RESOLUTION. [ADJOURNED DEBATE.]

HC Deb 28 April 1879 vol 245 cc1249-351

Order read, for resuming Adjourned Debate on Amendment proposed to Question [24th April], "That Mr. Speaker do now leave the Chair" (for Committee of Ways and Means).

And which Amendment was, To leave out from the word "That" to the end of the Question, in order to add the words "this House views with regret the great increase in the National Expenditure,"—(Mr. Rylands,) —instead thereof.

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

Debate resumed.

MR. GOSCHEN

said, that, representing a constituency which was as much interested as any other constituency in the United Kingdom in the soundness, the straightforwardness, and the courage of its finance, he trusted he might be permitted to say a few words in the discussion of a Budget to which, he regretted to say, in his judgment, not one of those qualities could be attributed. He held, on the contrary, that the Budget was unsound; calculated to mislead public opinion and public feeling; and, above all, wanting in that courage which he should have thought at the present juncture it particularly behoved Her Majesty's Government to manifest, for the sake both of our credit at home and good repute abroad. The Motion of the hon. Member for Burnley, important as it was, ought not entirely to monopolize the attention of the House; for hon. Members had to discuss, not only the Expenditure, but the whole financial policy of the Government. The scale of the Expenditure, "ordinary and extraordinary"—to use the jargon which the Government had introduced into the discussion—was a startling element in that financial policy; but, in his judgment—though he did not know to what extent the House would share in it—it was scarcely less serious to see how the Chancellor of the Exchequer, in providing Ways and Means, had abandoned the sound paths of their old traditional finance. He should be exceedingly brief on this occasion, and he thought it generally detracted from the thoroughness of their debates that too many Members tried to cover the ground under discussion; but he did not accept that which he left unchallenged. He should leave many important questions raised in the debate for others to deal with, and he should address himself to the financial policy of the Government. There were two points only connected with the Expenditure which he wished briefly to touch. They were both raised by the First Lord of the Admiralty. The one was the fallacy produced by the mode in which the right hon. Gentleman presented a comparison based upon the ordinary and extraordinary Expenditure; and the other was the challenge of the First Lord of the Admiralty, addressed to Members sitting on the Opposition side of the House, whether, if they were in Office, they would venture to reduce the armaments by a single man or a single gun. First, as regarded ordinary and extraordinary Expenditure, let him ask the House to understand precisely how this matter rested. There were two kinds of extraordinary Expenditure—he was using the language of the Government, and not that of our old finance—that which was used for a distinct expenditure, and that extra Expenditure which was merely spent in our own Dockyards, increasing the ordinary quantities of supplies, stores, and ships. So much of an extra Vote of Credit as was employed on a real warlike expedition was gone. It was shot away, or it was spent upon transport; at all events, it was gone. But so much of the extra Expenditure as was expended at home in Dockyards, in raising the qualities of ordinary stores, increasing the number of ships, or increasing the work in the Dockyards remained; and the House would, see that it ought to tell, and must tell, on the ordinary normal Estimates of the ensuing year. How was this found to act on the present occasion? For two years there had been certainly very extraordinary Expenditure in our Dockyards, on the Army and Navy; and all that the First Lord of the Admiralty could make out of it was this—that, after the Departments had been spending for two years as hard as they could, the Estimates of the present Government, benefiting by that Expenditure, were not very much higher than the Estimates of the previous Government had been before. That established the fallacy of the comparison. There was a fallacy in the Chancellor of the Exchequer's argument, too, which resembled this very much, when he congratulated himself upon having been such an excellent calculator in fixing upon £6,000,000. The right hon. Gentleman said—"We took £6,000,000; we spent £6,150,000; I think you will admit we were not bad calculators." Of course, they spent what they got. They spent it in increasing their stores and supplies. He believed that if they had asked for £7,000,000 instead of £6,000,000, they would have spent that also, and they would then see how the attempt to establish that difference between ordinary and extraordinary Expenditure told. If they had asked for another £1,000,000 and had spent it on more stores, they could have further reduced the Estimates. If, on the other hand, they had asked for only £5,000,000 they would have bought less stores, and the Estimates would thus have been higher now. The fact was, the House had lost power as to the Expenditure of the country through the introduction of this distinction between ordinary and extraordinary Expenditure. The First Lord of the Admiralty asked, with much emphasis, whether, if the Liberals were in Office, they would diminish the armaments by a single man or a single gun? He (Mr. Goschen) would answer that challenge with great frankness for himself. If it were his misfortune to be responsible for the acts of the present Government—if he had an Afghan War on his hands; if he had left a Viceroy in charge who moved a division of the Army half-way on the road to Cabul "on sanitary grounds;" if he had a High Commissioner who dreamed a dream of establishing a second India in Africa, whom he had censured, but not yet removed; and if he had to provide for garrisoning Roumelia in consequence of obligations contracted under the Treaty of Berlin; if, possibly, he had to send men to Cyprus in order to meet his engagements in Asia Minor—no, he certainly should not think of reducing the armaments with which he had to face those engagements. But the First Lord of the Admiralty was not deterred, though he put the question to the Opposition, from reducing the number of Marines by 1,000 men. How did the right hon. Gentleman explain that, after his question about the reduction of the armaments of the country by a single man? It appeared to him that it was only part and parcel of the policy of the Government. While they hunted with the hounds they ran with the hare; and after singing "Rule, Britannia" at Conservative dinners all over the country with might and main, they came down to the House, as the First Lord of the Admiralty did the other night, and professed themselves the devoted and convinced disciples and champions of Peace, Retrenchment, and Reform. He did not see how Government was to reduce the Expenditure if it encouraged all the enterprizes to which he referred. The House was asked by the hon. Member for Burnley, acting in this matter entirely on his own responsibility, to de- clare "that it views with regret the National Expenditure." He regretted that Expenditure; and he believed there were few on that side of the House who would not support his hon. Friend in expressing that regret. But there were other points in these Resolutions. There was the 3rd Resolution, with which he did not agree, as he did unreservedly with the 1st. It touched the question of the effect taxation must have upon the resources and capabilities of the country. He deplored the effects of the taxation as much as his hon. Friend. He regretted the burdens that were imposed upon the people; but he did not feel clear that it would be wise on the part of the House, in the face of Europe, which was watching how we bore our commercial depression and warlike enterprizes, to put such a Resolution on the Journals of the House. He agreed that the heavy taxation, local and Imperial, was to be deplored in every respect, though it might not actually diminish the strength of the country. He had listened with the greatest interest—as he was sure the House generally did—to the speech of his right hon. Friend the Member for Montrose (Mr. Baxter) with regard to the situation of the country. His right hon. Friend spoke of the gloom of the commercial aspect, of the gloom of the agricultural aspect; and he (Mr. Goschen) did not think that he over-coloured the picture. Public economy and private economy seemed to be demanded by such a state of things. But when they looked at the fall in wages, at the commercial disasters, and at the agricultural distress, he thought it would not be wise to blind their eyes to some few favourable circumstances on the other side. Food was cheaper almost than it had been at any other time. Food was pouring in in immense quantities from abroad. Wheat was very low, meat had fallen in price, bacon, an article of great importance, was very low; the prices of tea, sugar, and coffee were almost as low as they had ever been. There were circumstances which might mitigate, to some extent, the suffering which was caused by commercial depression; and he did not think it would be wise either to leave entirely out of sight the satisfactory point that 1d. in the pound Income Tax still continued, notwithstanding the stagnation of trade and the prevailing distress, to realize the enormous sum of nearly £1,800,000. He thought it was his duty to allude to these circumstances, because he did not think it would be entirely wise to have it go forth that the House of Commons was too down-hearted at the present state of affairs. He would turn to the Budget of the right hon. Gentleman—to his financial policy. Fortunately, it could be described in a very few words. It simply postponed the excess of Expenditure and liabilities over income to a future day; it renewed bills; it prolonged liability. The right hon. Gentleman told the House that he had put those liabilities—not entirely out of sight, because that would be unheroic, mischievous, and enervating—but so far out of sight that they need not look at them unless they liked. The right hon. Gentleman said he had adopted, a viâ media with regard to these liabilities. When the House wanted a tonic, it could look at them; but it would be too enervating to put them entirely out of sight. That course, however, when looked at gravely, would not, he (Mr. Goschen) thought, ultimately commend itself to the favour of the country. It might be an unpopular thing to say; but it was better, for the cause of economy and for the good of the country, that we should pay off our burdens by taxation than stave off the payment to a future day. Let thorn remember this—they were not asked to impose any taxes at present. They were asked to postpone the whole of these liabilities—in other words, the country was not asked to associate itself with the action of the Government at all. Now, there was no better test of how a policy was approved by the country than when the policy had got to be paid for. Cheerfulness on the part of the country to make the necessary sacrifice would be a proof of patriotism most valuable to Her Majesty's Government, and to have imposed taxation would have shown what confidence they had in the resources of the country. But the Government had shrunk from that test. He did not think that was a fortunate circumstance in the present state of European affairs. He thought it was of great importance that in these matters they should remember the attitude of other countries, and that other countries were watching us to see how far we carried out a strong, sound, financial policy, when we were put to it and when we were really pressed. The great Military Empires of Europe were watching us; and would it not be curious to see the effect upon them when they found that the money bags which our Plenipotentiaries sat upon at Berlin—he supposed to give majesty and power to their pose—were only stuffed with Exchequer Bonds, which some future Parliament, perhaps some future Government, was to provide for, Heaven knew how? Let them look at the example of America, which had a Debt of £150,000,000; and again at the example of France, staggering under a Debt of £200,000,000! With what fortitude they bore the burdens necessary to re-establish their financial position! Our subjects in India were watching to see how, when a strain was upon us, we bore ourselves. He considered it a serious charge against Her Majesty's Government that at such a critical time as this, when to display real strength was so important, they had shown not financial courage, but financial hesitation. Theirs was an exhibition of an apparently strong policy carried out by weak men. He did not mean men intellectually weak, but wanting in the nerve and courage to face unpopularity. They had shown a want of confidence in the willingness of the country to bear the burdens which were the result of the policy of the Government. He frankly stated that he should not be afraid to face any constituency in the United Kingdom, and say to them—"Rightly or wrongly, we have heavy enterprizes on our hands; we are engaged in serious work—not work beyond our strength, but work which requires some sacrifice; subject-races, friends and enemies are watching to see how we bear ourselves; at such a time will you let the foreigner sneer, and say that England is unwilling to pay in cash even for the first instalments of her new responsibilities? Are you unwilling to follow the bolder course and to pay your way? I know the state of commercial gloom—I know what pinching there is in many households—but I still believe you are willing to bear your share of the burdens, and to uphold the old English principle, and say—'Do not let us be financial cowards, but let us pay our way like men.'" He believed that the soundest and most courageous finance was not necessarily unpopular; and he brushed aside any contemptible suggestion that they would like to see the burdens of the country increased in order to increase the unpopularity of the Government—that was not the spirit in which he made those observations. But the Chancellor of the Exchequer said it was not a question of popularity or unpopularity, but that it was a new principle. It was a great principle which the Chancellor of the Exchequer had invented, and which was this—if they had an accidental surplus, do not give it away; and if they had an accidental deficit, do not provide for it. He (Mr. Goschen) was inquisitive to know the date when the right hon. Gentleman invented that principle? He had read with great interest the right hon. Gentleman's Twenty Years of Financial Policy, but it was not there; and he suspected they would find it for the first time in the "Six Years of Conservative Finance" which the right hon. Gentleman was now writing in thick and heavy lines on the pages of history. Let them look for an accidental surplus and see how the right hon. Gentleman had applied the first part of the doctrine; but the insuperable difficulty was that there never was an accidental surplus, or any other kind of surplus, during a Conservative Administration. But there was a very accidental surplus so far as they were concerned. The right hon. Gentleman had an accidental surplus when the Government came into Office in 1874, and, instead of applying his new doctrine to it then, he gave the whole of it away with a light hand. It could not be doubted, then, that the date of the invention was later than 1874. Well, what had happened since? The Income Tax had been increased from 2d. to 3d. and from 3d. to 5d. in the pound; while last year the Chancellor of the Exchequer had actually summoned up the courage to raise indirect taxation to the extent of £500,000 from a duty on tobacco. The effort, however, seemed to have exhausted the right hon. Gentleman, for this year he ventured to impose only a small tax on cocoa paste and on cigars. But if the courage of the right hon. Gentleman was small, his imagination was lively, and he had introduced to the notice of the country the new principle—"If you have an accidental surplus, do not give it away"—that was for the Liberals—"but if you have an accidental deficit, do not provide for it"—that was for the Conservatives, He had alluded to the effects of such a policy upon our relations abroad, and he should have liked to say something with reference to its consequences in connection with our position at home. He would, however, leave it to others to examine the effect of the new doctrine as it related to the cause of economy. Was there not, he would ask, infinitely loss chance of our pursuing the path of economy, if we knew that all we had to do was to postpone our payments to a future time? The cause of economy was unpopular enough at all times. Even when increased Expenditure meant increased taxation, it was difficult enough for its advocates to make way; but when increased Expenditure did not mean increased taxation, but only the accumulation of burdens in the future, where, he should like to know, would be the cause of economy? The imposition of taxation was a real and ready way in which the people associated themselves with the action of the Government. The payment of taxes acted as a sobering force on our national policy. It sobered those who had to impose the taxes and those who had to bear them. Sound finance was one of the best safeguards of their popular Constitution, while loose finance was one of its greatest dangers. The new Constitutional levies had not yet been under fire. Had the Government misgivings that they would not stand? It was very significant. The Leader of the House had stated that the extra Expenditure amounted to about £8,000,000, and nearly the whole of that amount was provided for by an Income Tax after its incidence had been lightened by exemptions; while the contribution to the support of the policy of the Government by means of indirect taxation was £500,000 raised from tobacco. That he did not call Conservative statesmanship, or, indeed, statesmanship of any kind worthy of the name. It was merely a hand-to-mouth policy. It had been said the other day that the heavy cloud of the coming Dissolution seemed to hang over the discussion of that House last Thursday night, and it appeared to him that the same cloud had hung over the Budget. He had stated it to be his belief that the people, if approached with boldness and frankness, would not have disapproved a courageous policy. The Government might, however, have thought the time just before a Dissolution was a peculiarly unhappy moment for imposing new taxes or restoring old ones. The sooner this state of things came to an end the better for the country. These were days when the gaze of those who governed ought to be fixed with peculiar intentness on the work before them. They had heavy rowing, the water was rough, and the breeze was strong, and he did not think it would improve their stroke if they were to look too intently on the electioneering figures on the bank. He thanked the House for the patience with which it had listened to him. He was anxious to protest against the Budget. It appeared to him to be shabby, flabby, inadequate to the occasion, and to be wanting in that courage which was calculated to secure repute abroad and credit at home. To use the witty expression of his hon. and learned Friend the Member for Oxford (Sir William Harcourt), "Peace with honour on tick" was not a lofty attitude for Englishmen to assume. If it were true that the present Government had inaugurated a new reign—a new era of bold foreign policy, let it be hoped that they would not, at the same time, inaugurate a new era of cowardly finance. If every Prime Minister henceforward was to be called upon to play the trumpet, let the instrument be cast in the true metal and have the true ring. Courage at home was as sure a path to the hearts of the English people as a menace abroad; and those would best deserve the confidence of the people who told them to their face that seldom in their history had it more behoved them to say what they meant, to act up to what they said, and to pay for their acts.

