reductions had been made. The malt tax, for instance, yet remained untouched. Contemporaneously, too, with the abolition of all duties upon silks, laces, gloves, and other foreign luxuries, the duties upon British spirits had been augmented in England by 27 per cent, in Scotland by 172 per cent, and in Ireland by no less than 275 per cent. He was willing to recognize the Imperial necessities as well as the moral considerations which had induced our statesmen thus to fix the duty upon spirits at the highest possibly maximum; but in doing this regard should have been paid to the classes by whom this increase was paid, and some equivalent ought to have been afforded them by the abolition of duties on articles of such general consumption as tea, sugar, and coffee. He would not conceal his distrust of any system of fiscal policy which thus retained and augmented the privileges of the wealthy, while pressing unduly on the poorer classes. Now that the number of commodities upon which Customs duties were levied had been reduced to 10 principal, and 55 kindred articles, he found by the Customs' Returns for the year ending March 31 last, that from those 65 dutiable articles £125,000 more had been received than from 1,092 dutiable articles in 1847. Eight years ago, when he had occasion to investigate the question of the incidence of taxation, it was proved from the results of sales at co-operative stores at Manchester, Rochdale, and elsewhere, that an artizan, earning 25s. a week, with a wife and three children, by his consumption of dutiable products, was, in effect, taxed to the extent of 20 per cent of his income. Happily, things had somewhat improved since then; but with the duties at present levied, and the enhancement of prices consequent thereon, the artizan population was now mulcted by indirect taxation fully 12½ per cent of their incomes, or, in other words, an amount equal to an income tax of 2s. 6d. in the pound. No doubt, according to the Chancellor of the Exchequer's argument, people might escape taxation by abstaining from the use of tea, sugar, and coffee, &c., but push that argument to its limits, and what did it come to? Why, that we should escape payments for clothing if we were contented, like our ancestors, with a colouring of woad, and should live at less cost, if we satisfied ourselves with the aboriginal acorns. If the doctrine of abstaining were seriously recommended, there were many things that persons in higher stations, having so many other sources of enjoyment and happiness open to them, might forego with ease, compared with the poorer classes, whose sources of enjoyment were unhappily exceedingly few. He was thankful to the Chancellor of the Exchequer for the remission of one halfpenny per pound of the duty on sugar, which he had announced, but he (Mr. White) was disposed to believe that he ought to have now abolished that duty altogether. By doing so a very great been would have been conferred, not only on the consuming and commercial, but especially on the agricultural interest, for a new and most important manufacture—that of sugar from beet-root might have been established in this country. Mr. James Duncan, at Lavenham, had proved that the manufacture of sugar in this country from beet-root was taken out of the category of experiments, and if a sufficient supply of roots were furnished it would become a profitable industry. Farmers, moreover, might feed their stock with the pulp after the saccharine matter had been extracted. The Chancellor of the Exchequer would have earned himself an everlasting name if he had had the courage to sweep away the duty on sugar. He did not desire to exempt the working classes altogether from taxation, and it would, in fact, puzzle the right hon. Gentleman to devise any system of taxation that would not, in a greater or less degree, bear upon labour, or the products of labour. In this country everyone should contribute to the Revenue in proportion to his means, and a Committee on the incidence of Imperial taxation was a necessary, and, indeed, indispensable preliminary to legislation upon or revision of local taxation, in regard to which a Select Committee was now sitting. Imperial and local taxation ought to be considered as a whole, and only in this way could any system of taxation be put in an honest condition, by everyone being assessed in just proportion to the burdens of the State, and the Revenue each one earns or enjoys under its protection, The Chancellor of the Exchequer, two years ago, in addressing his constituents, used these memorable words— Economy is little regarded in these days, but I believe extravagance to be doubly an evil, as a needless waste of the money of the people, and as a sure sign of inefficiency. The true way to save is not the cutting down of single items, but a more complete organization of our departments, and the determination that for whatever the country spends it shall have full value in labour, talent, or materials. The Revised Code has saved us £500,000 a year, but it has been by making the Department of Education more efficient. This was quite true. The right hon. Gentleman deserved the highest credit for what he had done when Vice President of the Committee of Council on Education, and he trusted that his past success at the Privy Council Office would encourage him to insist upon the adoption henceforward of that cardinal principle of sound administrative policy—the payment by results—in every State Department. The national expenditure would then be importantly diminished, and our taxation would not then be so repugnant to the moral sense and intelligent convictions of vast masses of our fellow-countrymen, as it would be alike consonant with fiscal equity and impartial justice.

MR. BARING

I have no wish, Sir, to enter into the details of the generally satisfactory statement made this evening by my right hon. Friend the Chancellor of the Exchequer, and I should not have said a word if it had not been that I think one portion of his statement ought not to pass without comment. I refer to the description which he gave us of the mode in which he raised the money due for the purchase of the Telegraphs by the sale of stock. He takes credit to himself that this was effected without any publicity and without, as he says, even the newspapers becoming aware of it. That would be very clever on the part of an ordinary stockjobber or a stock, operator; but it is a method that no Government ought to pursue, and one which in the long run cannot tend to its public credit, nor do I believe it is fair to the public at large. My right hon. Friend said that he borrowed £4,500,000 from the National Debt Office, using the funds of the savings-banks and other resources, and sold £2,500,000 on the market without anybody being aware of it, and that he did it without any pressure upon the price of the Funds. That may be very true; but those sales were effected at a time when the prices of other stock were rising, and it is clear that a rise in Consols was anticipated in proportion as the price of other stock rose. But while this was going on there was a man in a mask—a man behind a curtain, who was engaged in an operation which could not fail to prejudice the market and those who dealt in stock. I do not mean to say that this operation has affected public credit; but for a Government, I maintain, the most politic, the most advantageous course in general is the one which is most straightforward and fair, and it is the only conduct which can be pursued in this country without at some time or another injuring public credit. I must enter my protest at least against these operations. It is not right that the Chancellor of the Exchequer should sell stock at his own pleasure, without any publicity of his intention, and without any notice of his intention to those who deal in them. My right hon. Friend will, I am sure, believe that I intend no disrespect to him personally when I say that it is not becoming on the part of the Government to become a dealer in stock in secret. The only way is for the Chancellor of the Exchequer to declare openly his intention and the mode in which he operates, and leave it to competition to fix the price.

MR. CRAWFORD

said, he trusted some short time would be allowed to traders to get rid of their heavy duty-paid sugar. There was a large quantity of semi-refined sugar on which a duty equal to 11s. 3d. had been paid, and in sharp active competition with which would, in the next few days, be brought the sugar from abroad. He had no doubt that the statement which the Chancellor of the Exchequer had made was fully known by that time at Brussels, Paris, and other centres of sugar-refining abroad, and he thought it but fair that the holders of large stocks of semi-refined sugar in this country should have a short time allowed them during which they might get rid of their stock. On a former occasion eight days were allowed. He would not even ask for that extension. Would the right hon. Gentleman grant three days, or, as Friday was a holiday, extend the time to Saturday? He had had an opportunity of conferring with several representatives of the sugar-refining trade outside the House since the Chancellor of the Exchequer had made his statement, and they had charged him to state these views to the Chancellor of the Exchequer and the Committee, and he earnestly hoped that the right hon. Gentleman would see his way to granting their request. He had heard with great satisfaction the statement of the Chancellor of the Exchequer about sugar, though he could wish that the right hon. Gentleman had dealt with the duty on coffee. He would remind his right hon. Friend of this—that whereas in the purchase of tea a highly manufactured article was bought which might be at once consumed, in the case of coffee the article was bought in a raw state and had to go through a considerable amount of preparation before being brought into use. Take a certain description of coffee, worth in the market 65s. per cwt. This coffee sold for 112s. when roasted and fit for consumption. A duty of 3d. per lb. was 28s. per cwt., which appeared to him to bear very unequally and unjustly on coffee. The consumption of coffee for the last 10 years had gone steadily down from 1lb. 10oz. per head of the population to 15oz. He was assured, on good authority, that if coffee had been selected as the article on which the duty was remitted the consumption throughout the kingdom would have been doubled. That would have brought no gain to the Revenue; but it would have made a wholesome article to be very much more used by the great mass of the population. With respect to the question of stamps, he would like to ask the right hon. Gentleman whether he had considered a proposal which had been made to him. Under an existing Act of Parliament railways before issuing their bonds were privileged to commute the duty on transfer by the payment of a composition. What he wanted to know was, whether the Chancellor of the Exchequer would not consider the propriety of extending that privilege to corporations and other persons who might have occasion to raise money for the public service within their districts. At present the duty to which these bonds were subjected was so heavy as to be a positive bar to their circulation. Stock was raised by the Metropolitan Board of Works four or five months ago; but that stock could not be transferred except upon the payment of 2s. 6d. per cent for every transfer. The consequence was, that it would not be held by any banker or any one who held stock for the ordinary purposes of his business. It would be only fair that corporations, by the payment in the first instance of a composition, say of 10s., should be relieved from the necessity of paying a duty of 2s. 6d. upon every transfer. He entirely concurred in the proposal of the Chancellor of the Exchequer with regard to Terminable Annuities for the reduction of the National Debt. As to the Budget generally, he reserved his opinion till he had further time to consider it.

