WAYS AND MEANS.—COMMITTEE.

HC Deb 01 May 1871 vol 205 cc1937-2040

MR. W. H. SMITH

, in rising to move— That it is inexpedient that the income tax should be increased to the extent contemplated in the Financial proposals of Her Majesty's Government, said, he had ventured to undertake the discharge of a duty—upon which he felt it incumbent upon him to ask the forbearance of the House—which devolved upon him as the Representative of a large and important constituency, who felt deeply interested in the financial measures proposed by the Government. In pursuance of that duty, he would remind the House of the several steps taken by the Executive during the consideration of their proposals. In his statement, about ten days ago, the Chancellor of the Exchequer had informed the House of the fact that the Revenue of last year, the year just closed, had exceeded the estimated receipts by £2,311,000; but that the estimated Revenue from existing taxation for the current year, 1871–72, would fall short of the estimated expenditure of £72,500,000 by £2,713,000. To meet this deficiency, it was proposed to tax matches and to increase the succession duty, proposals which had been abandoned, the former last Tuesday, the latter on Thursday. The substitute offered to the House was an additional 2d. on the income tax, which, it was calculated, would produce a surplus of £300,000; but the Chancellor of the Exchequer had himself given a reason against this when he deprecated the acquisition of an excessive surplus, believing it would establish a dangerous precedent; and he (Mr. W. H. Smith) had the further objection, that it would be wrong in principle to impose a tax, yielding more than the necessities of the case required, and which, in the odious shape of an increased income tax, would still further grind the taxpayers of the country. Under these circumstances, he had placed a Notice on the Paper, by which he desired, by means of a Resolution, which he hoped the House would adopt, to protest against raising the whole sum required by means of income tax, and his task had been made more easy by the chorus of objections raised on all hands against the proposals of the Government. ["No, no!"] He had carefully watched the organs of public opinion in which reference had been made to this suggestion; and, although those organs differed as a rule on public questions, not one had expressed, a clear verdict in favour of the proposed addition to the income tax. All felt it to be both unjust and unnecessary. It had been urged that the House had accepted the Estimates, and must find the Ways and Means; he had little to say upon this point, for his proposal did not distinctly affect the Votes the Government asked for, and further, he considered the responsibility of making Estimates rested with the Government; but the circumstances of the country had somewhat changed since the Estimates had been submitted to the House. The Army Regulation Bill had not made very rapid progress; it stood for Committee on Thursday, and it was possible some of the numerous Amendments suggested upon it would be supported by a majority of the House. If those Amendments, and especially that proposed by the hon. and gallant Member for Bewdley (Colonel Anson), were passed, the Government would either find itself in possession of £600,000, the estimated cost of the abolition of purchase falling on the current year; or it might, on the other hand, happen that the charge would be greatly swelled, and the Government would then have to re-consider its course, and decide whether the charge should be spread over a term of years, so as to distribute as fairly as possible the burden on the shoulders of those upon whom it ought to fall. He had noticed that the First Lord of the Treasury, in the course of the debates that occurred on the Budget, had referred to two questions which might, in his opinion, result in a reduction of expenditure in the course of the ensuing year. They were asked to grant the Ways and Means for the demands of the Government, and yet, at the same time, they were told it was a question after all whether the Ways and Means would be entirely required. He thought with the enormous demand made upon the public purse for the Army and Navy, there never was a time when prospective Budgets were more required than at the present moment; for if it was intended that the very large Votes demanded from and granted by the House were merely to be Votes for the present year, and if a fit of economy should ensue, and if reduced establishments were to be the order of the day next year, this year's Vote would be nothing less than meaningless extravagance. Every effort had been made to obtain from the Government some declaration as to its policy in Army regulation for the next three years or so, as to what those establishments might be; but, up to the present time, the House had been left completely in the dark on that subject, and unless he could feel sure that the proposed expenditure would give an efficient Army of Reserve, based upon a distinct principle, clearly stated by the Government, and carrying out the promises already made by them, he would gladly vote for a reduction in the Estimates. He should be glad if Her Majesty's Government would tell the number of men they intended to have not only this year, but for future years. He would next allude to the analogy which existed in his opinion between the position of the present Government and that of Lord John Russell's in 1848, when it was proposed that the income tax should provide for a deficit of £3,346,000, by a Government as strong as the present. [Mr. GLADSTONE: No.] At all events, the proposal of the Government was at first received and carried by a large majority; and although there might, indeed, have been subsequently some secessions, yet they never materially affected the number of the majority. A Budget was brought on in January, another in February, and another in June, and the result of the whole matter was, that at the end of the year it was found that the addition to the income tax could be dispensed with, and at the end of three years from that time not only had there been no increase to the income tax, but the public service had not suffered in consequence. There was this further circumstance, too, that now while we were endeavouring to re-organize the Army, a charge which had not yet been incurred, then we required a large outlay to meet a charge already incurred in consequence of the Kaffir War. Now, he ventured to say that the immediate mode in which this deficiency was to be met would not receive the acceptance of the country. He believed there was no tax which fell so heavily and so severely upon those who had to pay it as the income tax. He was aware that hon. Gentlemen opposite approved the income tax on the ground that it was a direct tax, and was so strongly brought home to the taxpayer as to lead to increased watchfulness and an increased check upon wasteful expenditure. The fact of the case was, that by far the largest portion of those who paid income tax were very poor persons indeed. They were persons upon whom such a direct tax fell with all the severity which had been so eloquently described by the right hon. Gentleman the Chancellor of the Exchequer a few days since; indeed, he despaired of being able to find any stronger objections to the tax than those furnished by the right hon. Gentleman himself. Now, from the Returns furnished to that House, it appeared that of the 400,000 persons who contributed to the payment of income tax under Schedule D, 325,000 paid upon less than £300 a-year. Thus they had evidence that four-fifths of the payers of the income tax were persons struggling probably more severely against poverty than the artizan or working man, who was under no pressure whatever to keep lip what was termed "a decent and respectable appearance." He was one of those who rejoiced in the fact that the House had passed an Act under which the ratepayer became liable for the major portion of the cost of the education of the working classes; but we had done nothing to assist people with incomes of £300 a-year in the education of their children. Further, he would say, that in addition to the 325,000 persons he had referred to, 36,500 persons paid income tax upon incomes of less than £500 a-year. Then there was this further augmentation of the extreme nature of the pressure caused by the payment of income tax, that, under the arrangements initiated by the right hon. Gentleman the Chancellor of the Exchequer, the whole of the income tax was paid in the first quarter of the year, and the House could picture to themselves the inconvenience and hardship and suffering inflicted upon poor professional men or upon poor tradesmen, who, in the first month of the year, were called upon to pay £7 10s., instead of £5, out of the £75 which constituted their first quarter's income. In the case of the poor professional man the addition of £2 10s., at a time, too, when the person who had to pay it might fairly consider it unnecessary, might reasonably be looked upon as an unnecessary exercise of a harsh and cruel power. He would venture to say that the income tax was never designed for an occasion like the present. In 1842 it was revived by Sir Robert Peel, as he (Mr. W. H. Smith) thought most wisely, to meet a great emergency. But after having carefully traced the history of the tax, he could find no occasion in which it had been increased, unless in view of some emergency, some apprehension of war, or of some trouble under which it was necessary to have recourse to the income tax, in common with other sources of taxation. On the present occasion, Her Majesty's Government proposed to refer to the income tax alone as a source of revenue. The Chancellor of the Exchequer had lately drawn attention to certain exemptions at present existing. Now, the income of the country was estimated by very competent authorities to be no less than £760,000,000 a-year, but the amount subjected to the income tax was only £366,000,000. Was it, therefore, the intention of the Government that the remaining £400,000,000 should be exempted from taxation? We must, he supposed, wait till next year to know what course the Government intended to pursue; but it was quite clear that a very large portion of the incomes of the country were exempted from the payment of income tax, and the Chancellor of the Exchequer had distinctly given notice that the question of exemptions ought to be considered by the House, and they might, therefore, regard the £400,000,000 as liable to taxation when the proper time arrived. In making this statement, he had no desire whatever to impose the income tax below the point at which it at present pinched most injuriously those who laboured under it; but it was right that the Chancellor of the Exchequer, after what he had stated the other evening about exemptions, should bear in mind the fact that the whole of the incomes of the country were not liable to the payment of the income tax. He must apologize to the House for having trespassed so long upon its time and patience. He had not ventured to quote the opinions, which he held in his hand, of right hon. Gentlemen who sat upon the front Ministerial bench, because circumstances occasionally occurred under which opinions changed even at the distance probably of a single week; but he would appeal to hon. Gentlemen on both sides of the House not to subject the poorer and struggling classes of the community to a tax which was unnecessary; with regard to which Amendments had been proposed by hon. Gentlemen sitting on the Ministerial side of the House; which was felt to be harsh and cruel in its operation; and which was attended with great danger, except when applied to a necessity recognized by the country. He did not desire to offer any suggestion to the right hon. Gentleman the Chancellor of the Exchequer, for the responsibility in this matter appeared to him to rest with right hon. Gentlemen on the Treasury bench. It had been suggested that the application of money to the reduction of the National Debt by the creation of Terminable Annuities should be suspended. Hon. Gentlemen who took that view might, most consistently, support his Resolution, for by voting against it they would be supporting the proposal for an additional income tax. Again, the hon. and learned Gentleman the Member for Oxford (Mr. Vernon Harcourt) desired to afford the Government an opportunity of re-considering their Estimates, and the hon. and learned Gentleman would, by voting with him, afford the Government that opportunity; whereas, if his Resolution were negatived, the hon. and learned Gentleman would lose the opportunity he desired. His wish was that the country might escape from this large addition to the income tax, and he trusted he might receive, if not the unanimous, at all events, the warm support of a large majority of the House. The hon. Gentleman concluded by moving his Resolution.

MR. LIDDELL

, in rising to second the Motion, said, he would take three distinct objections to the financial schemes of the Government, and would challenge the accuracy of the description of them which had fallen from the right hon. Gentleman the Prime Minister. The right hon. Gentleman had called the expenditure transitional; he, (Mr. Liddell) maintained it was not, and challenged hon. Members to prove it; and he wished, in the first place, to state his reasons for contending that it was not transitional. The second proposition which he would urge was, that the expenditure was national, and, consequently, ought to be borne by the whole nation, and not thrown on a portion of the nation only. His third and last proposition was, that it was grossly unjust to charge the payers of income tax with the entire burden of the cost of the abolition of purchase in the Army. With regard to his first objection, the difficulty of proving his case was very much mitigated in consequence of an answer recently given by a Colleague of the Prime Minister (the Secretary of State for War), and according to which the expenditure to be incurred for the abolition of purchase was professedly to be spread over a considerable term of years—for they did not know how many years; and even assuming for the sake of argument that it was a boon —although he thought it was a measure of the most doubtful character, and certain to be followed by the most hazardous results—it was not a boon to be enjoyed by the present generation only, but for all time. Therefore, he held that the expenditure upon it could not be properly termed transitional, and, as it was to be spread over a long period, the means of meeting it ought to be raised by a loan, and ought not to be a charge on the year. Again, they had just been told by the War Minister that the remaining portion of that expenditure was intended to provide small arms for our troops and big guns for our fortifications and our ships, torpedoes, and other warlike stores. Well, was that a transitional expenditure? They all knew that the life of a rifle was 16 years; and according to that, that expenditure for small arms ought likewise to be spread over a considerable period. So, also, with the outlay upon guns for ships and forts; its advantages would be extended over a long time, and therefore it could not be accurately described as transitional. His second point was, that that being a national expenditure, ought to be borne not by a part of the nation, but by the whole nation. What was it to be incurred for? Within the last 48 hours they had been informed by that great and wise statesman the Commander-in-Chief—the highest authority on military expenditure—that this increased expenditure was necessary, in order that the country might maintain its position in the world. What was the meaning of that expression? He apprehended that it meant that we must maintain our dignity and our credit, and thereby give stability to trade; and the stability of trade meant certain employment at fixed wages. Surely those were objects in which the working classes were essentially interested, and in the cost of securing which the working classes should bear their share? Then he came to his third proposition—namely, that it was a grievous injustice to throw on the payers of income tax the whole charge for the abolition of purchase in the Army. It was unjust to call upon professional income—the kind of income more severely pressed upon by that impost than any other in this country—to bear a double burden for the jeopardizing of the interests of the highest and perhaps the noblest profession we had among us. It was cruel and unjust to call upon the pensioned officer, living on his hard-earned pension, won perhaps on the field of battle, to bear a double tax, in order to inflict what probably, in his opinion, was the greatest blow to the service with which he had been connected. It was still harder to impose a double tax on the widow of the officer who had perished on the field of battle, and to deprive her perhaps of the schooling of one, or it might be two, of her children in the course of the year, in order to pay the full amount that the brother officers of her slain husband, required as compensation for the value of their commissions. Those were questions on which he believed the Government dared not challenge the opinion of the country, because they knew well the response the country would make to such an appeal. Another point connected with that increased military expenditure was, that they had never been told a word about the cost of retirement. They ought to know how far that would go to swell the deficit before they voted any addition to the income tax. The right hon. Member for Buckinghamshire (Mr. Disraeli) the other night said he shrank with alarm and apprehension from that question. Now they were responsible to their constituents for that matter, and so far from shrinking from it, he (Mr. Liddell) considered it their duty to scrutinize it with a vigilant and keen eye, and not allow the Budget to pass out of their hands, until they had some definite estimate from the Government as to what amount of money would be swallowed up by the cost of retirement from the Army. His great complaint against the Government was that all the expenditure at which they were now grumbling had been rendered necessary by the Government themselves, for their difficulties were difficulties of their own creation, because they were caused by that excessive zeal for reduction by which they had been actuated during the last two years. While they were engaged in starving the services, they were at the same time squandering the Revenue; they threw away in one financial year £900,000 in the shape of the registration fee upon imported corn, and in the next year, when they had a magnificent surplus to deal with, they threw away £2,350,000 upon the sugar duties, which were complained of by no single class. They were now driven from pillar to post to meet a deficit, and it was a remarkable fact that the amount of Revenue they threw away in those years corresponded pretty nearly with their present deficit. That was the source of these financial disorders and embarrassments. Much had been said out-of-doors, and a good deal more was likely to be heard in that House, as to suspending the Terminable Annuities scheme, to provide the Ways and Means now sought to be raised by additional taxation. Having himself only recently been one of those who, in common with other hon. Members of the House, had urged on the Chancellor of the Exchequer the policy of endeavouring in time of prosperity to make some greater effort for the reduction of the National Debt than of late years had been the practice, he thought it would be almost cowardly in him to desert the right hon. Gentleman on the present occasion in regard to that proposal, and, therefore, he could not vote in favour of interfering with the operation of the Terminable Annuities. At the same time, however, he thought there was a very great and wide difference between the policy he had then urged and the policy proposed now. It was one thing, when they had a surplus Revenue, to retain existing taxes for the reduction of Debt, and another thing, in the face of a deficit and increased expenditure, to put on new taxes to meet that increased expenditure, and also to pay off debt. The proposition that he and others had pressed on the House on a former occasion was, that when they were in a state of prosperity they should retain their taxes and reduce their debt; but now they were putting on new taxes, which the country would not accept at any price, to meet increased expenditure, and at the same time, with the other hand, they were paying off Debt out of taxes to the extent of not less than £2,250,000, according to this year's Estimates. Those were the reasons which induced him to second the Motion of his hon. Friend (Mr. W. H. Smith), and he did so with a perfectly clear conscience, believing that they would be supported by the country, if an appeal were made to it, against the financial projects of the Government. He believed that their principle would be supported by the country, because that principle was nothing less than that upon which the whole prosperity of the nation depended—namely, a system of just, of equal, and therefore of sound finance.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "it is inexpedient that the Income Tax should be increased to the extent contemplated in the Financial proposals of Her Majesty's Government,"—(Mr. William Henry Smith,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

MR. PEASE

said, that having been one of the hon. Members who opposed the Army Estimates when originally introduced, he wished to state his reasons for supporting Her Majesty's Government on the present occasion. In a multitude of counsellors there was wisdom, it was said; but the danger of the Government appeared to be that there was a great deal of counsel and very little wisdom. This was evidenced by the fact, that four distinct proposals were on the Paper; the hon. Member for Westminster (Mr. W. H. Smith), for instance, was opposed to the levy of an additional income tax; the hon. Member for Brighton (Mr. White) reiterated his view, upon which the House had already expressed its opinion, as to the general policy of the proposed expenditure; while the hon. Members for Finsbury (Mr. W. M. Torrens), and for Cambridge (Mr. W. Fowler), regarded the question from the point of view affecting the payment of the National Debt. Let the House bear in mind what had occurred. On the 17th of March the hon. and gallant Member for Berkshire (Colonel Loyd Lindsay) brought forward a Resolution, by which he invited the House to affirm that, owing to the proposed Army outlay, the time for the abolition of purchase was inopportune; but the House negatived the Motion, and practically affirmed the proposals of the Government, which involved the principles of a large outlay on the Army, and, in addition, the abolition of purchase. The Army Bill, in which the abolition of purchase constituted the vital point, was read a second time without a Division, and thus the House stood committed to the principle of the Bill, although the process of extinguishing the purchase system might be extremely gradual. On the 23rd of March the hon. Member for Sheffield (Mr. Mundella) moved the Resolution which he himself had seconded, affirming that the money paid for the Army in the year previous ought to be sufficient to provide an Army in the current year. But the House negatived that Motion by a majority of 203, thereby adopting once more the Army Estimates for the present year. Almost immediately afterwards the House went on to vote in Committee £5,411,900 for the pay of officers and men. This Vote practically determined the shape of the Votes on Estimates, for, having granted the men, it was impossible to refuse the necessary stores. The Easter holidays, however, came round, and hon. Members found that the expenditure, against which some of their number had been contending in the House, was not very popular among the constituencies; and opinions found expression upon both sides of the House that the amount which Her Majesty's Government was about to spend upon the Army was not justified by the state of things existing either in this country or abroad. The House, however, had committed itself to the principle, and it was only now when the money came actually to be voted that resistance was raised. He was one of those who had voted in the first Division against the match tax; he had also done his best to induce the Government to give up the increased succession duties, believing that these would be taxes permanent in their nature, and that they were not required to meet a temporary expenditure; but, he must say, he felt confidence in the assurances of Her Majesty's Government that this was only a temporary tax. He could not say "yes" to the proposition of the hon. Member (Mr. W. H. Smith), that the Government should bring forward Estimates for 1872–3; and he intended to give them his support against the proposal which was now before the House. He entertained a confident hope that the measures which were being taken with regard to the creation of an Army of Reserve would considerably reduce the military expenditure, and that an efficient Army of Reserve was impossible till the great question of purchase was boldly faced. But great as the loss to the country would be, in his opinion, if those now sitting upon the Treasury bench were to cross over to the other side of the House, he should prefer even that result to any further withdrawal of the Estimates which had been so largely supported by the House. The question lay between direct and indirect taxation, and those who had urged the Government to take away the match tax and the increased succession duties might legitimately support an increase of income tax to meet a temporary emergency. Let them raise this taxation in a way which would be always in their minds—in a way which would remind them that it was money levied for a temporary purpose, and the purpose aimed at by the Resolution would soon be attained. His hon. Friend the Member for Westminster knew that there was no tax more fallacious in the view which it afforded of the persons who sustained the burden than the income tax; and it should be remembered, as an additional reason why the income tax was the fittest tax to supply the increased charges, that it was the middle, and not the working classes, who had called for the measures which had rendered that increased expenditure necessary. For his own part, therefore, he should vote with the Government in support of a tax falling upon those who were best able to afford it.

LORD GARLIES

said, he hoped some explanation, as promised by the right hon. Gentleman the Secretary of State for War, so far back as the 16th February last, would be given of what was really meant by the term "transitional expenditure." Taking the several Votes together, he found that the increase upon last year's military Estimate amounted to £2,890,450, and deducting from this amount the due proportion of Votes 12 and 13, for ammunition, buildings, barracks and fortifications, amounting together to £1,283,813, there remained a net increase of £1,606,637. The only way, he maintained, in which this increase could be got rid of in future years was by decreasing the number of men, with their clothing, &c.; but if they did that, if the number of men were only increased this year to be taken off again next year, he quite concurred with the hon. Member for Westminster in thinking that no practical purpose was gained by increasing the Army Estimates. "Le jeu nevaut pas la chandelle." Besides, what would be the use of their Army organization in such a case. There were two other Votes to which the House should look. The first was that for munition of war, which this year amounted to £995,461; but as during the past two years the Government had reduced that Vote by £478,000, it could not be surprising that they should now find it necessary to increase their expenditure; but the transitional portion of it was only about £500,000. The other Vote, that for buildings, amounted this year to £288,352; but, as in the last two years, the expenditure under that head had been reduced by £264,151, the Government only asked for £24,201 extra. One part of the new Array scheme of the Government related to the provision of barracks for the distribution of battalions among counties; but the replies to the circular which had been issued by the Secretary for War showed that it would be necessary to begin the reorganization scheme by the erection of 89 new barracks, and the sum required for that purpose could not be called "transitional expenditure." After hearing the figures he had quoted, he thought the House would be of opinion that that term was a deceptive one, and that when next year there would be an additional expenditure of £1,200,000, it would be found that, instead of 2d., 3d., or 4d. extra would be required on the income tax.