SIR HENRY SELWIN-IBBETSON

said, he was not at all surprised that the right hon. Gentleman should have told the House that the hon. Member for Burnley, in bringing forward his Resolution, acted entirely on his own responsibility. Occupying the position he did, however, he must touch lightly upon that Resolution, which, notwithstanding what had fallen from the right hon. Gentleman, was a direct attack on the administration by the present Government of the financial affairs of the country. Whatever might have been the good fortune of Liberal Administrations as to their Revenue, and however much the present Government might have had to contend with untoward circumstances, he did not believe that the latter ought to be more reprobated than their Predecessors for the state of the harvests and the seasons. Now, there were two tests of financial policy—the lightness of the burdens imposed upon the people in the shape of taxation, and the wise expenditure of the proceeds of taxation in accordance with the exigencies of the State. They had had several comparisons as to the Expenditure of Liberal and Conservative Governments. They had the comparison taken by his right hon. Friend the First Lord of the Admiralty between the years 1874–5 and the present year. They had another comparison by the right hon. Gentleman the Member for Chester (Mr. Dodson), who drew a comparison between the year 1872–3 and the present year, and had chosen, very wisely, one of the best financial years of the Liberal Government; but, for his own part, he preferred making the comparison—and he thought it was the fairest course to adopt—between the five years during which the Liberal Government had been in Office, dating from 1869–70 to 1874, and the five years during which the existing Government had been responsible for the conduct of affairs. The five years of Liberal Administration, he found, gave an average income of £74,806,442, and an average Expenditure of £71,416,853; while the average income for the five years from 1874 down to the present time was £78,699,574, the average Expenditure being £79,377,264. In that comparison of Expenditure he had included the Expenditure for the Alabama Claims in the last year of the Liberal Government, and in the last two years of the Conservative Government he had included the charges to which we were put on account of the Russia-Turkish War; but the incomes comprised contributions which might be more properly assigned to the Miscellaneous Revenue, from India and the Colonies, from the sale of Stores, the Revenue of Crown Lands, the Post Office profits, and a variety of other contributions which were not derived from taxation; so that, in short, there was a considerable amount of such Miscellaneous Revenue, varying from £9,000,000 to £13,000,000 a-year. He thought it would be fairer, for the sake of comparison, to ignore, as far as possible, that Miscellaneous Revenue, and to take only the figures representing the sums derived from taxation, confining the income to the proceeds of the Customs, Excise, Stamps, Land Tax, House Duty, and Property Tax. That calculation, he might remind the House, was founded on an idea supplied by his right hon. Friend the Member for Pontefract (Mr. Childers) in a valuable Return for which he had moved. It appeared that the average proceeds of the taxation of the country during the five years in which the Liberal Government was in Office amounted to £64,498,000, and their average Expenditure was £61,109,400; while the five years of Conservative Administration showed an average of the proceeds of taxation of £65,679,800, and an average Expenditure of £65,371,000; or, taking into account the extraordinary Expenditure of £4,932,000, an average of £66,357,500. That was to say, the Liberal Government during their five years in Office had raised an average sum of £64,498,000 out of the taxation of the country, and the Conservative Government an average of £65,679,800, leaving out the extraordinary Expenditure, or, including that Expenditure, of £66,357,500—a direct increase of £1,181,800 in the one case, or£1,859,500 in the other. But during the whole of the 10 years of his comparison the country was not standing still; there was a growth—a continued growth—of population; and, consequently, there were more and more people to consume those articles which produced a Revenue through the Excise, and, in the same way, more direct taxpayers in the country. During the five years of Liberal Government the average population was 31,500,000; but during the time the present Government had been in Office the average population was estimated at 33,000,000 odd, and thus they arrived at this conclusion—that the average taxation per head during the Liberal Government was £20s. 11d. per year; during the Conservative Administration it only amounted to £1 19s. 10d. per head, or if they put it at its worst, and included everything, to £2 0s. 2½d. per head only. Even during this year the average per head would only reach £2 0s. 6d., or less than the average of the Liberal Government. That was sufficient to show that there was not such a great difference between the two periods, and that whatever difference there was, was not averse to the Conservative Government, and it brought him to the second part of the subject, which was the method of levying taxation. He considered that the Conservative Government had levied their taxation by less oppressive machinery than their Predecessors had done. Every tax, with the exception of the 4d. on tobacco that was paid now, was paid while the Liberals were in Office, and the Conservatives had taken off the remainder of the sugar duties—averaging 6s. 9d. per cwt—the 10s. 6d. tax on horses, and the £12 10s. on horse-dealers' licences; while the brewers' licences paid 12s. 6d. per 50 barrels instead of 15s. These were small matters. He would take a more considerable point of comparison. During the tenure of Office of the Liberals, the Income Tax stood, on an average, at 4⅖d.; the average for the five years that followed their Administration was not more than 3d., while abatement had been made by which the incomes of £400 and under £120 was deducted as exempt from the tax, instead of the former deduction of £80 from incomes under £300. He therefore contended that while the Conservatives had been in Office they had raised less taxation per head of the population, and by a less oppressive means, than was raised during the Liberal Government. He would pass to the second point which he wished the House to consider—namely, the manner in which the money had been spent by Liberals and Conservatives respectively. The average Revenue of the Liberals was £64,498,800, of which £26,689,115 was spent on the management and interest of the Debt, £23,226,680 on the Naval and Military charges, £5,779,251 on Civil Government charges, £1,540,910 on Education, £2,422,676 on the relief of Local Rates, and the remainder on smaller items. The chief feature of the Expenditure of the Liberal Government was the amount devoted to the reduction of the Debt. Now, what was the way in which the Conservatives spent their yearly average of £65,679,800? When they came into Office they found themselves in a posi- tion to consider the claims of those who were interested in the subject of local taxation, amongst whom might be found many hon. Members who now sat upon the Opposition Bench. The result was that the Government gave away large grants for pauper lunatics, for the police, for the rating of Government property, and for prisons; and he believed it would be found that the Conservative Government had spent something like £2,000,000 a-year more than the Liberals did upon these particular items. He would remind the House that grants of that kind involved no increase of Public Expenditure, but were only a transfer of the charge from one shoulder to the other; and that by so spending the proceeds of taxation, instead of redeeming Debt, the money was allowed to fructify in the pockets of the ratepayers. The question, however, that might fairly be asked was whether or not the results were good, and whether the money was well spent in the relief of the ratepayers? He had been at some pains to ascertain the fact, and found that in many ways the local rates had been very considerably reduced. For instance, the Metropolitan Police Rate had fallen from 6¾d. in 1874 to its present amount of 5d. The County Police Rate throughout England had fallen from 2⅜d. to 16/8d. It was more difficult with regard to the Poor Rate to reach the exact facts; but between 1874 and 1878 there was a decrease in the Poor Rate of £403,000. They, had however, to consider, not only what had been the reduction of the rates, but what the ratepayers would have had to pay to meet the increased reqirements of the public if there had been no Government grant. The county ratepayers had by the increased charges on the Government gained £597,000, and the Metropolitan ratepayers £173,000. On the average, he thought it would be found that the English ratepayers had been saved £1,443,000, which spread over the country would amount to 2¾d. in the pound. It was difficult to speak of the extent to which the local rates had been saved by the transfer of the prisons from the hands of the local authorities to the Crown, inasmuch as it had not yet found its way into the Accounts; but it could, he thought, be shown that, in certain instances, considerable relief had been afforded. He had had a letter from the magistrates of the West Hiding, in which they stated that the transfer of the prisons to the State had saved the county rate £21,000. In West Suffolk, it was stated, at the October Quarter Sessions, that the effect of the Prisons Act had been to reduce the county rate to the lowest point known—1 1–18d. In the West Riding, too, the number of people sent to the prison there had fallen from 1,500 in February, 1878, to 800 in February, 1879. Upon whom did this charge now imposed upon the State fall? It did not fall upon the poor, because he had shown that relief had been afforded in the matter of indirect taxation; while, with regard to the Income Tax, relief had been given during the Conservative reign in the direction of the smaller incomes to a considerable amount. Although this burden had been transferred from the rates to the Imperial taxpayer, yet it had, practically, been thrown principally upon those who were best capable of bearing it. Then, again, the Conservatives had spent a very much larger sum in all their five years of Office upon education than the Liberals had, the sum amounting in the average to £1,300,000 in excess per annum. Then, with regard to the Army, the Conservatives found it certainly not so efficient as the country desired. They also found schemes which were set on foot by their Predecessors, for the abolition of Purchase, and the creation of a Reserve, which involved additional Expenditure; and it was not until 1874 that the addition of 1½d. to the pay of the soldiers came really into operation. With regard to the Navy, the Conservatives claimed to have had ships built and stores supplied at a largely increased Expenditure arising from the machinery, which now formed such a prominent part in everything that was done, and also in the wages of the artificers and men employed. And, lastly, the Conservatives had had to expend a sum of £6,500,000 for putting the country in a state of defence during the war between Russia and Turkey. When they came to what, after all, constituted the difference in the way in which the Conservatives spent their £65,679,800 as compared with the table he had mentioned before, they would see that the interest and management of the Debt amounted to £26,517,295, against £26,689,115, or a diminution of £171,820; Army and Navy charges, £25,749,977, as against £23,226,680, an increase of £2,523,299; Civil charges, £5,737,857, as against £5,779,251, a diminution of £41,394; Education, £2,726,491, as against £1,540,910, an increase of £1,185,581; relief of local rates, £4,055,900, as against £2,422,679, an increase of £1,633,224; net charges of Revenue Department, £122,750, as against £811,367, a decrease of £688,617; and in respect of the Alabama a diminution of £639,375. Surplus applied to the reduction of Debt, £308,802, as against £3,389,426, a decrease of £3,080,624; and for new Sinking Fund, an increase of £460,726, or a total Conservative Expenditure of £65,679,800, as against £64,498,800, or a net increase of Expenditure out of the proceeds of taxation of £1,181,000, being an amount of expenditure less in proportion to the increase of the population and accompanied by less pressure on the taxpayer. They had, too, kept down the ordinary expenses of Civil government to the usual cost in spite of the rise of prices and the growth of the Departments. They had given back revenue to the local taxpayers, and had strengthened the Naval and Military Services of the country. Now, if they referred to Table 3 of the Return of the right hon. Gentleman the Member for Pontefract, separating grants in aid of local taxation and education, it would be seen how small was the growth of Imperial Civil charges. They comprised the cost of the Civil List, salaries and pensions of officials of State, cost of public buildings, salaries and superannuations in the Public Departments, administration of Justice, Diplomatic and Consular Services, and other items; and yet the economy practised by Conservatives and Liberals alike had prevented an increase in the net Expenditure from decade to decade; for in 1879 they had a lesser Expenditure than in the year after the Crimea for Imperial Civil charges, and there was a reduction of £22,000 in 1879–80 as compared with 1875–6. He had no doubt it would be pointed out that the Conservatives had spent in 1878–9 £4,932,000, raised by Exchequer Bonds—and that was true; but it should be remembered that in those years the Russo-Turkish War cost £6,124,969, the Transkei and Transvaal £529,000, the Zulu War £1,559,000, and the Abyssinian War, in 1867–8, £17,865—in all, £8,293,834, of which extra Expenditure £3,361,834 would be met out of income, and £4,932,000 by the issue of Exchequer Bonds to be redeemed in two or three years. And, surely, that fact might well be defended, because the normal Expenditure of several years had been crowded into a few months. £1,500,000 had to be spent to buy ships that it would take four years to build. Malta had to be victualled for three years; a large number of torpedoes, and a great amount of stores, had to be purchased. But these were not lost. They had not been used, and why should one year's Revenue bear the burden? There was another point, one as to which the right hon. Gentleman the Member for Montrose (Mr. Baxter) had expressed dismay—namely, the increase of the Unfunded Debt from £4,479,000 when the last Government resigned, to £27,870,100 on the 31st of March last, while the Funded Debt had only fallen from £723,514,000 to £710,843,000. He admitted they had not reduced the Unfunded Debt as their Predecessors had; but he contended that, apart from the value of Terminable Annuities, they had not increased its true amount. The Unfunded Debt consisted of Exchequer Bonds and Bills and Treasury Bonds running for short periods, and these had increased, in the five years ended March 31 last, by £20,914,514. Of this sum, only £5,350,000 had gone to meet extraordinary Expenditure. £4,000,000 of it were applied to the purchase of the Suez Canal, of which the securities were certainly not falling in value, while the rest of it had been placed out in loans to local bodies. A sum of £12,460,000 was now outstanding in this way. However much hon. Members might differ as to the policy of making these loans, it was a policy which had been largely accepted by the House and generally approved by the country. He thought the Government had a right to set off against their Funded Debt the amount of their assets, whichamountedto£17,500,000. Though, therefore, the total figures quoted by the opponents of the Government sounded very alarming, the net Unfunded Debt of the country had been really reduced by £2,580,500, and the Funded Debt had undoubtedly decreased by £12,500,000. He would now for a moment or two turn to the broader policy which had been attacked so vigorously by the right hon. Gentleman the Member for the City of London (Mr. Goschen)—the policy in accordance with which the Government had framed their Budget and postponed their liabilities. What was the position of the Government at the time the Budget was drawn up? They had to face the extra Expenditure of 1878–9, caused by the Transkei, Zulu, and other African troubles, and the war between Russia and Turkey. Let them take this extra Expenditure and see how it might have been met and how it had been met. The wars to which he had alluded left £10,176,000 as the total increased charge to be met by taxation or otherwise. How had his right hon. Friend the Chancellor of the Exchequer proposed to meet this? By increasing the Income Tax by 2d. in the pound, and by levying 4d. in the lb. on tobacco. The fairest method of considering the question would be to take the actual excesses of ordinary Expenditure above the ordinary Revenue for the two years 1877–8 and 1878–9. Those excesses amounted to £2,640,000 and £2,292,000. These were the real sums which had been provided for by loan. Assuming the surplus to be sufficient for the whole of the Zulu War, the extra charges of 1877–8 and 1878–9, amounting to £10,176,000, would have been met by £5,244,000 out of increased taxation, and £4,932,000 out of loans. The Chancellor of the Exchequer had, therefore, met, or was meeting, more than one-half out of taxes, and loss than one-half by loans, which, if the existing surplus was maintained, would be defrayed in two and a-half years from March, 1880, or in a year and a-half beyond the time proposed in the Budget. What other course could have been pursued? The Chancellor of the Exchequer might have suspended the new Sinking Fund and re-converted the larger part of the Terminable Annuities into Stock, thus obtaining about £4,450,000 in 1879–80, and he might then have paid off the temporary loans raised for the extra Expenditure before the end of this year. Another 1d. on the Income Tax would have more than sufficed to pay them off. Did the emergency, however, justify the Chancellor of the Exchequer in suspending the Sinking Fund? He could quite understand that in an emergency like the Crimean War such a course might have been advisable; but surely it would not have been right to put out of gear the machinery devised by Parliament for diminishing the Public Debt merely to pay off certain Exchequer Bonds which happened to fall due. In the matter of their Expenditure, the Government were following strict precedent. It had been the invariable practice to renew Exchequer Bonds when the Revenue of the year failed to suffice to pay them off. During the Crimean War £7,000,000 of Exchequer Bonds were issued, redeemable in four, five, and six years. They should, therefore, have been redeemed in 1860 and 1861; but, as a fact, 1,700,000 of them were not redeemed till 1869–70. A very warm discussion had arisen in 1858 on the proposal of the present Prime Minister to postpone £2,000,000 of Bonds then falling due. The right hon. Gentleman the Member for Greenwich (Mr. Gladstone), however, approved the proposal. He wished to know why there should be any objection to the postponement of Bonds now? In 1858, certain Bonds being due, the Chancellor of the Exchequer did not think the finances of the country sufficient to pay them off, and he proposed postponing them. In 1879–80 Bonds also incurred for warlike purposes fell due in the same manner, and the Chancellor of the Exchequer thought they ought to be postponed. Surely, therefore, the course of his right hon. Friend the Chancellor of the Exchequer was according to precedent. He would now turn to the question whether the Government ought to have increased taxation, and would ask whether the present time was a favourable opportunity for putting taxes on the people? He could quite understand his right hon. Friend the Member for the City of London advocating the adoption of such a course by his opponents; but he could hardly understand the possibility of a Conservative Government adopting it if any means of avoiding it existed. Depression had diminished considerably the consuming power of the people. The addition to indirect taxation made last year had not been encouraging in its results, and to resort to direct taxation in all cases of need was not good finance. He would remind the House of what occurred in 1860. The Government of the day had to make a provision for the China War, which broke out after the Budget for the year had been passed, and, consequently, had to ask for a Supplementary Grant. The Chancellor of the Exchequer at the time said— We propose to apply to the sum (£2,336,000) which we still require, the same principle of a divided method of provision … that is to say, we ask the Committee to give authority for raising that sum in part by taxation, and in part from sources other than taxation. In so doing, we follow the rule which is commonly applicable to war expenditure. It is the opinion of Her Majesty's Government that that is a rule which ought justly to be applied to a case like this of China—first of all, because the scale of the Expenditure is such that the country can hardly be expected, especially at a period when charges are rapidly growing under other heads, to provide the whole from the proceeds of annual taxes."—[3 Hansard, clix. 1970.] The Chancellor accordingly provided £1,050,000 by increased taxes, and said he would take the remainder, £1,286,000, from the balances in the Exchequer. In addition to this, he renewed £1,000,000 of Bonds which fell duo in the year, and issued £600,000 new Bonds. It might, therefore, be fairly said that a precedent existed for meeting extraordinary Expenditure partly by taxation and partly by other means. At the close of the financial year 1860–1, there were outstanding £3,000,000 of old Crimean War Bonds, and £600,000 of China War Bonds, which were not paid off until 1869–70 and 1870–1. As far as the question of precedents for the course which had been taken by Her Majesty's Government was concerned, he would ask the attention of the House to the course which, on another occasion, was pursued by the Administration of which the right hon. Gentleman the Member for Greenwich was Prime Minister, and the right hon. Gentleman the Member for the University of London (Mr. Lowe) the Chancellor of the Exchequer. Referring to the payment of the Alabama Indemnity, the latter right hon. Gentleman, speaking in 1873, said— So large a payment, however, undoubtedly interferes with our ordinary finance; but it interferes with it not as a permanent payment, but as one that comes once and that may never recur. We have taken these matters into our consideration, and we are of opinion that, on the whole, it is our duty to place one-half of this payment upon the ordinary Revenue of the present year. That will be the sum of £1,600,000. As to the rest of the sum—namely, another £1,600,000, we think that we ought to provide for its payment, without any further resort to the taxation of the year, by asking for power to give Exchequer Bonds or Exchequer Bills for the amount, in case—which I do not at all anticipate—of an unfavourable state of the finances."—[3 Hansard, ccxv., 664.] Practically, however, the year was so prosperous that it was not necessary to provide for the extra payment partly out of taxes and partly by other means; but the principle was broadly laid down by the then Chancellor of the Exchequer. To sum up, the Government, having in two years to provide about £10,000,000 for extraordinary war expenditure, had, following the precedents of 1860 and 1873, provided rather more than half this sum by taxation and part by the issue of Exchequer Bonds, which, in the present case, were to be paid off in a short period and "kept in sight," instead of being held over almost indefinitely, as had been the case with former Administrations under similar circumstances. He had endeavoured to show that part of the increase of Expenditure the present Government were not responsible for, and that a part of it was inherited from their Predecessors. He had tried to show that the policy of the Government was not so indefensible as might be supposed, and it was the only one which could, in the circumstances of the country, be adopted, and which the precedents justified them in the real question, therefore, was as to whether the country could bear the increase, and whether it had borne so heavily upon trade as seemed to be supposed by some persons? A good index as to this was to be found in the Returns of the Savings Banks. He found, in regard to the Post Office Savings Banks, that the capital invested rose from £13,524,209 in 1869 to £21,167,749 in 1873, while a Liberal Government was in Office, or a gradual annual increase of £1,750,000; and in the five years of Conservative Administration, from 1874 to 1878, the sum rose from £23,157,469 to £30,156,000, or a larger and equally steady increase. The figures of other Savings Banks showed similar satisfactory results. Could the Government, therefore, in this state of things reduce the Estimates, and, if so, which? He had endeavoured to show the difficulty of reducing the Civil Service Estimates, and as far as the Army and Navy Estimates were concerned, he did not think anyone would suggest, in the present state of affairs abroad, that any reduction was possible. The hon. Member for Burnley said that the Government ought either to make a reduction of several millions, or go out. If that was the alternative, and the reduction was to fall on our Military and Naval Services, he, for one, would much rather go out than incur the responsibility, at such a time, of the reduction. In May, 1877, the House of Commons, by a majority of 131, approved the Turkish policy of the Government; in February, 1878, on the Vote of Credit the majority was 204; in May of the same year a majority of 121 supported the Government in regard to the removal of the Indian troops to Malta; three months later still they had a majority of 143 on the Eastern Question, while in December last the majority of the House in favour of the Government policy in Afghanistan was 101. That policy was not one of a do-nothing character—it was not one which left us out of the Councils of Europe; it was not one that resulted in the destruction of a Black Sea Treaty; and he had such confidence in the common sense and patriotism of Englishmen that he did not believe—notwithstanding the distress and stagnation of trade—that the present policy of the Government would meet with disapproval.