COLONEL BARTTELOT

said, he wished to make two appeals to the right hon. Gentleman. The first related to a question which had not been well understood throughout the country—he meant the operation which had been effected last year with respect to the assessed taxes. He wished the Chancellor of the Exchequer to make a concession with regard to farm-horses. The right hon. Gentleman had stated that they ought to have paid duty when they carried materials for repairing the roads; but that never had been the case, and it was essential that our roads should be repaired as cheaply as possible. If these horses could not draw materials without paying duty the repairs would be confined to a very few hands—namely, those who had paid licence duty for their horses. If necessary, a short clause might be framed which would set the matter right for ever. In this Budget the right hon. Gentleman had not yielded much to the agricultural interest. It was true he allowed them to sprout their barley for feeding purposes, a privilege they had possessed some years ago; but, after the conciliatory speech of the right hon. Gentleman the other night and the pleasant face he put on upon that occasion, they certainly expected a little more. The Chancellor of the Exchequer was going to reduce the sugar duties by one-half, and, therefore, he was going to put another commodity to compete with barley in the making of beer. If the duty on sugar was reduced by one-half they would have a considerably greater quantity used in brewing than at present; barley would be so far supplanted that the agricultural class would be in a worse position than before. There was a certain duty now paid on sugar when it competed with malt in brewing, and he hoped it would be continued.

THE CHANCELLOR OF THE EXCHEQUER

That is so. It is provided for by one of our Resolutions.

COLONEL BARTTELOT

As the right hon. Gentleman had taken the 1s. duty off imported corn and flooded the country with an enormous quantity of foreign grain, he ought to impose on agriculturists at home as few restrictions as he could. He ventured to hope that the right hon. Gentleman would, if his heart was not too hard, think of them at a future time. He could have run malt against sugar on the present occasion, but he would not, because he knew it was most important that the question should be decided whether the duty should be taken off sugar or not. He ventured to submit, looking to the grievances he had pointed out, that they ought to have some consideration from the Chancellor of the Exchequer.

MR. BEACH

said, he must express his gratification that the right hon. Gentleman had devoted some portion of his surplus to the reduction of the National Debt. That was a matter which had escaped Chancellors of the Exchequer for many years, and it was a shame in the present state of the country that so little of the Debt had been paid off in recent times. The right hon. Gentleman had told them that the principle of a Sinking Fund was an excessively bad one. No doubt the principle of a Sinking Fund depended on the accident of lurking an excess of receipts over expenditure. When the first Sinking Fund was instituted by Mr. Pitt, there was a surplus, but war ensued, and the error consisted in this, that it was necessary to contract a Debt in order to maintain the Sinking Fund. But it was believed that that war would be of very short duration, and therefore it was not thought expedient to put an end to the machinery which had been formed for the extinction of the Debt. He was glad that provision had been made for the extinction of portions of the Debt in future. There was one part of the right hon. Gentleman's statement which would give great satisfaction to the country, and that was that he was placing a tax upon guns. People were in the habit of carrying guns for all sorts of purposes, and the tax upon them would have a very salutary effect. He considered that it should be levied in proportion to the number of guns kept. Some men who were fond, of shooting had a number of guns, and it was fair that they should pay more than the man who had only one. He should have preferred the continuance of the duty on game licences, and that the proposed tax on guns should be simply a supplemental duty. With regard to the malt duty, he had ventured to hope, though scarcely to expect, that the right hon. Gentleman would have felt himself at liberty to make some reduction of that duty during the coming year. He was glad, however, that the right hon. Gentleman had not thought it incumbent upon him to change the malt duty into a beer duty. For his own part he entertained the most serious objection to the change which the right hon. Gentleman had been strongly urged to make. In 1830, when a careful investigation was made into the subject, the Chancellor of the Exchequer of that day came to the conclusion that the beer tax pressed much more heavily upon the community at large than the malt duty; and he (Mr. Beach) was pleased that the present Chancellor of the Exchequer, respecting the opinions of his predecessors, and with a regard to the good of the Revenue had thought it right not to convert the malt duty into a beer tax. On the subject of the income tax the right hon. Gentleman said he had well balanced the claims between direct and indirect taxation; but nevertheless he had reduced the amount of indirect taxation to a much larger extent than the amount of direct taxation. The proposed reduction of the income tax was not large, because the right hon. Gentleman had merely taken off the penny which was imposed for war purposes. He thought, therefore, the right hon. Gentleman might have reduced the income tax a little more. The other remissions proposed by the right hon. Gentleman were generally satisfactory. He hoped the financial results of the coming year would exceed the right hon. Gentleman's expectations as much as those of the past year had surpassed his former anticipations, and that the state of the Exchequer this time twelvemonths would enable him to make still further reductions of direct and indirect taxation.

MR. POLLARD-URQUHART

said, that the Financial Statement would be a cause of congratulation to the entire country. The increase in the Excise duties, showed, he hoped, that the condition of the working classes was becoming better, and that the distress under which they had so severely suffered was passing away. Very different was the state of the Revenue in former periods of distress—for instance, in the years 1840–1–2, and in the year 1848. He regretted, however, that the right hon. Gentleman had not determined to raise the income tax to its old amount of 7d. in the £1, which would have enabled him either to sweep the whole of the duty off sugar, or reduce the duties on tea and coffee, or reduce the malt duty one-half, or even abolish it altogether, supposing he had not touched the sugar dnties. The right hon. Gentleman did not seem disposed to carry out to as great an extent as he might do, the principle so strongly advocated by the present Premier when Chancellor of the Exchequer, that of reducing as much as possible the number of articles on which duties were levied. He hoped, however, the Government would persevere in their measures of economy, in spite of the taunts of hon. Gentlemen opposite, for it was by doing so they would enable themselves to reduce the burdens of taxation. The other points to which he had referred were rather matters of detail. It would be hard to find fault with the Chancellor of the Exchequer, because he might, perhaps, have done better, as all must admit that he had done well. The operation of the proposed remissions would give great relief throughout the country, and more than counterbalance the effect produced by the dismissal of labourers from the Government Dockyards.

MR. HUNT

Sir, I do not intend to detain the Committee long, but there are two or three points on which I wish to make an observation. I confess I almost entertain a feeling of envy towards the Chancellor of the Exchequer when I think of the happy lines that have fallen to his lot. During the past year he seems to have been happy in almost every particular; and he has made his Financial Statement under circumstances that must be exceedingly agreeable to him. He has been able to shake off the effects of the "Black Friday," from which his predecessors had the misfortune to suffer, and that other incubus, the financial results of King Theodore's war. Again, his Colleagues who are at the head of the great spending Departments seem to have been seconding his endeavours in an extraordinary manner. Then during the past year the harvest of death has been exceedingly productive to the Exchequer. During the time I held the office of Chancellor rich testators exhibited a most determined tenacity of life; but this has not been the experience of the right hon. Gentleman in the past year. The only drawback in the Statement of the right hon. Gentleman was doubtless owing to the indiscretion of a Colleague. There had been a very general expectation that there would have been, a great change in respect of the articles that usually appear on the breakfast table, and as a consequence the Customs duties collected on these articles had fallen off. It is the fate of Ministers to suffer for the indiscretion of their Colleagues; but in this case there was a set-off. The right hon. Gentleman who advocated "a free breakfast table" was not present when the Budget was discussed by the Cabinet. If he had been we might not have had the same Budget, because the Chancellor of the Exchequer might not have been able to secure the adoption of his views with reference to articles for the breakfast table. In his retrospect of the change made in the mode of collecting certain taxes, the right hon. Gentleman said that the commutation of assessed taxes into licenced duties had not justified the complaints made of that change. He said that the hardships which had been anticipated had not resulted from the change. Now, I did not understand that last year complaints were made of the hardship of that commutation.