MR. OSBORNE MORGAN

said, that whatever might be thought of the financial proposals of the Government he thought everyone would agree that some commiseration was due to the Chancellor of the Exchequer. The right hon. Gentleman had had to bring in a panic Budget without the assistance of a panic; at a time when the spring-tide of enthusiasm which carried us so gaily over the addition of 20,000 men to the Army and £2,000,000 to the Estimates had receded and left us stranded amid the shoals and quicksands of a re-action. But that was not all. The right hon. Gentleman had brought in three Budgets. He had tried Everything by turns, and nothing long. He had burnt his fingers with lucifer matches. He had invented a percentage which no human being had been able to reduce to any known coin of the realm, and last, but not least, he had braved the wrath of the paterfamiliases of this country by telling them that a man who bequeathed his property to his wife and children was entitled to no more consideration from the State than a man who left it to a stranger whom he had never seen, or to endow a hospital for the reception of sick dogs, or to a society for supplying flannel petticoats to the widows of Evangelical negroes, or to any other equally useful and philanthrophic purposes. And having done all this—having disported himself for three or four days amid the aerial regions of finance he had had to come down to the common ground and to fall back upon the income tax—that financial donkey which was always at hand, ready to bear any extra burden which could not be disposed of in any other way. He could assure the hon. Member for Westminster (Mr. W. H. Smith), that he liked that income tax as little as he did. Speaking not only for himself but for other professional men like himself, he could truly say that no tax hit them harder. This addition of 2d. to the impost was therefore a very bitter pill to swallow, and it stuck in his throat as much as in that of the hon. Gentleman opposite. But he asked what was to be done? His hon. Friend the Member for Oxford (Mr. Vernon Harcourt) said—"Take back your Estimates—take back your Army Bill—as you have taken back your Budget. Let us make a tabula rasa of the whole concern, and begin afresh from the beginning." Well, now, considering that they were at the 1st of May—just half through the Session—and that they had not got into Committee on a single Government Bill except the University Tests Bill (and that was not yet out of the wood), it was not a very encouraging prospect to be told that they were to flounder through another Army Bill and another set of Estimates. No doubt it was never too late to mend, and if they had to retreat it was better to do so at once. But was there any real chance that the House—whatever individual Members, like himself, thought—would reverse its decision? From the speech of the noble Lord who spoke last, one would think that we had passed the Army Bill and the Estimates without a discussion. Why, they had discussed nothing else. Talk of the long windedness of lawyers, why, the noble Lord the Member for Haddingtonshire (Lord Elcho) spoke for two hours and a-half on the purchase system alone; and he had no doubt he would do the same again. Perhaps he said a word too much, but to a non-military mind like his (Mr. Osborne Morgan's) it was somewhat of an infliction. And when Mr. Speaker put the Question that the Army Bill do pass, how many voices challenged his decision? Not one. How many Members voted, as he did, for his hon. Friend the Member for Huddersfield's (Mr. Leatham's) Motion against the increase of the Army Estimates? He did not recollect the exact number, but it was under 100. Now, he was not a thick and thin supporter of the Government—he had voted against them almost as often as he had voted for them, but he did say that the line taken by a large party in this House was not creditable to this House. It was not generous—it was not just towards Her Majesty's Government to throw upon them the entire blame of an expenditure to which the great majority of this House was, by its vote on that occasion, party and privy. Talk of expenditure, indeed! Why the gravamen of the charge brought against Her Majesty's Government until quite lately was that they did not spend money fast enough. He never took up a Conservative paper, or read the speech of a Conservative Member to his constituents last autumn, without seeing an attack upon that "cheeseparing Government" which, by its miserable parsimony and its contemptible economy, had reduced England to the rank of a fourth-rate Power, and effaced her from the roll of nations. [Opposition cheers.] The effrontery of that cheer amazed him. Did they think that men, and ships, and guns were to be had without paying for them? The cheers he heard just now reminded him of a picture which used to amuse him when he was a boy in a work very popular then—Mr. Pip's Diary of the Manners and Customs of the English. It represented a scene with which they were all familiar—A white-bait dinner at Greenwich. On the one side was the dinner. There were the guests bawling for more champagne—shouting, singing, and speechifying. Then came the reverse of the picture. The waiter brought in his "little bill," as his right hon. Friend had just brought in his Bill. The change which came over the company was remarkable. Their faces were lengthened by several inches. Instead of "more claret, more champagne," it was, "I did not order that extra bottle." "I did not want that dish," and in the back ground was a little gentleman of whom his hon. Friend the Member for Westminster forcibly reminded him, who was trying to sneak out by a back door without paying his share of the entertainment. Well, now, that was just how they stood. There was the Bill—it must be paid. There was the gulph—it must be filled. How were you to fill it? You dared not tax the necessaries of life. No Government dared put a new tax upon the articles on which the poor man lived—tea, sugar, and the like. It was idle even to discuss it. It was all very well for the hon. Member for Brighton (Mr. Fawcett), to talk about taxing the wage-earning classes by putting duties on the articles which they consumed. But he wondered whether his hon. Friend dared go down to his constituents and tell them that he was in favour of putting a 6d. duty on tea, and a 3d. duty on sugar, and he wondered what sort of a reception he would meet with if he did. If he did, he did not believe that all his advocacy of woman's rights would save him from being torn to pieces by the fair hands of the ladies of Brighton. The increase of the legacy and succession duties being also out of the question, what source of revenue remained? An hon. Member (Mr. Osborne) suggested a tax on photographs, and recommended the Chancellor of the Exchequer to utilize his motto Ex luce lucellum in that way. Having been himself several times the victim of photography, he (Mr. Osborne Morgan) could only say that he should not object to the prohibitive tax on that diabolical art. But he suspected after his experience in what he might call the fancy department of finance the Chancellor of the Exchequer would hardly care to repeat the experiment. Besides, he (Mr. Osborne Morgan) did not doubt but that, if he did, some one would discover that the making of photographic chemicals constituted the staple industry of the East-end of London, and we should have another procession, another row in Palace Yard, and another set of questions asked of the Home Secretary; and in the meantime the photographers of England who have so much in their power would exercise their ingenuity, and wreak their vengeance on the classical features of the right hon. Gentleman the Chancellor of the Exchequer. The question then resolved itself into one of two alternatives. Either you must get this deficiency out of the income tax or in the mode proposed by the hon. Member for Finsbury (Mr. W. M. Torrens), by stopping the conversion of permanent into terminable stock. Now, into the general question whether the establishment of a sinking fund was a wise and sound measure, he was not going to enter; but he quite admitted that it was competent for Parliament, which created this scheme, to suspend its progress if a fitting occasion arose. There was something very seductive in the idea of meeting your requirements, not out of your own pockets, but out of the pockets of posterity. In the year 1885, when these annuities would fall in, many of us sitting here would have escaped even from the clutches of the tax collector—let us hope to a pleasanter place even than the House of Commons—and it would matter very little then to us whether these annuities expire on the 1st of April or the 1st of October of that year. But in the very pleasantness of the plan consisted its danger. Once begin to cut at that loaf and depend upon it they would come and cut again. And he wanted to know what was there exceptional in the expenditure of this year which would justify them in having recourse to this last resort? We wanted £600,000 for carrying out the abolition of purchase. But next year we should want £1,200,000 for the same purpose; so that there would be a stronger reason for repeating the process then—to say nothing of the yawning deficit of £5,000,000 annually, which the right hon. Gentleman opposite (Mr. Disraeli) promises us. We are not at war; we have not had a commercial crisis. On the contrary, trade, he believed, was never so sound or wages so high. Then if they suspended the payment off of Terminable Annuities this year, when were they to abstain from doing so? [The hon. and learned Member then read an extract from The Economist against the suspension of this payment. The annuities, it said, were created in order to pay off our National Debt steadily and systematically, and if on any slight necessity we chose to stop redeeming the Debt, we had better abandon the pretext altogether.] There was another argument against this proposal. If they once began to adopt it they would have a panic and a deficit every year of their lives. The hon. Member for Waterford said the other evening that it was right that the wealthy classes should understand that if they were to have the luxury of periodical panics, they should be compelled to pay for them. But he (Mr. Osborne Morgan) thought that was hardly a correct view of the question. It was not the wealthy classes who bore the brunt of the income tax. It was the struggling professional man, clerks with families, small merchants and tradesmen, men who had to keep up appearances, men who were trying to cover over the skeleton of poverty with the veil of respectability; those were the persons on whom the income tax fell so hard. But were those the persons who got up panics? Why everyone who had studied the history of panics, knew that panic-mongering in this country was as much a trade—a business—as petition-mongering or demonstration-mongering, or any other kind of mongering—as much a trade or business as patriotism itself. But though the income tax paying classes did not create panics, they were almost as much responsible for them as if they did. For they were the class which held in their hands the direction and control of the public opinion of the country. Let him remind them of the fact stated the other night by the hon. Member for Brighton (Mr. Fawcett), that Lord Russell put a stop to a panic in a few days by threatening to raise the income tax from 7d. to 1s. Now, he (Mr. Osborne Morgan) said that if the middle classes of England chose to surrender the power of which he spoke of, they allowed themselves to be blown about by every breath of vain doctrine, whether it came from above or whether it came from below—they were as little to be pitied when they came to feel the consequences, as the peace-loving and industrial masses of French people who were now reaping the bitter consequences of having allowed themselves to be hounded into a war by a small knot of noisy and interested agitators. And he would say this for the income tax, much as he disliked it, it had one redeeming and invaluable feature, Like the toad, ugly and venomous, It wears a precious jewel in its head; for it did bring home—if anything ever would bring home—to the minds of the most thoughtful and intelligent classes in this country—those classes upon whose demeanour depended the future greatness and happiness of England—the folly, as well as the wickedness, of a reckless and fruitless expenditure.

MR. STANSFELD

said, he would admit that nothing could be more judicious than the speech of his hon. Friend the Member for Westminster (Mr. W. H. Smith); nothing could be more astute than the Motion he had placed on the Table. It stood at the head of certain other Amendments to which the names of hon. Members who sat on that side of the House were attached, inviting their adhesion and support. In one sense the Motion was highly practical; it directly attacked the financial policy and Budget of the Government, and no one could doubt the result that would follow the acceptance by the House of the Motion of his hon. Friend. But although in one point of view the Motion was highly practical, in another point of view it was catholic and vague in its nature; it asserted no positive view, either with regard to expenditure or finance; it opened wide its arms, as if it were the expression of the creed of a negative Church, to all who dissented from the established creed. Then the hon. Member spoke mainly of the injustice of a considerable addition to the income tax, but he addressed himself also in a few suggestive words to the subject of expenditure, and turning to his hon. Friend the senior Member for Brighton (Mr. White), he asked if the Army Votes were transitory or permanent; and he argued if these Votes were transitory and in future to be reduced, then being extravagant, he claimed his support. He (Mr. Stansfeld) however, did not think the hon. Member for Brighton was to be seduced by an argument of that kind, because if anything could satisfy him—as he trusted he would be satisfied—it would be the assurance he had already received, and which would be repeated to-night, that these Estimates were transitory in their character, and that they might reasonably look forward to their reduction. The hon. Member for Westminster, moreover, had excusably fallen into an error, which he must take the liberty of correcting. He stated that his first objection to the imposition of an extra 2d. in the pound of income tax was that it would give the Chancellor of the Exchequer a surplus of something like £300,000; but that was a misapprehension and a miscalculation. The deficiency was £2,713,000; the extra 2d. of income tax would give not £3,000,000, but £2,720,000 within the year. The source of the error into which the hon. Member had very naturally fallen was this—the arrears at the conclusion of last year were arrears at 4d. in the pound, amounting to £800,000; and the arrears at the end of this year would be arrears at the rate of 6d., which would be £1,200,000. The question before the House was twofold, being a question on the one side of expenditure, and on the other side of Ways and Means; and as he took a very great interest in the question of expenditure, he hoped the House would allow him to say something upon the subject, perhaps even more than was called for by the remarks of those who had preceded him. In the course of his Financial Statement the Chancellor of the Exchequer said that the expenditure upon the Civil Service Estimates had increased by no less a sum than £1,609,000; and his right hon. Friend, with a generosity which was best appreciated by those who knew him, spoke kindly of his labours upon the Civil Service Estimates and Expenditure. He could not, however, fail to remark that the impression which seemed to remain was that those efforts had succeeded in a very small and insufficient degree in checking an expenditure which was subject to illegitimate and abnormal growth. He wished to say, and he thought the hon. Member for Brighton (Mr. White) would agree with him, that it was not to the Civil Expenditure of this country, it was not to the Civil Service Estimates that we must look for great economic operations in the future. He was prepared to prove that the whole increase in expenditure since 1868–9 was not in the slightest degree a matter to be apologized for or regretted. Part of it was merely the result of transferences from the Consolidated Fund, and from fee funds and similar sources; and part of it was the growth of expenditure which we did not desire to keep down, because, if it were rightly applied, it was profitable expenture. That, however large, was not waste, and therefore the saving of it was not true economy to the State. The total gross increase of expenditure between 1868–9 and 1871–2 was no less than £1,795,000; and of that the principal items were the following:—Surveys, transferred from the Army Estimates, £128,000; salaries and superannuations of the Courts of Chancery and of Bankruptcy, £371,000, transferred from fee funds, and diplomatic salaries transferred from the Consolidated Fund, £159,000: altogether a sum of nearly £700,000 was thus simply transferred as a charge from one service to another. Then there were increased charges for police and reformatories, while the item of £134,000 for the Census came this year only. And to conclude, there was a large and profitable increase of £715,000 for the education of the country; but he could, if required, carry this view of the matter much further. There had already been laid on the Table, and would shortly be distributed, a Return, drawn up by an extremely able accountant—Mr. Mills, of the Treasury—which would show that from 1853–4—a year so often taken as indicating the economy which preceded the Crimean War—down to 1868–9, the increase of expenditure for civil government, whether charged to the Consolidated Fund or to the Civil Service Estimates, was less than £3,000,000. These figures showed the hon. Member for Brighton, and those who thought with him, that it was not to the Civil Service expenditure they must look for future economy, but that they must look to the expenditure upon the military and naval forces. No objection had been offered to the Navy Estimates of this year. The grants for 1868–9 were £11,157,000; the amount of the Navy Estimates for this year was £9,756,000, which showed a reduction of no loss than £1,401,000. He did not affirm that the smaller amount was one which it was necessary should always be maintained. This would depend partly upon the condition in which our naval forces were maintained from year to year, and partly upon the condition of Europe; but, as far as this year was concerned, he thought the House would agree with him that, under present circumstances, no fault could be found with the Navy Estimates that were before the House. Without doubt, the Army Estimates were the head and front of our offending; the increase, compared with the grants of last year, was no less than £3,487,000. He did not desire to extenuate that large increase; he certainly was not prepossessed in favour of any unnecessary increase of expenditure of that kind; but he might make one or two remarks upon the items which constituted that increase by way of justifying it, at any rate, under the conditions of the time at which these Estimates were framed. Of the increase of £3,487,000, £1,047,700 was to be attributed to that increase in the number of men and of horses which was made at the end of last Session, when Europe was involved in the throes of convulsion produced by a tremendous war. Whatever reduction might be possible and prudent in future, and he would reserve to the Government perfect freedom of judgment as to the number of men that should constitute the Army of future years, no one would say that we ought now to reduce the number of men and of horses added at the close of last Session. The next item was £554,900 for the Reserve forces, and to that addition no one would object who considered that the reform of the Army would increase its efficiency, augment the defensive power of this country, and eventually result in economy of expenditure. Then came the increase upon stores, principally guns and small arms, £995,400; and for works, including torpedoes, £288,000. The hon. Member for Northumberland (Mr. Liddell) had spoken of these items as if they had not been transitional, and no doubt he should exaggerate his own aspect of the question if he were to say that all these amounts constituted transitional expenditure; but it was impossible to deny that in this year the Government, for reasons which were perfectly well understood, were asking for a very much larger sum for great guns, small arms, torpedoes, and works than was likely to be required in any future year, and therefore he was justified in saying that a large proportion of this expenditure was transitional and would not recur. Then there was £600,000 for the abolition of purchase in the Army, which was the bribe offered to the other side of the House by his hon. Friend the Member for Brighton (Mr. White) and his hon. and learned Friend the Member for Oxford (Mr. Vernon Harcourt). This sum of £600,000 represented less than a saving of a halfpenny in the pound of income tax, and what was the price at which that last halfpenny was to be saved to the payers of income tax? It was the suspension, if not the abandonment, of the proposal to abolish the system of purchase in the Army—a scheme which hon. Members on that side of the House were almost unanimously in favour of, which they believed to be at the bottom of all radical Army reform, and without which, in their opinion, neither efficiency nor economy in Army administration was possible in the future. He trusted and believed, therefore, that his hon. Friends who were economists would not be seduced to vote with his hon. Friend the Member for Westminster (Mr. W. H. Smith). He now came to the supposed hardship of the increase of the income tax on the poorer middle classes, who might be said to feel the incidence of that taxation more than the working population. While the hon. Member for Westminster did not draw attention to the proportion of direct and indirect taxation, his hon. Friend the Member for Northumberland (Mr. Liddell), who seconded the Resolution, had had the courage to refer to the Budget proposals of past years, and to suggest that it might be well if we were to "go back" on our free trade policy, re-impose the duty on corn, and increase the duty on sugar. He agreed with the politico-economical views expressed by his hon. and learned Friend the junior Member for Brighton (Mr. Fawcett), who was perfectly justified in saying it would be most mischievous to accept the notion that an increase of expenditure must necessarily be met by an increase of the income tax. The hon. Gentleman spoke of the danger of voting in democratic times and in a democratic assembly an expenditure to be borne by those who did not possess control over the representation of the country. He did not know whether in the opinion of his hon. and learned Friend these were democratic times and this was a democratic assembly; but, as far as existing financial legislation went, he maintained there was no evidence on which he was entitled to say that a disposition had been shown by Parliament unduly to burden the population by direct taxation. Practically speaking, we could not recede from our free trade policy of recent years. He was prepared to make the admission that if in future any remission of indirect taxation should be proposed, it should be carefully con- sidered before being assented to; but when taxes had been taken off the necessaries of life, or been prevented from hampering trade and commerce, it was practically impossible, on an exceptional occasion and with reference to a transitional expenditure, to "go back" on that policy. The alternative was an increase of 2d. in the pound on the income tax, or an increase of 1d. in the pound on the income tax and a suspension of the reduction of the National Debt. This, he admitted, was a fair issue. He trusted, however, the House would never consent to the abandonment of the policy of reducing the National Debt. We had not made such bold and ambitious steps in this respect as our Transatlantic neighbours; but still we had already done much, and might do more. The House entered on that policy deliberately; it was pledged to it by it own Resolutions; and it would be a mischievous, a dangerous, and a fatal step if, for a passing necessity, it were to abandon that policy. Since 1868–9 we had redeemed upwards of £10,000,000 of the National Debt; and at this moment we were reducing it by more than £2,000,000 per annum in respect of Terminable Annuities which would come to an end in the year 1885. His right hon. Friend the Chancellor of the Exchequer had a still larger scheme which he indicated the other night, and which, in connection with the Chancery and Bankruptcy Fee Funds, would enable him to operate still more liberally and largely in this direction. The House had been told that it would be easy to suspend at least one-half of the payment of capital, as far as Terminable Annuities for this year are concerned; but it would not be quite so easy as some hon. Gentlemen imagined. In the first place, it would require legislation; and it would be necessary for the Government and the House to say to the country and to Europe—"Although we have determined to re-organize our military forces and defences, although the danger is a passing one, and the expenditure is not likely to be permanent, we are frightened at the last penny of the income tax it would cost us in order to carry out our schemes for this single year, and we are going to call upon Government, or Government are going to call upon us, to suspend the operation of a deliberate policy which finds its place in the Statute Book of this country for the reduction of the National Debt." How would that House, the country, and the Government look in the face of Europe if they did such a thing; and how would the country like the adoption of such a course? He might mention to the House one embarrassment which would follow on such a course. The Terminable Annuities were Ways and Means in the hands of the Commissioners for the Reduction of the National Debt, and one of the immediate consequences of the adoption of such a policy would be, that they would be obliged to refuse a continuance of the assistance they were now rendering to the Irish Church Commissioners by advancing them money at a low rate of interest. But if the operation were easy, he would say to hon. Members that, because it was easy and tempting, therefore they ought not to yield to the temptation. It had also been asserted that the creation of Terminable Annuities was a contract based on a promise made to ourselves, and that we could at any moment break it. Well, it was upon that ground that he appealed to the House, and to his hon. Friend who was to speak to-night on this subject, not to be tempted into such a course, for everybody knew how easy it was to fall away from virtuous resolutions. They knew how dangerous was the first fall; and he maintained that if hon. Gentlemen who supported the proposal before the House succeeded in inducing Her Majesty's Government to yield to their proposals, no future Government would be able to hold its own upon a great and deliberate policy like that which had been adopted by the present Government, and accepted by Parliament and the country, and which was pregnant with benefit to the people in the future. There was, he considered, no necessity for taking refuge in such a worn-out expedient as that which had been laid before the House. The national expenditure was large, but the burdens of the country were not overwhelming. The real increase in the expentiture of the country in 1870–1, as compared with 1853–4, making allowance in respect of transfers, miscellaneous revenue, and so forth, was £5,500,000. In arriving at this conclusion, he omitted the cost attaching to the General Post Office from his calculation, because that Department was a source not of burden, but of profit; and though the cost of its maintenance had increased of late years, the profit arising from it had increased also. He also left out of his calculation what was called miscellaneous revenue, and amounted to upwards of £3,000,000, because it arose entirely from fees and other similar contributions, and was not derived from the taxation of the country. This being so, he asked the House to compare the increase in expenditure with the increased Revenue and resources of the country, and to remember that in 1853–4 the income tax was not 6d., as was now proposed, but 7d. in the pound, and that the charge for Debt was £28,054,000, against £26,910,000 in the current year, which last sum included the charges on account of Terminable Annuities. He therefore maintained that the resources of the country were not so low that the House was driven to the alternative of suspending the payments in reduction of the National Debt; and while concurring in the view, that in future the expenditure ought to be reduced, he thought that the proper course to be taken was to grant the Ways and Means necessary to meet the Estimates which the House had itself sanctioned.