MR. GLADSTONE

Sir, I have not troubled the House at any length for three or four years on questions of finance, and there are reasons which would have led me to desire to remain silent on the present occasion rather than subject to a close review the policy and the measures which are now proposed to us, and the grounds on which those measures are sustained. But, having been so closely and so long connected with the finances of the country, I feel that my silence would not be compatible with my public duty. We have now reached a point at which it is of vital importance to the country that the whole of this matter should be brought under careful review, and yet it seems to mo, although I had thought we were all aware of the question we were discussing, that I find no less a person than the Leader of Her Majesty's Government in this House does not appear to be thoroughly cognisant of it. I had the honour of being one of his auditors on Saturday evening outside the walls of this House, and on that occasion he assured a more mixed but very harmonious party that the Government were arraigned upon a certain charge; and in the hearing of the hon. Member for Burnley (Mr. Rylands), who sat near him, he stated that the charge upon which the Administration was arraigned was this—that they did not choose or think proper to impose additional taxes upon the country. Hon. Members on the Ministerial side of the House seem to think that this was a correct description of the charge; but it seems to me that those who make the charge are capable of forming an opinion upon what it is, and it is not a very unnatural course, when we want to know what is being charged upon a Government, to refer to the Motion on which the charge is based. The Motion before the House expresses regret at the amount of the Public Expenditure. That is the charge upon which the Government is to be tried by the House; that is the charge upon which hon. Gentlemen will have to vote. It is perfectly true, when we look back at the amount of the Public Expenditure, that the subject is inextricably mixed up with the policy of the Government, and it is not for me to enter into the question of whether the Expenditure of the Government is or is not a necessary effect of that policy. Having objected to the policy point by point, I am entitled to object to it still, and to object to it in connection with the Expenditure which it has involved. The hon. Gentleman who has just sat clown, after making a most intelligent and temperate speech, recounted us the imposing majorities by which the Government has been supported—120 to-day, 140 another day, 204 a third day, and then I think he said, last of all, 101. Was it really last of all? I think there was another Division of vital importance to the policy of the Government in which the majority of 101 dropped to 60. But, Sir, that is a comparatively small matter. It is all very pleasant for hon. Members to enjoy voting for what is called a vigorous or a spirited foreign policy; but the day will come when they must face the cost of that policy. That day has arrived, and that is the charge upon which the House has to decide and which the country will have to consider. My right hon. Friend availed himself of the opportunity afforded by the munificent hospitality of my hon. and gallant Friend opposite, the Chairman of the Metropolitan Board of Works (Sir James M'Garel-Hogg), to make a speech, and in listening to it I bethought me of the remark often made, I hope untruly, that the clergy are in the habit of making strange assertions in the pulpit because they know nobody can reply to them. It appeared to me that my right hon. Friend, with considerable ingenuity on a happy occasion, gave a direction to the mind of the company, and through that company to the public in general, rather wide of the truth. This is a debate on the Expenditure of the country. The question of the imposition of taxes necessarily enters into this debate; but it enters into it as a matter consequential to the main question, which is the Expenditure of the country. The hon. Gentleman who has just sat down prefaced his speech with a declaration of his belief on financial matters. He said there are two articles in his financial creed—two tests and criterions of good sound finance. One was that it ought to be known which of the two Parties taxed the country the most lightly, and the other was which spent the taxes the most wisely. Allow me, Sir, to plead, though I do not wish for tests of any kind, for the introduction of a third article into the financial creed of, at least, the Secretary to the Treasury, and that is that the income of the country ought to balance its Expenditure. The hon. Gentleman observed that the present Government has been singularly happy in being able to remove important taxes. They removed the sugar duty and the horse duty, and they reduced the Income Tax. That is an observation which in itself is perfectly true; but he set me a-thinking about the manner in which every incoming Government finds itself heir, from the necessity of its position, to the engagements of the Government which has gone before. It is perfectly true they did remove the sugar duty, they did reduce the Income Tax, they abolished the horse duty; but how was it done? What kind of financial heritage did we receive, and what kind of financial heritage did we deliver? The financial heritage which we received was an engagement with the Telegraph Companies, which compelled us to contract £9,000,000 of debt, and a surplus charge unpaid from the Abyssinian War of £4,300,000, or altogether a beneficent and charitable bequest from our Predecessors of the modest amount of £13,300,000. That was the beneficial heritage into which it was our good fortune to enter at the end of 1868. What was the heritage into which it was the good fortune of the hon. Gentlemen opposite to enter? It was simply this—the disposal of a free and unencumbered surplus of £6,000,000. So much for the heirship of the Government, and the manner in which they are accustomed to hand over the affairs of the country to those who succeed them in Office. I shall not enter into that portion of the speech of the hon. Gentleman which related to the Public Debt. That is a matter of great importance, and I leave it to my right hon. Friend the Member for Ponte fract (Mr. Guilders); but I will not pass from it without saying that the hon. Gentleman is entitled to the credit he claims for labouring assiduously and following the good example set him by the First Lord of the Admiralty in endeavouring to keep down that portion of the Expenditure which fell within his control and immediate discretion. There was another remark which I must notice—that referring to the Black Sea Treaty. I am sorry to obliged to refer to it; but the remarks made compel me to deviate from a rule I had laid down, to avoid to-night discussing the merits of foreign policy. The question now before us is quite sufficiently grave, complicated, and extended, without casting our net so wide as to cover all the matters on which we differed on former occasions. I am prepared to subscribe to most of the assertions the Secretary to the Treasury has made. I do not accuse him of any inaccuracy in matters of fact; but I will show that he did not touch the issue now before the House. I say the same of the speech of the First Lord of the Admiralty. How did that right hon. Gentleman proceed? He thought he disposed of the case in this way. He took certain Estimates for the year 1874–5, which were prepared in the year 1873–4 by the Departments, and which, though they did not receive the sanction of the Government of the day, he supposes—and I do not complain of the supposition—might have been adopted by them. He compared these with the Estimates of the present year, showing a considerable increase, and he thought he accounted for this by giving a number of items by which it was covered. I find four most serious and fatal flaws in that method of handling the question. In the first place, the right hon. Gentleman took no notice whatever of the fact that, whereas during the year first named the range of prices for provisions, for material, stores, and all kind of clothing, was extraordinarily high, the Government have no win the Estimates the greatest advantage of a range of prices unusually low. The right hon. Gentleman quoted, in favour of the Government, a sum of £500,000 or £600,000 which was due to the increased pay to the Army. I would venture to suggest that the gain to the Government on stores and materials and clothing from the low range of prices is probably not less, perhaps it is more, than the amount of the increased pay to the Army. What is the value of a comparison of this kind, which carefully takes credit for all the important items from which advantage can be drawn in argument, and which passes entirely over those set-offs which go to the other side, and would destroy the force of that argument? Secondly, as the right hon. Member for the City of London (Mr. Goschen) has shown, the right hon. Gentleman has taken no notice of the ships that have been bought, of the stores that have been bought, of the provisioning of the Malta Garrison for three years, and various other measures borne out of Votes of Credit, and which have enabled the Government to dispense with a portion of the Estimates for the present year. Thirdly, the right hon. Gentleman compares the Estimates of the present year with the Estimates of 1874–5. The hon. Member for Burnley (Mr. Rylands) has not made a Motion about Estimates; he has made a Motion about Expenditure, and it will be, I am sorry to say, a very disagreeable part of my duty to endeavour to show that the Estimates which are made by the present Government in and before the month of April afford no clue whatever to the ultimate Expenditure of the year. The right hon. Gentleman confined himself entirely to the Expendi- ture which arises out of the ordinary administration of the establishments of the country, whereas my hon. Friend contemplates in a large degree, I may say mainly, that Expenditure which arises out of the policy of the Government, to which we objected when it came before us in the shape of policy, and to which we now object when it comes to us in the shape of greatly increased Expenditure. As to taxation, that is a question for the Government, and not for us. We do not admit that there have been necessities in the condition of the world which ought to have created the necessity for imposing new taxes on the country. We allege that partly laxity of administration, but mainly errors of policy, have led to a vast Expenditure; and for those who think that that Expenditure is justified, it is an absolute and primary duty to meet that Expenditure by adequate taxation. I am sorry to be obliged to say a few words on the proceedings of 1860; but they have been misrepresented by the hon. Gentleman who has just sat down, and also by the First Lord of the Admiralty. The hon. Gentleman who has just sat down says that in the early part of 1860 I formed an inadequate estimate of the expenditure of the China War, and that in the month of July I had to come down to the House and ask for a Vote. Now, the hon. Gentleman is not accurate in his recollection of history. I formed no estimate of the expenditure of the China War in the early part of 1860, and I did not come down later in the year and say I did not know exactly what it had cost. That was not the mode of proceeding in those days. The China War, in fact, did not exist in the early part of the year, and I could not possibly estimate the cost of a war which had not begun. But the hon. Gentleman says I afterwards, on the part of the Government of Lord Palmerston, pleaded with the House that we ought to make a provision for the charge of the war, partly out of taxes, and partly out of the balances of the country, which was equivalent to adding so much to the Debt. Upon the back of that he has heaped another charge, that with respect to the erection of fortifications which was proposed in the same year, we did not provide for them upon the Votes, but by the purchase of Annuities to expire in the year 1885.