THE CHANCELLOR OF THE EXCHEQUER

I meant the hardships complained of in some newspapers in the months of January and February of the present year.

MR. HUNT

I do not think any complaint, was made of the change itself. The complaint, I believe, was that the right hon. Gentleman was having two different systems working at the same time, and had fixed the date at which the new licences were to be taken out at a part of the year when they formed an inconvenient addition to other taxes. The right hon. Gentleman says that the system of licence duties is so successful a mode of collection that he proposes to extend it, and to have other taxes to which he alluded collected by Imperial officers. Now, though there may be some little grumbling on the part of those who have vested interests, I think the proposal of the right hon. Gentleman will commend itself to the common sense of the community. The right hon. Gentleman takes credit for the large amount of the Debt he paid off last year and yet having so large a surplus; but there are circumstances which must be taken into consideration. He put on an express tax to meet the expense of the Abyssinian War, and he anticipated the collection of Revenue, and therefore I do not think he can take credit to himself for clearing off that debt out of the Revenue of the country. Of course, this year he has been unable to repeat that operation, which was very successful in a financial point of view, but rather oppressive in another one, notwithstanding the statements that may have reached him. He has this year a very handsome surplus without any such extraordinary operation, and he only proposes one new tax—that on arms, which he substitutes for game certificates. I need not have any reserve upon that matter, because it has been under consideration for some time, and I know that the proposed change will give general satisfaction. No reason can be given why a gentleman who goes to Hurlingham to shoot pigeons should not pay equally with one who goes into Norfolk to shoot partridges. I always felt that the tax pressed very heavily on persons who had only a short holiday, and would like to enjoy three or four day's shooting with a friend; for it was not worth the while of such persons to take out licences, and the result was that conscientious persons lost their amusement, while unscrupulous persons shot without certificates. The right hon. Gentleman's proposition will do away with that hardship, and will equalize the tax on all persons and on all shootings, and when the Bill comes before us we shall see whether it is so worded as to carry out the proposition as stated to the Committee, and whether there are proper exemptions, so that there shall not be any case of hardship under the new law. Another proposition which the right hon. Gentleman has made with regard to his surplus is to reduce the National Debt by changing the Permanent into Terminable Annuities, a proposition which has received the assent of the House on several occasion, and is possibly the only practical way of reducing the Debt. To my mind, that plan is not wholly satisfactory, and I believe that if the right hon. Gentleman were at the head of a despotic Government it is not the mode he would choose, but he would rather go to work in a more direct way, and set aside a part of the Revenue of each year. The fact is, that the proposal of the Chancellor of the Exchequer is intended to hoodwink the House of Commons, on the ground that our virtue is not stern enough to maintain a surplus. He proposes to treat this as a charge upon the public that must be met, and in that way he will be allowed to obtain large sums of money for the purpose of reducing the Debt. That proposition is, to my mind, one of an extremely doubtful character, but I am not prepared to say that I shall oppose the right hon. Gentleman on that subject, although there may be other ways to arrive at the same object, and I simply desire to express the opinion that the right hon. Gentleman's proposition is only a very clumsy contrivance to effect his purpose. He also proposes to deal with the foot hawkers' (or pedlars') and other small licences, and, in accordance with a pledge which he gave to my hon. Friend the Member for Liverpool (Mr. Graves), he will reduce the postage on printed matter. I am glad that the Chancellor of the Exchequer has made that concession, and 1 congratulate my hon. Friend on the success which has attended his efforts; for when I was Chancellor of the Exchequer I hoped to effect such a reduction, and led my hon. Friend to believe that I would do so if I continued in Office. The right hon. Gentleman also proposes to reduce the railway passenger duty, and when last Session he dealt with the taxes on locomotion, I felt that the tax on railways could not long continue, but would be a necessary consequence of the alterations he then made. The right hon. Gentleman also proposes to reduce the income tax by 1d.—a reduction which I believe all persons thought would be made as a matter of course whenever the Abyssinian debt was cleared off. With regard to the sugar duty, I think my hon. Friend the Member for West Sussex (Colonel Barttelot) is right in not contesting that matter, although I think the agriculturists will be disappointed to find that the Chancellor of the Exchequer has not considered them a little more, because there are many who think that malt is as much a necessary of life as sugar. I discussed the matter with some of my constituents a short time ago, and I then ventured to make the prophecy which I will repeat to the House—that the malt duty will come off about 20 years after a compulsory education Bill is passed. The connection between the two may not seem very obvious; but my opinion is that the malt duty will be repealed as soon as the inhabitants of towns are sufficiently intelligent and educated to find that they, as consumers, pay that tax. When they find that out there will be "a long pull and a strong pull, and a pull altogether," and they will get rid of that tax; but until they are better educated I do not think that the efforts of my hon. Friend will be very successful. The right hon. Gentleman has not gone into any great detail about his proposal to reduce the sugar duty; but I assumed that there would be such an adjustment as regards the sugar used in brewing that that article would not be brought into unfair competition with malt. I have no doubt the right hon. Gentleman has also considered the point that the foreign refiner ought not to compete unfairly with the English one, and should it be necessary to make any representations on that subject he will probably listen to what the trade may have to say. The right hon. Gentleman estimates that he will lose £1,125,000 by the reduction of the income tax; but I think that is too low, and my impression is that it will be nearer £1,500,000, unless he makes it up by the arrears that have to come in. I wish he had been a little more explicit on this point, but perhaps he will be kind enough to afford the Committee some information.