MR. HUNT

The truth of the saying, "Great is the irony of events," has never been better exemplified than in the incident that has just come under our notice. Who could have expected to see the right hon. Gentleman, who made his first remarkable speech from below the gangway on a Motion to reduce the national expenditure, put up by the Government to defend their conduct in raising the income tax by 2d., and that, too, in a time of peace? It is not my intention to attack the expenditure, though the right hon. Gentleman seemed to think he was called upon to defend it; but I think it must be a perfectly new discovery to the right hon. Gentleman to find that the Civil Service expenditure cannot be reduced, but must increase. Before the phrase "automatic services" was invented, and when I had the charge of the expenditure, we were told the new expenditure should be met by new economies; but now the phrase seems entirely to have departed from the minds of right hon. Gentlemen opposite, and we are now told of "automatic services," and of expenditure which, in the Chancellor of the Exchequer's words, "takes care of itself." I must ask the House to consider under what circumstances Her Majesty's Government ask to impose an additional 2d. on the income tax, which it is contended by the Motion of my hon. Friend the Member for Westminster ought not to take place. We are at peace with all the world, and the Chancellor of the Exchequer told us in his first Financial Statement that this year the Revenue was in a prosperous condition, maintaining all its elasticity, and yet the Government are asking this additional 2d. The right hon. Gentleman seemed to think we might single him out for blame; and he remarked that as he had got credit last year to which he was not entitled, there would be some compensation by his receiving blame this year to which also he was not entitled. I am not prepared to single him out either for praise or blame. I assure him that though it was his good fortune to reduce taxation, I never thought he deserved any great encomiums on that ground; neither do I single him out for blame, because I think the whole Government are responsible. [Mr. GLADSTONE: Hear, hear!] The right hon. Gentleman at the head of the Government cheers that sentiment. Well, as I said before, while holding the Government, as a whole, responsible, I specially and particularly hold him responsible, and that proposition will be shown by taking a broad view of the question. The financial difficulties in which we now find ourselves are the legitimate consequence of—I will not say the heedless rhetoric of the South Lancashire hustings, for I believe it was well considered—but I will say the ill-judged rhetoric of the Lancashire hustings. For the purposes of my argument we must decline to look at the proposals of the Government merely for this year; but we must look at the policy of the Government as statesmen, and at their conduct as running through their present Ministerial career. We must see whether they have taken a broad view of the circumstances, after careful examination, in having been led to recommend to the House those changes which they have proposed during the nearly three years they have held the reins of power. I say most deliberately our financial difficulties, notwithstanding our flourishing Revenue, and the financial difficulties of the Government in having withdrawn one Budget and now introduced a second one, which is being opposed, entirely arise from the ill-judged rhetoric of the right hon. Gentleman when canvassing South Lancashire. He told the constituency that the Government then in office were extravagant; that the expenditure was excessive; that they wished to "make things pleasant all round" by dispensing public money; that he wished a radical change; and that if the Government was turned out, and the Government over which he might preside came in, there would be a considerable reduction of expenditure and a consequent reduction of taxation. Well, the right hon. Gentleman laid so much stress on this, that when the change of Government took place, and he came to the charge of the councils of the nation, he felt bound, in order to maintain his consistency, to reduce the expenditure. Well, what happened? He singled out the great spending Departments of the State, into which he put men he could trust not to make those Departments more efficient, but to make them less costly. In fact, their very tenure of office was their success in reducing the expenditure. The right hon. Gentleman the Chancellor of the Exchequer, in the first speech which he made in that capacity, told us of the heroic efforts in the direction of retrenchment, made by the Secretary for War and the late First Lord of the Admiralty, whose absence we all regret. What were they? The Secretary for War struck off 20,000 men from the rolls of the Army, and the policy of the ex-First Lord of the Admiralty took the same direction. I want to know if that was a statesmanlike course? Can the right hon. Gentleman opposite get up and defend the course that has been pursued, considering that within two years they have been obliged to reverse that policy—the Secretary for War restoring the number of men he had cut off in 1869? These heroic efforts are now directed to the increase of the expenditure of 1871. The Chancellor of the Exchequer, seeming to expect that this argument would be used against him, said the other day, that when Army and Navy retrenchment was determined upon, he could not know what was going to happen. We did not know whether the French or the Prussians were to be victorious in the war then in preparation; but, I ask, had not the Government rea- son to know that great military preparations were being made on the Continent? To what purpose do we spend large sums every year in maintaining functionaries in foreign capitals with military attachés but to afford information? Will any Member of the Government get up and say that they did not know what was coming? Why, we have had in the papers interesting communications published which Count Stoffel had with the Emperor of the French, in which certain German preparations for war were very fully described. I want to know had the Government no such communications? If they were not informed, all I can say is that they were very badly served; while if they were, they were most culpable in making the reductions of last year. The Chancellor of the Exchequer has been following the advice of that favourite author he used to quote five years ago, who says that to dig a hole and fill it up again is the means by which you may judge of the productivity of land; but then the advice is to fill up the hole with the same soil that has been taken out. The right hon. Gentleman has made a difference, however. He dug a hole by taking off indirect taxation, and he is now trying to fill it up by putting on direct taxation. This is the blot in the right hon. Gentleman's present scheme. The particular proposals of the Government it would be needless to argue, for they stand condemned out of their own lips. I will not refer to the eloquent speeches on Reform by which the right hon. Gentleman distinguished himself in 1866, and what he represented as the influence of the extension of the franchise upon the expenditure; or to his illustration, de profundis, about the pressure by which minute animals existed at the bottom of the sea; I shall go no further back than Monday, when he told us his great object had been to refrain from increasing the burden of the income tax, because it was grinding too much on the lower and middle classes. He is now shifting his ground, however, and proposes to make up the whole deficit by increasing the income tax, so that he has departed from the scheme he had in view when he made his first statement. The right hon. Gentleman, in answering my right hon. Friend the Member for Buckinghamshire (Mr. Disraeli), alluded to the way in which the expenditure of the Abyssinian War was met, and thought it an argumentum ad hominem; but I deny that the circumstances are the same. I remember being taken to task in 1868, when I made the proposal on the subject. The war was of very short duration, and on that ground alone we contented ourselves with depending on the income tax. The Chancellor of the Exchequer, on Thursday week, took credit for, and boasted of, the amount of the taxation he had taken off since he had been in office—the reduction being £8,600,000. According to the way in which he endeavoured to explain it, only £3,000,000 of that was direct taxation—namely, the 2d. put on for the Abyssinian War; but admitting he is justified in saying so, even in his own view he is not entitled, after digging the hole by taking off indirect taxation, to fill up the void by purely direct taxation. But he was not justified in saying he had reduced direct taxation to the extent that he took credit for, because it was put on especially to meet the expenses of the Abyssinian War, and as soon as the war was over, the 2d. went with it. The fair way to put it is, that he has actually reduced the indirect taxation £5,600,000. When we attack the mode in which he now proposes to raise the deficit, we are constantly told that as we have voted the expenditure already we must find the money; and I have no wish that we should depart from the usual custom with regard to voting the expenditure. Whatever we have voted in the way of Supply the House is bound to provide Ways and Means for; but the expenditure for the abolition of purchase in the Army stands on a different footing. The House had read the Bill a second time before we had the Financial Statement of the right hon. Gentleman; and before the House was aware of the difficulty there would be in meeting the extra expenditure it involved. As far as regards the amount that will be required for the Bill, I do not consider the House is finally committed, and the £600,000 could be lopped off. Now, the right hon. Gentleman will say—Why do you not provide us a substitute for the proposal you condemn? I answer, that it is not my duty. It is the duty of the House to criticize the proposals made by the Government, and if it be not acceptable, it is then the duty of the right hon. Gentleman to produce another. I feel certain the fertility of invention to which we owe the match tax, the increase in the succession duties, and the new mode of levying the income tax, is fully equal to provide us with the £600,000 required by other means. We have been repeatedly told by the right hon. Gentleman at the head of the Government, that these are transitional Estimates and expenditure; but my view is that the reduced Estimates during 1869–70 were the transitional Estimates, for whatever can be saved in another year will be more than lost by what we have already been advised of by the Government considering the reduction in the Revenue. My right hon. Friend the Member for Buckinghamshire (Mr. Disraeli) pointed out that there would be £870,000 less of miscellaneous receipts; that £600,000 would be required for the abolition of purchase; and that £1,200,000 would be handed over to the local authorities by the sacrifice of the house duty. Now, neither the right hon. Gentleman who has just sat down, nor the Secretary for War can attempt to show that the transitional expenditure will be less than the sums I have just named. Whether it is so or not, I do enter my most solemn protest against the facile injustice of meeting this deficit from one particular source, and that, the one which has been selected by the Government.

MR. RICHARD

said, he must confess he was one of those who felt considerable sympathy for the Chancellor of the Exchequer in the peculiar position in which he was placed. He believed that right hon. Gentleman came into office with an honest desire to be an economical Minister of Finance; and to act the part of the "benignant" fairy to which he referred in his Budget speech, by the remission of taxation to the comfort and contentment of the families of this land. As seen by the picture which the right hon. Gentleman desired to offer on that occasion, his present position was, therefore, all the more unfortunate, for not only was the whole of the surplus which he had hoped to possess, and to offer in that beneficent direction absorbed in the bottomless abyss of military expenditure, but he was required to impose additional taxation upon the people of this country to supply the deficit occasioned by the enormous cost of our armaments. Now, he objected to every proposition of the right hon. Gentleman for adding to the taxation of the country. He had objected to the tax on matches, which was a singularly unpopular conception; he objected to the increase on succession; he objected to increasing the income tax; and he objected, above all, and most emphatically, to having an addition to the taxation at all, as circumstances did not, in his judgment, require such an addition. As a friend of the present Government—an ardent and sincere friend—he looked with dismay at the proposal which they had made to add £4,000,000 in one year to the naval and military expenditure. Three years ago, many of them had gone to the country to plead the cause of the right hon. and hon. Gentlemen sitting now on the Treasury Bench, on this ground among others—at least, it was the ground he took—that if they were installed in office, the country might depend upon two things—first, that their foreign policy would be a policy of peace, and, secondly, that their financial policy would be a policy of retrenchment and economy. The former part of the promise which many hon. Members had made to their constituents, on behalf of Government, had been redeemed honourably; and he was glad of this opportunity of thanking them, from the bottom of his heart, for the admirable manner in which, on the whole, they had conducted our foreign relations during the difficult and very perilous crisis of the war which had just been raging in Europe. He thanked them for having courageously and consistently adhered to the principle of non-intervention, or intervention only by means of friendly offices, during that terrible and calamitous war. He thanked them also for their conduct in the Russian quarrel; but the peculiarity of their conduct—and what he objected to—was this—Government gave us a peace policy and a war expenditure, to use the language of the right hon. Gentleman the Chancellor of the Exchequer, in introducing his Budget. He wanted to know why we were to have a war expenditure in time of peace? No Government ever came into power more deeply pledged to a policy of economy than the present Government; and no one had a right to call into question the sincerity with which the right hon. Gentleman at the head of the Government had advocated that policy; for, not only when he was out of office, and in those celebrated speeches in Lancashire, which had been so often referred to, had he done so, but when he was in office under Lord Palmerston, he used to groan in spirit at the enormous Budgets which he presented to the House, and did everything to stimulate the slumbering conscience of the House and bring it into rebellion against the extravagance of his own Government. In a speech in Lancashire, in 1868, the right hon. Gentleman said that "the House of Commons was becoming the stimulator and promoter of public expenditure;" and the right hon. Gentleman most earnestly hoped that, in the New Parliament, we should witness a new state of things. All these circumstances rendered it the more inexplicable that the right hon. Gentleman should now countenance such an addition, which he maintained was enormous and uncalled-for during a time of peace, as £4,000,000 to the naval and military expenditure of the country. He (Mr. Richard) wanted to know why this was to be? It was not, he hoped and believed, that the Government intended to assume that aggressive and meddlesome policy which had cost this country formerly so much, not only in money, but also in reputation and credit. He rejoiced to know that the leaders of all parties in this country had recognized that non-intervention was the sound principle on which the foreign policy of this country was for the future to be conducted; and he would venture to address a word to some hon. Friends sitting below the gangway, by telling them that, if they intended to be sincere friends of economy, they must give up all hankering after what was called a public-spirited policy; for, if we were to act the part of a little providence over the nations of the world; if we were to espouse everybody's quarrel and champion everybody's cause, and guarantee everybody's territory, and single-handed to hold all the Powers of Europe bound, under the perils of war, to observe all the obligations of all the foolish treaties to which we had made ourselves parties, then £26,000,000 of naval and military expenditure, so far from being too much, would not be enough. And if we were not to adopt that policy, why were we to have all this expenditure? The Secretary of State for War had stated emphatically that we were in no kind of danger, and last year, in introducing his Estimates, said there never had been in time of peace a force in this country equal to the force of last year. He (Mr. Richard) had listened with attention to the speech which the Prime Minister had delivered on the Motion of the hon. Member for Sheffield (Mr. Mundella), as to the increase of the expenditure. No man living was abler to give a plausible reason for the course he had to pursue than the right hon. Gentleman; but not only had there been no plausible reason, but no reason at all offered, except that it was an expenditure of transition. Recalling to mind the financial history of the last 25 years, he had not derived any comfort from the assurances which the right hon. Gentleman then offered; for all that interval had been a period of transition, but the transition had been upwards, never downwards. The House had been told that this was a transitional expenditure; but it was a remarkable fact that when the Army and Navy Estimates were increased under any pressing emergency, the increase remained after the emergency had passed away; he had, therefore, been driven to this conclusion—that the Government had unworthily yielded to one of those panics with which this country had so often been invaded, and, as he must say, dishonoured. In the present instance, however, he believed that the country had not participated in that panic to any extent, and adverting to the assumption pervading most of the speeches which had been delivered on the question that the country itself had shown a want of confidence in the provision made for its defence, he challenged that assumption, as no public meetings had been held, no resolutions passed, not a single Petition had been presented to the House during the war, indicating the slightest uneasiness or any desire for an increase of our naval and military Empire. Had the Government looked back to the history of former panics they might have found reason to re-assure themselves, for in every instance which had occurred during the last 20 years the event had utterly belied the panic-mongers. In 1847–8 a violent panic was produced by a pamphlet written by one of the Orleans Princes upon the French Navy; a cry was raised that Louis Philippe was going to invade England, and he did land upon the coast of Sussex, but it was from a little cockboat, in which, under the name of John Smith, he had escaped from revolution at home to find a refuge in this country. Another panic took place in 1852, when a general officer wrote to Mr. Cobden, offering to pay ten guineas every year to any charitable institution that might be named until the French landed here, on the condition that Mr. Cobden would pay £20,000 when that event took place. The offer was accepted, the money was paid to the Manchester Infirmary, and for aught he knew was being paid to the present day. In bringing forward his Estimates the right hon. Gentleman the Secretary of State for War, in noticing his measure for the re-organization of the Army, gave as a reason for the increase—and it was the only reason to be found in his speech—that, though we were in no danger at the time, yet, by the re-organization of the military force, we might be saved from the apprehension of danger, and of those panics which were occasionally arising. If the right hon. Gentleman thought he could provide against the recurrence of these periodical panics, and silence persons who were always clamouring for large establishments, he (Mr. Richard) must say he must be of a singularly sanguine temperament. Within the last 15 years we had paid £434,000,000 for our naval and military defences—that was to say, every 30 years we expended more upon our defences than the whole of the National Debt, and yet when any emergency arose, the very people in whose lap we had poured this treasure came to that House and said—"We are absolutely defenceless." If this was true, we had a right to ask these people what had been done with our money. But, casting that aside, and coming to the question—What were we now to do? he would answer it by asking another—Who had been the accomplices of Government in this panic folly; and had those accomplices a right to turn round now and become the avengers? The accomplices of the Government, in the main, had been hon. Gentlemen opposite. The Chancellor of the Exchequer, in his speech on the Motion of the hon. Member for Brighton (Mr. White), let the cat out of the bag. He made an appeal to hon. Gentlemen opposite—a sort of argumentum ad misericordiam, and said—"It is you who have brought us into this mess; and are you going to vote against us now, you who have been always urging us to do something?" The Government had given way to Gentlemen opposite in this matter, as they were always giving way to them, and as they gave way upon the Education Bill, which, from a measure of national education, was transformed into a series of inventions for enlarging and perpetuating a system of sectarian education, which would be found to return with bitter interest on the heads of those who made the proposal. With regard to this proposition for the increase of our armaments, it was hon. Gentlemen opposite who had been hounding the Government on. And were they now to assist the Mephistopheles of the Opposition to destroy the weak-minded Ministerial Faust, who were always selling themselves to—[Laughter]—well, he would not say to whom? He thought not; for it could not be forgotten that the right hon. Gentlemen who constituted the present Government had rendered great and illustrious services to the cause of progress in this country, and he was not insensible to that kind of gratitude which consisted in a lively sense of future favours, and he hoped to get something more from them. He wanted the Ballot, before hon. Gentlemen opposite had a chance of appealing to the country; and he wanted the Licensing Bill to be carried, which, notwithstanding the clamour raised against it by the publicans and sinners, he believed to be a good Bill. But, in saying what he had said, he must add, that there were other accomplices besides hon. Gentlemen opposite. Were those on the Government side of the House quite guiltless? He believed not. He believed the increase of the expenditure was laid at the close of the last Session of Parliament, when Government came down in a great fright, when there was only a small fragment of the House left, and asked a Vote suddenly for two millions of money and 20,000 men. There were only seven hon. Members in the House who had the courage to resist that Vote; and they were sneered at by the War Press as the seven wise men, and he thought they richly deserved that title; he had been one of them himself, and he thought they deserved also to be called the seven brave men. Now, of what avail would these 20,000 men have been in the gigantic conflict? He believed, if Europe was to be saved from ruin, it would not be by treading the path they were invited to tread by the propositions of the Government as to the re-organization of the Army, for it was not by arming, but by disarming, that there was any hope of salvation for Europe. At this moment the great bulk of national expenditure, and almost all study, science, skill, rewards and emoluments seemed directed to the work of destruction. Including all the losses to industry and trade, he believed it was no exaggeration to say that the armaments of Europe cost from £300,000,000 to £400,000,000 a-year. While millions were trembling on the verge of pauperism, and while a still larger number were kept from want only by incessant toil, Governments came in year after year, and swept away enormous amounts from the product of their industry, in order to throw it into the unfathomable gulf of military expenditure. The military expenditure of Europe had doubled itself during the last 20 years, and in the present rivalry of armaments, he saw no reason why it should not double itself again in the next 20 years. Was it not possible, then, to bring human reason to bear upon this system of mutual folly and mutual ruin, and so put an end to this miserable game of "beggar my neighbour?" Why should not our own Government—and no Government was in a position to do it as well—take the initiative, and make an overture to the other Governments of Europe, with a view to a general understanding for a mutual and simultaneous reduction of armaments? By taking such a course, the Government would ensure the gratitude and blessing of myriads of the population of Europe, and be the means of relieving them from a burden which was crushing them into the dust.

MR. HERMON

said, he still entertained the opinion he had formerly expressed—that if part of the money voted for military purposes had been applied to the Navy, it would have been to the advantage of the country. The Conservative side of the House had frequently been charged by hon. Members opposite with having hounded on the Government to increased expenditure, and the charge had just been repeated by the hon. Member who had just sat down (Mr. Richard). But he (Mr. Hermon) was not prepared to accept the dictum of hon. Gentlemen opposite as to the course of the Conservative Members, for only this year he had himself made a feeble effort to obtain a reduction in the military expenditure, and in reply to the taunts of hon. Members opposite, he would ask whose policy it was that had led to this result, and had left the country unprepared for any emergency that might happen? Why the increased expenditure was owing, in a great measure, to the abandonment, on the part of the First Lord of the Treasury, of that policy of non-intervention which he proclaimed in his visit to Lancashire. At the end of last Session, without obtaining one word of assent from Parliament, the Government concluded a treaty with the Emperor of the French and the King of Prussia for securing the neutrality of Belgium. He thought it would be for the interests of this country, and of Europe generally, that there should be a revision of treaties; for he could conceive nothing more dishonourable to a country, than at a time of emergency and difficulty, to find fault with a treaty which ought to have been fully discussed and considered before it was accepted. With regard to the income tax, he hoped something would be done to remove the uncertainty which prevailed as to the obligation on employers of filling in the amount of the salaries paid to their servants. Only that day he had received a letter from a friend, who, in consequence of a recent reply of the Chancellor of the Exchequer, had refused to comply with such a request, and had been since subjected to continual pressure. As to the Terminable Annuities, he wished to remind the House, that when the Bill which created them was introduced, it was specially mentioned that in a case of difficulty or in the event of any transition occurring in the expenses, that method of dealing with stock might be suspended. Much inconvenience at present arose in consequence of the income tax being collected in one month somewhere about the month of January, and he suggested that in future it would be advantageous to allow the tax to be paid by two instalments. If any plans of the Government ought to be well considered before they were laid before the House, they were plans connected with finance. Nothing gave more trouble than uncertainty in connection with finance. All uncertainty in reference to taxation interfered with the national credit, and brought trouble and anxiety upon every person engaged in commercial pursuits.

SIR JOHN LUBBOCK

said, he should have voted for the Amendment of the hon. Gentleman the Member for Westminster (Mr. W. H. Smith) if it could have been taken as an abstract Motion, or as a Motion in favour of economy; but while, on the one hand, it was not intended as an abstract proposition, on the other it could not be regarded as in favour of economy, supported as it was by hon. Members who had systematically voted for increased expenditure. No Motion of that kind could, he was sure, be proposed by any hon. Gentleman sitting on the Opposition side of the House, inasmuch as they had supported the Government in every proposal for increasing the national expenditure. He regretted that the Government had made proposals for the increase of our armaments; but, at the same time, he felt that if hon. Gentlemen opposite had been in power the country would have had much heavier burdens to bear. Still he hoped that the Estimates need not be considered as unalterable. He could not forget that they had been framed at a time when Europe was much agitated; when the general condition of affairs was totally different from the present; and it certainly appeared to him economy then would now be extravagance. He, therefore, thought that the proposals of the Government might be subjected to a re-consideration under the altered circumstances of the case. The present mode of voting the income tax was, in his opinion, inconvenient, the income tax being now voted for the space of a single year, commencing on the 6th of April; the result was that at the beginning of each year, and especially when, as in the present instance, there was any delay in passing the financial proposals of the Government, bankers and merchants had a difficulty in knowing what income tax ought to be deducted from dividends payable on particular stocks, and at the present moment the dividends on several important stocks—Russian, Swedish, Turkish, and others—were being paid, without the deduction of any income tax whatever. That must involve considerable loss to the Revenue, because it was impossible to recover the tax if it were not collected when the dividends were paid. He would suggest, then, to the Government whether it would not be possible on the present occasion to take the Vote for the income tax for a period of rather more than a year, subject to any arrangement which Parliament might make. Again, he could not understand why income tax on railway debentures should be calculated in a different manner from that on Government securities; and he thought greater uniformity should be adopted in that respect. With regard to the subject of Terminable Annuities, he had not long ago expressed an opinion unfavourable to the reduction of the National Debt by means of Terminable Annuities. He still thought that was not the best or most economical way of reducing the Debt, and he should prefer the more straightforward mode of raising a sum every year for that purpose. Instead of Terminable Annuities he should prefer the proposal of the hon. Member for Sunderland (Mr. Candlish), to reduce the interest on the National Debt by straightforward re-payment. If the country year by year saw the Debt diminishing, and a less sum taken for interest upon it, although we might not be able to effect as much in that direction as had been achieved in the United States of America, which during the administration of their present Government had paid off $2,004,000,000, yet we might accomplish a great deal more than we now did in lessening the public Debt. But although he did not think Terminable Annuities formed the best method of reducing the Debt, still they were infinitely better than nothing; and he was surprised that anybody who had studied financial matters should object to the reduction of the Debt in a country like ours, where so much of our prosperity was due to coals, which we were rapidly consuming, and to our trade, which might not always remain what it was. They were told that they ought not to do so much for posterity; he thought, on the contrary, we ought to do what we could for posterity; but that was not a question for posterity at all, because those Terminable Annuities would fall in at the end of 14 years, when it might be hoped that many of those now in that House would be found there still. It had been asked, would it much matter whether those annuities were paid off in October, 1885, instead of in April of the same year? It was, however, a most insidious and dangerous thing to suggest that they should postpone the fulfilment of a duty because it involved a present sacrifice. The hon. Member for Westminster (Mr. W. H. Smith) asked the Government to give them Budgets for future years; but it was quite impossible for any Minister, however wise and far-seeing, to tell what the circumstances of the case might require them to do in future years. The hon. Member for Northumberland (Mr. Liddell) had suggested that the Terminable Annuities should be deferred. Even, however, if this were a year of transition, it would not be worthy of a great nation like this to suspend the payment for the Terminable Annuities; but he did not think it was a year of transition, and if they were now to suspend the paying off of those Annuities, it would be still more difficult to bring the scheme into operation next year, when they would not have the present windfall of £800,000—when the contribution for the extinction of purchase in the Army would be increased, and when it was also proposed that the house tax should be given up. But they were also met by the argument that individuals could employ their money so much better; and one high authority said they could invest at 5 per cent, whereas the Government only gave 3¼ per cent. Now, apart from labour and risk, people could not get 5 per cent for their money; but even if they could invest at a slightly higher rate than that on Government securities, that would not be a conclusive argument against reducing the Debt by the plan now in operation. Taxes were, to a certain extent, paid by economy; they came, not out of capital, but out of income, and our national savings were but a fraction of the whole national inline. Moreover, one great element of the strength of this country was its financial position, and the knowledge possessed by foreign States that if we got into a war our power was not to be measured by our Army and Navy, but by the money, the science, and other resources that we had at our command. To tell foreign nations, in effect, that we had been taxed as much as we could bear, and that we could not raise a sum of £3,000,000 without interfering with a policy which had been deliberately adopted, by Parliament, and approved by the leaders of both parties, would be a confession of weakness which he hoped would never be made. While the proposed new taxation hardly balanced that remitted last year, in the course of the last 10 years nearly £20,000,000 of taxation had been taken off; to add to which trade was reviving, pauperism was diminishing, and on the whole the country was in a prosperous condition. Therefore, though he regretted to throw the whole of the additional taxation on one source of Revenue, yet seeing the difficulty in which the Government were placed, and remembering the services they had rendered to the country, he would cheerfully support them on that occasion.