The accusation is this—that it is inconsistent to object to the proceedings of the Chancellor of the Exchequer on the part of one who was a party to those proceedings in 1860. Now, it was impossible, in my opinion, to fall into a grosser error. What was the position of the country in 1860? It was this—that in a time of peace, I mean of general and European peace, we had done that which has been, I believe, unparalleled in finance. We had in the course of one year raised the Income Tax from 5d. to 10d. in the pound. Now, these were circumstances under which we felt it necessary, when an extra charge for fortifications was adopted, to resort to the method of Terminable Annuities. Those were circumstances under which, when the China War came on, we said that a portion of the cost should be met by taxation. But I will not go further into detail on these matters, because, after all, it would avail but little as far as the country is concerned, if the right hon. Gentleman opposite could make good the charge, with respect to which I believe it is entirely and absolutely groundless. But I come to the main matter that is at issue to-night, and I wish to remark, in the first place, upon the Expenditure itself—its quantity and its quality. I wish to remark, secondly, upon the mode that has now been adopted, by a perfect innovation, of striking the public balances. And, thirdly, I feel it my absolute duty to comment upon the doctrines by which these proceedings are supported, which, in my opinion, are even a great deal more objectionable than the proceedings themselves. I look upon the Expenditure first in the gross, subject to the remarks made by the Members of the Government; and when I say I take it in the gross I find the Expenditure in 1873–4, less the Alabama payment, which had no connection whatever with the operations of the year, to be £73,269,000. The Expenditure of 1878–9, the whole of which was associated with the proceedings of that year, except a comparatively limited sum which had accrued under the form of Terminable Annuities, was £85,407,000, showing an increase of over £12,000,000 in the course of five years of the history and experience of this country. Do not let it be supposed I am going to charge the whole of the £12,000,000 to the responsibility of the present Government. I do not quote it for that purpose. Nor do I propose to enter into a discussion in detail of a matter on which there is a good deal to say, both one way and the other. But I quote it because I think it is a fact that should draw the attention of the people of this country, and they ought to consider in what direction they are travelling with respect to Public Expenditure, and likewise at what rate they are proceeding. But, wishing to get rid of doubtful questions, I come to and I will take my stand upon a question for the purpose of the present night's argument. I will take my stand upon what is called Expenditure for the Forces. The Expenditure for the Forces in 1873–4, including a war which certainly did not grow out of our policy in particular, but for which it was our duty to provide, and which we did provide for to the extent of £800,000—namely, the Ashantee War—was £26,220,000; and upon an average of five years of the Liberal Government, the Expenditure for the Forces was £25,299,000. That Expenditure arose, as I contend, through the operation of causes independent of our choice, but through the operation of free action on almost every point of the present Government—and especially on the policy which they had thought fit to adopt with the support, I grant, of triumphant majorities in this House—but, at the same time, candour will compel the Government to admit that this was in the face of our determined and repeated protests. That Expenditure had increased in those five years, if we compare them with the average of the late Government, to the extent of £6,896,000 a-year; or if we depart from those averages which are apt to be fallacious, and compare with the last year's Expenditure of the late Government, 1873–4, we find the increase is £5,975,000 upon the Expenditure for the Forces, or, in round numbers, an augmentation of £6,000,000. This is an augmentation which I challenge, and I challenge it in the amount which it presents, and for the purposes to which it is applied. I challenge it on the amount which it presents, and I decline to admit any reduction, because I believe that, although the right hon. Gentleman the First Lord of the Admiralty did not tell us the fact, he has profited by the low rate of prices to quite as great an extent as the increase of pay which he was careful to quote. It is not only that we have got this augmentation of £6,000,000 in the Military and Naval Expenditure of the country, but let us observe how this Military and Naval Expenditure has grown. We have had a large reduction in the Estimates this year. Sir, a reduction in the Estimates in the sixth year of Parliament bears an unwholesome resemblance to that which is known as the death-bed repentance. We see how, when Parliament was young, it sowed its wild oats, and how, when it has grown old, there is a semblance of repentance; but we are as yet entirely without any evidence of the reality of the change. In the first year of the present Government, the Expenditure for the Forces was £25,903,000; in the second year, £26,842,000; in the third year, £27,286,000. They were the years before we had entered upon that remarkable career of foreign policy by which the later experience of the present Government has been distinguished. In the fourth year of the present Government the Expenditure rose and developed more freely and largely. We had an increased figure of £30,590,000, and in the fifth year £32,195,000. And now, Sir, it is pretended to say, in a modest and unassuming—nay, attractive and bewitching—form that there is an enormous reduction in the figures before us as to the Expenditure on account of the Forces, which now stand at only £27,332,000, or about as much as it stood in the third year of the present Government. I have stated that I cannot consent to attach any value to that reduction, and I will state my reasons; but, in the meantime, I will say that it would be very disgraceful in an old public servant to be the man to challenge the Expenditure, unless he challenges the main cause to which it is due. I challenge those causes, Sir, from first to last. I challenge them, and have challenged them, in this House from point to point, from their dangerous and subtle, but I grant most successful, commencement in the silly business of the purchase of the Suez Canal. I will not enter into detail on that subject. I will only say two things. You have increased the territory of the country, it is true. You own the Fiji Islands, which you did not own before. You have got what you call "the occupation of Cyprus," which you had not before. You have occupied by force of arms a portion of Afghanistan; you have made a disastrous acquisition of territory in South Africa; you have enlarged the Empire, and in enlarging the Empire you have simply augmented the drains upon its resources; and you call to mind the significant words of Scripture—"Thou hast multiplied the nation, but not increased its joy." This is not all. You have not by your foreign policy improved in one single case your relation to any nation or any race on the face of the earth. I come now to two remarks, which I think were most unwise remarks, one made by the First Lord of the Admiralty, and the other by the Secretary to the Treasury, who could not resist a flight into the higher region of politics by way of rounding off their perorations. The First Lord of the Admiralty said that this expense had been incurred in order to bring about a more satisfactory estimate of the position of England in other countries and bettor relations with other Powers. That is a declaration of the First Lord of the Admiralty. I want to know what is the nation or race upon the earth with which you have improved your relations? Is it with the Aborigines of South Africa? Is it with the gallant Hill Tribes of Afghanistan? Is it with the oppressed races of the Turkish Empire? Is it with the 80,000,000 inhabitants of Russia? I am afraid, on the contrary, that what has been done has contributed more than anything that has ever been done in the like time—certainly far more than was done by the upright and straightforward proceedings of the Crimean War—to estrange the affection of the people of Russia from the country to which we belong. But the right hon. Gentleman undertook to say that our relations with foreign Powers are now upon a more satisfactory footing. What is the proof? Have you been so successful in bringing about, by this harmonious state of relations with foreign Powers, the settlement of the questions which you thought you had settled by the Treaty of Berlin? Have you been able, by this wonderful state of harmony which you have created, and in consequence of the opinion which you have inspired as to the valour and the might of England, to carry with you the Powers of Europe in arranging the question of the Greek Frontier, or in allowing the entry of Turkish troops into Eastern Roumelia? Where, I would ask, are the evidences in your performance of the boast you so unwisely make? When the right hon. Gentleman was not First Lord of the Admiralty, but was most usefully employed at the Treasury, we were told, on higher authority than that of the right hon. Gentleman, in what state he found the foreign relations of this country when the present Government acceded to Office. On the 19th of March 1874, Lord Derby—["Hear, hear!"]—Lord Derby—[A laugh]—yes, the present Lord Derby—[Ironical cheers]—Lord Derby—[cries of "Go on!"]—I will go on—the present Lord Derby, who, until he had occasion, in the operation, I presume, of his own conscientious convictions, to quit your ranks, it was your daily habit to extol as a model of intelligence and wisdom—it was Lord Derby, I say, who, when he possessed your entire confidence and was your organ for the purposes of foreign policy, spoke, on the 9th of March, 1874, words in flat contradiction of those which we have heard from the First Lord of the Admiralty. Lord Derby then told us— All I can say is that at the present moment "—he had then been a few clays in Office—"the position of the country with regard to our foreign relations is most satisfactory; there is no State whatever with which our relations are not most cordial."—[3 Hansard, ccxviii. 49.] That was the state of the nation. Now, it was necessary for us to spend millions—you say to improve—I say to shake and to disturb, and, in some too well-known cases, to embitter relations. Shall we go back now to the Secretary to the Treasury and his Black Sea Treaty? I should like to ask the Secretary to the Treasury if he has bestowed a single hour on the investigation of the history of that transaction? He told the House that it was owing to us that the clause in the Treaty of Paris relating to the Black Sea was done away with. Is not he aware that the Powers of Europe, before Russia declared that she would not have the clause, without exception pronounced it to be their opinion that she ought to be released from its operation? At the time when the thing happened, I believe Austria would have joined England if we thought fit, but the Turks would not have joined us; but I should like to know what kind of war could we have carried on in union with Austria in refusing that which had the approval of France, and Italy, and Germany, and to which Turkey herself was an assenting party? This is the sort of accusation which is brought against the late Government. I have now said enough, I think, without going into further detail, to justify my statement that I was not going to object to the mere amount of the Expenditure of the Government—though I do object to it—but that I base my objections especially on the policy from which that Expenditure has arisen. The second question to which I wish to call the attention of the House is one which, in my opinion, is not less serious, because this is a rich and powerful country, and because the fact of a few millions being wasted though very important—and I do not wish to disparage it—yet is less important than the mode and principles on which our finances are conducted. Certain statements have been made to us, from year to year, on the authority of the Government, as to our financial position; and as in dealing with them I am obliged to comment sharply on proceedings of which the Chancellor of the Exchequer is the organ, I desire, in the first instance, to render him a tribute which I think it is my duty to pay him. I do not think any man within the last 40 years—and certainly I include myself, I need not say, among the number—has taken the office of Chancellor of the Exchequer with as great a capacity for the discharge of its duties on the whole, from his general intelligence, his experience, knowledge, and assiduity combined, as the right hon. Gentleman. But while I am most desirous that he should have the benefit—if any benefit can accrue to him from such an admission—and although I have done what in me lies to give his plans a fair hearing, I am bound to say I have known no Chancellor of the Exchequer from whose proceedings it has been my duty in my own mind, and occasionally in this House, so emphatically to dissent, or whose administration I consider to have wandered so far from the well-known traditional and salutary principles of English finance. Now, Sir, I object to the mode of balancing the public accounts. How is it done for 1878–9? Why, there is a deficiency of £2,291,000. Does that represent the real deficiency of the year? Most certainly it does not; because my right hon. Friend attached to the charge of the year the set of Exchequer Bonds which he thought fit to issue and promised to pay this year, and which amount to no less a sum than £2,750,000. Let us go back to the history of the Bonds of 1858, which Mr. Disraeli declined to pay, and which, I say, he was right in declining to pay, for he had nothing to do with the creation of those Bonds. They grew out of the Crimean War, and were to be handled as part of the general finance of that year. But these £2,750,000 Exchequer Bonds of which I am now speaking are essentially part of the deficiency of the year; so that the real deficiency, instead of £2,291,000, is at least £5,000,000. You have chosen, deliberately and gratuitously, to make war on the Afghans, which cost you up to April some £2,000,000, and you have declined to take the charge of that war directly on the English finances. You are going to borrow money for the purpose, and to lend it to India; and I am by no means sure that that £2,000,000 will not ultimately prove to be a portion of the deficiency for 1878–9. But I desire to dwell more pointedly on the year 1879–80, for the purpose of illustrating the meaning which I wish to lay before the House. We have got an apparent reduction of Expenditure for the Forces exceeding £4,000,000, and a total reduction of Expenditure exceeding £5,000,000, and we are told that there is to be a surplus of £1,900,000. Now, it cannot, it appears to me, at first sight, but create astonishment that those who offer us this splendid prospect, instead of being hailed with gratitude and acclamation as the saviours of their country, and as the most prudent, thrifty, bountiful Administration ever known, should be gruffly met by a Motion such as that of my hon. Friend the Member for Burnley, censuring their conduct; and by my right hon. Friend near me, the Member for the City of London (Mr. Goschen), declaring it to be his opinion—in which I concur, as do nearly all the Members on this side of the House—that that Motion is deserving of our support. And how far, let me ask, are we justified in that support? In the first place, there is no surplus at all. The £1,904,000 which is presented to the eyes of delighted beholders as the surplus of Revenue over Expenditure has no existence. It was the absolute duty, in my judgment, of the Chancellor of the Exchequer to have dealt with the grave question of the war in Africa in a manner diametrically opposite to that in which he did. My right hon. Friend said—"I have consulted my right hon. Friend the Secretary of State for War and the First Lord of the Admiralty, and I am not in a position to give any definite or distinct estimate with regard to the expenditure for the Zulu War." That is the statement of the Finance Minister of England, acting on behalf of a Government distinguished for their spirited foreign policy; he can give no clear estimate with regard to the expenditure of the war, and therefore he will assume nothing at all, and will put down the whole sum as a surplus of Revenue. [The Chancellor of the Exchequer: I did not say that.] I beg pardon. I am strictly accurate. I know what my right hon. Friend said; he said—"There is to be some charge, no doubt; and it would go against the £1,900,000." My allegation is, that this money is put down as a surplus, and has gone forth to the country as a surplus. Of the admirable speeches that we all make in this House, do you think that anything more than the summary of half-a-dozen lines is read by one person in a thousand? What has been read in the country, and what is insisted upon in the Conservative Press, is that there is a surplus of £1,904,000. Here is a Parliamentary Paper submitted to the House, and circulated through the country, with the amount in those attractive and delightful large letters to which I have referred. That is the delusion which my right hon. Friend has encouraged, if not created. But now let us consider this matter. We are generally governed in financial as well as other matters by precedent. I do not know any Government that has done so much to set aside the authority of precedent as the present Administration; but I am thankful to say that precedent is still of some importance in this House: and I am quite sure that the regular ordinary Parliaments of England will not depart from that most salutary principle, and will not forego that great safeguard of wise action—a careful regard to precedent. The Chan- cellor of the Exchequer says he cannot form any distinct or definite estimate of the cost of the Zulu War. Did he ever hear of any Chancellor of the Exchequer who could form any definite or distinct estimate with regard to any war whatever? What is the nature of the Zulu War that makes it impossible to form a definite and distinct estimate? When a Finance Minister of this country cannot form a definite estimate, it is his duty to form a liberal and a large estimate. I speak not from any mere opinion of my own, but in accordance with the principles of the finance of this country. I say, in what he has done he has departed from precedents which are most striking, and are also, as I believe, uniform. If the precedents I quote are precedents in which I myself am concerned, I do not claim the smallest merit for that. I quote them because I have an accurate and intimate knowledge of the facts, and because I had not the slightest idea that I did any more than conform to the rules which the whole House of Commons of those days would have cried out against if I had attempted to compromise them. In the year 1854 I brought in the Budget on the 8th May. The Crimean War had just broken out. Was it in my power to form a definite and distinct estimate of the Expenditure in the war which had just been declared, but in regard to which no military operations of a serious character had been taken? In that respect it was different from the case of this Zulu War, so sadly inaugurated by the destruction of many of our gallant countrymen. Did I come down to the House and plead that I was not able to form a definite and distinct estimate of the cost of the war? On the contrary, the Military Expenditure of the preceding year—1853—had been £16,506,000, and we put Estimates on the Table for raising that Expenditure by £11,000,000 to £27,440,000. I was followed by my right hon. Friend—my greatly esteemed Friend—Sir George Lewis. What did he do? Did he say he could not form a definite and distinct estimate of the cost of the war, and had no power to form one? This Zulu War is one of the easiest wars we have ever had to estimate for. It lies within a comparatively small area. It can be done. It cannot be done exactly; but I will stake my experience that it can be done. It ought to have been done. According to the principles of our finance, and in other Parliaments, it must have been done. What did Sir George Lewis do in 1855? The Military Expenditure which I had raised by £11,000,000 had exceeded my Estimate of £27,500,000 by £1,000,000 or £2,000,000. That Estimate he raised to £49,800,000. Do yon suppose he presented a "definite and distinct" Estimate? No, Sir! but he did not search for all expedients by which to avoid facing his public duty and incurring responsibility or unpopularity by charging heavy taxation. But we are charged with our conduct in 1860, and I refer to that subject now in a different aspect to that in which I spoke of it a few minutes ago. On July 4 we heard that the Chinese Government had rejected the overtures of peace which we had made. It was our duty to come down to the House and ask for Supplies. Well, Sir, nothing would have been more agreeable to me at that time personally than to have acted upon the principles now in vogue. I might have said—"The time for making the financial arrangements of the year has passed by many months—(our Budget was in February)—it would be very inconvenient to disturb the public mind. We will, therefore, resort to a temporary expedient." I might have said—"The country is very greatly depressed." The country was seriously depressed, and it had then the prospect—unfortunately afterwards realized—of the very worst harvest that had occurred for half-a-century. But I did not plead that, and I had no merit whatever in not pleading it. I only fulfilled the commonplace duty of my Office in refraining from the plea that I could not make a "definite and distinct" estimate, and that my right hon. Friends could not make such an estimate of the cost of the war in China. What did we do? We asked the House of Commons, which had given us a Tote of Credit in the spring for £500,000, to raise that Vote of Credit to £3,800,000. Because we could not make a "definite and distinct" estimate we took a large and a free estimate; and while our vote of Credit—of the details of which we knew, and could know, nothing—was £3,800,000, our Expenditure for the year fell within that Vote of Credit by £300,000, and amounted to £3,000,000. That is the mode, and these are the principles, upon which every Finance Minister that I have known for half-a-century has acted. These are the elementary principles of finance, and it is our duty to watch carefully, and to condemn the first attempt to depart from them. What is the effect of this doctrine? It cannot be proclaimed too distinctly that so long as the methods of the present Government are in uso—of which the present Finance Minister is the organ, but I never will believe can be the author—that annual Budget and Financial Statement to which the Representatives of the people—to which the whole country—has been accustomed to look once a-year in order to comprehend its financial position, that April Budget is tending to become absolutely worthless. Its value is already enormously impaired, and with it the control of Parliament is impaired. What is the position of Parliament under a system under which we have one Budget in April, another Budget in July, and another in the next February, before the year is over? Why, that we go through the form and semblance of financial control, but might just as well leave the whole matter in the hands of the Government, calling it afterwards to account; for the real financial control—the control by anticipation—is become absolutely impossible. Unfortunately, it is impossible to meet this question without some recollection of the fact that this is the sixth year of Parliament, and according to all precedent it would be the year of Dissolution. ["No, no!"] What precedent, then, is there the other way? What precedent is there for a seven 3'ears' Parliament? [An hon. MEMBER: Lord Palmerston's, in 1859.] Will the hon. Gentleman consult one of those very recondite authorities—Mr. Vacher or Mr. Dodd? He will find that the Parliament dissolved in 1865 was elected in 1859; and if my arithmetic does not err, from 1859 to 1865 was a period of six years. Sir, this is the sixth year of the Parliament. We have a war raging in South Africa, independently of other circumstances that are dangerous and menacing. The Chancellor of the Exchequer declines to give us any estimate of the expenses of the war in South Africa. But although he does not give us any estimate, I believe that those who consult the Colonial journals can arrive in a certain way at the opinion in the Colony, and can obtain, not trustworthy estimates, but some outline of the ideas that prevail. The ideas represent several millions—and, in some cases, many millions—as the probable cost of the Zulu War. I hope that may not be so; but I say that it is for the Government, who have means of forming a judgment which we do not possess, to give us the best estimate they can, and to put it down as a charge. They are not to treat it as something about which there is not a doubt. But when there is a doubt about the particulars, they should solve that doubt by making a liberal estimate of the amount. I will go back to 1868. In that year an estimate was given of the cost of the Abyssinian War. That estimate was, I think, between £4,000,000 and £5,000,000. We went to the Dissolution under the belief that that was to be the cost of the war. Well, we entered upon Office after the Dissolution, and then for the first time we learned, and the country learned, that the true cost of the war was £9,000,000. My right hon. Friend now pledges himself to nothing; and even if another £9,000,000 should be the cost of that war, it will probably fall on those who may be the Ministers of the Crown after the next Dissolution, should the Dissolution take place according to precedent, to find the money for meeting the charge left by the right hon. Gentleman. Sir, in my opinion, Parliament has a most serious question to consider, quite apart from the mere figures of this case, in the subject that I have now touched with regard to the mode of presenting the Expenditure to the country. It has often happened to me, in the course of my financial experience, to have consultations with Ministers of foreign countries on their method of finance; and I have invariably said to them this one thing—"Depend on it, if you mean to have anything in the nature of popular control over Expenditure, that which beyond all other things you want to do is to have a full Financial Statement made once a-year, embracing the entire charges to be incurred." That is a principle which appears to me to have been trampled under foot by Her Majesty's Government. I must, Sir, again compare their proceedings with the proceedings of the former Government, not because there was any particular merit whatever in our proceedings, but simply because I believe they afford a fair example of the application of ordinary rules. I say, first, that it is absolutely necessary, if we are to exercise control, to have a Financial Statement once a-year, setting apart, of course, those excesses which, from circumstances wholly new, may arise in the course of the year. Now, what is the state of the case? Here are the five years during which the late Administration existed. In two of these—1871 and 1874—there were such additional charges, in 1870–1 the Franco-German War led to the proposal of a considerable Vote of Credit, and in the last year of the late Government there came the Alabama charge. In these two years the final charge for the year went up to something more than £2,000,000 in excess of the April Budget. I have named the causes of this, and the House can judge whether they were justifiable or not. In the other three years I will compare the April Budget with what I will call the final Budget—that is to say, the whole amount of charge asked by Government from Parliament during 12 months. In the first year of the late Government the final Budget corresponded with the April Budget, except that there was an excess of £275,000; in the third year the excess was only £125,000; and in the fourth, £350,000. Those small excesses may, I believe, be entirely justified by the nature of the system we now pursue, and which in certain items of the Civil Estimates makes it absolutely necessary to apply towards the close of the year for certain new credits. Of course, the figures I have given do not at all imply that the Expenditure of the year was in excess of the original Estimates. I have shown that £200,000 or £300,000 was found under the late Government to be the measure of this excess. Now I come to the experience of the present Government. In their first year the difference between the April and the final Budget was £1,016,000; in the second year, £1,209,000; in the third year, £1,127,000; in the fourth year the excess was £6,875,000; and in the fifth year, £3,652,000. Now, Sir, the effect of this is that the House loses its control, and the Government loses its responsibility, and the fundamental principle of keeping the income up to the charge is forgotten and got rid of. The House loses its control, for in the pressure of Business it is impossible to make up a true annual Statement more than once a-year. The Government loses its responsibility, because in the beginning of the year they come down, saying they are not going to lay on a tax because they cannot form an estimate of what the charge is. They wait until the close of the year, and then come down, and, as in 1878, say—"It is too late now to lay on a tax, because it cannot be gathered within the year." My right hon. Friend, and the Government to which he belongs, will certainly be remembered for many long years in the history of this country. I do not now intimate the sense in which they will be remembered; but this I say—that, whether they are right or whether they are wrong, their modes of proceeding in finance are entirely subversive to all those which have heretofore been considered the true precedents to follow. What were the doctrines given to us by the Chancellor of the Exchequer in his Financial Statement? The first is, that a Minister need not estimate for any war in actual progress unless he knows definitely and distinctly what the charge will be. Under cover of that principle no such estimate could ever be made, because it would never be possible to know definitely and distinctly what the charge of a war might be; and a Chancellor of the Exchequer who wishes to emancipate himself from responsibility would be able to avoid submitting estimates for such a war. What is the second doctrine? Taking the distress of the country, which my right hon. Friend says is not an excessive distress—there is just enough of it to make it disagreeable and inconvenient to impose any additional taxation—the distress of the country is a reason why the public income shall not be made adequate to meet the charge. Where did my right hon. Friend obtain any sanction for that principle? But he was not satisfied with denouncing those who would lay on taxes when there is distress in the country—the Chancellor of the Exchequer sneered at it. He called our finance heroic finance—a thing to be avoided. The meaning of that phrase was obvious enough. But the man who used that phrase was the man who, in his deliberate reflection, eulogized the proceedings of Sir Robert Peel in 1842. Was there no distress in 1842? It was one of the most distressed years which this country has ever known in the lifetime of any man who hears me. Sir Robert Peel had then to deal with the finances of the country, and in circumstances even less fortunate than those which now exist, and with great prescience he brought into view the charge of a few millions entailed upon India for the Afghan War. He said—"Depend upon it, you cannot afford to overlook the state of Indian finance." Is it enough now to point to remote dangers which may possibly arise? This is not the time to enter into detail upon the finance of India. That question has grown to such vast and menacing importance that it must, I think, form the subject of separate, serious and early discussion in this House. If I am not much mistaken, we have arrived at a time when, if measures very different from those of the present Government be not taken, the people of England will have to face the formidable duty of assuming the responsibility of the charge and debt of India. But, Sir, there was distress in 1842, and Sir Robert Peel did not make that a reason for imposing no taxes, but he imposed them, and he has been commended for so doing by my right hon. Friend. What more does my right hon. Friend say in his book? He says that they all recognized the duty of funding, and that any other process would be most mischievous and enervating. That is his doctrine, and he is a pupil of Sir Robert Peel, and received his first political education in the atmosphere which was pervaded by the principles and practices of Sir Robert Peel, and lauded in the warmest terms the proceedings of Sir Robert Peel in 1842. Why, what was the very first measure of Sir Robert Peel on entering Office in 1841? It was to fund between £4,000,000 and £5,000,000 of Exchequer Bonds. This is the "mischievous and enervating" process to which the Chancellor of the Exchequer will not resort! But my right hon. Friend says he has discovered a via media, and he will make provision by temporary instruments to keep the debt before our eyes. But, again, my right hon. Friend dealt with the ques- tion also on a former occasion, and what he now calls a via media he then called by a very irreverent name which I am almost ashamed to quote. He called it a financial nostrum. [The CHANCELLOR of the EXCHEQUER dissented.] I would remind the right hon. Gentleman that it is on page 15. [The CHANCELLOR of the EXCHEQUER: Oh! I know it.] This, Sir, is what the right hon. Gentleman said of Sir Robert Eeel—"Eirst he swept away all idea of meeting the difficulty with financial nostrums." He then goes on to enumerate them, and among them is the issue of Exchequer Bonds. The financial nostrum of 1842 is now exalted into the via media of 1879. These are the indications of the progress of the human race in the matter of finance, of the survival of the fittest, the evolution of all wisdom, and the advance towards perfection in the 27 years that have since elapsed. On every point my right hon. Friend is at daggers drawn with the finance of Sir Robert Peel. There is no principle on which Sir Robert Peel proceeded that my right hon. Friend has not reversed. I have gone through most of them; but there is yet one more. I need not dwell upon it, because it has been dealt with before. He says that taxes ought not to be imposed when you have only to provide for one year or two of deficiency. How does he know that he has only got to provide for one or two years? He has had to provide for two already, or rather he has not provided for them, and how many more there are to come I know not, nor does he; but this I know—that until there be an alteration in these methods of procedure, by which Her Majesty's Government have disturbed needlessly Europe, Asia, and Africa, this country will not regain its wonted tranquillity of mind nor feel the confidence which it ought to feel in the course of public affairs, and which is so necessary in order to enable its industry and its enterprize to pursue their course, unchecked. I need not dwell upon the other part of the doctrine which the Chancellor of the Exchequer has now invented—namely, that you need not mind an annual deficit or two, and that you need not provide for them, but that you can balance them when you have a surplus; and that, on the other hand, when you have a surplus you should not give it away. What did he do, as my right hon. Friend (Mr. Goschen) has shown? When he had a surplus he gave the whole of it away; and yet when he has a deficit he invents a doctrine to show that that deficit need not be supplied until he has a surplus. With regard to this scheme, one of the proposals is really inoperative—namely, that half of the doctrine which lays it down that deficits need not be supplied; and the other half of it—namely, that surpluses need not be given away, is a pure airy and imaginary abstraction, and will not keep an additional pound in the pocket of my right hon. Friend, if ever he should again be so fortunate as to have a surplus. Well, these are the doctrines which are now in vogue, and against which we desire emphatically and sternly to protest. What were the counter doctrines which were enforced among the Liberal Party in my early life, and of which it was the political pride of the Conservative Party under Sir Robert Peel, when, in an unhappy moment, Liberal finance had deviated from them, that it was their duty and their honour to restore the strict observance? If there was one thing more than another that gave Sir Robert Peel his position in the estimation of the country, long before the question of Free Trade came up, and that in 1841 designated Sir Robert Peel as the coming Minister, it was this—that under Lord Monteagle laxity had been allowed—although nothing to compare with what we see now as a matter of every-day practice—to creep into the application of financial principles, and the country had fixed upon Sir Robert Peel as the man that would adhere to those old principles. And what were his rules? I will venture to say they were to make moderate Estimates of his Revenue and to make full Estimates of his charges. His rule was to bring the estimated Income of the country up to the estimated Expenditure of the country. With regard to moderation of Estimates I will say nothing, except that I observe the Estimates of the present Administration have come pretty close upon the results; the receipts have not been as liberally estimated as they were upon the whole in former times. But I do not make that a matter of charge, because it is possible that it may be due to circumstances affecting all Estimates. But as to making full Estimates of charges, which are oven more important than making moderate Estimates of Revenue, I have shown that the present Government have created fictitious surpluses, and sent forth large letters of credit to the country by excluding from their balances altogether charges that they found inconvenient, and that would show them standing in a prospective deficit, or that would impose upon them the laying of new taxes that would be unpopular. Sir Robert Peel's principle was this—that by those modes of handling Expenditure and charge he hoped to secure in bad years an equilibrium, and to secure in good years a large or considerable surplus. Subject to these rules, his principle was to give away the balance of a surplus when he had it to dispose of, and to give it honestly; but the present Government invent an abstract doctrine against the giving away of surpluses. I want to know whether, tested by results, these principles of Sir Robert Peel were not sound principles; whether they did not result in a considerable reduction of the national burden and in a great diminution of the National Debt, and in maintaining the confidence of the country in the modes of its financial administration? Then Sir Robert Peel's principle, above all, was that which appears to me to have been entirely forgotten—namely, to make a fair balance between the charges and the Expenditure. He likewise sought to do something else which we do not hear mentioned now. Of course, in the experience of a country of this kind, it will necessarily happen that new wants will emerge. Well, whenever a new want emerges, we immediately hoar of a new charge accompanying it. But in better times than these, both under a Liberal and Conservative Government, there was a constant study to meet those new wants and the charges they entailed by abolishing charges that were unnecessary, and by careful, strict, unceasing vigilance, getting rid of them. There were multitudes of new wants for which provision was made between the time of the Reform Act and the Crimean War; and all those new wants were met without increasing the general Expenditure of the country. Those were the principles on which our finance used to be administered. Those were doctrines opposite to the doctrines of my right hon. Friend. It is impossible to conceive two modes more widely at variance. They are not only distinct from one another, but they are contradictory to one another. The wit and ingenuity of man cannot reconcile them. We know what the result of one of them has been. The application or endeavour to apply the former system resulted in the disappearance of the late Government, for which Government I claim no credit whatever, beyond the desire to act in consistency with the sound precedents and rules which were handed down to them by their Predecessors. But since that time the whole of this system has been turned inside out and upside down. We have lived into a region of new ideas. We have a new code of rules laid down for us. It is the duty of Members of this House to endeavour to bring these matters clearly and fully to the knowledge of Parliament and the country. It will be the duty of Parliament, in the first instance, to decide upon them, and of the country in the last and final issue. I hope that those who take such dark views as I do of recent proceedings will miss no effort to cause these matters to be fully and thoroughly understood. If the country approves this financial revolution that, as I have shown by hard facts and figures, is in progress, the country is its own master, and can return again a Parliament like-minded with the present to perpetuate an Administration under which we enjoy such bounteous store of financial as well as other blessings. From my point of view, the matter is a very different one. I do not undertake to predict what this Parliament will do, or what the nation will do in considering its own interest, and in making provision for its own fortunes; but, unless I am mistaken, the doctrines that are now promulgated on the part of the Government are financial delusions; and, if so they be, I can only say I am convinced of this—that the longer they last, the more complete sway they obtain for a time under the administration and influence of the Party opposite, the sharper will be the re-action when it comes, the more complete the reversal of your momentary triumph, and the more severe the retribution politically inflicted upon the Party that has invented these erroneous doctrines, and that has too fatally carried them into effect.