MR. J. B. SMITH

said, he had listened with interest to the general statement of the Chancellor of the Exchequer; but felt great disappointment that, with the largest surplus at his disposal ever known, the right hon. Gentleman had made no provision for the reduction of our enormous National Debt. The time has arrived when it is criminal to delay serious efforts to reduce it. A more just feeling of the sound policy and of the moral obligations of the country existed at the termination of the French War. In 1819, the House passed a Resolution for setting apart the sum of £5,000,000 annually to pay off the National Debt. That Resolution was not literally carried out; but from the close of the War, to 1830, the Debt was reduced from £902,000,000 to £842,000,000, being a reduction of £60,000,000, or £4,000,000 per annum. In 1828, a Finance Committee again asserted the obligation of the country to make a gradual reduction of the Debt, and suggested that at least £3,000,000 a year should be provided for that purpose. Now, it is important to inquire what were the resources of the country at the period when these efforts were made to reduce the Debt, and to contrast them with its present condition. The period from 1815 to 1830 was one of the darkest in our commercial history. We had the most industrious population in the world struggling with poverty, because the law prohibited them from exchanging the produce of their industry for the food and produce of other countries. The Corn Laws taxed their bread, and the Custom House levied duties on nearly 2,000 articles of foreign production. We may be said to have then had no railways, only 30 miles having been opened in 1830, between Manchester and Liverpool. We had no steam navy, the great philosopher of the day contending that it was impossible to cross the Atlantic by steam; and the extent of our foreign trade was limited to an export of £38,000,000. Notwithstanding the then distressing state of things, however, we reduced our National Debt £60,000,000, or at the rate of; £4,000,000 a year for 15 successive years. It will be instructive to contrast the state of things which existed when the nation made these sacrifices to pay, its debts, with the state of things as they exist at present. The Corn and Provision Laws have long been abolished, The duties which then existed on nearly 2,000 articles of foreign produce are reduced to about 30. We have now more railways, according to the size of the country, than any other country in the world. Steam navigation, spite of philosophers, is become a great success; and our mercantile steam navy is equal to that of all the other nations in the world—crossing the seas in all directions. Our foreign trade has increased from £38,000,000 in 1830, to £181,000,000 in 1867, or nearly five-fold. Wealth has increased in a similar proportion, and the country is at present richer and in ore prosperous than any country we ever knew or read of; and yet, with these enormous means at our command, in the 36 years, from 1830 to 1866, the National Debt has only been reduced by £41,000,000, or at the rate of about £1,200,000 per annum! Hon. Gentlemen had referred to the severe competition already existing with foreign manufacturers, and which is likely to increase. If we have a race to run with foreign manufacturers the smaller the burden of taxation we have to carry the better chance we shall have of successful competition; and on that account it is folly, while we have the ability, not to make provision for the contest. The Chancellor of the Exchequer has alluded to the disputes which may arise with other countries, or with our Colonies, whereby our public burdens may be increased. Any such addition to our burdens would necessarily enhance our difficulties in competing with the foreign manufacturer. On every ground, therefore, it was important that serious efforts should be made, while we possess such abundant means, to reduce our National Debt. If we continue to reduce the Debt in the same proportion as for the past 40 years, it will take about 660 years to pay it off. What a contrast is shown by the proceedings of the; United States! Our race on the other side of the Atlantic, taking a similar view, that was formerly taken by this country, of the moral obligations of those who contract debts to make some efforts towards discharging them, have, in the five years since the Civil War, reduced its debt of £550,000,000 by about £70,000,000, and if they continue to reduce their debt at the same rate as at present, it will be entirely extinguished in 30 years. He (Mr. j. B. Smith) thought the mode hitherto chiefly pursued of paying off our Debt by means of Terminable Annuities, most objectionable—it was an expensive way of paying off debt by a kind of side-wind. Terminable Annuities can only be disposed of at a great sacrifice, as compared with the sale of stock; while the relief of such payments afforded no benefit to the present generation. The Chancellor of the Exchequer submitted, for the opinion of some eminent bankers, a proposition of giving the holders of £100,000,000 of stock a present bonus of 10 per cent, on the condition that at the end of 100 years the whole should be cancelled. The effect of such a proposition would be that the present generation would for 100 years pay an additional amount of taxation for the purpose of relieving those who may live 100 years hence. Well may it be asked, what has posterity done for us? In this case we pay at present say 3 per cent on £100,000,000 of stock, or £3,000,000 per annum. The proposed addition of 10 per cent would raise the payment by £300,000 a year for 100 years; but if this amount were paid off every year, existing taxpayers would participate in the benefit arising from the annual reduction of that amount of Debt. The time is arrived when the National Debt ought to be reduced on a large scale, and this object may be easily effected if our expenditure is kept within limits which were, a few years ago, thought reasonable. Since he had had the honour of a seat in that House our net expenditure (in 1854) was only £49,500,000, to which, if £3,500,000 were added for charges in collecting the Revenue, we should have a total expenditure of £53,000,000. The Chancellor of the Exchequer's Estimate of the expenditure of the present year is upwards of £67,000,000—deducting the Expenditure of £53,000,000, in 1854, from the Estimate of £67,000,000 in 1870, there remains a balance of £14,000,000, which, added to the increase of Revenue which is certain to accrue from the improved state of trade, leaves a large margin, which, with, a wise reduction of the public expenditure, will be applicable to the reduction of the National Debt. Now, supposing there should, with a proper economy, remain a surplus of £10,000,000 per annum applicable to this object, what would it effect? Why, at the end of six years as much debt would be cleared off as would leave the sum of £2,000,000 a year for ever to be applied to the reduction of taxation. At the end of 12 years they would have cleared off £4,000,000, to be applied to the same object, and so they might go on from year to year, the present generation—as is not the case in Terminable Annuities—as well as all future generations, sharing in the benefit of the reduction of the Debt. In this way, at the end of 30 years, £300,000,000 of debt would be paid off, which, added to the Terminable Annuities expiring in that time, one-half the existing National Debt would be cleared off. And all this may be accomplished without any addition to our present taxation. He regretted that the right hon. Gentleman proposed to take off another 1d. of the property tax. He would rather see that tax 6d. in the pound, which would only be a fair contribution by the owners of property towards the reduction of the Debt. The right hon. Gentleman proposed to reduce the sugar duties; but however good the reduction was in it-self, he still continued the existing objectionable regulations. Sugar is the only article on which an ad valorem duty is levied, and it is pretended that the duty is assessed according to the quantity of saccharine matter it contains. This absurd and expensive system involves the necessity of sampling every package of sugar imported, and about 5,000,000 such samples were taken by the Custom House officers during the past year for the purpose of determining its value. But it has been proved that it is utterly impossible to ascertain the quantity of saccharine matter contained in sugar by its mere appearance. The result of this system, however, has been to banish the import of the best sugars entirely from our market, and to substitute an import of all the rubbish of the world, which, is deprived of its richness by being washed and remade into what is called pieces by English sugar-refiners. He spoke a few days ago with a Member of this House connected with the Mauritius, whose good sugars have been excluded by the existing law, and reminded him that he would have an opportunity on the Budget of again bringing forward the sugar grievance; but he replied, we no longer care about our sugars being excluded from England, as we have now a market for all the good sugar we can make in Australia, and can send our rubbish to England. Surely this country is entitled to good sugar as well as our Colonies, and how long will it submit to be obliged by law to consume the worst sugar in the world? Strange to say, we have succeeded in persuading other countries to commit the like follies as ourselves in this matter of sugar duties; but they have found out their folly, and want to get rid of the treaties by which they cheat themselves, and some even refuse to carry the treaties into effect. He hoped that means would be taken to get rid of these absurd treaties, if that course was indispensable to our adopting an equal rate of duty on sugar. All kinds of sugar, like every other kind of produce, ought to be admitted at one rate of duty, and then we should cease to discourage the import of the best qualities by imposing a high rate of duty upon them. If something were not shortly done with that view, he should himself call the attention of the House to the subject.