MR. GOLDNEY

said, he thought whatever might be the result of this debate, that it would afford much benefit to the country, and that it would show the Government that the attention of the country was now drawn to its large expenditure, which could not be long continued without bringing the Government into very great difficulties. The right hon. Gentleman the head of the Poor Law Department drew a contrast between our expenditure now, and what it was 10 years ago, declaring that the increase was only £5,000,000. But he (Mr. Goldney) would go somewhat further back and take the year 1846, for the purpose of showing the contrast between that period and the present. In 1846 the Revenue of the country amounted to £57,500,000; the net expenditure was £49,500,000, and on the previous year the late Sir Robert Peel had remitted more than £4,500,000 of taxation. Out of this expenditure, no less than £28,500,000 were appropriated to the Terminable Annuities and the payment of the interest of the Debt, leaving but £21,000,000 as the real expenditure of the country, including the Army, Navy, Civil List, and Civil Service. The expenditure now was about double what it was a quarter of a century ago; and this was the answer to the statement that the increase in the expenditure for the last 10 years was only £5,000,000. Last year the total net expenditure was £64,000,000; and after deducting £27,000,000 for Terminable Annuities, £37,000,000 was left as the expenditure, being £16,000,000 above what it was a quarter of a century ago. He believed that the time had arrived when it was necessary to inquire into many of the new items that had been placed upon the Consolidated Fund, for the new charges placed on that fund this year amounted to £1,500,000. For that reason, he quite agreed in the principle embodied in the Motion of the hon. and learned Member for the City of Oxford (Mr. Vernon Harcourt) as he thought that if there was this deficiency as estimated, the House ought to have some opportunity of reviewing the expenditure they had voted in ignorance. In reference to the proposal of the Government for 2d. additional income tax, he was disposed at first to think it the easiest solution of the difficulty; but, at the same time, he could not understand what the benefit was of taxing the community on the one hand for the mere purpose of making a payment to the same community on the other, yet that was precisely what the Government proposed to do in their proposal of an increased income tax and the payment of the Terminable Annuities. Looking at our Revenue now, as compared with what it was 25 years ago, he was satisfied that the resources we possessed for meeting that debt were nearly doubled—were very much larger than they were 10 years ago, and larger this year than last year, for every class of property had greatly increased, and was still gradually increasing day by day, thus adding to the productive wealth of the country, and he should vote with the hon. Member for Westminster (Mr. W. H. Smith), because he thought that the proposal of the Government was ill-conceived, and that a check by this means should be put to the increasing expenditure of the country.

MR. SINCLAIR AYTOUN

said, he must decline to vote with the hon. Member for Westminster (Mr. W. H. Smith), because he did not think it was convenient to take the division on the question whether the income tax was or was not to be increased by 2d.—a Motion that involved a Vote of Want of Confidence in the Government. He had no idea of complimenting them; but he confessed he did not wish to see the Government leave office then, although he did not think that they had done much that Session. There were two divisions of work which the Government had taken in hand— namely, pulling down and building up. The Government had shown their powers in the work of pulling down, for example, in disestablishing the Irish Church, in which work he concurred with them; but when they set about the work of re-construction, as in the measure for the regulation of the Army, they had shown themselves sadly deficient in the capacity for construction. Nevertheless, he thought it desirable that they should remain in office in order that the Session might not be utterly wasted; for there was the Bill for the abolition of purchase in the Army, which he looked upon as an important measure, and which, if passed, would save the Session from being considered as futile. There was also the question of the Ballot, which, though he was no ardent supporter of, still he thought it was one that ought now to be settled; while the Scotch Education Bill, too, was a measure of the highest importance, and one which ought to be no longer delayed. When the Government first brought in their Budget, it seemed to have been founded on the principle that the burdens to be laid on the country should be distributed with the utmost equality possible over the various classes of the community; but he considered the proposals for the match tax and for the alteration in the legacy and succession duties as very unwise proposals, and he was glad they had been dropped. If the Government started with the principle that the sum required should be distributed equally over various classes of the community, why had the House not had any explanation why this principle was altogether ignored now? He would now say a few words as to the payment of the National Debt by a system of Terminable Annuities. The present First Lord of the Treasury proposed the conversion of the book-debt of £24,000,000, held by the Bank of England on account of the savings banks, and his successor in the Government, the right hon. Member for Buckinghamshire (Mr. Disraeli), carried out the scheme. In his (Mr. Aytoun's) opinion, the system adopted was open to every possible objection. When the First Lord of the Treasury introduced the scheme it was based upon the anticipated exhaustion of the coal-fields; but he (Mr. Aytoun) had never met any man who was practically acquainted with the state of our coal-fields, who shared in the alarm of the right hon. Gentleman; and whether the anticipation were well founded or not, it furnished no reason for resorting to an objectionable mode of paying the Debt. The right hon. Gentleman, in 1866, stated that he was opposed to the principle of a Sinking Fund; but added that his plan was not liable to the objections urged against Mr. Pitt's Sinking Fund. The principal objection to Mr. Pitt's Sinking Fund was, that at times when they were obliged to borrow money to carry on the Government, they would be obliged to borrow an additional sum for the payment of the Debt, and necessarily to borrow it at a high rate. The right hon. Gentleman said that he had found a means of paying the Debt which would not render it necessary to go into the open market to borrow money on unfavourable terms. His plan was to convert the book-debt into Terminable Annuities, to create an annuity that would be more than sufficient to pay the yearly demands of savings banks. The interest of the £24,000,000 amounted to £720,000 a-year, and an annuity was created which amounted to £1, 725,000 a-year; so that £1,000,000 would remain after paying the average annual demands of the savings banks depositors; the National Debt Commissioners then invested the surplus money in the purchase of Consols, which were held as an asset on account of the savings banks. But the operation of creating Terminable Annuities had never been carried into effect, for to convert a debt into Terminable Annuities you must cease to owe the debt that you have converted into a payment for a fixed number of years, and nothing of this kind had taken place, for they were bound, at any time the depositors in savings banks asked for their money, to pay it. The only thing they had done was to fix upon the Consolidated Fund a certain annuity that was larger than was required for the particular purpose of paying the ordinary annual demands of the savings banks depositors, and to apply the surplus in the purchase of Consols. Passing from that point, he should like to know what could, be said by the Government on the proposal for suspending the Terminable Annuities to meet the present exigency. Then they had been told that they should treat the present Budget as an ordinary, and not as an exceptional Budget; but providing money for extinguishing purchase in the Army was as exceptionable as it was possible to conceive. When money was required for fortifications it was raised by Terminable Annuities, and he thought no one could say that that was a more exceptional matter than the one at issue. The President of the Poor Law Board had objected to the suspending the payment of the Terminable Annuities, because the creation of those annuities was a policy which had been deliberately adopted by the Government and by Parliament. Now, that was an extraordinary objection for so advanced a Liberal. He also said that it was not an easy matter to suspend the payment, because the National Debt Commissioners could not then lend money as they were now doing for the purposes of the Irish Church; to him it was an extraordinary thing that a question of finance should be made to depend upon the necessities of the Irish Church. He told them also not to do it, because it was such an easy operation to begin to suspend the payment of the Debt. The two reasons given were surely very opposite ones—because it was so very difficult and so very easy. He thought the Government ought to pause before they absolutely refused to consider the proposal to suspend the payment of the Terminable Annuities, because it was, in his opinion, reasonable to do this to such an extent as would render only an additional 1d. upon the income tax necessary. He hoped that some Member of the Government would fully explain the reasons which had induced them to determine upon bringing forward a Budget which was entirely at variance with the principles of their first Budget, that principle being the equal distribution of the additional charge over various classes of the community.

MR. G. B. GREGORY

said, he had not heard any hon. Gentleman on the other side deny that the income tax was in itself burdensome to a large class of the population, a proposition which he thought so self-evident that it would not require affirmation at his hands. Speaking for himself, he frankly admitted that he did not very much care about a moderate increase of the tax: for this reason—that by him and others situated as he was, its incidence was not very much felt; but that was not the case with the mass of persons who lived on small incomes, small tradesmen and others, who had to make their calculations very closely, and he thought they deserved the consideration of the House. The House had been told that this Budget was transitional, and that the expenditure would be for purposes of a permanent character, such as guns for our fortifications, torpedoes and munitions for future wars; if that were so, then the money required might fairly be divided between revenue and capital, or between those who incurred that expense now, and those who would enjoy the benefit hereafter. Any prudent man dealing with his own affairs would so deal with the expenditure, and why should not the Government act in like manner? Then came the question whether they had capital which could be properly applied in that way, the answer to which was, that there was a certain amount to be applied to the absorption of the Terminable Annuities. That was capital, and if devoted now to the reduction of the National Debt, while an increased income tax was imposed, we should be conferring a double benefit on a future generation; a course that would not be fair to the present one, and it appeared to him that those who would suffer from the imposition of an increased income tax, and who would be the hard-working, industrious men of the present day, had a fair right to complain, and that the Government would do well to take their case into consideration.

LORD FREDERICK CAVENDISH

said, he had listened to most of the speeches which had been made, and he thought he should be conveying a true idea of their import, when he said that there were only three possible courses which hon. Gentlemen had been able to devise, if they did not accept the proposals of the Government. One course was to take back the Estimates and reduce them; another was to suspend the operation of the Terminable Annuities; and the third was to resort to indirect taxation. With regard to the first, even hon. Members who had opposed increased Estimates for the Army had said that they would feel humiliated if, when the House had sanctioned what it held to be necessary for the dignity and security of the country, they should now, when asked to find the means, say that the country was too poor either in resources or spirit to do so. Then as to the second, the measure for the reduction of the National Debt by means of Terminable Annuities was deliberately adopted by the House, on the ground that our posterity should be relieved of the burden of that Debt; and he thought that to suspend the operation of that measure would hardly be worthy of the House. Could it be said that the burdens of the country were so great that it was necessary to take that course? The hon. Member for Brighton (Mr. White) professed to be a stern economist; but only a few days ago, he heard that hon. Gentleman encourage the House to do that which he (Lord Frederick Cavendish) thought would tend more than anything he could conceive to lavish expenditure, for the hon. Gentleman told the House to meet this expenditure by suspending all means of reducing the National Debt. If they accepted the proposals of the Government there would be an income tax of 6d. in the pound. In 1865 the present head of the Government had the pleasing duty, as Chancellor of the Exchequer, of reducing the income tax below that amount for the first time since it was imposed by Sir Robert Peel. That tax had been borne with patience for 23 years; and now it appeared that somehow or other, either by a reformed Parliament or some other cause, we had become so degenerated that such a burden was more than our virtue was equal to in order to carry out the determined policy of the House. And yet, in former times, the payer of income tax had to meet other heavy imposts, including a fire insurance duty, which was estimated as equal to a tax of 7d. in the pound on property. With regard to the proposal for increasing the income tax to 6d., a late Chancellor of the Exchequer (Mr. Hunt) told the House that the necessity for the proposed increase was owing to the reduction of so much indirect taxation. Now, could anyone who looked at the state of our finances as a whole for the last 30 years make that assertion? When Sir Robert Peel began his reform of the tariff, the Revenue derived from indirect taxation was £35,500,000; and at this moment, after all the remissions made by the Chancellor of the Exchequer, the Estimates showed that the Revenue from indirect taxation this year would be £42,500,000. Last year the Revenue from that source was £41,000,000, and the greater part of that was paid by non-payers of income tax, for, owing to increased trade and work, the producing classes were able to pay far more to the State than ever they did before. He would remind the House, that the wealthy classes once paid a far greater proportion to the indirect taxation than they did now, for formerly those classes paid for tea, sugar, and wine, however expensive they were; but those who were poor were not able to do so. Therefore, it was not simply to a reckless remission of indirect taxes, as affirmed by the right hon. Gentleman the Member for North Northamptonshire, that this increase of income tax was due. He fully acknowledged that the income tax pressed hardly on those who just came within its reach; but, considering that in assessing that tax, £60 was allowed to be deducted from incomes under £200, and that the only alternative offered to the House was, that it should acknowledge before the world that it was unable to meet the expenditure which it deemed necessary for the dignity of the country; that it must suspend that policy which was begun in a time of peace for the reduction of the National Debt, and abandon that policy which had produced such incredible results, he should, without a moment's hesitation, vote against the Motion of the hon. Member for Westminster (Mr. W. H. Smith).

MR. HENLEY

said, he wished to state to the House the grounds which would influence him in voting upon the Motion before the House. He thought that everything that had passed tended to show that the expenditure which the Government were asking the House to sanction was not a temporary one, and there was something about it that led to the conclusion that it must go on. He then asked himself was it fair, was it according to the custom that had prevailed—he believed to the general satisfaction of the country for some years past—that where there was to be an increase of expenditure it should be fairly apportioned between direct and indirect taxation? That consideration of itself would have induced him to support the Motion of his hon. Friend the Member for Westminster (Mr. W. H. Smith), because he did not find in this proposal of the Government any disposition to adhere to that which had been, if he might say so, a sort of rule for some time past, whether in proposing taxation or in taking it off. He heartily wished they had to vote on the Motion standing on the Paper in the name of his hon. and learned Friend the Member for the City of Oxford (Mr. Vernon Harcourt), because he thought the expenditure proposed by the Government to be, he had almost said, profligate, and he thought it so large and so uncalled-for, that he would vote for every measure tending to show that opinion of the expenditure. He was not able to be in the House when the Estimates were voted, or he should have expressed the opinion he was now expressing, that he did not wonder at the position we were in. Eight or nine months ago many hundred, thousands of men were engaged on the other side of the water in the amiable occupation of cutting one another's throats, and great excitement prevailed in this country in consequence of what was then and there going on. Numbers of people—some regular practitioners, others quacks; some military, others non-military men—went about the country to urge increased military expenditure, and the burden of their song was the insufficiency and inefficiency of our military defences; the whole country had been disturbed, and innocent people had been tormented and worried by the various alarms that were raised. His only regret was, that the Government had not the courage to withstand those alarms; and he thought that those who were as old as he was, and, perhaps, many who were younger than himself, must feel the resemblance that existed between the present state of affairs and that of 22 years ago, at the time of the Revolution that occurred in France. At that time, there had been just the same statements made as had been put forward recently: we were then told that the Channel was bridged over, and, consequently, everybody was alarmed; but at that time there fortunately existed a man in this country whose opinion the people valued—he referred to the late Duke of Wellington. The Duke told the country, then—"It is perfectly true that the Channel is bridged over, and the generals of France may be able to throw many thousands of soldiers upon the country; but if you will enrol the Militia, old as I am, I will undertake to defend it against all comers." At that time, the Army was much about the strength that it was last year, without the addition of the 20,000 that had since been made to it; but we now had the Militia not only enrolled, but regularly called out for training for many years, and we had also our Volunteers, who were doubtless worth something, or else our economical Government would have declined to pay the considerable sum of money they cost us. When the Duke delivered the opinion which he had quoted, our naval force consisted of 40,000 men, whereas we had no less than 60,000 in that service at the present time; and he thought that addition to its force must be taken as some element in our first line of defence, and as no inconsiderable element in the expense to which the country was put; but, at the same time, he was very glad that we had that first line of defence, because he believed it to be of great value to us. He now wished to say a word or two upon what had been termed the inefficiency of the Army. It was a very curious thing that in the year 1850, we had precisely the same number of troops that were put down in the Estimates for last year—namely, 113,000, but the cost in 1870 was considerably more than in 1850; from that, apparently, then, the only advantage that we derived from our increased Estimates was, that the country was distracted from one end to the other by the belief in what was termed the inefficiency of our Army. Another thing that struck him as being curious with reference to this alleged inefficiency of the Army was, that the Government had involved us in an unknown expense, to be spread over an unknown number of years, having made no statement whatever that anybody could rely upon of their reason for so doing. And all for what purpose? Why, to break down the only part of our Army system that in all times had never failed us. During the best part of this century—and he could recollect 65 years smartish of it himself—plenty of complaint had been heard of the inefficiency of the administrators of the Army, the generals had been described as "wooden-headed," and many other inconveniences of that sort had been pointed out; but nobody had ever stated or thought that there was any ineffi- ciency in our regiments—indeed, it had often been said that our regiments had redeemed the mistakes of our generals; and never had it been alleged that the men had been badly led, or that the officers had been badly followed. Under these circumstances, the system could not be a very bad one when that was the result, yet the Government were going to break it down, and to put the country to no end of expense for no other reason, than because there had been a great cry in the country, chiefly raised by the quacks, that we must do something—the only reason, as far as he could see, that had been given for plunging the country into this expense. No doubt a great deal might be said in favour of the re-organization of the Army; but the proof of the pudding was in the eating, and when the present regimental system worked well, why should it be broken down merely to satisfy a cry that had been got up? He deeply regretted that the Government had yielded to that cry; but he saw no chance of putting a stop to their course than by voting against the Estimates in Supply. He wished the Government would take their Estimates back. He did not wonder at the Government being almost kicked into the state in which they now were, and he could only regret that they had not shown more courage than they had exhibited in reference to this matter. He believed that within the last 20 years, the population of this country had increased some 12 per cent, while our expenses had increased more than 30 per cent during the same period. That was not a satisfactory state of affairs. He did not care whether it was one Motion or another; but he should vote in favour of anyone which went to show dissatisfaction with the proposed expenditure on the part of the country.