MR. HERMON

remarked, that the right hon. Member for Greenwich (Mr. Gladstone) had spoken with a gravity which contrasted strongly with the levity and the off-hand manner of the Mover of the Resolution; and it might be fairly assumed that every objection which could be taken to the financial proposals of the Government had been fully stated by the right hon. Gentleman. The hon. Member for Burnley (Mr. Rylands), when he indiscriminately assailed everything that had been done by the Government, and sought to excite merriment in the House, was really "bubbling" the political Friends who sat near him. The question before the House was a very grave one; and if an adverse vote were come to that night, the result would not only be serious to the Government, but would inflict still further injury on the country. The Resolution began by expressing regret at the increase in the public Expenditure. They all agreed in that sentiment. The right hon. Member for Greenwich had not condemned the increased Expenditure itself, so much as the absence of a provision for meeting it. Now, the question was, whether that Expenditure had been necessary, and whether it had not been necessitated, to a certain extent, by the action of the House? He knew not whether the estimated Expenditure for the present year would be exceeded or not; but the injudicious speeches made in that House, and out of it, by men on both sides, might have the effect of creating circumstances which no estimate could contemplate. During the Russo-Turkish War the inflammatory speeches delivered in this country produced an Expenditure from which we were now suffering. Those speeches, to a considerable extent, paralyzed the action of the Government; and he believed that had Her Majesty's Ministers, at the time of the struggle at Plevna or before the crossing of the Balkans by the Russians, acted in a firm and decided manner, this country would have been relieved from a great amount of anxiety as well as of expense. He thought, however, that the Government had now only provided that degree of assurance for the interests of the nation which was needed in time of desperate trouble. Of the £6,500,000 which had been added to the Expenditure since 1874–5, £1,500,000 was due to the increase on the Vote for Education. That and other items were necessitated by the Acts passed by Parliament itself. Looking to the unsettled state of things all over the world, he regarded it as a matter of congratulation that a Conservative Government had preserved this country from a costly and terrible European war. As to the Zulu War, it had been shown that the Government were not responsible—in fact, that it had been commenced contrary to the express instructions of the Colonial Office. Hon. Members who complained of the increased Expenditure ought to watch the Bills which passed through the House. They had had measures brought forward with regard to prisons, lunacy, and the police; and now there was before the House an Ancient Monuments Bill which, he believed, would entail on the public a new charge of between £200,000 and £300,000 a-year. The Trade Marks Act, and all sorts of Acts, were passed with the idea that they would benefit the commercial community; but, as a member of that class himself, he said that the less Parliament interfered with it by legislation the more thankful it would be. Of the four Resolutions placed upon the Paper by the hon. Member for Burnley, only one was to be pressed to a division, and that was the very one with which all the House could agree, because they must all regret the great increase in the Expenditure of the country, as they might regret an unavoidable increase in their own expenditure. The right hon. Member for Montrose (Mr. Baxter) had alluded to commercial distress and the failure of banks. But so far as the Eastern trade was concerned, he would say advisedly that those who had failed deserved all they had got. They had been bolstered up by banks, and so a fictitious trade was supported which was not creditable to the country. The causes of the existing depression were to be found in the four bad harvests we had experienced at home, and the two severe famines in our Dependencies. Moreover, foreign competition was telling upon our trade, although he believed that our innate energy would enable us to compete successfully with the foreigners eventually. Other sources of depression were to be found in our extravagant mode of living, and in the non-payment of dividends upon foreign loans. The Press of this country had adopted the course of decrying our own productions, which must have a deleterious effect upon our trade. The wages dispute had also conduced to the present depression. He believed that all these were causes which had not been put in operation from any action of the Government. He regarded the Resolution of the hon. Member for Burnley as a Party device, constructed for the purpose of catching votes; and he therefore should deem it his duty to give the Government his best support.

MR. RATHBONE

I had not intended to take part in this debate until the right hon. Gentleman the First Lord of the Admiralty attempted—I think unsuccessfully—to explain away the serious warning given by my right hon. Friend the Member for Montrose; but I think it most important, in the interest of our commerce and manufactures, that there should be no mistake as to the very serious position in which this country is now placed, and the absolute necessity that she should have full command of her resources and energies, if she is to extricate herself from the difficulties which threaten her commercial and manufacturing power. To show that I am expressing no hastily-formed opinion on this point, I may refer to a most unpalatable warning which I felt it my duty to give, more than two years ago, to the working men of Liverpool, that a period of great difficulty to this country was approaching, which would severely strain the resources of all classes of the community; and a year and a-half ago I repeated the same warning to the commercial classes in the columns of The Economist. The numerous communications which I received in consequence of the letter last alluded to, and all that has occurred since, have tended to strengthen my opinion that the present crisis in the affairs of England is not merely an ordinary ebb from the ordinary flow of commercial and manufacturing prosperity, such as has occurred every 10 years or so, but is of a more serious character. The long duration of the present distress, the way in which it is not confined to our country only, but is extended to most countries throughout the world, alone would show that it is not merely one of those peri- odical crises to which we are accustomed, the fact is, that this country has now to face a fierce competition for her commercial and manufacturing preponderance with other nations, who have learned from her to be free, and are, with the energy which freedom gives, fiercely competing with us for the commerce and manufactures of which we once had a preponderance almost amounting to monopoly. Some experienced manufacturers and merchants fear that our material prosperity has culminated, and that we must resign our pre-eminence. But I agree with my right hon. Friend the Member for Montrose that this is no case for despair, for hopeless folding of our hands, and resigning to other nations that proud position which the energies of our forefathers and our own have gained for us in the commerce of the world. But I do not hesitate to say that success in the struggle is impossible unless this country is allowed to do what France is doing, what Germany is doing, what America is doing—to devote its resources, un-wasted by war, and the extravagant expenditure which war creates; and, what is still more important, is allowed to bring to the task before it the whole of her energies, undissipated by political uncertainty and excitement. Meanwhile, I think the Government takes far too sanguine a view of the present state of affairs. It is quite possible that the extreme abundance of money, the consequence of mercantile distrust, may find vent in an outburst of speculation, which may, for a time, give us the appearance of fictitious prosperity, only to be followed by re-action. With the purchasing power of our exports diminishing in six years by £58,000,000, while the expenditure of the country and its consumption has only slightly diminished, it will require a period of economy and retrenchment which will not give the Chancellor of the Exchequer abundant means, and it will require a period of concentrated energy and exertion to become again prosperous. Now, the First Lord of the Admiralty said that he failed to see that the Government were responsible for the present distress. I have never held—and I believe no one on this side of the House holds—the Government responsible for causes which have originated the present distress, any more than the captain of a ship is responsible for the storm which overtakes his ship in mid-ocean. But the captain is responsible if in such a storm he so handle the ship as to increase beyond endurance the strain upon her, or if he so acts as to divert the energy and attention of her crew from the measures necessary for her safety. That is just what we accuse the present Government of having done; and we do, and shall, hold them responsible before the country for continuing to do so by their restless and weak foreign policy. We complain that at a time when our commercial and manufacturing rivals—especially France, America, and Germany—are in the most determined manner refusing to increase the troubles which oppress their people by adding to them those of foreign complications and expenditure on foreign wars—at a time when economy and the example of economy is so needed—our Government is allowing us to be plunged in all kinds of foreign complications, involving warlike expenditure, preventing national progress, and, by the uncertainty which such a state of things produces, discouraging commercial enterprize, of which quiet and security are the very soul. But the evil effects of the present course of the Government are much more serious than any question of waste of the pecuniary resources of this country. The wealth of this country is so great that it might survive extravagance of that sort; but what our prosperity cannot survive is that at a period like the present, when, I repeat, it will take all our energies to maintain our position, that the energy, and the inventive power, and the enterprize in improving machinery and economizing labour in every way, should be discouraged and prevented, by men's minds being taken off their own business by the excitement of war, the fear of war, or the sort of feeling that nobody knows at any moment what may happen next. In times of excitement people carry on their business from day to day, as they are obliged to do; but they do not improve, they do not invent, they do not economize as they would if their whole attention were concentrated on their own business, as it ought to be, for the salvation of the country at the present moment. The First Lord of the Admiralty denies that the Liberal Party value peace, economy, and reform more than he and his Colleagues do; and no one who knows them will doubt that he, and the Chancellor of the Exchequer, and the Home Secretary, and probably the majority of their Colleagues, cannot view with approbation or indifference the present state of things; but so far from that relieving them from responsibility, it intensifies it, while they allow their less prudent Colleagues to pass the word l'audace toujours l'audace, and thus convey to restless and ambitious spirits in every part of our Dominion the understanding that a disturbing and aggressive policy would be approved of, or, at least, condoned. To conclude, then; we do, and must, hold the Government responsible for having by their policy made it almost impossible for the country to recover from its present distress, or to hold its own in the fierce struggle in which she is now engaged with other nations for the maintenance of her commercial and industrial position; and we complain bitterly that they have imposed these risks and sacrifices on the nation for no great cause of freedom and justice, but in undertakings which we consider unnecessary, and, therefore, unwise and unrighteous.

MR. PELL

denied that the policy of the Government had in any way tended to bring about the depression which at present affected agriculture, and which seriously affected the landed interest. The profit of the agriculturist in ordinary years was probably about £34,000,000 annually, and the Income Tax Return under Schedule B agreed with that conjecture, the assessment under that Schedule amounting to £69,000,000, half of which sum might be taken as the measure of tenants' profit. If so high an authority as Mr. Caird gave figures, from which it could be deduced that three bad seasons in everything except barley gave a loss of £21,000,000 out of the £34,000,000 of profit, it might be fairly said that the depressed condition of agriculture could not be traced to the policy of the Government. The Government had very properly been firm on the question of Free Trade; but suppose they had desired to make matters better for the farmers, they might have wavered as to Free Trade, and made concessions. Prices might have been driven up for a time, and then they would have had a Motion, not like the present one, but condemning the Government for having departed from the principle of Free Trade. There had been some confusion in the debate caused by hon. Members arguing from different sets of figures. He wished to point out that the figures in the Estimates which were really due to the policy of the Government, were not as large as they were said to be by some hon. Members. Let them take the heads of police, lunatics, prisons, rates upon Government property, and registration. The total grants under those heads were nearly two millions and a-quarter—namely, £2,220,000. But the whole of that sum could not be attributed to fresh policy on the part of the Government, a great deal of it being due to the policy of the previous Government. About £380,000 out of the £2,220,000 could be referred to the policy of the late Government. Political capital had been attempted to be made in support of the Resolutions before the House from the large sum annually granted out of Imperial funds in aid of local taxation; but it seemed to be forgotten that almost half of the annual £5,000,000 so granted—for instance, the grants in aid of the Metropolitan Police, the Poor Law auditors, the Irish Police, and valuations and prisons in the United Kingdom—was as much under the control of the Central Government as were the sums granted for the maintenance of the Army and Navy. Again, it was said that in the grants in aid of local taxation the rural districts were more highly favoured than the towns and boroughs. Nothing was more unfounded. In 1872 Liverpool got £12,000 in aid of its police, it now got £38,400; in 1872 Manchester got £12,500, and in 1876–7 it got very nearly three times that amount; in 1871 Birmingham received £6,500 in respect of its police, and in 1876it got £19,000. This showed that the counties had not been benefited at the expense of the towns. The Government had been called to account for its Expenditure by hon. Members sitting below the Gangway; but the House had shown by its votes that it was satisfied that that Expenditure bad been called for. He thought the Leaders of the Opposition had hardly been wise in giving their support to the Resolution before the House. This Government had received such marked support from many hon. Members of the Opposition, on various occasions when their foreign policy was called in question, that they had a right to expect the votes of those hon. Gentlemen to-night, when they came to count the cost. Coming down for a moment from Imperial to local expenditure, he would ask the attention of the House to a few figures, premising that exceptional causes which had led to an increase in the one case, might have been at work as far as the other was concerned, and that he simply wished to draw attention to the comparative increase in the two cases of Imperial and local expenditure. In 1871–2 the expenditure of Liverpool was £440,000; at the present time it was £1,196,000. [Mr. RATHBONE: Under Conservative government.] In Manchester, within the same period, it had increased from £600,000 to £1,157,000, which ought to be enough to appal the citizens of Manchester; while in Birmingham it had increased from £201,000 to close upon £2,000,000. The same thing was observable in the smaller boroughs, as in Warrington, for instance, where there had been an increase from £22,000 to £36,000. Hon. Members opposite seemed to be above considering such trilling matters as local expenditure. He wished next to refer to rather a startling document which had been issued with regard to the expenditure on education.