MR. STEPHEN CAVE

reminded the hon. Gentleman who spoke last that it was not many years since a very strong Committee, presided over by a very strong Chairman, inquired into the whole subject of the sugar duties. The hon. Gentleman said it was a very absurd thing that sugars should be brought into this country at different rates of duty, and that, in consequence of that, we got the very worst sugar in the world. But if all kinds of sugar came in at the same duty it would be impossible for anybody but those who made the best qualities to send their sugar here at all—[Mr. J. B. SMITH: Hear!]—and, therefore, we should be deprived of sugar which was not equal in quality to the best. It was very difficult in any part of the world to make good sugar without extensive and expensive machinery, and therefore were the proposition of the hon. Member opposite to tax all sugar alike to be adopted, the low-class sugars, the produce of India and of the emancipated slaves of the West Indies, would be excluded from the British market. The principle we had adopted was the best, because it ensured the largest supply of every quality. The right hon. Gentleman had very rightly stated that the growth and manufacture of sugar were in a transition stage, and that we must look to the Chinese as the future producers of that article of commerce in the Tropics. The Chinese were more like the aboriginal inhabitants of the West Indies than the negroes, and he regretted that so many obstacles had been placed in the way of their emigrating there. With respect to beet sugar, he must observe that the zone in which beet was grown for sugar-making purposes with success was a very narrow one, running through the north of France, Belgium, Germany, and Russia, where the climate was hot enough, but not too hot; and he greatly doubted whether it would succeed in this country, in consequence of its requiring a considerable amount of sun heat to produce the necessary quantity of saccharine matter, though late experiments appeared to show the contrary, probably in consequence of the exceptional heat of the last few summers. The hon. Member for Stockport (Mr. J. B. Smith), in referring to the French Treaty, had observed that we had not only made fools of ourselves, but had persuaded others to do so. If such were really the case, it was certainly odd that so many nations had followed our example, and he should be inclined to draw a very different deduction from the circumstance to what the hon. Member had done. With regard to this Convention he hoped that some pressure would be put upon the French Government. While the Dutch and the Belgians had fulfilled their part of the Convention, the French had interposed one delay after the other, and now had asked not to be compelled to perform their engagements until June, 1871, with the qualification that they would see whether they could not manage to carry the arrangement into effect at an earlier date. Perhaps the right hon. Gentleman would state whether there had been any recent communication with the French Government upon this subject. The hon. Member for Stockport had suggested the possibility of our paying off the National Debt; but was he prepared to ask this country to tax itself to the extent that the American people had done, to the ruin of their trade? The hon. Member for Westmeath (Mr. Pollard-Urquhart) had talked very glibly of adding 2d. or 3d. to the income tax; but he should recollect that were the income tax to press too heavily upon the richer portion of the community they would be compelled to curtail their expenditure, and would therefore be the less able to be the employers of labour. The misfortunes of 1866 showed them how grievously the reduced circumstances of employers reacted upon the employed. With regard to the abolition of passengers' duty on railways, he wished to know what course would be taken to compel the railway companies to keep faith with the third-class passengers, they having hitherto in many cases endeavoured to evade the law which required them to run cheap trains, either by starting them at unreasonable hours or by not allowing them to stop at certain stations? When he (Mr. Stephen Cave) was at the Board of Trade there were frequent cases of this, which the Board were able to meet by the power placed in their hands, by the remission of duty, and he feared that the poorer class of travellers might suffer from the change. lie thought the gun tax was a most excellent one, because it would prevent idle boys living in villages from getting hold of old rusty guns at Easter and Christmas, wandering about the country, and shooting sometimes a sparrow, sometimes a cow, and not un-frequently themselves. He did not look at this question as a sportsman, but as one interested in abating what was becoming an intolerable nuisance. Upon the subject of duty-paid sugar he might remark that the Chancellor of the Exchequer had allowed three weeks in order to enable the holders of refined sugars to clear their stocks; but he had altogether overlooked the case of the holders of large stocks of inferior or semi-refined sugars. The holders of sugar of that class in France might, by simply wetting it, send it over to this country to compete with semi-refined sugar, upon which a heavy duty had been paid. This was the more likely to occur because a substantial bounty was paid by the French Government for the export of semi-refined sugars. He regretted that the right hon. Gentleman had not explained in his Budget speech that he intended to levy the duty upon the landing weight, instead of upon the actual weight of the sugar, the holders of some sorts of which, such as Barbadoes, would be likely to suffer in consequence. He was sorry the Chancellor of the Exchequer did not see his way to any remission of the malt tax; but he was glad to hear that farmers were to be allowed to sprout their own barley, and he thought it probable that the large reduction of duty would enable them profitably to use coarse sugars and molasses in feeding their stock.

MR. J. B. SMITH

said, he wished, with reference to an observation of the right hon. Gentleman (Mr. S. Cave) to explain that he did not desire to maintain the taxation of this country on the same footing as that of the United States.

MR. PEASE

said, there were one or two practical questions in regard to that Budget to which he would like to call the attention of the Committee. He wished to second that which had been said by his hon. and gallant Friend the Member for West Sussex (Colonel Barttelot) with reference to the tax on agricultural horses employed in carrying materials for the repair of the roads. That might be almost entirely a sentimental grievance; but it was a grievance, and one which he could assure the Committee was keenly felt. The point to which he desired most to call the attention of the Committee, however, was the remission of £100,000 on railway-passenger duty. That was in effect a passenger duty at the present time; it was practically a duty of 5 per cent, levied upon first and second-class passengers. But it was now sought to impose a railway duty of 1 per cent on the whole traffic. In the South of England the traffic of the railways was, for the most part, passenger traffic, but in the North the greater part of the traffic was mineral. He thought that in these matters the Chancellor of the Exchequer was taxing the raw material, which was contrary to every sound principle of political economy. The tax would still bear heavily on small branch railways in rural districts, some of which were exceedingly poor. He would also call the attention of the right hon. Gentleman to the propriety of abolishing the stamps on the smaller class of transfers of railway shares, which were often used as a sort of savings bank by the poor.

MR. C. S. READ

said, he was grateful for small mercies; he tendered his thanks for the adoption of his suggestion made last year to forego the duties on hailstorm and cattle insurances, and for the restoration of the privilege of sprouting barley for cattle, a privilege not taken from the farmer by Parliament, but by the caprice of the Excise, just as that Department now imposed the licence duty on farm horses, when employed in carting materials for the repair of the parish highways. But he dissented from the Chancellor of the Exchequer's statement that, in allowing farmers to use sprouted barley, for cattle food he gave them the very best produce capable of being made from barley for feeding stock. Malt was very much better, although it was not necessary to dry or roast the malt to the extent necessary for making beer. He was, naturally, much disappointed that no remission whatever of the malt duties was made. There had been no remission of any duty on beer since 1830, but an increase of 5 per cent upon the malt tax was made in 1840. The sugar duties, on the other hand, were lowered only six years ago; but he, for one, was very glad the sugar duties were reduced rather than on tea, for the English farmer might grow sugar beet, though he would rather have had the chance of growing untaxed barley against all the world. The reduction on the sugar duties was a sensible one; it would amount to ½d. per lb., so that the change would be readily appreciated by the poor man. It was impossible last year that the abolition of the import duty of 1s. a quarter on wheat would ever reach the consumers, because it had to be divided between 110 or 120 4-lb. loaves; so that if the Chancellor of the Exchequer could congratulate himself on having reduced the price of wheat, he could not feel satisfied he had proportionably reduced the price of bread. The Chancellor of the Exchequer had said the average price of wheat just now was 42s. a quarter; but in the course of a walk through the East-end this morning he found the price of the 4-lb. loaf was in no case less than 6d., and sometimes 6½d. He was sorry he could not join in chorus of praise on the imposition of a tax on guns. In a purely rural district guns were kept not for the purpose of killing game, but of scaring birds. He had two men on his farm so employed with guns, and in his parish there were three men who took out game licences, and 12 who used guns for scaring crows, a duty formerly discharged by boys, who were now better employed in school. Although, the proposal to tax firearms might be very popular on his side of the House as a preventive of poaching—from which opinion he entirely dissented —yet it would seriously injure the agricultural interest. Fanners were not allowed to poison sparrows; and, although to some it might appear to be a joke, yet, considering the difficulty in destroying the great variety of vermin which preyed upon farm crops, the result would prove that this tax on firearms was a tax upon the production of cheap food. He would much prefer that it should be a tax on every gun, for that was the only way to get at the rich. He knew one gentleman who kept 25 guns, and it was no uncommon thing for a sportsman to be accompanied by two loaders carrying guns. But perhaps these loaders would have to take out a licence. As the farmer was at present exempt from the duty on farm horses, he hoped the Chancellor of the Exchequer would also exempt him from this new tax on farm guns.

MR. W. FOWLER

observed, with regard to the Chancellor of the Exchequer's remarks on the money market, that it would get on a great deal better than it did if it were left alone; but when a very large mass of money was kept idle at one part of the year, and at another the Government was obliged to go to the Bank for money to pay its dividends the arrangement could not be considered as economical. Whatever the advantages of the new mode of collection the objection raised to it by the Governor of the Bank (Mr. Crawford) last year was a sound one. The Chancellor of the Exchequer seemed to think that if the people had more for their money during the first three months of the year and less during the last three months it came to much the same thing. That might be so if the circumstances were different from what they really are; but the truth was, that the time when the Government required a large sum from the Bank was the very time when the public also wanted money, and he predicted that a Chancellor of the Exchequer who wanted very large sums of money during a time of commercial depression would not be a very popular Minister. The payments should be spread over the year as much as possible; and that accumulation of idle money should be discouraged. The railway duty should be abolished altogether; railway companies were most unfairly used. The North Eastern paid £80,000 a year in local taxation, equivalent to one-half per cent on its shares, and when a shareholder died his successor paid probate and legacy duty, as if he succeeded to personal estate. Thus, the railway was taxed as real property and as personal property as well. Besides this the company had to pay carriage duty. The whole arrangement was most unjust. He trusted also the Chancellor of the Exchequer would give his attention to the whole question of licencing. Why was it a brewer should require a licence to carry on his trade and an ironmonger not? He presumed political economy might be appealed to that night, though they had been told on that day week to make light of its teaching. He could not help expressing his gratification at the statement of the Chancellor of the Exchequer respecting the financial condition of the country. It was, indeed, a most remarkable circumstance that we should be able to raise with comparative ease such an extraordinary Revenue, especially as trade had been in a state of depression during the last four years. He trusted that, in future years, the Chancellor of the Exchequer would be able to submit to the House equally satisfactory, if not more satisfactory, statements.