MR. VERNON HARCOURT

felt satisfied that the observations which the House had just heard from the right hon. Gentleman opposite the Member for Oxfordshire (Mr. Henley), whose opinions were always received with such respect, not only in that House, but in the country, would be regarded as a most valuable contribution to the discussion upon this subject. Had more hon. Members on that side of the House shared the opinions that had just been uttered by the right hon. Gentleman, the House would not have been in the difficulty in which it now found itself, for having already agreed to enter into an unusual expenditure, they were now discussing who was to pay the bill, and everybody declined to have anything to do with that part of the transaction. The match makers said they would not pay the bill; the people affected by the succession and legacy duties said the same; and the income taxpayers also objected to have the burden shifted on to their shoulders; but he desired to ask a preliminary question, and that was, why the bill need exist at all, and why it need be paid; and he ventured to say that before the Session came to a close, that question would be very generally asked. Now, many proposals had been made for getting out of the difficulty; for instance, it had been suggested that the payment of the bill should be left to posterity, in whose defence no person was interested. But there was one tax, or one source of revenue which had never failed, one with which the Chancellor of the Exchequer was extremely well acquainted, and but that the right hon. Gentleman had recently acquired a contempt for ancient notions, he should have reminded him of the ancient adage, which he had repudiated— Magnum vectigal est parsimonia, if he would excuse the language in which it was couched. The House was told that they could not go back upon their steps, because they had already voted a Resolution in Committee of Supply; but was the House of Commons such a miserable slave of form, that if they were really of opinion that they had made a mistake, they could not retrieve it because they had passed a Resolution? They had passed a good many Resolutions in the course of the last 10 days, but the Government had revoked them all. The Resolution in favour of the match tax, after having been carried on two Divisions by majorities of 2 to 1, had been withdrawn. Her Majesty's Government had found no difficulty whatever in going back on that occasion, and why should not the House of Commons be allowed an equal freedom of action? As a mere matter of form, there was not the slightest difficulty in the way of the course he proposed being adopted, because on more than one occasion—namely, in 1814, and again in 1856, after a similar Resolution had been carried, the House of Commons, when a different state of things arose, had withdrawn from it. And could anyone say that a different state of things did not exist to that under which the Estimates were introduced? The Estimates had been taken, in what was practically a state of war, or at all events of war panic. The hon. Member for South Durham (Mr. Pease), who always rose on critical occasions as the guardian angel of the Government, when it found itself in any difficulty, had voted with himself and others on the Motion of the hon. Member for Sheffield (Mr. Mundella); but now, when it was possible to give effect to the spirit of that Motion, he shrank back and cried that it was too late. In his opinion, in voting the Estimates they had made a mistake; and in saying that, he was speaking not of the Government or of the House of Commons, but of the country, for at the time the Estimates were voted we did not know how much money we had at our disposal. The proposals of the Government could only be justified by a full Exchequer; whereas the very reverse was the case, and their conduct displayed that sort of recklessness which often characterized the conduct of persons on the verge of bankruptcy—they increased their expenditure in order to conceal the indigence of their circumstances. In order to keep up appearances the First Lord of the Admiralty had informed the House that the Government had determined to give up £1,200,000 of Imperial taxation to local bodies—a sort of exhibition of financial plethoria, which will delude hon. Members to believe that the Government were very flush of money. No wonder that a majority of the House had been induced under a mistaken belief as to the solvency of the Government to consent to these enormous Estimates! But if the House of Commons had known on the 1st of March, or in the middle of February, all they know now, would they have accepted these Estimates? He thought not. Therefore he said they had a right to re-consider this question under circumstances totally different from those in which they had formerly considered it, for he did not believe that the Government themselves thought, when they framed these Estimates, that on the 1st of April they would be so short of money. He did not believe that, deeply pledged as they were to the cause of public eco- nomy, they would have offered such Estimates to the House, if they had had any idea there would be a deficiency to meet; and it was only when the ugly rush was made for money at the close of the financial year, that they became aware of the difficulties of their financial position. The Government, therefore, as well as the House, were entitled to re-consider this matter, and no selfish amour propre should prevent them from doing so. He had no desire to blame the Government too much in this transaction, for no doubt they had framed their Estimates in the hot fit of the panic ague, and now they were asking the House to vote money in the cold fit of the same disorder; but what he blamed them for was that they were such bad physicians that they did not know the symptoms of the panic malady, for if they had, they would have known that it was intermittent and would soon change its character. The real question they had now to consider was, what was the foundation for these Estimates, and what was the justification that could be offered for them. Whatever the Chancellor of the Exchequer was or was not, he could never fail to be logical; he therefore felt he must lay some adequate basis for these enormous Estimates, and what was the foundation on which he rested them? The Chancellor of the Exchequer had made a most serious announcement; he said it was necessary to protect this country from invasion. He entirely agreed with the right hon. Member for Buckinghamshire (Mr. Disraeli) that there was no man in this country who ought to be so cautious in his statements as the Chancellor of the Exchequer; and the announcement of the right hon. Gentleman that this country was or might be in danger of invasion was certainly, he (Mr. Vernon Harcourt) thought, one of the most serious statements that could be made by a Minister. Why, if the House could for a moment believe that the country was in danger of invasion, there would be no hesitation in voting Estimates 10 times larger than these if they were necessary to protect the country. But was this allegation well-founded? Who was going to invade this country? He need not, he supposed, contemplate an invasion from Asia or from Africa, and we certainly had, he trusted, secured peace with America; but then there was the old panic of that worn-out crater of an extinct volcano, that the country was to be invaded by France. If the Chancellor of the Exchequer thought so, it was to be hoped he would tell the House which of the two Governments of France was about to conduct that invasion. Was the invading force to come from the Baltic or the North Sea; if so, he should like to ask if it had been considered what sort of preparations were necessary to invade a country like this? Did not the right hon. Gentleman know that neither Prussia nor Russia had the mercantile marine requisite for such an enterprise? Where was the flotilla that would carry 50,000 men across the North Sea or the Baltic? When that force did embark what had we to meet them? He would assume the impossible hypothesis that we had no Fleet to interfere with such an armada, and that a landing was effected. Last year we had 80,000 Regular troops in this country. Were these troops, in the opinion of the Government, so degenerate that if 50,000 men were brought across the seas to these shores, 80,000 Regular English troops would not be equal to meet them? If so, where was the boasted pluck of the British Army? If the Government believed in an invasion, they were deeply responsible for the policy they had pursued. The right hon. Gentleman the Member for Halifax (Mr. Stansfeld) had taken credit for the fact that no material increase had been proposed in the Naval Estimates; and so it appeared that the Government had actually, with this dread of invasion, which the Chancellor of the Exchequer held up as a bugbear to the country, slightly diminished the expenditure for that branch of the service, and he believed it was a fact that there never was a time when fewer ships were being built in this country than at this moment. If a Government really believed in the possibility of invasion, their first policy should have been to have increased the Navy to the fullest extent. So far, therefore, the Chancellor of the Exchequer had failed in making out any ground for these Estimates. The right hon. Gentleman the Chancellor of the Exchequer, however, attempted another justification by a reference to the stupendous circumstances that had occurred in Europe, which he alleged had taken him by surprise; but he (Mr. Vernon Harcourt) believed, if the Chancellor of the Exchequer was surprised, that he was the only intelligent man who had been taken by surprise in the matter. The Battle of Sadowa was fought in 1866; did the Chancellor of the Exchequer, then, not know that Prussia had a great Army, that France had a great Army, and that Prussia and France were waiting for the opportunity to fly at each other's throats? Did not the right hon. Gentleman know that Lord Clarendon had been occupied from time to time in endeavouring to induce those two great Powers to disarm, and had finally failed, long before the war broke out? A Government, whose Foreign Minister had been occupied in vain in averting such a disaster, had no right to be surprised at those two countries going to war. But if the Government had learned for the first time, that France and Prussia were great military Powers, what had been their policy? Why, merely to add 20,000 to the Army. Were they going to meet France and Prussia with 20,000 men? He agreed with the statement made by the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli), and repeated by Lord Derby, that our expenditure must depend upon our policy; and what he complained of was that those who sat below the gangway were not told what the policy of the Government was. There was one policy which consisted in defence against invasion, and that was the policy to which, apparently, the Chancellor of the Exchequer adhered; so far as that policy was concerned, he firmly believed these enormous Estimates were utterly unnecessary. Another policy had been described by the hon. Member for Northumberland (Mr. Liddell) as that of a great military statesman, who said that England must "take her position in the world," that was rather a vague, but, no doubt, very popular phrase. It was with reference to this "position" that he observed in The Quarterly Review, which represented the opinions of hon. Gentlemen opposite, a recommendation that England should be ready at any moment to place 100,000 men on the Continent. That was a definite policy which could be understood; but it was one to which he was entirely opposed; and the Government that followed it would, in his judgment, deserve serious condemnation. If, however, that were the policy of the Government, their Estimates and their preparations were totally inadequate to sustain it; thus, while our theory of foreign policy was adopted, the Government appeared to be halting between two opinions; for the security of a defensive policy they asked a great deal too much; while, if they wanted to carry out the policy of this great military statesmanship—if they were desirous of being able to throw 100,000 men on Europe at any moment, their preparations and Estimates were miserably, ridiculously, and contemptibly inadequate. It therefore happened that the policy and proposals of the Government failed equally to satisfy those who agreed with him and hon. Gentlemen on the other side. The hon. Member for Westminster (Mr. W. H. Smith), with sweet simplicity, and with that amiability which always characterized him, suggested that he (Mr. Vernon Harcourt) and his Friends might vote for his Amendment; but he should like to make a bargain with his hon. Friend before he did that, for if they voted with him on the subject of the income tax, he did not feel sure the hon. Member would vote with them on the subject of the Estimates; and, unless they had better security than they now possessed for a reduction of expenditure, he, for his part, would not take the course his hon. Friend had been good enough to suggest. The hon. Member very adroitly and properly declined to say what new taxes he would propose; but he did not promise to vote against the expenditure; on the contrary, he said—"If you promise to make this expenditure perpetual and permanent, I will support it; but, if it is only for this year, I think it is extravagant." [Mr. SMITH: No, no!] He should be sorry to misrepresent the hon. Member; but he certainly understood him to say that if the expenditure was to be for this year only, then he thought it extravagant; now, that was exactly what he (Mr. Vernon Harcourt) did not think; and it was because he hoped the expenditure, if it was to be incurred, was to be only for this year, that he thought, although it was wrong, it might be venial. The hon. Member for Northumberland (Mr. Liddell), more candid than the hon. Member for Westminster (Mr. W. H. Smith), avowed what it was he desired—he sighed for the lost flesh-pots of Egypt; he regretted that we had "thrown away" taxes upon corn and sugar; but he (Mr. Vernon Harcourt) and his Friends were there to "throw away" such taxes and to prevent their re-imposition. They were placed to-night, as the Government had too often placed them during the last 18 months, in a very painful position. [Laughter.] Hon. Gentlemen opposite might well laugh. They knew better than anyone the annoyance of such a situation, for they were in that position themselves some years ago; and it seemed that it was becoming an inveterate habit of Governments to place their followers in unexpected situations, such as that in which the right hon. Gentleman the Member for Buckinghamshire had placed his party in respect to household suffrage. Five years ago, who would have dreamt that those hon. Gentlemen opposite who cheered him now, would now have become enthusiastic supporters of household sufrage? As little did he and his Friends dream, in 1868, that they would be called upon to support a Government which brought in such enormous military estimates? The two situations might very well be paired off one against the other—[Mr. GLADSTONE: Hear, hear!]—and he was glad the right hon. Gentleman assented to that view. The question was, what were they to do under circumstances he had ventured to describe as painful? He did not know whether the right hon. Gentleman the Member for Buckinghamshire and the Prime Minister ever met in casual conversation behind the Speaker's chair; but if they did he should think the interview would be much like one recorded in history, between the Duke of York and Charles II. The Duke bade the King take care, because his life was in danger on account of the Popish plot; and Charles II. made the celebrated reply—"James, they will never kill me to make you King." Little as he admired the Budget of the present Chancellor of the Exchequer, when he heard the speech of the right hon. Member for North Northamptonshire (Mr. Hunt), and the agreeable prospect he held out of increased expenditure, he thought it was hardly worth while exchanging one Chancellor of the Exchequer for another. Another reason why he should not like to do it was, that the right hon. Gentleman opposite was an extremely consistent man, and if he became Chancellor of the Exchequer, he would certainly be true to the principles he had professed with re- gard to indirect taxation; whereas, with regard to the present Chancellor of the Exchequer, the case was exactly the contrary. He had a mind singularly open to political correction, and he had no doubt that he would, one of these days, recant his present extravagant heresies. The right hon. Gentleman opposite had said the principles laid down by the Prime Minister on the Lancashire hustings were the cause of the present situation of affairs; and he (Mr. Vernon Harcourt) concurred with that remark in a totally opposite sense, for those principles brought together the most powerful party that had ever supported a Government in this country; and he must add that, as long as that Government had been faithful and loyal to their principles, it had received in return the faithful and loyal adherence of the party which had been returned to support them; and it was only when it thought fit to depart from them that it found itself in financial difficulty and Parliamentary embarrassment.

THE CHANCELLOR OF THE EXCHEQUER

I have but one fault to find with the hon. and learned Member for Oxford (Mr. Vernon Harcourt)—he thinks all the world is as clever as himself. Because he, being endowed with supernatural foresight and penetration, saw the whole course of that fearful drama which has been played out in Europe during the autumn and winter—saw with his prophetic eye before war was declared, the catastrophes of Metz, of Sedan, of Paris—saw the civil war which has followed, and all the rest of it, therefore he assumes, with his usual candour and good nature, that I, humble wretch as I am, ought to have foreseen these things too, and ought to have regulated my conduct and that of the Government, so far as I could influence it, by a degree of information which I assure him, in all humility, I did not possess. But I must remember I have serious business to talk about to-night, and that must be my excuse for passing by the rest of the speech of the hon. and learned Gentleman. The Motion of the hon. Member for Westminster (Mr. W. H. Smith) is so conceived, that it opens up a very wide field for our discussion; because he states merely that he does not approve the increase of the income tax to the extent contemplated by the Government: on that there are two observations to make. The first is the fact that the hon. Gentleman entirely renounces any claim to the support of those hon. Gentlemen, who, like the hon. and learned Member for Oxford and others, think that no increase whatever should be made in the taxation, so that the Motion openly carries on its face the assertion that some increases should be made. I beg it to be noted that, although the hon. Gentleman has expressed his dissent from the increase of the income tax to the extent proposed, he very dexterously, but fairly, so that I do not object to it, abstains from saying how the difference between the money that is raised and the money that is proposed to be raised is to be met with without the increase of the income tax. This is perfectly fair, because he combines as many differing and discordant opinions as possible in support of his Motion; the inconvenience is that he forces us to go over a good deal of ground, and to exhaust all the alternatives that can be conceived, if one is to give a complete answer to all that is said. In accordance with that, I will now endeavour to show to the House that the plan of the Government is better and more worthy of the acceptance of the House than any of them. This I shall not do at any length; I will merely indicate the task which the hon. Gentleman has set me, and I shall not think it necessary to go at any length into the proposal of the hon. and learned Member for Oxford, even though it be supported by the right hon. Gentleman the Member for Oxfordshire (Mr. Henley), whom we are all so glad to see again in his place. The hon. and learned Member suggests that the House, which has already voted almost all the heaviest items of expenditure, should review the Estimates again; but, although on all-fours with him as to the necessity of scrutinizing the Estimates narrowly, yet surely to keep the question hanging before the country, would be so complete an inversion of our proceedings, as would cause much inconvenience, and therefore I will not seriously pursue this point any further. The principle on which we act in this matter, like most of the principles which guide our proceedings, is founded on good sense and great experience. [Laughter.] Well, all persons who watch the proceedings of this House will be struck with the singular good sense and justice with which they are framed, and when they do not work well, the fault is almost uniformly owing to something which no sagacity could have foreseen; and in accordance with the experience of our forefathers, as manifested in those rules, we ask for the expenditure first and the Ways and Means afterwards. We have the authority of the hon. and learned Member for Oxford (Mr. Vernon Harcourt), however, that that principle ought to be inverted; for he says—"Settle the Ways and Means first, and the expenditure afterwards." [Mr. VERNON HARCOURT: I did not say that.] Well, that is the construction I put on his words, and also on his Motion. It certainly can never be contended that we are first to see what income we have got, and then to say what we are to spend; and that the expenditure which may really be required for the use of the people is to be put aside, because we cannot make provision for it without imposing new taxes. We ought, it is true, to frame our Estimates with every view to economy, and to cut them down to the wants of the nation; but we ought never to shrink from imposing the taxes required to raise the Revenue which is necessary. Another way which may be suggested, is that some other tax should be imposed in place of the income tax. On that subject I think I need not dilate; I have been very fairly and reasonably taunted for having spoken against this particular proposal; but the fact that this proposal is substituted for that which I submitted to the House 10 days ago, shows that it was not, in the opinion of Her Majessy's Government, the best proposal that could have been brought forward. We took this view of the case—We thought the defence of the country was a great and a worthy object, although we did not think, as is asserted by the hon. and learned Member for Oxford, that we were in any immediate danger of invasion. The hon. and learned Member puts those words in my mouth, though I never used them. Well, we thought, either rightly or wrongly, that it was the duty of this country to put itself in such a state that it could not be taken by surprise. The hon. and learned Gentleman said—"If there were any danger, we would vote Estimates to any extent you might think proper." Of course you would; there can be no doubt of it. The nature of this country has always been to oscillate between extreme confidence and extreme alarm. I can express it no better than in the words of Æneas— Et me, quem dudum non ulla injecta movebant Tela, neque adverso glomerati ex agmine Graii, Nunc omnes terrent auræ, sonus excitat omnis Suspensum et pariter comitique onerique timentem. [Mr. OSBORNE: Translate.] Those who, while objecting to the course proposed, say that when we are in danger they will vote Estimates, forget the great lesson taught by the late war in Europe, which has proved that when the country is in danger it is too late to do anything. I could not, like the hon. and learned Gentleman the Member for Oxford, foresee the war; but I can draw from it an inference which he appears unable to draw—namely, that patriotism, wealth, resolution, and population are of no use to a country when it is taken at a disadvantage, unprepared and unarmed, by a great and well-armed military Power. We thought this was a contingency to be guarded against, and we think so still; we therefore deemed it necessary to impose new taxes, and everybody will see that a considerable portion of the burden must be borne by the income tax; and as we held this to be not only a great and a necessary work, but a national work we should have been very glad, had it been in our power, to have suggested in the first place a tax the incidence of which would have been felt, in some degree, by the whole community, so that everybody might be conscious that he had a share in the national defence. We thought we should not go far wrong, however, if, when we were putting the weight on a small article, used by the whole of the community, at the same time we put a moderate impost on realized property. We failed, however, and were obliged, to my great regret, to withdraw those portions of the scheme which we meant to be balance wheels to the main work, and to leave the income tax alone. I, myself, may have been in fault in regard to the new taxes, and in the manner in which I express myself upon the subject; but we were met in a manner which showed that not only were those taxes not acceptable to the House, but that it would be absolutely impossible to propose any new taxes which would be acceptable. It may be said that what we did was all a mistake; but I say nothing of the kind. Then, besides the disinclination of the House to entertain new taxes, we had to contend with hon. Gentlemen who felt strongly the impropriety of any increase in the Estimates; and the two questions of expenditure and the means of providing for it, were mixed up together in a manner which rendered it impossible for us to do justice to either of them. You cannot at one time be considering how you shall meet the expenditure and how you shall incur it. We were satisfied that it would not be just to propose any new taxes instead of those that were withdrawn. More than that, I felt very strongly that we owe a duty to taxes just as we owe a duty to anything else. The reputation of a tax ought to be dear to a Chancellor of the Exchequer; and we felt that any tax which was thrown down for the House to deal with at this moment, would certainly not come out with such a reputation as would induce anyone to pick it up and put it in the same position again for many years to come. We therefore thought it right not to propose any new tax, and, adhering to our first opinion that the deficiency was to be met by taxation, we really had no choice but to fill up the void by increasing the income tax. The right hon. Gentleman the Member for North Northamptonshire (Mr. Hunt) referred to the taxes which it had been my good fortune to remit during the last few years, though he did not state the facts with perfect accuracy; for I wrote off £8,600,000 in taxes, and the proportion of indirect to direct taxation was as two to one. The taxes I took off were as follows:—£3,000,000 income tax; £1,000,000 tax for fire insurance; £400,000 assessed taxes; and £200,000, stamps; altogether, £4,600,000—thus, of the £8,600,000, £4,600,000 were remissions of direct taxation. I will now say a few words on the proposal to stop for a year the payment of the principal of Terminable Annuities. This is a subject of great intricacy, which I will endeavour shortly to make clear to the House. I was told that the Motion of the hon. Member for Finsbury (Mr. W. M. Torrens) was the one from which we had most to dread on this occasion, and, therefore, it was with unmistakeable relief that I read the terms of the Motion, because it satisfies me that we have nothing to dread from it. I am sure that if the hon. Member's Notice of Motion had been lifted out of the urn before that of the hon. Member for Westminster (Mr. W. H. Smith), it would have inflicted even less injury on the Government than is to be feared from the Motion now before the House. The hon. Member intends to move— That, while means are available by suspending the conversion of Stock into Long Annuities to provide for transitional expenditure, it is not expedient that the whole of such outlay should be defrayed out of the Taxation of the year. The only objection I have to that Motion is, that there are no such means as it refers to available, for the Motion assumes that a process is going on by which Stock is being converted into Long Annuities, and that it is desirable to suspend that process, in order to pay the money that is wanted for the requirements of the year; but the fact is, that there is no such process going on, and therefore the remedy proposed by the hon. Member could not possibly be applied. The conversion of Stock into Terminable Annuities is a process that takes place from time to time as there happens to be a quantity of Stock available, and as the Chancellor of the Exchequer for the time thinks it is right to impose the burden of Terminable Annuities upon the public. Last year I converted about £7,000,000 of Savings Bank Stock in this way; but that transaction was completed in itself, and there is no such operation going on now; therefore, the hon. Member for Finsbury must fail in his Motion for the same reason that Archimedes failed to move the world—because he has no fulcrum. Then comes the hon. Member for Cambridge (Mr. W. Fowler), who has given Notice that he will move— That, in the opinion of this House, it is expedient to suspend the application of any moneys to the reduction of the National Debt under the Savings Bank Investment Acts, or otherwise, during the financial year ending the 31st of March 1872. This is a course to which the objection I have urged against the Motion of the hon. Member for Finsbury does not apply. If it is right to be done, it can be done; but I submit to the House that it is not right to be done, and I will give my reasons. Every quarter an account of the income and expenditure in the previous four quarters is taken, and, if the income is found to be larger than the expenditure, one-fourth of the surplus is handed over to the Commissioners for the reduction of the National Debt, who choose the Debt they think it right to redeem, and apply the money for the redemption of such Debt, that being the legitimate discharge of their duties, as appertaining to their appointments. But the case is very different when the Commissioners come to deal with the moneys of savings banks, for then the trustees of those banks have no choice, but are compelled to pay over their deposits, after retaining a certain necessary reserve in order to carry on their business; and the duty of the Commissioners is to invest that money in Stock, and to pay back to the savings banks the money they require for the use of their depositors. Thus the Commissioners, in regard to these transactions, are not merely discharging their functions as Commissioners, but are acting as treasurers, trustees, or bankers—call them which you will—for the depositors whose money is intrusted to them. This comprises the whole of the duties of the Commissioners as regards savings banks, and there is nothing in it affecting payment of the National Debt; but when the Stock accumulates in the hands of the Commissioners, it has been the practice of Parliament from time to time to pass Acts enabling the Commissioners to exchange the security upon which the public is bound to pay them a perpetual annuity, for another security for which the public is only bound to pay them an annuity for a term of years, paying back portions of the capital as well as the interest upon the money. This practice commenced in 1863, has gone on uninterruptedly ever since, and the result now is, that the Commissioners are in receipt of Annuities from the Government on account of Stock to the amount of £2,966,000, and on account of the loan for fortifications, which was also made out of the money of the savings banks depositors, to the amount of £420,000—making a total of £3,386,000. Therefore, though they are Commissioners for the redemption of the National Debt, they really receive this money on behalf of the depositors, and I therefore maintain that as the contract substantially between the Government and the Commissioners is really that the Government borrow money of the savings banks and invest it, though the Commissioners have the power of varying the securities for these moneys, Parliament has never given them the power to take a less valuable security than the one originally given, and I most emphatically declare that Parliament is just as much bound to observe faith in these transactions with savings banks as though it were dealing with private individuals. If a private individual was to purchase a Terminable Annuity from Government, nobody would dream that Parliament could, without a gross breach of faith, bring in an Act of Parliament to postpone the payment of any instalment of that Annuity. I submit this view to the careful consideration of the House, because unless it is maintained I foresee most portentous mischief in the future. I agree that the savings banks could, if the worst came, fall back upon the credit of the Government and would not ultimately lose; but the contract with the Commissioners is, nevertheless, one on the faith of which people have advanced their money, and they have a right not only to be substantially guaranteed against loss, but also to have the terms of the contract scrupulously observed so far as they are concerned. It would be unfair if the Government, of its own authority, were to obtain a power to vary or alter it, to the prejudice of those whose money they hold. There cannot be a doubt that any change of this nature is prejudicial to the persons interested; for, first, it postpones the payment to which they are entitled, and then it tends to throw a discredit on the security which cannot be estimated in money. I hold that the Government is bound, if it wishes to maintain a character for fair dealing above all suspicion, to respect the transactions which it enters into with private parties in regard to Terminable Annuities; and it is not right to use the power given to it, for its own convenience, for converting the assets in the banker's books into Ways and Means for the expenditure of the year. Government, then, through the National Debt Commissioners, exercises the functions of a banker, and having large payments to make and receive, it must, if it means to keep itself secure from loss and discredit, conduct its dealings on purely business principles, and know exactly always what it has to receive and pay, and so long as that function is honestly carried on, there can be no possible objection to it; but if the public once knew that Parliament had empowered a needy Chancellor of the Exchequer to take their money and use it as Ways and Means, they would lose confidence in the Government, and they would say—"If it is to be in the power of Parliament or the Chancellor of the Exchequer to take our money, although we see the beginning, we do not know where the matter is to end, and we object to it altogether." Such a system as at present exists possesses advantages which ought to prevent its being lightly and rashly interfered with; it, for instance, the command of these resources should we be denied accommodation on reasonable terms, makes us independent of the tyranny practised in some needy countries by great capitalists, and enables us to undertake operations of very great magnitude without disturbing the money market, or inflicting trouble or annoyance upon any person. Why, at this moment we have passed a Bill commuting the pay of officers in the Army and Navy, and £600,000 will be required for this purpose in the current year, but if the fund we are now discussing is interfered with, it is very probable that the money either cannot be found, or must be obtained from some other source. Further, I think the House must be fully aware that nothing has assisted the Government more in settling the Irish Church question than the facility which this command of money by the National Debt Commissioners gave us, of enabling the Church in Ireland to anticipate the resources which are spread over a number of years, and cannot be got in at once. In conducting that operation, we have already advanced the Commissioners £1,500,000; in July next we shall have to advance them £1,000,000 more; and, after that, we expect to advance them £500,000 a-quarter. These advances have been counted on as a sort of undertaking, given by us under the faith of an Act of Parliament, which enables us to enter into such an arrangement; and to stop short now in measures of this kind, bypassing the Motion under consideration, would be to cause an enormous amount of inconvenience, and a large expense would be thrown upon those persons who have a right to calculate that they will get the money at the low rate of interest at which we have agreed to lend it to them. If this money is withdrawn, we shall not have the money to meet our liabilities, and we shall, therefore, be compelled to sell Stock by forcing it upon the market, and thereby do a great deal of mischief. For these reasons, therefore, I submit to the House that, seeing that this money is really money for securing the dividends of savings banks, and that the reduction of the National Debt by its means is not the essence of the transaction, and seeing that, by the proposal now made, we should strike a severe blow at this convenient system, in conjunction with the objects of a Bill which I hope to introduce to the favourable consideration of the House, for extending the plan of commuting pensions of persons in the public service, I think it would require a much stronger emergency than the present case to justify us in interfering with a system which seems to me to be a prodigy of ingenuity, by which a large amount of Debt can be cleared off at a small expense to the country, and which possesses the additional merit of being carried out at a small expense. This is what I have to state to the House. If I have succeeded in showing the House that that alternative cannot be adopted, I think it is quite manifest that we cannot go back from the position we have occupied, and which we believe the House has already sanctioned. I say frankly, that the provision we have made for meeting this expenditure so sanctioned by the House, is not, in our opinion, the best that could have been made, but it is the best that the case admits of, and however little confidence the House may have in me, I trust it will not cause us to fail in our attempt to carry out the objects we have in view.