MR. GOURLEY

rose to Order. Was it relevant to refer to questions of local taxation in a discussion on Imperial taxation?

MR. SPEAKER

I think that the remarks of the hon. Member for Leicestershire are relevant. He desires to show that both Imperial and local taxation are increasing.

MR. PELL

said, he was not going into the general expenditure as to education. He was going to refer to only one item—that respecting the teaching of singing in elementary schools. The grant for that accomplishment was £120,000. Why, that was the third part of the cost of a handsome iron-clad. To return to the Resolutions of the hon. Member for Burnley (Mr. Rylands). It was alleged in those Resolutions that the action and policy of the Government had tended to produce pauperism and crime. He was not going to trouble the House with statistics as to crime; but with regard to pauperism he could show that the hon. Member for Burnley was utterly wrong. In 1872, at the time the country enjoyed the advantage of a Liberal Government—when trade was at its very best and the country was in the highest state of prosperity—in every 1,000 of the population there were 42 paupers. What was the condition of affairs now, after three years of bad harvest—1875, 1876, 1877—and when trade was bad, not only all over this country, but throughout the world? The pauperism of the country had fallen in 1878–9 to 29 in 1,000. The hon. Member for Burnley was inconsiderate and unfair in drawing up the 3rd paragraph of his Resolutions; but, perhaps, he proceeded on the principle that if he only threw mud enough some of it would stick. He could, however, give another instance of the consequences of a Conservative Government. In 1872 the balance due to depositors in the savings bank at Leicester was £207,000. One would naturally expect, judging from the arguments used, that under the present Administration that balance would have gone from bad to worse; but, so far from that being the case, in 1878 the balance had been £317,000. There was still one more monstrous proposition brought forward by the hon. Member for Burnley. It was, that immediate steps should be taken to reduce the Expenditure. Possibly the hon. Gentleman was acting in concert with the hon. Member for Stoke-upon-Trent (Dr. Kenealy), who proposed to do away with a standing Army altogether—at any rate, that was a practical proposal for carrying out the idea. He considered that the country owed a great debt to the Government for its policy of economy. When hon. Members talked of Ministers obtaining "peace and honour upon tick," it should be remembered that education was obtained on tick, drainage was obtained on tick, and everything that he could see was done in the way of local taxation was done on tick. He might say, in conclusion, that, so far as he was concerned, he believed the Government policy had direct regard to economy; and, as such, he was prepared to support it.

MR. MITCHELL HENRY

said, three questions had presented themselves in the course of the debate which demanded serious consideration. First, was the country able to support the present Expenditure? second, did it get value for its money? third, was the taxation imposed upon the people for the purpose of raising the large Revenue required equitably and fairly imposed? It appeared to him that the figures, as formulated by financiers on both sides of the House, were calculated to have the effect of bamboozling those who had listened to them, for the reason that hon. Members who had spoken had taken entirely different data for their comparisons. The right hon. Gentleman the Member for the City of London (Mr. Goschen) had compared the four years, 1871 to 1874, with the four years, 1874 to 1878; and, having averaged the Expenditure of those periods, had arrived at the conclusion that in the first four years it amounted, as nearly as possible, to £70,000,000, and that in the second it had risen to £80,500,000. The right hon. Gentleman the First Lord of the Admiralty had, on the other hand, made a different calculation, and had taken the year 1874 solely, and compared it with the present year, with the result, according to his statement, that the Expenditure for the former year was about £72,500,000, and for the latter £80,650,000. According, therefore, to the right hon. Gentleman the Member for the City of London, the Expenditure now had increased by the sum of £10,000,000; while, according to the admission of the First Lord of the Admiralty, it had increased by the sum of about £8,150,000. He (Mr. Mitchell Henry) was not going to speak as the advocate of either of these comparisons; but wished simply to take a plain and dispassionate view, as far as he could, of the subject before the House. It appeared to him, then, that the right hon. Gentleman (Mr. W. H. Smith), who spoke on the first night of the debate, had clearly shown that a considerable portion of the extraordinary Expenditure had gone to reduce the National Debt; further, there could be no doubt that a very considerable portion of it had gone in subventions to local authorities—a policy which, although it had been endorsed by the House, was, in his opinion, a very bad one. It was, however, financially a wise policy, according to the defence of the hon. Member for Leicestershire (Mr. Pell), who had, moreover, stated that the money was not given to the local authorities, but was nationally administered by the Government. That was perfectly true; but to say that it was not a subvention to the local rates, was to take up a position which was altogether untenable. Allusion had also been made to the floating Debt, which was stated to have increased from £4,500,000 to £21,000,000; but of that sum £16,000,000 had been spent upon enormous works for the purpose of local improvements. He would very much like to know what the hon. Member for Birmingham (Mr. Chamberlain) would say if the House suddenly refused to continue these loans? The contention, indeed, of some hon. Members was that greater facilities should be given for borrowing and longer time allowed for re-payment. It, therefore, seemed to him that many of the complaints with regard to this portion of the Expenditure had been unfairly made. Another strong objection had been taken to the pretended loan of £2,000,000 to India, with regard to which he would only say that he trusted it would not be taken as expenditure for local purposes certain to be recouped, for that money, in his opinion, would never be seen again. The right hon. Gentleman the First Lord of the Admiralty had shown, as he (Mr. Mitchell Henry) believed, in a very plain way, that the actual Expenditure of the country, after allowance had been made for that portion of it which was not raised by taxation, amounted to between £68,000,000 and £70,000,000 sterling. Was that Expenditure larger than the country could bear? Ten or 12 years ago, the annual income of the country had been calculated by Mr. Leoni Levy at £800,000,000; and at the present time, according to the right hon. Gentleman the Member for Greenwich, it had risen to £1,000,000,000 sterling. The Expenditure of the country, therefore, amounted to more than 1–15th of the national income. Was that proportion equitable and right? He (Mr. Mitchell Henry) believed that at that moment, seeing that the income of the country was diminishing to an enormous extent, the Expenditure was more than the country could afford. The hon. Member for Leicestershire had shown, in his undoubtedly truthful account, what an enormous sum of money had been swept away from the agricultural interest by bad harvests and inclement seasons. Again, it had been calculated that £100,000,000 to £150,000,000 sterling had been thrown into the sea, so to speak, by capitalists who had lent money to foreign States; and here he would take the opportunity of stating one of his great objections to the policy of the Government, which was that they had not maintained the traditional policy of the country by refusing to assist persons who had invested their money in foreign loans, but had, on the contrary, inflicted untold misery upon the people of Egypt, the most wretched people on the face of the earth, in order to enable the holders of Egyptian Bonds to obtain an unrighteous rate of interest. Upon that point, therefore, he expressed one of his strongest objections to the policy of the present Government. He now asked the question, did the country get value for the money expended? Besides the £17,000,000 spent upon the Indian Army, £16,500,000 were spent upon our own Army, which we were informed was in a very satisfactory position. But was it true that the administration of the Army was satisfactory? In our recent emergency, when we required to send out a certain number of troops to South Africa, with what difficulty had that 6,000 or 8,000 men been got together! He had, indeed, thought, when the late scheme of Army reform was inaugurated, that we should, at all events, have had one Army Corps always fit to go anywhere for what-ever purpose it might be required; and that when we wanted to get together a number of men, small as compared with Continental Armies, we should not have to move heaven and earth to make it up by drafts from different regiments, composed, for the most part, of boys. To say that for this expenditure of £16,500,000 we had an Army satisfactory to the country, that would enable us to enter upon a Continental war in case of need, would be to deceive both the country and the House. Questions were continually cropping up with respect to the administration of the Army, and particularly with regard to the soundness of its condition. Take that of the Ammunition, or of the Artillery. We had debated, year after year, whether we should have breech-loading ordnance or not; and after we had fully made up our minds to adopt the muzzle-loading system, a little more experience had shown us that, in all probability, we were wrong; indeed, we had from the first been told this by persons of the highest au- thority on the subject. Then there was the question of range-finders, and on that point hon. Members should read the letters of General Wray, showing the advantage to be derived from their use. But they had not been adopted; and hon. Members would see, by accounts in the public Press, that our arms of precision produced effects very small in comparison with what was expected. For his own part, certainly he did not believe, that with respect to our Army, we received anything like the value of money expended upon it. The same with the Navy. The right hon. Gentleman the First Lord of the Admiralty, at a banquet now become historical, which was given the other day in the Metropolis, and to which the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) had just alluded, had boastfully quoted a calculation, made that very day, that we had sent that body of 6,000 or 8,000 troops 7,000 miles across the sea entirely by the aid of the Department over which he presided. Was there ever a more unfounded boast? The vessels employed were merchant ships, which had grown to the magnitude that had now been attained by a course totally opposed to the policy of the present Government—that was to say by the arts of peace, and not by the arts of war. Nevertheless, whenever war was indulged in by us, we had to resort to those very ships, which had been now for some time out of employment. But it was perfectly well known that many of the ships so employed on the last occasion were old, and that they consumed an enormously large quantity of coal; while there were ships lying in our Docks which could have performed the service required of them much better, and without touching at Madeira or anywhere else. However, the Admiralty did not choose to engage them; and on that point he could not help making the remark, that the Government had been penny wise and pound foolish, for had they taken up those ships which consumed a small quantity of coal, although they might have paid a little more for them, they would have had their Army disembarked at the Cape a week or 10 days earlier than it was. Her Majesty's ships of war had had very little indeed to do with the transport of the troops; merchant ships alone had been employed. The next question upon which he desired to make some observations was this— Was the taxation of the country fairly distributed—that was to say, did it fall in an equitable manner upon different classes and portions of the people? To that question he was compelled to answer—No. He believed that the incidence of taxation was most unfair towards the different classes of the people, and especially so with regard to the three portions of the United Kingdom. We were raising an enormous amount of taxation by the Excise duties, which were an unfair substitute for the land charge paid to the Crown in the time of Charles II. That charge had been imposed upon the great masses of the people in the shape of Excise duties, and had ever since been fructifying in the pockets of the landowners. Then, as regarded the probate and succession duty—Could there be anything more unfair than the exemption of real property from this tax? That was another instance of the unfair way in which the taxation of the country was raised at the expense of the great mass of the people. Now, with reference to the three portions of the Kingdom. The promise had been made to Ireland, at the time of the Union, that the taxation should be raised in proportion to the financial ability of the two countries; that meant, that it should be raised in proportion to their respective incomes; but, instead of that promise being fulfilled, taxation had been equalized, with the result that in Ireland every man paid 3s. in the pound of his income; whereas in England a man would escape for 1s. 8d. That state of things had been brought about by the Liberal Government, which, in the year 1859, equalized the spirit duties for the three portions of the Kingdom, making them 10s. per gallon all round. As they had been previously much lower in Ireland, the greatest possible injustice had been perpetuated by that Act; and he would make that fact perfectly clear to hon. Members in a few moments. From the year 1870 to the year 1878, the spirit duties had yielded £123,500,000 sterling, of which sum England had paid £52,500,000; Scotland£37,000,000; and Ireland £33,779,000. Now, had this tax been raised from the three portions of the Kingdom fairly, England, having a population of six and a-half times that ofScotland,wouldhavepaid£90,000,000, and Scotland about £13,500,000. Again, the population of Ireland being 4,500,000 in proportion to 28,000,000 in England, Ireland would have paid about £20,000,000 in place of the £33,779,000 contributed since the year 1870, and the charge would not have fallen upon her with such crushing force. A most unequal burden had, therefore, been imposed upon the Scotch and Irish peoples, as compared with that of England. Now, with respect to beer. What we taxed in spirituous liquors was the alcohol which they contained; that was the basis on which we regulated the Customs duties on wine. He (Mr. Mitchell Henry) said that the same test should be applied to all the other alcoholic liquors, his view being that alcohol should be taxed "wherever you could catch it." But, at the present time, the amount of alcohol contained in beer paid only 1s. 8d. a gallon, while the alcohol contained in whisky paid at the rate of 10s. a gallon. He was speaking of beer of Bass's strength; but of course, in the case of fourpenny ale, the ordinary drink in England, the disproportion would not be so great, but it was, nevertheless, considerable. Hon. Members would say that people were not bound to drink whisky; truly, they might drink beer: but in Ireland and Scotland they could not get it. To say that the spirit duty was not a tax upon individuals living in those two countries, was to say what was evidently untrue. If you were to put a tax upon people going to mass, upon whom would that tax fall? Of course, on the Irish, people who went to mass; it would not touch the English people. If you said the Irish people need not go to mass, you would use the same kind of argument as you did when you said that they might drink beer, like Englishmen. The Chancellor of the Exchequer should do something to remedy these inequalities, which would not be a difficult matter. An immense portion of the national income was derived from taxes on alcoholic liquors. According to his calculation, it was now £33,000,000 a-year. There was £5,500,000 on wine; £4,000,000 on beer; brewers' and maltsters' licences, refreshment licences, and British wines, £7,500,000; and £15,000,000 spirit Duty. He asked the House why they should restrict themselves to that £33,000,000? Why should they not raise £50,000,000 from alcoholic liquors? To do that, it would only be necessary to approximate the duty on the alcohol contained in beer to that on spirits. That change would hardly be felt by the consumer; while the great object of taxation would be obtained by the great masses of the people contributing their fair share of the amount raised, which, as he had said before, would be £50,000,000. The course suggested would enable the Government to abolish all the other Customs duties; and they would, moreover, get rid entirely of the whole army of Custom House officers. The duties at present levied at the Custom House on tea, coffee, and dried fruits could be abolished, as well as those upon tobacco and snuff, together with licences, the railway tax, and, above all, one of the most abominable taxes in the world—the inhabited house duty. If the right hon. Gentleman would adopt his (Mr. Mitchell Henry's) suggestion, he would then be able to equalize, not perhaps entirely the legacy, succession, and probate duties, which would then produce £8,000,000, instead of the present £6,000,000. Let him keep the Income Tax at £5,000,000, because that tax fell upon the upper classes. He would have his Revenue from the Post Office and Telegraphs, the Laud Tax of about £1,250,000, Crown Lands producing about £500,000, and Miscellaneous Items of £4,000,000. By that simple mode of imposing a just and fair taxation upon alcoholic beverages, a Revenue of £80,000,000 would be provided. That anybody should confess the desire of promoting the temperance of the people, and yet retain the duties upon tea and coffee, seemed to him a complete contradiction. Those articles of consumption had, in the rural districts, become the necessaries of the poor man; the meanest labourer took with him the tea which was to sustain him during the labour of the day. And yet we had put a duty on tea to the extent of 100 per cent of its value; and in raising that £5,000,000 we made the consumer pay very nearly double, because the duties were not paid by the people in the same way as they were charged at the Custom House. If hon. Members would give their attention to the subject they would see that this was one of the great questions of the day. The present system of levying spirit duty pressed most unjustly upon the people both of Scotland and Ireland, while the English consumer of beer escaped the taxation. Seeing, then, the increase in the national Expenditure brought the country no good, he believed that it would be deeply regretted by the House. If the Government had increased the Expenditure for the purpose of carrying out their spirited foreign policy, he must say that they had miserably failed to attain their object. Did anyone doubt that the attempt to keep separate the two Bulgarias would fail, in the same way as the attempt to keep the Austrians in Italy had failed? Could anybody suppose that the Turkish Army would for all time prevent the inhabitants of those two countries from uniting? Could it be supposed that a mixed occupation, although it might defer that union, could eventually keep asunder people of the same race and of the same religion? Could it be supposed, again, that we could for all time continue to wring from the Egyptian peasant the dreadful amount of taxation necessary to pay off the Egyptian Bonds? And, lastly, could hon. Members believe that we could maintain the enormous expanse of Empire, either in Afghanistan or Natal even, by this increase in the national Expenditure of £10,000,000 in the course of four years? All those questions merited the most earnest consideration from the House. He would only add, in conclusion, that he should certainly vote for the Resolution of the hon. Member for Burnley, upon which a division was about to be taken.