MR. SCOURFIELD

said, that as there was not the remotest possibility of his occupying the post of Chancellor of the Exchequer in the year 1885, or at any intermediate period, he should confine himself to making a very few remarks on two minor topics. In the first place, if horses employed in agriculture were to be exempted from the Excise tax, horses employed in the conveyance of materials for roads, which were so materially connected with agriculture, ought, in his judgment, to be likewise exempted; and, secondly, he would remark that the tax it was intended to impose on the conveyance of materials on railroads would seriously affect some of the small railroads, which had been established in some parts of the country, mainly for the conveyance of agricultural produce. He thought the Chancellor of the Exchequer ought not to reduce the Post Office rates at a time when the Post Office revenue was beginning to show some weakness.

MR. CANDLISH

said, he thought his hon. Friend the Member for Brighton (Mr. White) made a mistake in saying that the working classes were in a distressed condition. He believed that they were, on the whole, in a tolerably healthy commercial condition, and evidence of this was to be found in the enormous accumulations in savings banks and building societies. As an instance, he might mention that in the borough which he represented (Sunderland) engagements had been entered into for payment of £1,500,000 into building societies. Another proof of the increasing prosperity of the working classes was to be found in the fact that while in 1820 the sugar consumed was 171bs. per head, at the present moment it was 43lbs. During the same period the consumption of tea had increased from 20oz. to 50oz., and that of tobacco from 12oz. to 20oz. per head. The hon. Member for Brighton also made a mistake, when speaking of the cost of Government, in including in it the cost of sending our letters and our telegraphic messages. He was glad to find that during the last two years there had been a reduction in the expenditure of from 10 to 12 per cent; and he was also glad that there had been a recognition on the part of the Government of our obligation to pay off the National Debt, for we were now paying off £2,250,000 by the increased amount on Terminable Annuties. There was, however, ample room for the application of the pruning knife, for although during the last two years the expenditure for the Army and Navy had been reduced to the extent of £2,000,000, the charge for their maintenance now exceeded by £6,000,000 the cost before the Russian. War. He was of opinion that some decisive and effectual action should be taken with reference to the National Debt. During 40 years of prosperity since the year 1831 that Debt had not, in point of fact, been reduced by a single farthing. This was, in his opinion, a discredit to us, considering how largely our wealth and resources had increased during that period. He hoped that the Chancellor of the Exchequer would yet use his efforts to remedy such a state of affairs. He wished that instead of taking 1d. off the income tax the Exchequer had increased it by another 1d.; for if he had adopted that course he would have had £3,000,000 at his command with which to reduce the Debt.

MR. HERMON

said, he regretted that the Chancellor of the Exchequer had not removed those trifling burdens, which existed as an additional quarter per cent charge on the duty payable on Customs. They led to an amount of writing and calculation of which commercial men very much complained, while they were of little or no importance as items of revenue. As to the tax on railways, he did not know whether what the Chancellor of the Exchequer proposed to do would prove satisfactory to those interests; but he could not help expressing the hope that it would have a better effect than the proposals made last year with respect to the means of carriage locomotion. He had been informed that the Government policy of last year had acted in a very detrimental manner with respect to the cab proprietors in the metropolis, and he trusted that a like complaint would not require to be made by the railway companies next year.

MR. W. H. SMITH

said, he thought it would have been well if the Chancellor of the Exchequer, in dealing with the collection of taxes, had devised some means of appeal against the arbitrary manner in which income tax under Schedule D was assessed. He hoped the right hon. Gentleman would, in any changes which he might make in the mode of collecting the income tax, respect the interests of those who collected that tax. He held that those collectors discharged very important duties, and that their services to the public ought not to be overlooked.

MR. MELLY

said, he desired to congratulate his right hon. Friend the Chancellor of the Exchequer on having produced a most satisfactory Budget. During the General Election the right hon. Gentleman at the head of the Government had pledged himself, in the event of his return to power, to reduce the taxation by at least £3,000,000. That pledge had been more than fulfilled, for there had been an actual reduction of £3,363,000 in two years. He must also congratulate the hon. Member for Liverpool (Mr. Graves) on the success which he had, after many years of unwearied industry, achieved in connection with a question in which all commercial men took a great interest, and with which his name would ever be honourably associated. As to the Chancellor of the Exchequer, he should forgive him all his bitter sneers at "a free breakfast table," seeing that he made so large a reduction in the sugar duties. He did not think that the course which was proposed to be taken with respect to the game licences was altogether a wise one, for, in his opinion, it would virtually amount to making a present of between £3 and £4 a year to those who now paid it. The reductions of the Army and Navy Expenditure were highly important, because it was proved that the efficiency of the Services had at the same time been maintained. He could not, he might add, concur in the regret which had been expressed at the increase of the Civil Service Estimates, for in proportion as they were increased local taxation was diminished; and he, for one, should not be at all sorry to see the Education Vote considerably increased next year.

MR. SCLATER - BOOTH

said, he wished to remind the hon. Gentleman who had just spoken, and who had congratulated, the Government on having redeemed the pledges with respect to expenditure which they had given at the hustings, that one of the most important charges which had been made against the late Government was that their Civil Service Estimates were excessive and ought to be reduced. He would not enter into the subject on that occasion; but he would undertake to prove that the present Civil Service Estimates, making due allowance for items imported from the Army Estimates and from the Consolidated Fund, were higher by £250,000 than those which the late Government had introduced. He did not complain of that, because he knew those Estimates had a tendency to grow, in spite of all efforts to keep them down; but that was a matter in which the Conservative Government was unjustly blamed two years ago. He reminded the right hon. Gentleman last year that the duties on locomotion could not be dealt with irrespectively of the railway passenger duty, which the right hon. Gentleman had now dealt with; but it was scarcely fair for the right hon. Gentleman to escape from the anomalous position in which he had placed himself by imposing an entirely new charge on railway property without any notice. Railway proprietors were taxed, heavily enough for local and Imperial purposes; they paid income tax on their receipts; and it was hard they should be saddled with this new burden, which, although it was now to be 1 per cent, might be increased to 3 or 5 per cent, according to the exigencies of the Chancellor of the Exchequer. It would be better to put a heavy tax on net receipts than a light one on gross receipts; this was an entirely new tax; it was no longer a tax on locomotion; but it was a tax on the receipts of railway companies. He concurred with what had been said by his right hon. Friend near him (Mr. Hunt) as to the humiliation of paying off the National Debt by Terminable Annuities, but did not think the country had been lax about paying it off, for an enormous sum had been paid since the time of peace, in addition to which the cost of the Crimean War Lad been paid out of the taxes. The pressure of the Debt, and its proportion to the resources of the country, were less than they were 50 years ago.

VISCOUNT BURY

said, he agreed with the hon. Gentleman who had just sat down in thinking that it would be better to tax the net receipts than the gross receipts of railways. The proposed tax, however, was not a new one, but only an equalization of a tax which was exceptionably hard on passenger lines as distinct from mineral lines, which were the two great classes into which railways might be divided. The existing tax upon railways fell mainly upon the Southern lines, which subsisted chiefly by passenger traffic, while many of the Northern lines escaped the tax, in proportion as they depended more upon mineral and less upon passenger traffic. The railway interest was, therefore, divided into two great camps; those who wished to prevent mineral traffic being taxed at all, and those who wished the the Revenue to be collected with some degree of fairness and equality from the proceeds of both mineral and passenger traffic.