MR. BARING

said, he should not have risen on the present occasion, did he not feel that they had reached a critical turning point in their financial progress. It was not because there was anything alarming in the amount of the present deficit, nor because he had any doubt as to the resources and the power of the country to meet its engagements, or to struggle with any future wants or exigencies, that he felt called upon to make the remarks he was about to lay before the House, but it was because they were called upon to consider their finances without a system and without a principle to guide them. They had had a Budget, including an attempt at direct taxation; but, had he not heard from the right hon. Gentleman that he was serious when he proposed his tax upon matches, he should have considered it an attempt to bring into ridicule every kind of indirect taxation, and to convince the House and the country that they had nothing to rely upon in future but the income tax. He was not surprised at this result, for he had always felt that the constant removal of every indirect tax—not its reduction, but its total removal—would ultimately draw this House and the country into a system of direct taxation. Such a result was inevitable, and no one could feel that more than the right hon. Gentleman himself, who, with all his ability, his talents, and his ingenuity, and after all the study he had given to this question, told them that the only indirect tax he could propose was the tax upon matches; and that being objected to, he had nothing left but to say to the House—"You must put 2d. more upon the income tax." The income tax was an easy screw for the Chancellor of the Exchequer to put on; it was a heavy one for the resources of the country; and it might be put on to such a degree, and at such times, as to create a great indisposition to meet it fairly. He recollected that, after the Peace of 1815, on an attempt being made to renew the property and income tax, that indignant meetings were held throughout the country, in disregard of the recommendations of Lord Liverpool and Lord Castlereagh, and that, eventually, the income tax fell through. They might go on putting pennies in the pound on the income tax to meet the exigencies of the time, but they might go too far in that direction, and they might by so doing—to use a similitude—break the camel's back. He need not say a word against the income tax—all that could be said against it had been said by the right hon. Gentleman at the head of the Government, and by the right hon. Gentleman the Chancellor of the Exchequer. He need not cite Hansard, because they learned that Hansard no longer represents the opinions of public men. The time may come when, without any further system to fly to, the income tax may fail you; and nothing, however, could be more sure than this—and the right hon. Gentleman himself must have seen the dangers which must be incurred by placing their sole reliance on the income tax. Let them recollect that it was a tax unjust and inquisitorial, which the more it was added to, the more it increased the depths of fraud. It was open to every possible objection, and yet it was the only tax which the Government imagined ought to be retained. Her Majesty's Government told them that they could not have recourse again to indirect taxation; well, perhaps it may be so; he had always feared that the anxiety of every successive Chancellor of the Exchequer for many years past to produce what is called a sensational Budget, thereby renouncing the old custom of preceding Chancellors of the Exchequer, whose maxim was quieta non movere, for the sake of snatching a little temporary popularity, would lead us to this pass. As long as the country was prosperous, as long as the Revenue of the country responded to this decrease of taxation, all went on smoothly; but when the inevitable time arrived, when some exigency required an increase of taxation, no means were left by which money could be raised without having recourse to the income tax. Hon. Members had laughed at the reflections that had been made when it was proposed to remove the shilling duty on corn; but that was a tax which pressed upon nobody, and by the removal of which nobody benefited, and with it was swept away £900,000 of Revenue, which had he now possessed, would have saved the right hon. Gentleman from the fatal explosion of his matches. There were those who said that by removing all indirect taxation they were carrying out the principles of free trade; but he denied that: on the contrary, he maintained that, by adopting that course, you had been shifting the burden of taxation from one class to another, and that you had succeeded in throwing the whole of that burden upon income and property. He was one of those who thought each man ought to bear his share of taxation; but he was not one of those who thought that you could tax income and property without taxing the poor man. Doubtless, in the first place, you might tax income and property; but it was from income and property that the poor man derived his employment, his wages, and his prosperity. The Prime Minister and the Chancellor of the Exchequer told them they had no resource but the income tax. Let him ask, looking back to the past speeches of those two right hon. Gentlemen—was that the point to which they would wish to bring the finances of this country? Were they so unable among themselves to find any resource but the income tax? Armed even with the power of leading their own followers against their feelings, could they propose nothing? Were they only omnipotent for destruction? Were they powerless for construction? Could they only destroy a Church, and could not they propose and carry a Budget? The hon. and learned Member for Oxford (Mr. Vernon Harcourt) said he did not wish a change of Government, nor did he (Mr. Baring); but his feelings—perhaps his party feelings—had been a little shaken by past events. He wished to have seen, and he thought he might have seen, a strong Government in this country. He dreaded a weak Government, but he dreaded more no Government at all; and when he found the right hon. Gentleman opposite proposing, bit by bit, a Budget which, bit by bit, he withdrew, and, throwing the reins upon the House, said—"Take me where you will; I'll follow you, wherever you please; you are the Chancellor of the Exchequer; the House of Commons must propose a Budget, and we are ready to take what money you will give us." He held that the greatest blame attached to a Government that assumed a position of complete submission such as that. A Government should prepare their finances, submit them to the House, but submit them with such a knowledge of the feelings of the House and the country as would render their acceptance reasonably probable. He did not wish to say anything more than that he believed that the Government might have met the deficiency, without either committing themselves to measures which, in the opinion of the House were not required, or imposing this additional tax. He did not profess to assume the duties of a Chancellor of the Exchequer; but he confessed that he did not believe it was an extraordinary difficulty he had to contend with, and that it would not have been very difficult for him to have met that little want. But he would go further, and would say that, anxious as he was for the reduction of the National Debt—and nobody was more anxious—he felt that there was a line that ought to be drawn between the wants of the present time and those of future generations. This we acknowledged in the case of the fortifications, and he thought the right hon. Gentleman at the head of the Government himself introduced bonds that were payable in a certain number of years. Now, it was evident that if the abolition of purchase was adopted, it was for the benefit of the country at large, and, supposing that to be the fact, it was not for the benefit only of the present generation, and he thought it was a very fair question whether the burden ought to fall entirely on the current year. His objection, then, was this—that the Government had introduced a Budget which they must have known would fail. If they introduced it with perfect sincerity, it showed little capacity; or else it showed a wish to bring into ridicule the idea of anything like indirect taxation. It was mere trifling to regard this additional income tax as a temporary impost; but what would they do if danger menaced them or special measures of protection became necessary? He could not agree with the hon. and learned Member for Oxford (Mr. Vernon Harcourt) that no danger menaced this country, because France was weak and America was not to be feared. But they had no ally now that they could rely upon; they had no treaties that they could depend on; and therefore they must depend upon themselves, and their only allies were gold and iron; and so long as they possessed them, with English courage and determination, he should not fear for his country. He did not believe they had fallen so low as some Gentlemen seemed to suppose; he believed they could maintain their own with honour yet; but he did not think that, because they could do that, that they ought to mismanage our finances, and declare to all the world that their only resource was the income tax. There was more in this proposal to-night than he thought struck everybody. It taught the lesson, that they would only tax incomes, and only go on in that path and they would effectually drive away capital. He begged to thank the House for listening to the remarks he had made; but he had ventured to do so, because he considered the conduct of Her Majesty's Government was deserving of the greatest blame.

MR. GLADSTONE

The hon. Gentleman who has just sat down (Mr. T. Baring) has informed us of events that have occurred in recent years, which have slackened his party zeal; and in the course of his remarks, he has used words which, coming from him, must necessarily be of interest to the House, but which were not necessary, as far as I am concerned, to carry to my mind the belief that he was speaking his conscientious convictions, and not acting simply as a Member of a party. I freely own the high character and great authority of the hon. Gentleman; but if I am less impressed than another by the weight of that character and authority, it is because during more than a quarter of a century of close connection with the financial and commercial legislation of the country, having touched it at every point, and been a party to supporting or resisting every important measure that has been adopted during the last five-and-twenty years, I have never once had the satisfaction—and a great satisfaction it would have been—of finding myself on a commercial or economical question of any sort on the same side or in the same Lobby with the hon. Gentleman. In truth, the indictment of the hon. Gentleman is not an indictment merely against the present measure and the present position of the Government; it is an indictment against the rules and principles which have directed the commercial and financial legislation of Parliament during the whole of that period, and to which the hon. Gentleman has been radically and inveterately opposed.

MR. T. BARING

I think I was a supporter of Sir Robert Peel with the right hon. Gentleman.