MR. BALFOUR

believed that no Resolution had ever embraced so large a number of topics as that which they were discussing. The debate, which had begun in a comic and even a burlesque manner, had been continued by the right hon. Member for Montrose (Mr. Baxter) in a spirit of the deepest tragedy. The Treaty of Berlin, the Afghan War, and the Zulu War, had been discussed; and now, in the speech of the hon. Member who had just sat down, their attention had been also directed to the wrongs of Scotland and of Ireland, and to the incidence of the spirit duties. For his own part, he proposed to deal with a less number of topics and to occupy a shorter space of time. He would not go into questions of mere figures, however important they might be; but he wished to consider the financial expedient of not raising all the Supplies required within the year in which they were appropriated. The argument of the Government was, of course, that the requirements of the year were of an exceptional character. Not only was there a Colonial war and an Indian war, but Europe, also, was in a disturbed condition; while at home our trade was depressed, and we had not yet recovered from an extraordinary series of bad harvests. It was, therefore, only natural for the Chancellor of the Exchequer to treat the circumstances of the country as exceptional, and to believe that Expenditure incurred at such a time ought to be repaid gradually from the Income of years of normal prosperity. The right hon. Gentleman the Member for Greenwich had spoken of the financial expedient of the Chancellor of the Exchequer as a thing which was contrary to all financial precedent, and stated that Sir Robert Peel and other authorities would, have acted differently; but there was precisely the same ground for deferring payment as there ever had been for raising a loan. The sole ground for raising a loan was that there had arisen within the year certain necessities which it was expedient to spread over more than one year. It was impossible to say there was no precedent for spreading exceptional Expenditure over unexceptional years. Hon. Members opposite had argued that we ought not to pursue any foreign policy without making the public feel the cost they were paying. There was nothing that hon. Members opposite professed to desire more than to take the opinion of the country on the foreign policy of the Government; but did they seriously think that the people of this country, if they were intelligent enough to form an opinion on complicated questions of foreign policy, were not, at the same time, sufficiently intelligent to see that it was impossible to pursue an active foreign policy, good or bad, without having to pay for it? It had constantly been alleged that the Expenditure of the Government was incurred for warlike purposes; but most of those who reflected on the old saying would readily perceive that whatever was spent on preparation had the effect, not of provoking, but of preventing war. The policy of the Government having been successful, it had relieved the country of the heavy cost and responsibilities which a state of war would have involved. The 3rd Resolution appeared to him extraordinarily absurd. Not only had it been shown by hon. Gentlemen that pauperism and crime had not increased, but the present taxation of the country could not possibly press upon the springs of industry. The truth was that the allegation contained in the 3rd Resolution of the hon. Member for Burnley was a relic of the time when taxation did affect the industry of the country. There was a time when raw material, when products, when the necessaries of life were taxed, and then taxation did press upon the springs and resources of the country; but at the present moment, though taxation, no doubt, demanded sacrifices from the people of the country in some shape or other, he ventured to assert that there was not a single loom unworked, or a single furnace unused, or a single acre unfilled, on account of taxation. His real objection, however, to the present Resolution was that no Party could adopt it without committing themselves to a policy of unconditional retrenchment. And what were they going to retrench? As the right hon. Gentleman the First Lord of the Admiralty had shown, a large part of the increase in the Expenditure since 1874 had been automatic—that was to say, it was the result of measures passed independently of the present Government. It followed, then, that if they were going to reduce the Expenditure to the point at which it was in 1874, they must cut down the Army and Navy; and, what was more, cut them down below the point at which they were in 1873, inasmuch as other expenditure had increased, and thus cither reduce the Public Service to a dangerously inefficient state, or else stultify their whole policy previous to their leaving Office. They had heard a good deal about reckless expenditure; but there was such a thing as reckless retrenchment, which meant the gaining of temporary popularity at the expense of the permanent inefficiency of the Army and Navy. Supposing this reckless retrenchment having been effected, their diplomacy failed in their foreign relations—and they might depend upon it that foreign nations, seeing this country disarming, would misinterpret its motives, as they had always done, and believe it would consent to anything rather than go to war—in what condition would they find themselves? The people of this country, he was convinced, would not tamely submit to a rebuff. If their objects could not be gained by diplomacy, they would insist upon having recourse to forcible measures; and among the least of the evils of going to war unprepared would be a largo increase in the national burdens.

MR. MUNDELLA

said, the speech of the hon. Member for Hertford (Mr. Balfour) afforded a great contrast to every other speech which had been made on the Ministerial side of the House. Everyone would admit that the hon. Member was wanting neither in courage nor in candour. He had, at any rate, the courage of his opinions, and he maintained, in all its force, the efficacy of the large Expenditure which had been contracted by the Government, and did not attempt for one moment to summarize it or explain it. The House ought to be thankful to him for the boldness with which he had avowed his opinions; and from what the hon. Member had stated he gathered that he was quite prepared to go still further in the same direction. The hon. Gentleman not only justified the Expenditure, but he justified the mode in which the Chancellor of the Exchequer proposed to deal with the present condition of national finance. He asked what would any financier do but extend the deficit over exceptional years? But after listening to the speech of the hon. Member, he wanted to know when they were to come to the end of exceptional years. Had they concluded the exceptional years? Were they entering on a period of tranquillity? Did the speech of the hon. Member indicate that they had arrived at that tranquil period when they might diminish their Expenditure and begin paying off their deficiency? It was quite evident that we were at this moment, judging of what had been said in regard to Europe, Asia, and Africa, in a condition of exceptional Expenditure, and this year and next year would be years of exceptional Expenditure. So matters would go on until they had a large deficit, when it would become necessary to find means to meet it. The right hon. Gentleman the Member for Greenwich had shown the vast Expenditure arising out of the Forces, and the Chancellor of the Exchequer knew that this exceptional Expenditure pressed heavily on the country. What was the line which the First Lord of the Admiralty took in addressing his constituents in February last? He said, in making a statement of the comparative taxation of this and other countries— We are told sometimes that the people of this country are excessively taxed, that the burden of taxation is intolerable, and that our trades must suffer, because we cannot provide as economically as France or America. The taxation of all kinds in this country is £100,000,000, in the United States it was £100,000,000, and in France £120,000,000. The inference was that the working people of this country were the most lightly-taxed people of any people in the world. It was true France was taxed £20,000,000 more; but she had 4,000,000 of population more than England, and had suffered from 20 years of Imperialism, followed by a disastrous war. They had not, fortunately, as yet arrived at that result. But with respect to America, how did the right hon. Gentleman's statement stand? The Americans were 10,000,000 more in number; and he should like to ask the Chancellor of the Exchequer whether he was satisfied in his own mind with the progress we were making in the payment of our Debt compared with the progress made by America? It was a fact, however, that the Americans were taxed 25 per cent less than we, inasmuch as the population was 25 per cent more. The one thing they were told in which there was scope for reduction was the Education Estimates. Here a good deal was said about extravagance. Almost every hon. Member on the Ministerial side of the House complained of the extra £1,500,000 which had been spent in sweeping away the ignorance of the country, and fitting our people to compete with the rest of the world. The Government, after spending £85,000,000 last year, grumbled at the paltry sum which had been spent on education. It was a disgraceful thing to talk about the Education Expenditure.

MR. PELL

said, he did not complain of the sum devoted to educational purpurposes, but of the sum—namely, £120,000—spent on singing.

MR. MUNDELLA

said he accepted the explanation; but that was not what the First Lord of the Admiralty had said. The fact was, they had better "sing small" on that subject. He was bound to say that almost every hon. Member on the other side of the House endeavoured to explain away the large increase in the Expenditure of the last five years, and very ingenious had been some of the arguments. One hon. Member tried to prove that the £500,000 squeezed out of the tobacco duty came out of the pockets of the manufacturers. He (Mr. Mundella) knew that nobody paid more than the consumers, because they not only paid an extra farthing on the ounce but got an infinitely worse article than before. They now smoked stuff which was simply poison. Another hon. Member got up to prove that in the time of the previous Government the receipts of the Revenue were £2 8s. 2d. per head, and in 1878 were only £2 7s. 10d., and he quite satisfied himself, and probably some hon. Members on his own side of the House also, that in 1878 the people were lighter-taxed than in 1874; but he forgot that the Revenue of 1874 contained the large surplus of nearly £5,000,000, while the Revenue of 1878 left a deficit of nearly an equal amount; and, if those two things were put together, there was nearly £10,000,000 difference between the two Governments. The Expenditure of £32,000,000 on the Forces of the country—the Army and the Navy—was not the whole measure of the extravagance of the Government. The First Lord of the Amiralty had done his very best, he did not mean to say to deceive the House or the country, but to mystify the taxpayer as much as possible. He had been the head and front of the offending in this respect, because he only half revealed and half concealed the true state of the case. When the Government came into power, what did they find? That their Predecessors had been making their purchases at the highest rate for every article of consumption ever made by any Government. The late Government, elected in 1869, came into power when the markets were below the average, or certainly not above, and that year by year during their tenure of Office the whole expenditure for the purchase of stores, provisions, and of every article consumed by the Forces gradually rose upon them, until in 1873–4 prices culminated, and reached a higher cost than before. What had been their experience?

The right hon. Gentleman knew well that in the moment when his Government came into power the cost of all the Government establishments of the country, and the cost of the articles supplied, had been steadily diminishing. He was well aware that the British Government was the largest purchaser of supplies—food, clothing, and metal—of any customer in the world. Taking last year, the Army stores—he now spoke of supply—amounted to the sum of £7,073,340, and the Navy to £4,231,107, making a total of £11,294,357, and in this amount he did not include £1,000,000 paid for other works. In the price of most of these articles there had been a fall of from 16 to 25 per cent. What influence ought this fact to have on the Expenditure of the country? Mr. Giffen had shown that at the present moment there was a considerable reduction in the actual cost of living—food, and other necessaries of life—from two years ago. Eighteen shillings would now go as far as a sovereign then. If that was so in two years, what must have been the difference in the five years of the Government's tenure of Office? Within that period the Government must have obtained a reduction of 20 per cent in their purchases of stores and other necessaries. In other words, £32,000,000 should have gone as far as £34,000,000 before they came into Office. He asked whether the Budget was an honest statement of Revenue and Expenditure? The Economist newspaper had well described its principle in the words, "Date forward your liabilities and renew your bills." Then no account had been taken of the Zulu War, the cost of which he had never seen estimated at a lower sum than from £6,000,000 to £12,000,000, and if that were added to the Expenditure where was the surplus of the Chancellor of the Exchequer? He must also condemn the manner in which the Unfunded Debt had been increased. It had risen from £4,500,000 to £25,000,000. The money raised for the Unfunded Debt was raised at a rate not of from 1 to 2 per cent, as the Chancellor of the Exchequer had stated, but of from 3 to 4 per cent. Although the Expenditure of the Government had been most extravagant, yet he believed that the £30,000,000 or £40,000,000 which the Government had wasted since it went into Office had done much loss harm to the trade of the country than had been caused by the constant harassment and excitement of the public mind through its uncertain policy during the last two years. The President of the Local Government Board, on Thursday night, denied that there was anything like general distress and impoverishment among the working classes, and referred in a special manner to his (Mr. Mundella's) own constituency of Sheffield in proof of his statement. The chairman of the Board of Guardians at Sheffield wrote to him as follows:— I may say that on the cessation of the relief fund the Guardians passed a resolution that all able-bodied men should have an order to work on the new workhouse ground in breaking stones and excavating. They number nearly 400, and are paid by the piece. The chairman added— Had it not been for the work found on the new workhouse and other ground, there might have been a very large increase of pauperism. Indeed, I have not known so much distress in Sheffield for 30 years. He believed the depression of trade was steadily increasing, and ventured to say that the Chancellor of the Exchequer would not realize the amount he had put down as the probable Revenue of the year. Believing that the extravagance of the Government had been most damaging to our trade, and that the policy of the Government had been oven worse than its extravagance, he should vote with his hon. Friend the Member for Burnley for reducing the Expenditure of the country.