MR. LIDDELL

said, he thought that the Chancellor of the Exchequer, having an unprecedented surplus, had maintained an equitable balance between direct and indirect taxation; but as representing an important mineral district, he must join in the remonstrance that had been raised against the new arrangement of the railway tax. The proposal to re-distribute the burden upon railways by substituting for a 5 per cent passenger tax a general tax of 1 per cent upon all kinds of traffic was an entire novelty, and would give rise to a great amount of discussion and probable dissatisfaction in the country. The right hon. Gentleman would probably find that he had involved himself in some difficulties which he had not altogether foreseen. He would ask to what class of railways would this new arrangement apply? Was it to apply only to those which were under the supervision of the Board of Trade? Because there were many small mineral lines which were constructed for the purpose of conveying the raw material to the trunk lines or to the ports, and which were purely a matter of private contract between the owner of the soil and the constructor of the line. If the tax was to be imposed upon these lines it would entirely disturb the whole conditions under which they were constructed and carried on. He hoped the fullest opportunity would be given for discussing this matter.

MR. WHALLEY

said, he had presented Petitions from 47 towns, praying for the removal of the gross inequality and injustice in the assessment of the income tax, more especially under Schedule D. The Chancellor of the Exchequer had expressed to a deputation, which he (Mr. Whalley) had lately introduced to the right hon. Gentleman, his wish to remedy the injury and loss caused by the present system of assessment, which was much more than double that arising from the mere amount of the tax. That was a most important subject, and he wished to give Notice that he should to-morrow move— That a Committee be appointed to inquire into the mode of assessing the Income Tax leviable under Schedule D, and as to the practicability of providing for the Revenue raised therefrom, whereby, having due regard to existing liabilities, the injury resulting alike to individuals and the public under the present system may be avoided. He should propose that Committee with the view of ascertaining whether it was possible to modify the tax, so as to make it approximate, in point of justice, to the taxes levied on real property. The Committees of 1851 and 1854 had reported that nothing could be more plain than the injustice of the tax as now raised. An excessive wrong and injustice attached to the income tax, which possessed all the demerits both of direct and indirect taxation. If the right hon. Gentleman wanted an analogy, he should refer to the parochial and municipal taxation, which, by the consent of the inhabitants, had for centuries been raised entirely from fixed property, and not from trade profits.

MR. GRAVES

said, he desired, before the debate closed, to avail himself of the opportunity of tendering to the right hon. Gentleman his thanks for the substantial benefit conceded to the public by the reduction of the postage on newspapers and printed matter. It was a matter which he had himself brought under the notice of the House, and he was sure that no portion of the Financial Statement would be read by the public to-morrow with greater pleasure than the announcement of the unreserved and liberal manner in which the Government were prepared to redeem their promise of last year.

THE CHANCELLOR OF THE EXCHEQUER

I need trouble the Committee with very few words by way of reply, because a great number of Gentlemen who have addressed questions to me have been answered by others during the discussion. There are two or three points, however, on which I must reply. My hon. Friend the Member for the City of London (Mr. Crawford) asks me to consider the case of certain sugars which he says will be broken up and imported. Now I fear that, do what we can, we can hardly make such large changes as we propose, affecting so vast a trade, without doing some mischief; but our proposal has been carefully considered, I am not prepared to deviate from it, and I think it is better to say so at once. I must, therefore, press the Committee to pass this Resolution to-night, and report it to-morrow, on account of the infinite mischief which may result if any uncertainty were to prevail, and because, until it is reported, we cannot act upon it. I am quite aware that there are persons who may be more or less hardly dealt with; but we can only do the best we can under the circumstances. At present, I believe that stocks are very low, and, upon the whole, the change will be made with as little trouble and difficulty as can be expected in such a matter. As to the railways, the Committee have heard from hon. Gentlemen opposite a number of considerations which are well worthy of attention. The fact is, that there need be no difficulty in the matter. What I propose is intended as a benefit to the railways. If they look upon it as a benefit, I shall be glad to have done something in their interest. If they think otherwise, I will not press the change upon them, and have not the slightest objection to keep in the Exchequer the £108,000 that we proposed to give them, and say no more about it. The hon. Member for West Sussex (Colonel Barttelot) asks me whether I will not remit the duty in the case of farmers' horses employed in drawing materials for the repair of parish roads. I have made no change in the law on this subject, though I believe the law is now more strictly executed than it was. I take the law as I find it. Horses employed solely in agriculture are exempt from duty. I think that exemption not to be justified, though I have continued it; but when I am asked to carry the exemption further, I must decline to do so. If hon. Gentlemen think it prudent to raise the question, they are, of course, at liberty to raise it; but I think they would do more wisely to let the matter rest. At all events, I shall be no party to extend an exemption which I cannot justify as it stands, though I have not felt it my duty to interfere with it. I regret to hear from the hon. Member for South Norfolk (Mr. Clare Read), that kiln-drying is beneficial or essential to malt required for the feeding of cattle; because I have been informed, on what I believe to be good authority, that the contrary is the case, and that the process of kiln-drying is rather injurious than otherwise, and deprives the malt of its fattening qualities. But the hon. Gentleman is a high authority on this subject, and I shall be glad of any information he can give me respecting it. I cannot sit down without thanking the Committee for the very kind manner in which they have received my proposals.

LORD GARLIES

said, he wished to ask whether the right hon. Gentleman would include air-guns in his licence duty for carrying firearms? The same objections to the use of the one applied to the other, and poachers should not be allowed to carry air-guns without a licence.

THE CHANCELLOR OF THE EXCHEQUER

said, he thought the suggestion of the noble Lord well worth consideration; but he must guard himself against being supposed to entertain the question of dealing with air-guns as firearms.

Mr. FIELDEN

said, he must protest against any reduction in the sugar duties until the malt tax was dealt with. The consumer paid little more than the £5,500,000 of sugar duties, because the tax was levied at the point where the article went into consumption; but the malt tax was increased in price by the levy of the tax on the raw material, and the consumer paid, not £6,700,000, the amount of the tax, but something like £12,000,000. The duty on sugar amounted to 50 or 60 per cent, whereas the malt tax was as much as 70 per cent, and by the time the article reached the consumer it paid on account of the duty as much as 100 per cent. He therefore thought that the malt tax had a preferable claim for reduction over the sugar duty. As to the proposal to reduce the postage on newspapers, he could not see what possible benefit that could be to the country. Newspapers did not tend to foster real thought, but only spread gossip abroad. If they went into the manufacturing districts they would find that the great mass of people who read newspapers took the whole of their opinions from the editors; and, not looking upon the editors of newspapers as the best possible instructors, he was decidedly opposed to that proposition of the Chancellor of the Exchequer. He also objected to the proposal to make employers deduct the income tax from the salaries of those they employed; and, for his part, he protested against being a collector of taxes for the Government, and against being compelled to divulge what he paid to his clerks.

(1.) Resolved, That, towards raising the Supply granted to Her Majesty, on and after the undermentioned dates, in lieu of the Duties of Customs now charged on the articles under-mentioned, the following Duties of Customs shall be charged thereon, on importation into Great Britain or Ireland, viz.:

On and after the second day of May, one thousand eight hundred and seventy,—

Sugar, viz.:		£	s.	d.
Candy, Brown or White, Refined Sugar, or Sugar rendered by any process equal in quality thereto, and manufactures of Refined Sugar	the cwt.	0	6	0

On and after the thirteenth day of April, one thousand eight hundred and seventy,—

Sugar not equal to refine:—

First Class	the cwt.	0	5	8
Second Class	the cwt.	0	5	3
Third Class	the cwt.	0	4	9
Fourth Class, including Cane Juice	the cwt.	0	4	0
Molasses	the cwt.	0	1	9
Almonds, paste of	the cwt.	0	4	8
Cherries, dried	the cwt.	0	4	8
Comfits, dry	the cwt.	0	4	8
Confectionery, not otherwise enumerated	the cwt.	0	4	8
Ginger, preserved	the cwt.	0	4	8
Marmalade	the cwt.	0	4	8
Succades, including all Fruits and Vegetables preserved in Sugar, not otherwise enumerated	the cwt.	0	4	8

And that the said Duties shall be paid on the weights ascertained at landing.