MR. GLADSTONE

The hon. Gentleman has not caught me. He was a supporter of Sir Robert Peel in 1842, along with me; and if he will use the calculating powers of which he must be a master, he will find the year 1842 is not within a quarter of a century of the present time. Was the hon. Gentleman a supporter of Sir Robert Peel in 1846? Well, then, the period between 1846 and 1871 is sufficient to show, as far as my humble powers of reckoning go, that I did not greatly exaggerate in the state- ment I made respecting the hon. Gentleman. To-night, the last of the remissions of indirect taxation has come in for the censure of the hon. Gentleman, and there is no man's censure more conscientious than his; but the sacrifice of the duty on corn has also provoked the displeasure of another hon. Gentleman, the Member for South Northumberland (Mr. Liddell), who says how idle it was to waste the Revenue of the country by recklessly abandoning the duty that he describes as "the registration fee upon corn." How different, Sir, are the views taken by men, of the same facts and the same figures, according to the position from which they look at them. A few days ago, on my right hon. Friend (the Chancellor of the Exchequer) attempting to raise a direct tax on successions of about ½ per cent, at which it now stands, to about 1 per cent, we were then appealed to by doleful descriptions of the condition of the widow and the orphan. The 1 per cent on realized property shocked the hon. Member; but the 4 per cent on an article of commerce, the food of the people, levied for the benefit of the Treasury only from imported corn, but adding 4 per cent to the price of the home-grown commodity, yielding no benefit to the Treasury at all, that, forsooth, is to be regarded as a registration fee. Sir, however conscientious such proposed legislation may be, I do not think, notwithstanding what has fallen from those two hon. Gentlemen, that we shall find any disposition in this House seriously to propose that the deficiency which now exists shall be met by a re-imposition of the indirect taxes which have been happily removed; but least of all, and under no circumstances, by the re-imposition of a tax which was strictly protective in its character, which affected the first necessary of life, and which, for every pound it brought into the Exchequer, caused another pound to be gratuitously added to the price of the home-grown commodity. Now, objections have been taken to the proposal of the Government, as it now stands, from grounds absolutely contradictory. The hon. Member for East Sussex (Mr. G. B. Gregory) objected to the proposal, on the ground that the expenditure is strictly transitory, while the right hon. Member for Oxfordshire (Mr. Henley)—and he has been followed in it by the hon. Member who has just sat down—objected to our proposal on the ground that it is not transitory at all, but permanent. But I must say one word as to the right hon. Member for Oxfordshire, who founded his objection mainly upon the amount of the expenditure, for having been deprived, through circumstances we all regretted, of the most legitimate and natural opportunity of bearing his testimony against the amount of that expenditure, I cannot wonder, on the right hon. Gentlemen re-appearing here, he should avail himself of the first opportunity on which he thinks he is able to record his vote against it; and he is going to vote with the hon. Member for Westminster (Mr. W. H. Smith), because he objects to the expenditure of the year. Is that the ground on which the hon. Member for Westminster votes? Is that the ground on which Gentlemen who now crowd the benches opposite vote? I know they will tell me they object to that portion of the expenditure which has reference to purchase in the Army. Well, that is about one-sixth part of the whole augmentation of expenditure; as to the other five-sixths, have they objected to that expenditure? Have they not urged it on? Have they not called for more? Have they not, even when they have objected to laying out the £600,000 upon the purchase question, taken care to claim the whole sum that is to be paid for the redemption of purchase, and to assert that it should be laid out on other kinds—and, as they say, more profitable kinds—of military expenditure? Yet now, when the right hon. Gentleman the Member for Oxfordshire, with perfect consistency, I admit, is going to vote for the Motion, because he objects to the expenditure, are they to follow him into the Lobby—we shall yet see how many of them will do it—when they know that they have been themselves the warmest, the more than cordial supporters of that expenditure? But there is yet one other point. The right hon. Gentleman the Member for North Northamptonshire (Mr. Hunt) commenced his speech with a somewhat heroic exordium, and said—"Great is the irony of events!" Great, Sir, is the irony of events; and the man who, as Chancellor of the Exchequer, having a deficit to deal with of something over £2,000,000, proposed to meet that deficit in no other way than by the simple and sole resource of an income tax of 2d. in the pound, raising the tax to 6d., stating, at the same time, that he did it because the expenditure to be met was of a transitory character, is now the man to denounce the Chancellor of the Exchequer who succeeds him, who also pleading expenditure of a transitional character, and also having a deficiency not very different in amount from his, though somewhat greater, also proposes like him, in what appears to be an inauspicious following of the conduct of the right hon. Gentleman, to meet the deficiency by no other financial measure than by an addition of 2d. in the pound to the income tax, raising it from the standard of 4d. to 6d.; and the right hon. Gentleman under those circumstances, nevertheless with perfect comfort to himself, is large and eloquent, and rises even to an unusual level of his rhetoric, for the purpose of condemning the proceeding of my right hon. Friend. Well, Sir, I will not enter into the details of the Budget of the right hon. Gentleman; but I do not think he will question the truth of what I say—when I say, that he likewise called upon us to give him a million of Exchequer Bonds, which were also granted him. But he will recollect that he claimed that million of Exchequer Bonds on the ground that he was unable to receive the whole of his income within the year, and that, in fact, he was proposing a sufficient amount of taxation to meet the entire deficit. Well, so it stands, that the right hon. Gentleman and the party opposite are gathered to-night for the purpose of condemning in us the very thing which only three years ago was their own measure—that is, resorting to the income tax alone—resorting to it to the extent of 2d. in the pound, and resorting to it for the purpose of defraying an expenditure which they declare to be transitional in character. Sir, I must say one word on the subject of indirect taxation before I quit the point, lest I should be supposed to have condemned, under all circumstances, a recourse to indirect taxation. On occasions of great emergency, when large demands are to be made on the people, I think you must have a partial resort to indirect taxation; and on occasions when demands less large are to be made on the people, if those demands have a character of apparent permanence, then also, I think, we ought to call in the aid of indirect taxation. Nay, even on the present occasion, my right hon. Friend has shown that the Government were not unwilling to avail themselves of that resource; and we do not hesitate to say, that no injustice is implied under the circumstances of the case on our part, shut out as we have been from prosecuting the original proposals of my right hon. Friend in asking the House to do what was done in 1868, without objection from any party, portion, or section of this House, and to meet a deficiency of the nature of that now before us by the same measure that was then adopted. Well, with regard to this expenditure, as I have said, the objections have been taken that it is, and that it is not, of a passing description. Now, I will venture to say, what can hardly be denied with respect to the proceedings of the present Government. We have, in the course of the not quite two years and a-half that we have held office, effected large reductions, and we have also proposed large augmentations of expenditure. With reference to speeches which are made in the name of public economy, I must say, for my own part, even when I cannot admit the propriety of their direct application, that they command to a great extent my sympathies. The sins and offences of the British Legislature have not been on the side of economy. If the Government is to be vitally assailed—if it is to be dimissed from office, I ask myself what is the meaning and intention of that dismissal with respect to the prospects of public economy? For my part, I can truly say that although I value as highly as most men the privileges of personal liberty, I prize most highly the honour enjoyed by my Colleagues and myself of serving the country in the situations which we hold. I think it an error on the part of public men who have chosen their positions, freely to speak of the sacrifices, if such they be, that those positions entail. I thought it always a point worthy of admiration in the character of Lord Palmerston, that in his habitual language he avowed the satisfaction with which he found himself entrusted with the duty of wielding power, according to the best of his convictions, for the benefit of his country. Therefore, Sir, I do not affect to court the adverse vote of the House of Commons which at any moment may put an end to the existence of the Ministry; but I will say, in passing, to my hon. and learned Friend the Member for Oxford (Mr. Vernon Harcourt), after the description we heard from him to-night of the conduct of the Government, and of the manner in which the interests of the party had for 18 months been virtually betrayed, that I think he makes a great mistake if such be the case—if those interests have been so treated by the Government—if his description approached to justice—if it be not, on the contrary, an instance of extravagant injustice—he makes a very great mistake in not taking an early opportunity of putting an end to its existence. Whenever that existence is put an end to—though I do not say the operation will give me pleasure, nor affect to desire it—the pain of it to me will be greatly mitigated, if I believe that those who are to succeed us in office are duly consulting, as we have tried to the best of our ability to consult, the honour and safety of the country, and are likely to promote the interests of public economy. I will venture to say that we have effected great reductions, and we have proposed great augmentations; and the result is, that after £6,000,000 have been taken off the taxes of the country, even when you have voted, if you do vote, the £3,000,000 we now ask, after £10,000,000 have, in little more than two years, been taken off the public Debt, the result will be that now, with great public purposes in view of the most definite kind connected with the composition and constitution of the Army, our military Estimates which have caused so much indignation, do not quite reach the figure of those that we found in existence, and which had none of those special views and objects vouched for and warranted. But, as regards the economies that we have effected, and the augmentations for which we are also responsible, I will beg to be permitted respectfully to point out, that the character of those augmentations is, as we think, for the most part transitional, while the character of those economies is permanent. On a former evening I stated why, as far as I am able to judge, that expenditure must be called, to a great extent, transitional; but I will again take the opportunity of stating, what needs to be repeated in this House by those who entertain the opinion, in consequence of the incessant promulgation of the contrary opinion from other quarters, that I will not admit that, if this House does its duty, the abolition of purchase in the Army, and the gift of £320,000 a-year to the officers of the future, ought to entail upon the British public, either great or small, a charge additional to that which those officers now receive, in the shape of either pay or retirement. Therefore I do not admit the existence of that additional prospective charge. Now let us look at the character of the economies that have been made. We have been able to reduce the scale of naval expenditure, and, even in the recent circumstances of Europe, we have still left the public account largely the gainer in consequence of the changes that have been adopted. What is the nature of those changes? They are founded upon a cause of economy that has in it a permanent character, because they depend mainly upon the abandonment of a system, reasonable once, but now totally superannuated and unreasonable—namely, the practice, too long maintained, of keeping fleets and squadrons dotted over the whole surface of the globe. That system cannot, I trust, be defended or revived, and I look upon the abandonment of it as a source of permanent economy. With respect to the Army, the main economies which have been brought about were effected by the abandonment of another unfortunate and faulty practice—namely, that of employing the Army largely and very needlessly for the purposes of what were called "colonial garrisons," in Colonies not having the character of military positions. The abolition of that system of colonial garrisons is, I apprehend, a permanent source of economy. What is another cause of the expenditure of this year? It is the attempt to introduce with rapidity the system of short service into the Army, and I ask Gentlemen on either side of the House—"Do they, or do they not, believe that that system of short service will be a source of permanent economy?" Connected with that is the system of efficient Reserves; and these give the power of reducing, with entire security, the number of troops that may be thought necessary for the defence of the country. Without entering further into detail, I think I have shown under three great heads, that the economies to which we have endeavoured to lead Parliament are permanent and national in their character, and on other occasions it has been shown how small is the degree to which that permanency applies to the expenditure for which we now ask. With regard to the means proposed for that expenditure, the hon. Gentleman, who has just addressed the House (Mr. T. Baring) complains of the course of legislation that has recently prevailed in such a way that one would really think that the possessors of the higher and middle incomes of this country were ill-used as compared with the rest of the community. From the speech of the hon. Gentleman, one would suppose that the finances of the country had become less stable than they were "in the good old times," when, as he says, Chancellors of the Exchequer were content quieta non movere—"in the good old times" when the laws relating to the trade in corn were constructed against the interest of the consumer and in the supposed and fancied interest of the rich; when things necessary to the life of man were subject to severe taxation; when the commerce of the country was suffered to remain undeveloped through the pressure of taxation and the mischievous influence of Protection, so that our foreign trade scarcely amounted to one-sixth part of its present amount. After the labours, cares, and anxieties, the efforts and struggles by which, without assistance from the hon. Gentleman, for 25 years those results have been brought about, is he, at this day, to sigh for "the good old times" when Chancellors of the Exchequer were, in that state of things, content quieta non movere? The hon. Gentleman will always be respected in this House; but the respect he will enjoy will not be owing to the hopes he has given in matters of commercial and financial legislation, for they have on every occasion been in opposition to that course of change which has conferred such benefits upon the people generally. After all, the question that is before us to-night is not a very broad one, and if I have referred to the subject of expenditure; it is because, as my right hon. Friend the Chancellor of the Exchequer has observed, we are under the necessity, from the nature of this discussion and the topics embraced in the speeches on both sides of the House, of mixing to- gether, perhaps with so great advantage to the clearness of our debates, the two questions—first, whether money is to be spent; and, secondly, in what way the means of meeting the charge are to be found. The one question really before us at this moment is that of Terminable Annuities. I do not think that, as regards Estimates, anyone supposes that the House of Commons can with advantage look back, even if the Government were willing, upon the great and essential Votes that it has given. Let it be recollected that the receipt of those Votes—the having obtained those Votes, does not absolve the Government from considering how far the expenditure under them can be economized. It is necessary for the House of Commons to proceed from one twelve-month to another, and it is the duty of the Executive during the whole of the intervening time to watch the state of affairs, and to study how far it can properly and safely keep within the amount of authority that has been intrusted to it by the confidence of Parliament; but the House itself, after voting the scale of Army and Navy expenditure as far as we are concerned, and passing the Mutiny Bill upon that basis, ought not to suppose that advantage can arise from an entire reversal of those steps which have been adopted—on some points unanimously, on others carried against a very small minority of discontents. Then we come to this question—Shall we resort to the alternative of meeting the charge for the year or, as those who would make two bites of a cherry would say, two parts of the charge of the year, by suspending our system of the payment of Terminable Annuities? I have here to complain of divers Gentlemen, both in and out of the House, who have been referring to a declaration which they say was made by me—that the great beauty of this system of Terminable Annuities was that, in case of a deficiency, we might arrest the operation of the system. Now, I must say, that when an allegation of that kind is made against a man, whose guilt as to the amount of his speaking is great, it would be but an act of common charity to give some indication as to when the words were used and where they are recorded; for in my anxiety to discover this extaordinary declaration I have undergone a very considerable amount of one of the most purgatorial operations to which a man can be condemned—namely, the perusal of his own speeches, especially on a subject of finance; but not being able to discover it, I can confidently say that I never made any such declaration at all. What I might have said was that a great advantage of the system of Terminable Annuities, worked as it is now, is that when you have a legitimate and necessary occasion for borrowing money, provided it be not to a very large amount, you have, through the medium of that system, a means of borrowing with greater facility than was ever possessed before. That, however, is very different from what I am represented to have said; and I do not believe that you could arrange to interrupt the working of this system of Terminable Annuities, without being obliged to go through the Parliamentary operation of a loan, and that I hold to be its great merit. It is not well that this House should be able to borrow without the country knowing what is going on. The Fortifications Loan has been appealed to as a precedent; though, if the circumstances were equal, which they are not, that would be a precedent of doubtful value. But in the year of the Fortifications Loan, we had to provide £6,000,000 for the China War. Is there such a demand upon us now? The purpose for which the Fortifications Loan was made was one in regard to which it was not, as in the case with purchase in the Army, distributed over 20, 30, or 40 years, but it was supposed that the whole bulk of the charge would have to be met in three years. That precedent, therefore, is inapplicable to this case, and this year we are going to borrow £700,000 under the Fortifications Loan. The question is—in defending which, I hope we shall have the hearty assistance of the hon. Members—are we to invade a regular Parliamentary scheme, under which, from year to year, a considerable sum, between £2,000,000 and £3,000,000, and now nearly £3,000,000, is applicable to pay off the National Debt through the medium of Terminable Annuities. The hon. Gentleman is a friend of the old Chancellors of the Exchequer, whose maxim was quieta non movere, and I ask him to revere them for this point in their conduct—that under all difficulties and circumstances, when they had to impose taxes, they steadily maintained the system of paying off the Debt by Terminable An- nuities. Are we, then, for a cause so trifling and insignificant as the present, to break down this great and ancestral system, which has existed for 100 years, and which even the hon. Member for Huntingdon was happy to support, when, in 1842, I had the satisfaction of voting with him in support of the measures of Sir Robert Peel. In 1842 we were paying, from a country less rich than now, more than £3,000,000 in Terminable Annuities, and at that time we had a deficiency much more formidable in reference to the power of the country than we have now. How was that deficiency met? Did Sir Robert Peel come down to the House and ask Parliament to break up that most sagacious and provident part of our financial arrangements in order to evade a temporary difficulty? No, Sir! He not only did not give up the Terminable Annuities, but he increased the taxes, and introduced a great financial innovation by proposing in time of peace an income tax which had always before been regarded as the tax reserved for a period of war. I hope the hon. Member for Huntingdon, when we come to a division, will recollect 1842, when he supported Sir Robert Peel, and did not, as on this occasion, clothe himself in the vestments of the tempter, and whisper in the ears of Parliament, that part of the difficulties could be obviated by stopping the Terminable Annuities, and that he will show, as had been said by the hon. and learned Member for Oxford (Mr. Vernon Harcourt), that he will not fall into the quackery of attempting to meet the first difficulty which presents itself by a method which, if used at all, should be reserved for demands much more imperative and severe. If you determine to quit the course hitherto pursued, you will be establishing a precedent for every future Parliament, which we must expect will follow our example, and, in that case, how are we to provide for the steady maintenance of the system by which we have accomplished a reduction of the National Debt? Now, we never go on from year to year with a surplus of taxes, because the House invariably and justly requires that, whenever a surplus is shown on the Estimates of the Chancellor of the Exchequer, taxes should be repealed so as to come down very nearly to a level. The consequence of that system is, that deficiencies must occur from time to time. Whenever there is a diminution of the Revenue from a bad harvest, or whenever political exigencies require an increase of expenditure, there must be a past or a prospective—for it is not necessarily a past—deficiency. Is it to be supposed that we are to set what I will not hesitate to call the plain example of calling upon these Terminable Annuities to meet such a deficiency as that now before us? Are we to expect that other Parliaments will not follow our example in future; or how are you to provide for the steady maintenance of the system, by which it is that we really have accomplished by far the greatest part of the operations that have been effected for the reduction of the National Debt? We have two modes of reducing National Debt—one by the operation of Terminable Annuities, and the other by the application of surplus Revenue. The application of surplus Revenues has been considerable; but unfortunately it has been to a considerable extent counteracted by the necessity of meeting, or allowing for in some shape or other, the years of introspective deficiency which are never made the object of special Parliamentary provision by taxation. By your Terminable Annuities, the principle part of what you have done for the reduction of the Debt has been effected. Looking back over the half century since the close of the Great War of 1815, I ask the House, do you think, or do you not, that we have done much for the reduction of the National Debt? If you do not I admit that you are entitled to take an altered course of policy, and to find a Government that will consent to be the instrument of change. I admit that fully; but I do not think that that is the view or conviction of the House. I believe the view and conviction of the House is, that we have not done too much; but the question rather is, if there be any question at all, whether we have not done too little. If this is so, the question we have at issue to-night is not the question which the hon. Member for Westminster is urging upon us; but though he himself may be totally ignorant of its true bearing, it is whether we shall break down the most effective part of the system by pressing upon the National Debt. My right hon. Friend has shown, and I will not follow him in detail, the many difficulties that would attend any such operation; but this I must say, that before you determine to take out of the hands of the Chancellor of the Exchequer the command of bank funds with which he is now supplied, you ought to inquire how far that restriction of his means is likely to form a bar to important measures of public policy? I do not hesitate to say, that in passing the measure for the disestablishment of the Irish Church, it would have been totally impossible for us to make pecuniary arrangements even tolerably satisfactory, and to assist the disestablished Church, as we have assisted it—["Oh!"]—in economising its remaining means by lending upon the most favourable terms—and if the hon. Member who scoffs does not regard that as assistance, I must beg him to refresh his mind on subjects of political economy—had it not been for the fund which is possessed by the Chancellor of the Exchequer. It is not one measure only that has been aided by the use of that fund. Here, also, is my right hon. Friend the Vice President of the Council of Education, who was most anxious to give facilities to enable school boards to build school houses. You know that to be one of the greatest difficulties; everyone knows what high rates of interest are paid when it is necessary to raise large sums of money through local rates for local purposes. Well, my right hon. Friend came to the assistance of the school boards, and removed a great impediment out of their way, by providing that the Chancellor of the Exchequer should lend them money, by which school houses should be erected, which money should afterwards be gradually repaid. Independently of this profitable use of the fund at the command of the Chancellor of the Exchequer, that fund helps to reduce the National Debt; and therefore you would inflict the greatest inconvenience and mischief were you to divert that fund by making it available for meeting the deficiency shown in the Estimates by my right hon. Friend. The hon. Gentleman has aimed at us a deadly blow, no doubt; it is not necessary to consider whether he meant it as such or not; but it is so. He exercised his own discretion in doing it. I do not know much of the political handwriting of the hon. Gentleman; but I think, that in the Motion before the House, I recognize something of a political handwriting which is not altogether his, but which he has received from one of his political Friends. That is perfectly right; it is quite right that a party movement should be viewed as a party movement, and that there should be no disguise at all about it; and there is no disguise at all about it. The hon. Gentleman knows that the House has obtained from the Government every concession which it was possible to make. The Government has not exhibited any foolish self-love. We are quite aware of the severe suffering we shall have to undergo upon that score; but that is a proof that we have shown every disposition that we could show, without a sacrifice of honour, to meet the views and wishes of the House. It was said again and again by the right hon. Gentleman the Member for North Northamptonshire (Mr. Hunt) that it is not his duty to make any suggestion—that it was the duty of the Chancellor of the Exchequer, so long as he holds his office; when the Chancellor of the Exchequer presents his Budget, and it is disapproved, to produce another, and if that is disapproved to produce another, or as they call it in mathematics, toties quoties. When the right hon. Gentleman has become a little more conscious of the value of political economy and retrenchment, it may do him and the country good if, when he is Chancellor of the Exchequer again, some kind Friend sitting on the opposite bench will instruct him, by reading a passage from his speech to-day, and leave him to smart with a dart that will be winged with feathers drawn from his own breast. The right hon. Gentleman understands that perfectly; we all understand it. It is the duty of the Government to modify its financial proposals, and meet the views of the House within the limits that justice and reason prescribe; I say advisedly, it is the duty of the Government, and not the duty of the Chancellor of the Exchequer. The Members of the Government have no desire and, I hope, show no disposition to separate themselves, in the slightest degree, from my right hon. Friend; but it is also the duty of the Government, when it has reached the bottom of what may be its shallow understanding and resources, to make that fact known. Well, we have no further plan. The judgment of the House is entirely free. The House is entitled unquestionably to vote expenditure; and to reject one by one the particular measures that are proposed for meeting it. We have laid before the House these means of action and those altered means of action which suggested themselves to our mind, and we must confess to you that our resources are exhausted; in doing that we leave cheerfully in your hands, and leave cheerfully to the judgment of the country, the fate both of the Budget and the Government.

MR. DISRAELI

Sir, there is, happily at this moment, no controversy upon one point in respect to which both sides of the House entirely agree, and that is an extreme aversion—unless it be absolutely necessary—to an increase of 2d. in the income tax. The income tax is the most important of our fiscal resources; it is imposed with the greatest ease; and it produces, when necessary, a sum which it is difficult, unless we are acquainted with the facts, to believe. It has been looked upon in old days as peculiarly a war tax, and wisely. I do not say that I would approve, after all that has occurred, and after the time it has occupied in our fiscal system, of its entire obliteration from our ordinary finance; but, at the same time, I think it should be kept at as moderate an amount as possible, because, no doubt, it affords immense influence and power to this country, both with regard to foreign States, and its effect on the national credit. The fact that we can by a single tax, without distressing the community, on a great exigency produce £20,000,000 or £25,000,000 sterling—a sum which the most powerful States, were they engaged in war, would have to beg for at the different Exchanges and money markets of Europe—places this country at an immense advantage, gives us a position of power difficult to describe, and a line of defence scarcely less important than our Fleets and Armies. Well, then, it is natural under these circumstances that the House of Commons should be critical and jealous when an increase of such a tax is proposed. It ought not to be lightly proposed; it ought not to be proposed to attain a casual or a common result; it ought not to be the refuge of a distressed and disconcerted Minister; and it ought not to be proposed in every annual Budget, if we are to be influenced by those financial opinions which have hitherto obtained in this House, which have been expressed and professed by our most eminent states- men, and which the right hon. Gentleman and his Colleagues, who frequently tell us they are authorities on this subject, have themselves never shrunk from—namely, that in a financial scheme where we find it necessary to have recourse to the income tax, it should not be the only means of Supply, and that a Budget should not consist entirely of direct taxes. If this, then, be the case—if the circumstances to which I refer are accurate, and hon. Members assent to them, is it at all surprising that the House should view with some caution and criticism the proposition of the Minister which has now been made; and is it not remarkable that, when a Motion is brought forward, about the meaning of which at least I thought there would be no mistake, and about which I shall by-and-by have something to say, the right hon. Gentleman opposite should become indignant—that he should absolutely reproach us for taking a course which has always been, and I trust always will be, pursued in this House, that when a Minister comes forward, and in his Budget proposes to increase the income tax, there should be a natural jealousy of the proposal; and when he proposes a Budget which consists solely of income tax, there should be some opposition not on this side only, but on all sides of the House. The case was so simple at the first blush, that I was curious to watch the course of the debate, and see what was the colour that would be thrown on it by Ministers, and how they would treat a question which in its character and features seemed so simple. Well, a Cabinet Minister rose up early in the debate—and I must say he was welcome—to give us some information with authority from the Treasury Bench. The right hon. Gentleman the President of the Poor Law Board, for it was he, rose with the intention, no doubt, of making a great financial speech; but with a modesty, for which really there was no necessity, and a timidity, for which I did not give him credit, he suddenly seemed to change his intention. He threw over half his financial cargo, and, to my surprise, retained the half he ought to have thrown over; and, instead of giving us some information about the income tax, which both sides desired, he actually threw considerable light on the character of the Civil Service Estimates. Now, I was rather surprised at the information he gave us on that subject; for though this was not the occasion on which that highly interesting subject should necessarily be brought forward, he made some confessions which I heard not without admiration. He informed the House that the Civil Service Estimates have increased very much, but it was impossible to reduce them; that they were, in fact, of a character so reasonable and so necessary in their expenditure, that this country and the House could not wish that they should be reduced, even if it were possible, and he ended by saying that that possibility could not for a moment be contemplated. Sir, when I remember certain oratorical exhibitions in a distant part of the country, before the present Government was formed, and the staple of the most eloquent of one of those orations, which might be a model, like Demosthenes on the Crown, or Cicero pro Milone, my astonishment at the speech of the right hon. Gentleman was extreme, although I was glad to hear that the Civil Service Estimates were, to use an expressive word, "automatic"—that is to say, they were independent of Parliamentary support. Just as Her Majesty's Government, when their Budget is refused, and they cannot pass their measures, they become automatic—independent of Parliamentary support, like the Civil Service Estimates. Disappointed as I was, but still interested, I had hoped that the subject of the evening would have been treated, at least, by the Chancellor of the Exchequer. To my surprise, however, that right hon. Gentleman opened upon a subject totally different from that which was before the House. We have a Motion before us by the hon. Member for Westminster (Mr. W. H. Smith), which asks the House to declare its opinion that the whole of the deficiency that is requisite should not be supplied by the income tax. I think the natural inference from his speech, as well as from his Motion—if it were necessary to draw any inference from them—would be that the rest of it should be supplied by indirect taxation; but the Chancellor of the Exchequer rose and addressed himself to a topic not before the House, and entered into a long argument, to prove that it would be most unwise to supply the deficiency by dealing with Terminable Annuities. Why, what had that to do with the Motion of the hon. Member for Westminster? [The CHANCELLOR of the EXCHEQUER: As much as indirect taxation.] I do not say that indirect taxation had anything to do with the Motion. I say that the Motion of my hon. Friend is neither more nor less than this—it calls upon the House to express its opinion that the whole deficiency should not be supplied by the imposition of the income tax. But the Chancellor of the Exchequer argued for half-an-hour upon a totally different question, and, in fact, succeeded in satisfying the House that it was by the aid of Terminable Annuities we were to abolish not only purchase in the Army, but the Irish Church. Well, Sir, at last Achilles leaves his tent, and I did then expect that we were to have an answer to the clear and calm argument which had been offered by the hon. Member for Westminster; but I was again deceived, for, on the contrary, we had a speech that referred very little to the income tax, though it made one reference to it which I will notice in a moment—which was rich in argument and illustration upon Terminable Annuities. But what is Hecuba to us? What are Terminable Annuities to the Representative of aggrieved Westminster, who does not want to supply the whole deficiency of a bankrupt Chancellor of the Exchequer by the imposition of an increased income tax? But, then, what does the right hon. Gentleman say upon this subject of the increased income tax? "I have you now," says he, "for that is the very thing that your Government did itself. You increased the income tax in 1868 by 2d." Well, Sir, there is no doubt that in 1868 we asked the House to consent to an increase of the income tax amounting to 2d.; but were the circumstances of the two years the same? Why, have I not stated that the income tax, among its various powerful and valued qualities, was most esteemed for this—that it was especially a war tax? In 1868 you raised it justly and properly; for having gone to war in 1868, what was more natural and proper than that we should attempt at that time to raise the necessary supplies by the increase of the income tax? There were some, even then, who thought that we ought to have proposed a loan; and if the war had continued it would have been necessary to have so done. But can it be believed that this is the identical case to which the right hon. Gentleman refers, and which he thinks a vindication of the rickety proposition of his Government—can it be believed that this increase of the income tax in 1868 should have been proposed by us to carry on a war, and with the entire concurrence of the House of Commons? I cannot conceive a precedent more unfit could have been selected by the right hon. Gentleman; and he stole even that observation upon the income tax from the Chancellor of the Exchequer, who threw it at me two or three nights ago. I confess I was astonished at the Chancellor of the Exchequer when he did so; for remembering the purpose for which we proposed and carried the increased income tax—a great national object—I could not conceive it possible that the Chancellor of the Exchequer should have connected the miserable perplexities with which he has to contend with what, after all, everyone acknowledges was a great feat of arms consummately achieved. It is very true there was no great slaughter, and I know the right hon. Gentleman does not approve of war without slaughter; but he will not deny this—that the troops who effected that signal operation were brought home without the cost of a single English life; and the Chancellor of the Exchequer is the last man who should dare to depreciate the importance of that expedition, because the House still remembers the gloomy vaticinations of disasters and discomfiture respecting the Abyssinian Expedition with which he favoured the House, and which he breathed over it, at its departure, with his blessing. Now, the right hon. Gentleman the First Minister has been extremely playful to-night in his analysis and catalogue raisonné of the motives which influence in their vote hon. Gentlemen who sit upon this side of the House. Why could not the right hon. Gentleman, instead of wearying the House with an unnecessary dissertation respecting Terminable Annuities, favour us with an analysis of the motives on this and other subjects of hon. Gentlemen who sit on his own side? Are their motives all the same; are they identical? Are the motives which influence those hon. Gentlemen to-night, the motives of men who have the same opinions upon finance, upon general policy, upon any of the themes which have formed portions of this debate? Why, we have heard discordant opinions upon all these subjects; and there is only one thing in which a majority, a vast majority, on this occasion as on every other when we had discussions on the Budget, agreed—and that is their unqualified repudiation of the principles of the financial policy of the right hon. Gentleman, and their appeals to him to change them as soon as possible. There is a question which, after listening to the extraordinary speech of the Chancellor of the Exchequer, I cannot refrain from asking myself. I want to know why the right hon. Gentleman withdrew his Budget? He spoke the other night as well as tonight at considerable length, but he has never yet told us why his Budget has been withdrawn. Now that is the question I want to ask. He proposed an indirect tax, and, fortunate man, he carried it: a second division occurs, and he carries it again by a majority. That cannot be the reason why he gave it up. He proposed a tax on succession, and the opinion of the House was never taken with respect to it; that cannot be, therefore, the reason he withdrew his Budget. The whole affair, in fact, is involved in such mysterious obscurity that were it not for the ingenuous naïveté of the hon. Member for South Durham (Mr. Pease), who, I must say, generally manages to let the cat out of the bag, we should never had the slightest idea of this backstairs Resolution, which has defeated a Budget which had already received the support of the House of Commons in one of its preliminary stages, for the indirect tax proposed was agreed to, and upon the succession duty the sense of the House was never asked. But, more extraordinary still, the right hon. Gentleman at the head of the Government tells us he is determined to appeal to the House as on a question of confidence on the Motion under discussion, although he and the Chancellor of the Exchequer united in telling us that nothing could be more intolerable than a Budget which should consist merely of a proposal for increasing the income tax. The right hon. Gentleman is ready to test the opinion of the House as a question of confidence in his Government, not upon the duty on matches, with regard to which he had the support of a majority, not upon the succession duty, on which its decision was never asked; but to show, I suppose, the strength of the Ministry, upon a tax which he and his Colleagues have told us they reprobate. Now, as this discussion has gone on, it has, like all other discussions, cleared up many points which were previously somewhat ambiguous. Hitherto, when we have discussed these matters, we have heard two opinions put forward on the other side of the House—I might say 20—but two which have perpetually confused us: at one time the Estimates have been described as transitional; while, at other times, statements have been made from which it was impossible not to infer that they were to be regarded as of a permanent character. But to-night both the Chancellor of the Exchequer and the Prime Minister have more than once admitted that the Estimates are to be looked upon as transitional; and the right hon. Gentleman when he made his admission, turned to the Chancellor of the Exchequer and said, "as has been rightly expressed by my right hon. Friend." We may from that, therefore, take the Estimates as intended to be transitional, and I propose for a moment to consider them in that light; and although the Prime Minister has taken a course to-night which, I confess, has astonished me, yet that circumstance shall not alter the course which I myself determined to adopt. When I entered the House I was told, to my surprise, that the hon. Member for Westminster was not about to proceed with his Motion. Being asked the reason why, I expressed a doubt as to its accuracy, and looked upon it as one of those rumours which have no foundation, and treated it as such; but, although there was no foundation for the rumour, it must have reached the right hon. Gentle-tleman and his Friends, for they evidently prepared their speeches to meet a Motion of a different character. This debate, first of all, turned on a question which is not before the House; and, in the next place, they have converted into a Vote of Confidence the decision at which the House is asked to arrive with reference to raising the whole of the deficiency with which we have to deal, by means which they themselves have denounced. Now, I came down to the House quite in a different mood, and I was perfectly prepared, if I could obtain a clear admission from the right hon. Gentleman that these were transitional Estimates, to make any reasonable sacrifice to meet the demands of the Government. Let us then see if they really are transitional, and whether it is not possible to meet the difficulties of the case. I take it for granted that the right hon. Gentleman at the head of the Government will not blow hot and cold on this subject, and that he will keep to his position that these are transitional Estimates. Well, then, we have a deficiency of £2,700,000, and it will not be denied, at the same time, that we shall be called upon next year for a sum of £1,200,000 for the Army Bill, and a further sum of £1,200,000 for another project which the Government have in view. Now, it is impossible that these can be transitional Estimates if we are to meet these two demands of £1,200,000 each. If the prospect were to brighten; if the Revenue were to increase, and if the Government were to be able to effect economy without impairing efficiency, it might be possible to meet these transitional Estimates; but they cannot, under the most favourable circumstances, if they are to encounter a demand for £2,400,000 in the following year. Therefore, I say if the right hon. Gentleman wishes us to consider these Estimates really as transitional Estimates, and to take a sanguine view of the state of the country, more sanguine than his own Chancellor of the Exchequer has taken, let him withdraw the two propositions which involve in the next year this demand for £1,200,000 each—that is to say, £2,400,000 for the abolition of purchase and for the loss of the house duty. Let him do that, and then I will admit that we may consider these as transitional Estimates, and then we shall be bound to meet the Chancellor of the Exchequer as far as we possibly can. I say, this is a fair offer to bring things to a wholesome state. I imagine the Chancellor of the Exchequer will then have a fair surplus, because he will save £600,000 on this year; and we would give him as much income tax as would meet his deficiency and leave a proper surplus. That is the position, I think, the question ought to occupy, and which the right hon. Gentleman ought to accept; and I cannot help thinking that these Budget debates, of which this is just the beginning, will end by a transaction of that character; and therefore I throw out this view for the reflection of the right hon. Gentleman; and if he will only consider it, instead of considering Terminable Annuities, and will come down to the House and make a conciliatory speech, we will give him fair and honourable support. Sir, I should terminate my observations here, but for some remarks which ought not to pass unnoticed. A habit has grown up on the Treasury Bench of intimating to the House and the country that the difficulties of a pecuniary character in which its occupants are involved, are due to our having excited the country and produced a demand for great expenditure. I want to know what is the authority of the right hon. Gentleman and his Colleagues for a statement of that kind. It cannot be that he has been forced into this expenditure by the Opposition. What is the use of having a majority of 120 if you are to be forced into expenditure by the minority? It cannot be that the Tory Press has produced this extreme feeling in the country, for there is only one Tory newspaper, and therefore he cannot pretend this. Who is it that takes any lead in our party who has, to use an expression that has twice caught my ear, "hounded on the country." I hardly presume to speak about myself. But only once in the course of the autumn did I open my lips, and that was at a pastoral meeting. Our Arcadian simplicity was disturbed by a worthy friend of mine, a man of war, who said the country was in a defenceless state, and who seemed to alarm my neighbours. The only observations I made were of an encouraging character; I expressed my conviction that there were sufficient means, if these were well managed, to meet the enemies that might threaten us. My right hon. Friend (Mr. Henley) also addressed his friends in a neighbouring county, and he took a similar but much more decided tone. My noble Friend the Earl of Derby had several opportunities of addressing his countrymen, and, though he did not throw cold water on the martial spirit of the martial race of Lancashire, he spoke with his usual prudence and good sense. Therefore, I want to know who it is that has hounded on the Government to this expenditure? You cannot say it is those who, by the confidence of their friends, take a lead in the conduct of their affairs as a party who have prevented you, with your majority at your back, acting on your own determinate judgment. You cannot impute the blame to the Press of the country, because it is a highly Liberal Press, and its editors are, I believe, your personal friends, to whom you impart most curious and delicate information. Is it to be endured that these statements are to be made night after night; that it is to be said we have hounded on the country, and that it is to be said it is in consequence of our rash and unprincipled conduct that we are involved in this difficult position? I gave, and I shall give, the Government credit for having acted from a sense of duty upon their determinate opinions. No doubt, when they were called upon for this great expenditure, there was disappointment and personal annoyance; but they overcame it by a sense of duty which I still hope may be a characteristic of English statesmen. There is something shabby now, after you have entrapped the House of Commons into this vast expenditure, with which you cannot cope—which you cannot control after the exposure of last week—in turning round and making these unauthorized statements and these attacks on your opponents. I rose to bring the issue to its true character before the division. The Motion of the hon. Member for Westminster is a clear and honourable Motion; it is that the deficiency of the amount mentioned should not be entirely supplied by the income tax. That is the question before us, and do not let us be led away by this hocus-pocus about Terminable Annuities. Let the House and the country clearly understand what is the issue before it; and whatever efforts are made by a Government, who are themselves pledged to oppose the principle of supplying all deficiency by income tax, to suppress our debate and division, let them understand this, because the country understands it, that this is not the last stand we will make against this Budget; but on every occasion, at every stage, and by every means, we will oppose a proposition that is most unsound and impolitic.