(2.) Resolved, That, on and after the undermentioned dates, in lieu of the Drawbacks now allowed thereon, the following Drawbacks shall be paid and allowed on the under-mentioned descriptions of Sugar refined m Great Britain or Ireland on the exportation thereof to Foreign Parts, or on removal to the Isle of Man for consumption there, or on deposit in any approved warehouse, upon such terms and subject to such regulations as the Commissioners of Customs may direct for delivery from such warehouse as ship's stores only, or for the purpose of sweetening British Spirits in Bond (that is to say):

On and after the second day of May, one thousand eight hundred and seventy,—

	£	s.	d.
Upon refined Sugar in Loaf complete and whole, or Lumps duly refined, having been perfectly clarified and thoroughly dried in the stove, and being of an uniform whiteness throughout; and upon such Sugar pounded, crushed, or broken in a warehouse approved by the Commissioners of Customs, such Sugar having been there first inspected by the Officers of Customs in Lumps or Loaves as if for immediate shipment, and then packed for exportation in the presence of such Officers, and at the expense of the exporter; and upon Candy for every cwt.	0	6	0
Upon refined Sugar unstoved, pounded, crushed, or broken, and not in any way inferior to the Export Standard Sample No. 2, approved by the Lords of the Treasury, and which shall not contain more than five per centum of moisture over and above what the same would contain if the roughly dried in the stove for every cwt.	0	5	9

And on and after the thirteenth day of April, one thousand eight hundred and seventy,—

Upon Sugar refined by the centrifugal or by any other process, and not in any way inferior to the Export Standard Sample No. 1, approved by the Lords of the Treasury for every cwt.	0	6	0
Upon other refined Sugar unstoved, being Bastards or pieces, ground, powdered, or crushed
—Not in any way inferior to the Export Standard Sample No. 3, approved by the Lords of the Treasury for every cwt.	0	5	8
—Not in any way inferior to the Export Standard Sample No. 4, approved by the Lords of the Treasury for every cwt.	0	5	3
—Not in any way inferior to the Export Standard Sample No. 5, approved by the Lords of the Treasury for every cwt.	0	4	9
—Inferior to the above last-mentioned Standard Sample for every cwt.	0	4	0

(3.) Resolved,That, in lieu of the Duties of Excise now chargeable on Sugars made in the United Kingdom, the following Duties of Excise shall be charged thereon (that is to say):

On and after the second day of May 1870:

	£	s.	d.
Candy, Brown or White, Refined Sugar, or Sugar rendered by any process equal in quality thereto, and manufactures of Refined Sugar the cwt.	0	6	0

On and after the thirteenth day of April 1870:

Sugar not equal to refined:

First Class	the cwt.	0	5	8
second Class	the cwt.	0	5	3
Third Class	the cwt.	0	4	9
Fourth Class	the cwt.	0	4	0
Molasses	the cwt.	0	1	9

(4.) Resolved, That, on and after the thirteenth day of April 1870, in lieu of the Duties of Excise now chargeable upon Sugar used in Brewing, there shall be charged and paid upon every Hundredweight, and in proportion for any fractional part of a Hundredweight, of all Sugars which shall be used by any Brewer of Beer for Sale in the brewing or making of Beer, the Excise Duty of Seven Shillings and Sixpence. (5.) Resolved, That, towards raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and seventy, until the first day of August, one thousand eight hundred and seventy-one, on importation into Great Britain or Ireland (that is to say):

	s.	d.
Tea	the lb.	0	6

(6.) Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the sixth day of April, one thousand eight hundred and seventy, for and in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act passed in the sixteenth and seventeenth years of Her Majesty's reign, chapter thirty-four, 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 Four pence. And for and 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 Kate or Duty of Two pence, and In Scotland and Ireland respectively, the Rate or Duty of One penny halfpenny. Subject to the provisions contained in section three of the Act of twenty-sixth Victoria, chapter twenty-two, for the exemption of Persons whoso whole Income from every source is under One Hundred Pounds a-year, and relief of those whose Income is under Two Hundred Pounds a-year. (7.) Resolved, That, towards raising the Supply granted to Her Majesty, there shall be granted and paid on and after the sixth day of April 1870, upon a Licence to be taken out annually by every person who shall use or carry a Firearm of any description, or an Air Gun or any other kind of Gun, from which any shot, bullet, or other missile can be discharged, the sum of One Pound; and that on the 6th day of April 1870 the Excise Duties on Licences in Great Britain, and Certificates in Ireland, to take or kill game, imposed by the Act of the twenty-third and twenty-fourth years of the reign of Her Majesty, chapter ninety, shall cease to be payable. (8.) Resolved, That the following Duties of Excise shall cease to he payable on the several days hereinafter mentioned (that is to say): On the first day of October 1870: Upon Licences to Hawkers, Pedlars, and Petty Chapmen and other Trading Persons who shall travel and trade on foot in Great Britain without any Horse or other Beast bearing or drawing burthen, and who shall carry their goods, wares, or merchandize to, and sell or expose for sale the same at other Men's Houses only, and not in or at any House, Shop, Room, Booth, Stall, or other place whatever belonging to or hired or occupied or used by them for that purpose in any town to which they may travel. Upon Licences to Persons exercising the trade or calling of a Hawker, Pedlar, Petty Chapman,; or other Trading Person going from place to place, in Ireland, carrying to sell, or exposing to sale any goods, wares, or merchandize, and travelling on foot, with or without a servant or other person, employed in carrying goods of any such Hawker, Pedlar, or Petty Chapman, but without a Horse or other Beast of burthen. On the sixth day of July 1870, upon the following Licences, viz.: To Makers of Paper, Pasteboard, and Scaleboard. To Makers of Soap for sale. To Makers of Stills in Scotland and Ireland. To Dealers in Plate, so far only as relates to the sale of Watch Cases by the maker thereof. On the second day of September 1870: Upon Licences to sell Playing Cards to Persons not being the Makers thereof. (9.) Resolved, That, on the first day of July 1870, the Stamp Duties payable for Policies of Insurance under the tenth section of the Act passed in the twenty-eighth and twenty-ninth years of Her Majesty's reign, chapter ninety-six, shall cease and determine; and, in lieu thereof, on and after the 1st day of July 1870, there shall he charged and paid upon and for every such Policy as aforesaid a Stamp Duty of one penny. (10.) Resolved, That, on the first day of January 1871, all the Stamp Duties payable in Great Britain and Ireland respectively under or by virtue of the Acts specified in the First Schedule hereto annexed, except the Duties on Licences to Bankers, and the Duties contained in the third part of the Schedule to 55th Geo. 3rd, cap. 184, shall cease and determine; and on and after the first day of January 1871, there shall be charged and paid for the use of Her Majesty, Her Heirs and Successors, upon and for the several Instruments specified in the Second Schedule hereto annexed, the several Stamp Duties in the said Second Schedule specified:—First Schedul:55 Geo. 3, cap. 184; 5 & 6 Vict. cap. 79; 5 & 6 Vict. cap. 82; 6 & 7 Vict. cap. 72; 8 & 9 Vict, cap. 76; 13 & 14 Vict. cap. 97; 16 & 17 Vict, cap. 59; 16 & 17 Vict. cap. 63; 17 & 18 Vict,cap. 83; 18 & 19 Vict. cap. 78; 21 & 22 Vict, cap. 20; 21 & 22 Vict. cap. 24; 23 & 24 Vict, cap. 15; 23 & 24 Vict. cap. 111; 24 & 24 Vict, cap. 21; 24 & 25 Vict. cap. 91; 25 & 26 Vict, cap. 22; 27 & 28 Viet. cap. 18; 27 & 28 Vict, cap. 56; 28 & 29 Vict. cap. 96; 30 & 31 Vict, cap. 90; 31 7amp; 32 Vict. cap. 124.—Second Schedule: NOTE.—The Second Schedule is the Draft Stamp Consolidation Bill. (11.) Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged and paid, on and after the first day of April 1870, upon all sums received in respect of Traffic of every description upon any Railway in Great Britain, a Duty of Excise at and after the rate of one pound for every one hundred pounds; and the Duty payable in respect of the Fares received or charged for the conveyance of Passengers upon any Railway in Great Britain, on and after the first day of April 1870, shall cease to be payable. (12.) Resolved, That it is expedient to amend the Laws relating to the Inland Revenue.

House resumed.

Resolutions to be reported To-morrow, at half-past Two of the clock;

Committee to sit again upon Monday 25th April.