Question put.

The House divided:—Ayes 335; Noes 250: Majority 85.

AYES.
Acland, T. D.	Clay, J.
Adair, H. E.	Clifford, C. C.
Agar-Ellis, hon. L. G. F.	Cogan, rt. hon. W. H. F.
Allen, W. S.	Colebrooke, Sir T. E.
Amcotts, Col. W. C.	Coleridge, Sir J. D.
Amory, J. H.	Collier, Sir R. P.
Anderson, G.	Colman, J. J.
Anstruther, Sir R.	Corrigan, Sir D.
Antrobus, Sir E.	Cowen, J.
Armitstead, G.	Cowper, hon. H. F.
Ayrton, rt. hon. A. S.	Cowper-Temple, right hon. W.
Aytoun, R. S.
Backhouse, E.	Craufurd, E. H. J.
Bagwell, J.	Crawford, R. W.
Baines, E.	Dalglish, R.
Baker, R. B. W.	Dalrymple, D.
Barclay, A. C.	Dalway, M. R.
Barry, A. H. S.	D'Arcy, M. P.
Bass, A.	Davie, Sir H. R. F.
Bass, M. T.	Davies, R.
Baxter, W. E.	Dease, E.
Bazley, Sir T.	De La Poer, E.
Beaumont, Capt. F.	Denman, hon. G.
Beaumont, H. F.	Dent, J. D.
Beaumont, S. A.	Dickinson, S. S.
Beaumont, W. B.	Digby, K. T.
Bentall, E. H.	Dilke, Sir C. W.
Biddulph, M.	Dillwyn, L. L.
Blennerhassett, Sir R.	Dixon, G.
Bolckow, H. W. F.	Dodds, J.
Bonham-Carter, J.	Dodson, J. G.
Bouverie, rt. hon. E. P.	Downing, M. C.
Bowmont, Marquess of	Dowse, R.
Bowring, E. A.	Duff, M. E. G.
Brand, rt. hon. H.	Duff, R. W.
Brand, H. R.	Dundas, F.
Brassey, H. A.	Edwardes, hon. Col. W.
Brassey, T.	Edwards, H.
Brewer, Dr.	Egerton, Capt. hon. F.
Bright, J. (Manchester)	Ellice, E.
Brinckman, Captain	Enfield, Viscount
Bristowe, S. B.	Ennis, J. J.
Brocklehurst, W. C.	Erskine, Admiral J. E.
Brogden, A.	Esmonde, Sir J.
Brown, A. H.	Ewing, H. E. C.
Browne, G. E.	Eykyn, R.
Bruce, Lord C.	FitzGerald, right hon. Lord O. A.
Bruce, rt. hon. Lord E.
Bruce, rt. hon. H. A.	Fitzmaurice, Lord E.
Bryan, G. L.	Fitzwilliam, hn. C. W. W.
Buckley, N.	Fitzwilliam, hon. H. W.
Bury, Viscount	Fletcher, I.
Buxton, C.	Fordyce, W. D.
Cadogan, hon. F. W.	Forster, C.
Callan, P.	Forster, rt. hon. W. E.
Campbell, H.	Foster, W. H.
Candlish, J.	Fortescue, rt. hon. C. P.
Cardwell, rt. hon. E.	Fortescue, hon. D. F.
Carington, hn. Capt. W.	Fothergill, R.
Carnegie, hon. C.	Fowler, W.
Carter, Mr. Alderman	French, rt. hon. Col.
Cartwright, W. C.	Gavin, Major
Castlerosse, Viscount	Gilpin, C.
Cavendish, Lord F. C.	Gladstone, rt. hn. W. E.
Cavendish, Lord G.	Gladstone, W. H.
Chadwick, D.	Goldsmid, Sir F.
Chambers, M.	Goldsmid, J.
Chambers, T.	Goschen, rt. hon. G. J.
Cholmeley, Captain	Gourley, E. T.
Cholmeley, Sir M.	Gower, hon. E. F. L.

Gower, Lord R.	MacEvoy, E.
Graham, W.	Macfie, R. A.
Gray, Sir J.	Mackintosh, E. W.
Gregory, W. H.	M'Arthur, W.
Greville, hon. Captain	M'Clean, J. R.
Greville-Nugent, hon. G. F.	M'Clure, T.
	M'Lagan, P.
Grey, rt. hon. Sir G.	M'Laren, D.
Grieve, J. J.	M'Mahon, P.
Grosvenor, Capt. R. W.	Magniac, C.
Grosvenor, hon. N.	Maguire, J. F.
Grosvenor, Lord R.	Marling, S. S.
Grove, T. F.	Martin, P. W.
Hadfield, G.	Melly, G.
Hamilton, J. G. C.	Merry, J.
Hanmer, Sir J.	Miall, E.
Harcourt, W. G. G. V. V.	Milbank, F. A.
Hardcastle, J. A.	Miller, J.
Harris, J. D.	Mitchell, T. A.
Hartington, Marquess of	Monk, C. J.
Haviland-Burke, E.	Monsell, rt. hon. W.
Headlam, rt. hon. T. E.	Morgan, G. O.
Henderson, J.	Morley, S.
Henley, Lord	Morrison, W.
Henry, M.	Mundella, A. J.
Herbert, hon. A. E. W.	Muntz, P. H.
Herbert, H. A.	Murphy, N. D.
Heron, D. C.	Nicol, J. D.
Hibbert, J. T.	Norwood, C. M.
Hoare, Sir H. A.	O'Brien, Sir P.
Hodgkinson, G.	O'Conor, D. M.
Hodgson, K. D.	O'Conor Don, The
Holland, S.	Ogilvy, Sir J.
Holms, J.	Onslow, G.
Hoskyns, C. W.	O'Reilly-Dease, M.
Howard, hon. C. W. G.	O'Reilly, M. W.
Howard, J.	Otway, A. J.
Hughes, T.	Palmer, J. H.
Hughes, W. B.	Palmer, Sir R.
Hurst, R. H.	Parker, C. S.
Hutt, rt. hon. Sir W.	Parry, L. Jones-
Illingworth, A.	Pease, J. W.
James, H.	Peel, A. W.
Jardine, R.	Peel, J.
Jessel, G.	Pelham, Lord
Johnston, A.	Philips, R. N.
Johnstone, Sir H.	Pim, J.
Kay-Shuttleworth, U. J.	Platt, J.
King, hon. P. J. L.	Playfair, L.
Kingscote, Colonel	Plimsoll, S.
Kinnaird, hon. A. F.	Portman, hon. W. H. B.
Knatchbull-Hugessen, E. H.	Potter, E.
	Potter, T. B.
Lambert, N. G.	Power, J. T.
Lancaster, J.	Price, W. P.
Lawrence, Sir J. C.	Ramsden, Sir J. W.
Lawrence, W.	Rathbone, W.
Lawson, Sir W.	Reed, C.
Lea, T.	Richard, H.
Leatham, E. A.	Richards, E. M.
Leeman, G.	Robertson, D.
Lefevre, G. J. S.	Roden, W. S.
Lewis, H.	Rothschild, Brn. M. A. de
Lewis, J. D.	Rothschild, N. M. de
Lloyd, Sir T. D.	Russell, A.
Loch, G.	Russell, F. W.
Locke, J.	Russell, H.
Lowe, rt. hon. R.	Russell, Sir W.
Lubbock, Sir J.	Rylands, P.
Lush, Dr.	St. Lawrence, Viscount
Lusk, A.	Salomons, Sir D.
Lyttelton, hon. C. G.	Samuda, J. D. A.

Samuelson, B.	Trevelyan, G. O.
Sartoris, E. J.	Verney, Sir H.
Seely, C. (Lincoln)	Villiers, rt. hon. C. P.
Seely, C. (Nottingham)	Vivian, A. P.
Seymour, A.	Vivian, Capt. hn. J. C. W.
Shaw, R.	Vivian, H. H.
Sheridan, H. B.	Waters, G.
Sherlock, D.	Wedderburn, Sir D.
Sherriff, A. C.	Weguelin, T. M.
Simon, Mr. Serjeant	Wells, W.
Sinclair, Sir J. G. T.	West, H. W.
Smith, E.	Whalley, G. H.
Smith, J. B.	Whatman, J.
Stacpoole, W.	Whitbread, S.
Stansfeld, rt. hon. J.	White, hon. Colonel C.
Stapleton, J.	Whitwell, J.
Stepney, Colonel	Whitworth, T.
Stevenson, J. C.	Williams, W.
Stone, W. H.	Williamson, Sir H.
Storks, rt. hon. Sir H. K.	Willyams, E. W. B.
Strutt, hon. H.	Wingfield, Sir C.
Stuart, Colonel	Winterbotham, H. S. P.
Sturt, Lt.-Colonel N.	Woods, H.
Sykes, Colonel W. H.	Young, A. W.
Synan, E. J.	Young, G.
Talbot, C. R. M.
Taylor, P. A.
Tollemache, hon. F. J.	TELLERS.
Torrens, R. R.	Adam, W. P.
Tracy, hon. C. R. D. Hanbury-	Glyn, hon. G. G.

NOES.
Adderley, rt. hon. Sir C.	Cartwright, F.
Akroyd, E.	Cave, rt. hon. S.
Allen, Major	Cawley, C. E.
Amphlett, R. P.	Cecil, Lord E. H. B. G.
Annesley, hon. Col. H.	Chaplin, H.
Anson, hon. A. H. A.	Charley, W. T.
Arbuthnot, Major G.	Child, Sir S.
Archdale, Captain M.	Clive, Col. hon. G. W.
Arkwright, A. P.	Clowes, S. W.
Arkwright, R.	Cochrane, A. D. W. R. B.
Assheton, R.	Cole, Col. hon. H. A.
Baggallay, Sir R.	Conolly, T.
Bagge, Sir W.	Corbett, Colonel
Bailey, Sir J. R.	Corrance, F. S.
Ball, J. T.	Corry, rt. hon. H. T. L.
Baring, T.	Crichton, Viscount
Barrington, Viscount	Croft, Sir H. G. D.
Barttelot, Colonel	Cubitt, G.
Bateson, Sir T.	Dalrymple, C.
Bathurst, A. A.	Damer, Capt. Dawson-
Beach, Sir M. H.	Davenport, W. B.
Beach, W. W. B.	Dawson, R. P.
Bentinck, G. C.	Denison, C. B.
Benyon, R.	Dick, F.
Beresford, Lt.-Col. M.	Dickson, Major A. G.
Bingham, Lord	Dimsdale, R.
Birley, H.	Disraeli, rt. hon. B.
Booth, Sir R. G.	Dowdeswell, W. E.
Bourke, hon. R.	Duncombe, hon. Col.
Bright, R.	Dyke, W. H.
Brise, Colonel R.	Dyott, Colonel R.
Broadley, W. H. H.	Eastwick, E. B.
Brooks, W. C.	Eaton, H. W.
Bruce, Sir H. H.	Egerton, hon. A. F.
Bruen, H.	Egerton, hon. W.
Buckley, Sir E.	Egerton, Sir P. G.
Burrell, Sir P.	Elcho, Lord
Buxton Sir R. J.	Elliot, G.

Elphinstone, Sir J. D. H.	Legh, Lt.-Col. G. C.
Ewing, A. O.	Legh, W. J.
Fawcett, H.	Lennox, Lord G. G.
Feilden, H. M.	Lennox, Lord H. G.
Fellowes, E.	Liddell, hon. H. G.
Fielden, J.	Lindsay, hon. Colonel C.
Finch, G. H.	Lindsay, Colonel R. L.
Forde, Colonel	Lopes, H. C.
Forester, rt. hon. Gen.	Lopes, Sir M.
Fowler, R. N.	Lowther, Colonel
Galway, Viscount	Lowther, J.
Garlies, Lord	Lowther, W.
Goldney, G.	Mahon, Viscount
Gooch, Sir D.	Maitland, Sir A. C. R. G.
Gordon, E. S.	Manners, rt. hn. Lord J.
Gore, J. R. O.	Manners, Lord G. J.
Gore, W. R. O.	March, Earl of
Grant, Colonel hon. J.	Matthews, H.
Graves, S. R.	Mellor, T. W.
Gray, Lieut.-Colonel	Meyrick, T.
Greaves, E.	Milles, hon. G. W.
Greene, E.	Mills, C. H.
Gregory, G. B.	Mitford, W. T.
Guest, A. E.	Montagu, rt. hn. Lord R.
Gurney, rt. hon. R.	Morgan, C. O.
Hambro, C.	Morgan, hon. Major
Hamilton, I. T.	Mowbray, rt. Hon. J. R.
Hamilton, Lord C.	Neville-Grenville, R.
Hamilton, Lord C. J.	Newdegate, C. N.
Hamilton, Lord G.	Newport, Viscount
Hamilton, Marquess of	Newry, Viscount
Hardy, rt. hon. G.	Noel, hon. G. J.
Hardy, J.	North, Colonel
Hardy, J. S.	O'Neill, hon. E.
Hay, Sir J. C. D.	Paget, R. H.
Henley, rt. hon. J. W.	Pakington, rt. hn. Sir J.
Henry, J. S.	Palk, Sir L.
Herbert, rt. hon. Gen. Sir P.	Parker, Lt.-Col. W.
	Patten, rt. hon. Col. W.
Hermon, E.	Peek, H. W.
Hervey, Lord A. H. C.	Peel, rt. hon. Sir R.
Hesketh, Sir T. G.	Pell, A.
Heygate, W. U.	Pemberton, E. L.
Hick, J.	Percy, Earl
Hildyard, T. B. T.	Phipps, C. P.
Hill, A. S.	Plunket, hon. D. R.
Hodgson, W. N.	Powell, W.
Holford, J. P. G.	Raikes, H. C.
Holford, R. S.	Read, C. S.
Holmesdale, Viscount	Ridley, M. W.
Holt, J. M.	Round, J.
Hood, Cap. hn. A. W. A. N.	Royston, Viscount
Hope, A. J. B. B.	Sackville, S. G. S.
Hornby, E. K.	Salt, T.
Hunt, rt. hon. G. W.	Sandon, Viscount
Hutton, J.	Sclater-Booth, G.
Jackson, R. W.	Scott, Lord H. J. M. D.
Jenkinson, Sir G. S.	Scourfield, J. H.
Jervis, Colonel	Selwin-Ibbetson, Sir H. J.
Johnston, W.
Jones, J.	Shirley, S. E.
Kavanagh, A. MacM.	Simonds, W. B.
Kekewich, S. T.	Smith, A.
Kennaway, J. H.	Smith, F. C.
Knight, F. W.	Smith, R.
Knightley, Sir R.	Smith, S. G.
Knox, hon. Colonel S.	Somerset, Lord H. R. C.
Lacon, Sir E. H. K.	Stanley, hon. F.
Laird, J.	Starkie, J. P. C.
Langton, W. G.	Steere, L.
Laslett, W.	Straight, D.
Learmonth, A.	Sturt, H. G.

Sykes, C.	Walsh, hon. A.
Talbot, hon. Captain	Waterhouse, S.
Talbot, J. G.	Welby, W. E.
Taylor, rt. hon. Col.	Wethered, T. O.
Thynne, Lord H. F.	Wharton, J. L.
Tipping, W.	Wheelhouse, W. S. J.
Tollemache, J.	Williams, C. H.
Tomline, G.	Williams, Sir F. M.
Trevor, Lord A. E. Hill-	Wilmot, H.
Turner, C.	Winn, R.
Turnor, E.	Wise, H. C.
Vance, J.	Wyndham, hon. P.
Vandeleur, Colonel	Wynn, C. W. W.
Verner, E. W.	Yarmouth, Earl of
Verner, Sir W.
Walker, Major G. G.	TELLERS.
Walpole, hon. F.	Cross, R. A.
Walpole, rt. hon. S. H.	Smith, W. H.

Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.

WAYS AND MEANS—considered in Committee.

(In the Committee.)

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the sixth day of April, one thousand eight hundred and seventy-one, 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 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 Duty of Sixpence; 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 Duty of Three Pence; and In Scotland and Ireland respectively, the Duty of Two Pence Farthing; Subject to the provisions contained in section three of the Act of twenty-sixth Victoria, chapter twenty-two, for the exemption of Persons whose 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."—(Mr. Chancellor of the Exchequer.)

Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Robert Fowler.)

MR. GLADSTONE

said, he could not accede to the Motion. This was the first time in his experience when such an opposition had been made to the first stage of the financial measure. It was absolutely necessary that the Government should endeavour to proceed with the Public Business; he therefore trusted the Committee would not sanction the Motion for reporting Progress, for the hon. Member, and those who shared his opinions, would have abundant opportunities of opposing the Government proposals at their subsequent stages.

Question put, and negatived.

Original Question put, and agreed to. Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the sixth day of April, one thousand eight hundred and seventy-one, 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 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 Duty of Sixpence; 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 Duty of Three Pence; and In Scotland and Ireland respectively, the Duty of Two Pence Farthing; Subject to the provisions contained in section three of the Act of twenty-sixth Victoria, chapter twenty-two, for the exemption of persons whose 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.

Resolution to be reported To-morrow;

Committee to sit again upon Wednesday.

c2040
1. TREASURERS OF RATES BILL. 63 words