MR. CHILDERS

said, that the hon. Member for Burnley (Mr. Rylands) had asked the House to pass a Resolution of regret at the great increase of National Expenditure. He believed that hon. Members on both sides of the House would consider—and certainly it was his opinion that it had been thoroughly well established in the course of the debate—that during the term of Office of the present Government a very large addition indeed had been made to the Public Expenditure, excluding from the calculation the Votes of Credit which had been taken in the last two years. The most skilful advocate who had appeared in the course of the discussion on behalf of the cause and policy of the Government—the First Lord of the Admiralty—admitted that the increase amounted to £8,750,000 gross, or £6,500,000 net, taking as the basis of his comparison the Return which he (Mr. Childers) had moved for during the last few years, and which he believed afforded a sound criterion. Other Gentlemen who had addressed the House, and who had not spoken from an official point of view, had raised that excess to as much as £10,000,000 or £12,000,000 gross, or from £8,000,000 to £10,000,000 net. Whichever estimate was correct, it was certain that between £6,000,000 and £7,000,000 constituted the measure of increase which had taken place in the ordinary Expenditure of the country since the present Government came into Office. It had also been established that this great increase of Expenditure had taken place while the Revenue had been almost stationary, during a time of distress, and while there had been a steady increase, at least during the last year or 18 months, of pauperism and crime, and during a state of trade, both domestic and foreign, which the right hon. Member for Montrose (Mr. Baxter) had not, in his opinion, exaggerated, when he described it as being "greater than had before been experienced by the present generation." To meet this increased Expenditure, it was admitted that a very large increase in taxation had taken place. The Chancellor of the Exchequer had stated that during the last 15 months £8,750,000 had been expended under Votes of Credit, and that only a small part of that Expenditure had been paid out of current Revenue, and that by far the largest part of it must be deferred. It had likewise been established that the Vote of Credit Expenditure was increasing upon a large scale. Whereas the Budget of April last year provided that all past Expenditure in connection with the Eastern complications should be financially recouped during the present year, we now knew that very little or none of that Expenditure would be wiped out. They had., indeed, been told the other day that it would not be recouped for two years or two years and a-half. He thought it would be admitted on all sides that up to the present time there were no symptoms of improving trade or elastic Revenue, and, he was sorry to add, there appeared to him to be no symptoms of decreasing Expenditure. If these were accepted facts, how could it be doubted that there was going on the great increase in the National Expenditure referred to in the Motion of the hon. Member for Burnley? The only question was, ought or ought not the House to express its regret at this increase—a regret which, of course, involved blame upon those who were responsible for it? What was the defence or apology of the Government for the great increase in the Expenditure which they had incurred? It seemed to him to amount to this. His right hon. Friend the First Lord of the Admiralty said—"All that you say is true; all those facts may be taken for granted, but then some branches of Expenditure have not been increased; others have been increased, but that increase has been necessary, while other branches again have been increased, and although that increase has, perhaps, not been necessary, it was judicious; and, further, other branches of the Expenditure have increased, but that is not our fault, it originated with somebody else, and if we can show that the increase is only in some branches, and that we are not answer-able for it in others, our defence is ample." That, he believed, would be admitted to be practically the answer of the Government to the charge of having incurred an excessive increase of Expenditure. And then, as to the charge that this increased Expenditure had not been provided for in the old, proper, and legitimate manner, the answer of the Government to this was two-fold. First, it was said—"Why you, the Opposition, did the same yourselves." And then they had an elaborate argument to show that in former days also some part of the additional Expenditure had been deferred. The answer came practically to this—it was another way of saying, "How can we face the country, if we provide for the present increase by additional taxation?" His right hon. Friend the Member for Greenwich (Mr. Gladstone) had gone so thoroughly into the rules which had governed the finance of the last 50 years, and had proved so conclusively that the present plan of the Government was so novel, so dangerous in its working, so destructive to the control of the House, that he (Mr. Childers) would not enter at length into that part of the subject. He proposed to deal primarily with the other part of the question—whether the facts which had been alleged by the Government to justify their increased Expendi- ture had been proved; and, if so, was that justification adequate in itself? He would take the statement of the First Lord of the Admiralty, who, in his very able and clear speech, put the defence of the Government in such a shape as would be most satisfactory, and, following out that defence which he (Mr. Childers) had endeavoured to state tersely to the House, the right hon. Gentleman had based his arguments mainly upon a comparison between the Departmental Estimates of the late Government for the year 1874–5 and the Estimates laid upon the Table of the House by the present Government for the year 1879–80. The first remark he would make upon that was that, in his opinion, it was not a very wise or salutary practice for an in-coming Government to introduce into a discussion in that House, as if they were the established proposals of a former Government, the recommendations of the Departments under that former Government which had never been dealt with by the Government themselves, and which, therefore, did not carry with them the authority of the regular Estimates which were laid upon the Table of the House. But, passing from that primary objection, it had been shown abundantly by his right hon. Friend the Member far Greenwich that in one respect the present Government had erred very grievously in connection with the difference between their original and final Budgets—that was to say, that whereas the original Budgets of former Governments never in ordinary years differed from what were called the final Budgets by an average of more than £100,000 or £200,000, under the present Government, every year—exclusive altogether of the Vote of Credit—the difference between the original and final Budgets had amounted to £1,000,000 or £1,200,000. He would follow up that by another comparison, and say that it was not to the Budget Estimate, but to the actual Expenditure, that they must look. Now, under the late Government, he believed, with one exceptional year, the actual Expenditure came within their original Budget Estimate. In every year of the present Government the actual Expenditure had exceeded the Estimate. If that was so, it was evidently a fallacious comparison to take the Estimate of the present Govern- ment, which was certain to deceive, and compare it with the Estimate of the late Government, which was almost certain not to deceive. Passing from that subject, he desired to enforce what had been stated by the hon. Member for Sheffield (Mr. Mundella)—namely, that the Estimates for 1874–5 were based upon rates for iron, coal, and stores, which were almost the highest that had been reached for many years, whereas the Estimates for the present year were based upon rates for iron, coal, wages, and stores, which had reached their lowest point during the last year. Another reason why the comparison of the First Lord of the Admiralty was entirely fallacious was that the present Estimates had been greatly relieved by the Expenditure under the Votes of Credit of the last two years. If hon. Members would look carefully to the Army and Navy Estimates, it would be found that the economics made this year were precisely in those branches of Expenditure very fully provided for by those Votes. For these reasons, he (Mr. Childers) maintained that the comparison instituted by the right hon. Gentleman was an unfair one, and that the House would be led astray if they believed that a comparison of those Estimates was any criterion whatever of the relative economy of the two Governments. His right hon. Friend admitted that the gross Expenditure of the present Government, even in his most favourable comparison, was £8,750,000 more than the Expenditure of the late Government; and a comparison would show that it was really from £8,500,000 to £10,500,000 sterling, notwithstanding the low prices which had prevailed and the assistance received from the Votes of Credit. The First Lord of the Admiralty had stated that there was an additional provision made for the reduction of the National Debt under the present Estimates, as compared with the reduction by the late Government, and he gave the figures in the following way:—He said that the Terminable Annuity charge represented an additional reduction of Debt to the extent of £1,400,000, and that the new Sinking Fund provided for the reduction of Debt to the extent of £600,000; but the right hon. Gentleman forgot that the Chancellor of the Exchequer had, in the first year of the present Govern- ment, taken £500,000 interest on former loans, which went to swell the balance, and was treated as Revenue. That sum, therefore, would, of course, have to be deducted from the £2,000,000 said to have been applied to the reduction of the Debt. He was sure the Chancellor of the Exchequer would allow that he was right in that respect. In the present Estimates the increased provision for the reduction of the Debt was £1,500,000 more than the provision made for the last year of the late Government. But what was the use of making an increased provision, unless the increased provision was applied to the reduction of the Debt? Over and over again the First Lord had spoken of this increased provision for the reduction of the Debt, but had said nothing about its application. Now, he would like the House to look, not at the increased provision, but at the actual reduction, of the Debt which had taken place under the two Governments. The hon. Member for the Tower Hamlets (Mr. Ritchie), whose part in these financial debates all would hail as one likely to add much to their interest, had done him the honour, in his speech of Thursday last, to correct what he called an inaccurate statement of his (Mr. Childers) on the subject of the reduction of the Debt during the term of Office of the late and of the present Government; and he had concluded his statement by asserting that whereas during the last five years of the late Government the impression on the Debt had been £20,000,000, it had amounted to £19,500,000 during the five years of Office of the present Government. He (Mr. Childers) had been much blamed for that statement in other quarters, but for a precisely opposite reason. Since that time he had looked into the matter again. He would now state, in the presence of the Chancellor of the Exchequer, who had, of course, the actual figures before him, what was the actual comparison between the impression made upon the Debt during the whole five years of Office of the late Government, and the last four years of the present Government. He intended to give the figures quite accurately, without any colouring whatever. In the first place, the Debt of 1869 amounted to £805,000,000, and in 1874 to £779,200,000, making a difference of £26,200,000 paid off by the late Go- vernment. In 1874 the Debt was £779,200,000, and on the 1st April this year £778,000,000, so that the impression made upon the Debt by the present Government was £1,200,000. But that was not all; the late Government had increased the Exchequer balance by £2,700,000, while the present Government had decreased it by £700,000. Therefore, £28,900,000 was the impression on the Debt made by the late Government, and £700,000 by the present Government. The right hon. Gentleman might think he had left out what was a formal reduction of the Debt in connection with the Chancery and Bankruptcy Funds. But that was not so. Of the sum, £28,900,000, £5,900,000 represented the cancellation of those Funds. There remained, therefore, in the printed Accounts, £23,000,000 sterling as the impression made on the Debt by the late Government, and £700,000 as the impression made by the present Government during the four years of their Administration. The total impression made upon the Debt by the late Government, according to the method of computation proposed by the Chancellor of the Exchequer, was £35,400,000, whereas that made by the present Government was £17,900,000. The difference between what had been done by the late Government in that respect, and what bad been done by the present Government was, therefore, £17,500,000, or £3,500,000 a-year. But that was not all; the late Government had taken over what was virtually a Debt. He referred to the £4,300,000 for the excess in the Estimate for the Abyssinian War, and they had also to pay £3,200,000 on account of the Alabama Claims, which they did without adding one shilling to the taxation of the country, besides £800,000 for the Ashantee War. These sums, added together, gave a total of £8,300,000, by which the Debt was practically further reduced to that extent. He trusted that he had stated the case clearly and accurately to the House; but if he had fallen into any error, he relied upon the Chancellor of the Exchequer correcting him in his reply. Passing from that subject, he came to the items of charge for the Army and Navy, which were first discussed by the right hon. Gentleman the First Lord of the Admiralty. His right hon. Friend admitted that the gross charge for the Army and Navy had increased by £2,000,000, or by a net sum of £1,700,000, and he had given certain items in his explanation of how that increase had taken place—so much for pensions, so much for extra pay, and so much for stores—but, as the hon. Member for Sheffield (Mr. Mundella) had pointed out, the purchases in these Departments amounted to something like £11,000,000 a-year, and there had been a fall of 18 or 20 per cent in the prices as between the present year and the year 1874. On that ground, alone, it must be considered that the present Government had added since 1874, not £2,000,000, but from £3,500,000 to £4,000,000 to the Army and Navy Expenditure, although they had had the full benefit of the Vote of Credit during the last year to the extent of £1,000,000. So that the fact remained that the Army and Navy Expenditure had increased during the last five years to the extent of very nearly £5,000,000 a-year. In connection with this part of the subject, his right hon. Friend would forgive him if he alluded to a smaller question which he had brought before the House, in referring to which it had struck him (Mr. Childers) at once that he was treading upon very tender ice. The First Lord of the Admiralty referred, in connection with the deferring of some parts of these charges, to a certain portion of Army Expenditure which stood somewhat outside the ordinary Expenditure of the Army, such as the abolition of Purchase and the localization of the Forces, and he used this curious argument—"You have had the benefit of being able to postpone this charge by dividing it over a certain number of years." On hearing this argument, which appeared to him a very dangerous one, he had at once referred to the figures to see how much was so postponed by the late Government, and how much by the present Government, and the result was that he found the charge for these special Army purposes, in the time of the late Government, only averaged £400,000 a-year, whereas it now averaged £800,000; so that formerly but one-third of this charge was postponed, while the present Government had postponed two-thirds of it. He thought he had shown his right hon. Friend how dangerous it was for him to introduce into his speech a comparison of the kind which had been described. The next point of the right hon. Gentleman was the item for Education; and he said that, comparing the two periods, the increased charge for this purpose under the present Government was £1,500,000. It had been stated, in the course of the evening, that the amount was £1,200,000; but, whichever amount was correct, he would on this point only make one very natural remark. His right hon. Friend had himself said that this increased cost required very careful consideration, and that the House might look for some reduction of the item. On that point, the only suggestion he would make was that, considering the present Government had been five years in Office, if that increased charge really required re-consideration, the Government had delayed their consideration of this matter for a very long time. Lastly, the right hon. Gentleman referred to the grants made in aid of local ratepayers, and he gave figures, showing that the charge transferred to the taxpayer had increased since 1874 to about £2,000,000 a-year. At that point, he was obliged to refer again to a remark of the hon. Member for the Tower Hamlets (Mr. Ritchie), who had been rather severe upon what he (Mr. Childers) was supposed to have said upon a former occasion in making some allusion to the tea duty. Had the hon. Member read what he had stated a little more carefully, it would have been seen that reference was made not to the past but to the future. In 1874 the great majority of those who paid the tea duty had been relieved of a very large amount of sugar duty; and he had said, with reference to the grants in aid of the ratepayers, that the £2,000,000 given was not the whole of the sum demanded, that another £2,000,000 was required, that the ugly rush on the Treasury was by no means given up, and that if they were to give any further relief the result would be that instead of their being able to take off any such tax as the tea duty they would be obliged to leave it on, and the artizan would be obliged to pay twice as much as he then paid in aid of local rates. For his part, he had always admitted that the time for re-adjustment of the charges as between ratepayer and taxpayer had arrived, and that what ought to have been done was to go into the whole question, instead of bringing in a Bill to give away so much money without any argument in its favour. The question of education should have been gone into at the same time, and the whole matter properly re-adjusted. But what had been done? We had taken one or two charges and thrown them one upon another, and had done nothing to improve the administration of local funds; on the contrary, the question had been left in a state of chaos. "When the present Government took Office, however, two attempts at re-adjustment were made, which were about the most egregious failures of any during the present Parliament, and which left the whole question in a state of greater darkness than before. When, therefore, the course pursued by Her Majesty's Government could be justified, they could justify the increased charge in taxes, but not until then. The right hon. Gentleman, in making his comparison and in proving that some additional charges upon the taxpayer were, in his opinion, necessary, had omitted to refer to that which lay at the root of the whole matter. There were two cardinal principles in connection with Expenditure which had been altogether left out of sight. The first was that when new charges were imposed those new charges should be met by seeking opportunities for economy in other directions, and that those opportunities had been found in times past and would be found again; the second principle was that in such cases the Government should, if he might be allowed to say so, "cut their coat according to the cloth." A Government could not carry on the same rate of Expenditure when trade was in an unsatisfactory state, and when pauperism was increasing, as they might in a time when trade was flourishing and pauperism diminishing year by year, and when the burden of taxation was very much less than it was now. The right hon. Gentleman, therefore, in omitting to consider these two cardinal principles, had made an altogether fallacious comparison. What had been the increase of Expenditure and charge upon the public between 1875 and the present time? That was the second year in which the present Government controlled the finances of the country, when nothing was left from the previous year, when there was no question of "legacies" from the former Government, and when the present Government had to deal with a Budget for which they alone were responsible. In 1875, the Chancellor of the Exchequer estimated that the produce of his taxes would be little less than he had estimated for the present year; and it could not, therefore, be a worse year for him than the present for making any necessary changes. The Revenue from Customs, Excise Stamps, and House Tax was at the same rate as in the present year, and his Revenue from other sources were taken at £600,000, or £700,000 less than they were taken now. The comparison, therefore, upon that ground, was not unfavourable for the Government. In that year, the Chancellor of the Exchequer imposed an additional 1d. on the Income Tax, and in 1878 he imposed a further rate of 2d., as well as raising the tobacco duty, and to a certain extent the dog tax. He wished to show the House that the surplus of ordinary Revenue in 1875 was, to use the language of the Government, £800,000, and that the surplus for the present year—and this was the most extraordinary statement laid before them—was given at £1,900,000. The surplus, therefore, of present taxes over ordinary Expenditure in favour of the Government would, upon that statement, be £1,100,000 more than in the year 1875. But how much additional taxation had been imposed to make up that sum? £6,200,000! That sum had been imposed by the Government between 1875 and 1879, to maintain a contingent surplus of £1,100,000, which excluded Votes of Credit for warlike purposes. They had also increased the charge upon the public, not as between their time of Office and that of their Predecessors, but as between their fifth and seventh year, by no less a sum than £5,100,000. He thought that statement demanded an answer, because no comparison had been made with anything done by the former Government, but only between the uncontrolled overgrown Expenditure of the present Government, between their second and third year of Office. He had now dealt with the present Expenditure of the Government, and had shown that between 1875 and 1879 they had increased the ordinary burden upon the taxpayers for the common Expenditure by no less than £5,000,000 a-year. They had the figures of the Chancellor of the Exchequer, who had told them that within the last 18 months the Votes of Credit had been close upon £8,300,000; but there could be no doubt that this was a very low estimate indeed, and if it included the Cape War, with the part of the Afghan War which would have to be borne by this country—a rather curious point, when it came to be seen how much it would amount to—he (Mr. Childers) thought it would be very satisfactory if the Vote of Credit gave a total of less than £12,000,000 sterling. Her Majesty's Opposition were, therefore, entitled to ask whether the House looked with satisfaction upon that £12,000,000 as the price of the advantage to be gained from two wars and the complication of European affairs? Could they look with satisfaction upon the results of the Berlin Treaty? Turkey had been despoiled of five Provinces and was utterly bankrupt, she had lost more than half her Revenue, notwithstanding which it was believed that we had gained some advantage by the Treaty of Berlin. Why! had the Government not refused to follow the advice of the Opposition; had they not in 1877 refused to enforce the will of Europe, and compel Turkey to obey the decision of the Great Powers? She might have been saved from war altogether. Did hon. Members opposite view the Cape War with satisfaction? The Government had stated the other day that they disapproved that war; but that they approved of Sir Bartle Frere not being recalled. Was there anybody who understood military opinion in India, who was not thorughly dissatisfied with the position of the Afghan difficulty? But if little had been gained by our increased Expenditure, there remained one consolation, for the First Lord of the Admiralty had said our name had been made to be respected by foreign nations. He had had the opportunity within the last two years of seeing something of foreign capitals, and learning something of the effect which the policy of England had produced during that time. He was quite prepared to admit that there was considerable rejoicing in foreign capitals at the altered position of the British Government, because it had adopted their military policy, after having for so many years protested against it, and declared that, not being a military nation, we did not intend to take the same part in foreign affairs which military nations were more fitted for. There was also considerable approval of our policy in France, but simply because we were moving in the direction of that military system which had brought her to the brink of ruin. As to the effect which the recent change of our policy had upon America, and the increased respect which we had gained in that country, he remembered that there had been some demonstrations, and that the British residents in California had presented an address to the Government approving of the course which they had taken in foreign affairs; but he had only to say, in estimating the value of those expressions of confidence, that the inhabitants of that country did not pay our taxes, and, therefore, that their sympathy and approval was not accompanied by the test of having to pay for the foreign policy which they so much approved. Again, if we looked to the Government of the United States, it would be found that they, at any rate, were moving in a direction diametrically opposed to ours, for in the last 13 years they had reduced their Debt, not by such a sum as he had described, but by no less than £150,000,000 sterling, and the interest of the Debt by no less than £18,000,000 sterling. If we sought the respect of foreign nations, he ventured to say that we had better do so by striving to respect ourselves, and by following in the old lines of economy which had been the aim and object of every Government since the year 1826. For the first time since that period we were sliding away from our former system into one of the yearly-increasing extravagance, described in the Motion of his hon. Friend the Member for Burnley (Mr. Rylands), and the House might well come to the conclusion that the Public Expenditure had increased, was increasing, and ought to be decreased.

THE CHANCELLOR OF THE EXCHEQUER

My right hon. Friend the Member for Greenwich, in the opening of his eloquent speech this evening, brought against me a charge, half jocularly, perhaps, but half seriously, of having misrepresented, on a recent festive occasion, the nature of the issue which was to be raised against Her Majesty's Government to-night. Well, very possibly I may have fallen into an error on that occasion. But I must candidly confess that since the hon. Member for Burnley put this Notice on the Paper—and especially during the progress of this debate—I have been from time to time very much mystified as to what is the object, and as to what the real issue is, that we are called upon to decide. I must say with regard to the particular interpretation that I ventured playfully to put upon the hon. Member's charge—namely, that it was an indictment against us for having refused to put on additional taxes—when I had listened to the right hon. Gentleman the Member for Greenwich, from the beginning to the end of his speech, I thought there was more reason in that interpretation of the Resolution than before. Let us see for a moment what has been the history of these rather curious Resolutions. The hon. Member for Burnley, in the first instance, put upon the Paper what are now the 1st and 2nd Resolutions as one. He made it one Resolution, and as one it was very consistent and rather formidable. It was to this effect— That this House views with regret the great increase in the National Expenditure for which Her Majesty's present Government are responsible, and which is not necessary, in the opinion of this House, for the security of this country at home nor for the protection of its interests abroad. Undoubtedly, that was a very serious charge indeed to bring against the Government, for it fixed the responsibility for the increased Expenditure on the present Government; and it not only fixed them with the responsibility for an increased Expenditure, but for an increased Expenditure for purposes which were not, in the eyes of this House, necessary or justifiable. That was a very formidable indictment. But what happened? That Motion was cut in two, and a much more simple and bare Resolution is put before us—"That this House views with regret the great increase of National Expenditure;" and the House is not invited at the present time to express an opinion in their votes as to whether that increase is due to the present or to any other Government, or whether the increase is occasioned by purposes that are necessary or for purposes that are not necessary. That is a very convenient form of Resolution. I do not mean that it is intended for the purpose of catching votes; but I cannot help thinking that we can trace it to the hand, very probably, of a right hon. Member opposite who has a great share in the direction of the councils of the Liberal Party—I mean the right hon. Gentleman the Member for Clackmannanshire (Mr. Adam). I think that, because I observe that the right hon. Gentleman has lately laid down the doctrine that the cardinal point to which the Liberal Party should direct their attention is this—that they should commit themselves to nothing. Certainly, that is a very safe proposition, and, no doubt, the right hon. Member for Clackmannanshire thinks that the purposes of the Liberal Party will be served by the acceptance of such a Resolution. But in the form in which it stands, the Resolution is a very good one, and has been brought forward on many different occasions. The last hon. Member who brought such a Motion before the House was the hon. and learned Gentleman the Member for the City of Oxford (Sir William Harcourt). We have not had the advantage to-night of a speech from the hon. and learned Gentleman; but I suspect that he may have had some little hesitation about speaking on this Motion, because he probably remembers that when he brought forward a similar Motion in 1873, and when he declared that the last two years might be described as disastrous in a financial point of view, he was answered with great effect by the then Prime Minister, the right hon. Gentleman the Member for Greenwich, who had to point out to him that in order to make a fair comparison between the then present time and the year 1868, we had to bear in mind that there were very important elements of Expenditure that now weigh heavily upon us that were not in view during the transactions and discussions since 1868, and were not in existence in 1865, nor in the other periods chosen by the hon. and learned Gentleman. I will not detain the House by making further quotations from that speech, or by pointing out the new items of Expenditure which have come into existence. I will only say that that is the line of argument which the right hon. Gentleman the Member for Greenwich adopted then, and that that is the line of argument which we adopt now. The hon. Member for Burnley (Mr. Rylands) has told us that he does not wish to point his Motion directly against the present Government or to the present time. He said he would go back a good many years, and would take in the misconduct not only of the present Government, but of previous Governments, and especially of that of Lord Palmerston. The hon. Gentleman selected a particular year, as is the habit of hon. Gentlemen bringing forward Motions of this sort. Hon. Gentlemen always select some year for comparison, and on this occasion the hon. Gentleman has selected as a model year with which, to compare the Expenditure of the present time, the year 1819. But the year 1819 is certainly not a good specimen of a golden ago. If we compare the condition of affairs now with the condition of affairs in 1819, of course we see very great progress indeed in the Expenditure of the country. But then let us look at the difference of circumstances. Everyone will have before him the cost of a line-of-battle ship at that time and what the cost is now. But what is the cost of all the Services which we now have to perform compared to the cost of the Services formerly necessary? In addition to the cost of the Services formerly performed being greater, we now have a large number of new Services. I will not attempt to detain the House—and it would be absurd if, at this time of night, I were to do so—by drawing a comparison between every year since the year 1819. But still the argument is the same. In fact, you reduce the argument to an absurdity if you begin to compare years so different. The same observation applies, to a certain extent, to a comparison between a year taken some little time back and the present year; for new Services have sprung up, new ones have been created, and new interests have called for an increased Expenditure. Therefore, if we are to be treated in the way in which the hon. Gentleman treats us, I think those who support him ought to go further, and carry their opinion to a logical conclusion, like the hon. Member for Stoke (Dr. Konealy), who contends that we should do away altogether with a standing Army. And that is the real point. If you can afford to do away with a standing Army—to reduce your Expenditure—then by all means do so. Let England be placed in a condition in which she will be able merely to look after her own shores, to the exclusion of the rest of the Empire; and let us not stand higgling over a few hundreds of thousands or millions, more or less, but let us make a sweeping reduction at once. But if you require an Expenditure which shall place the country in a certain position, let us do what is necessary to make the outlay effective. Do not let us make ourselves ridiculous by pretending to place ourselves on a footing of efficiency, and yet just falling short of it. It would be absurd to say—Let us maintain an Army and Navy adequate to the Services of the Empire, and then spoil the whole thing by not spending the amount necessary for keeping our ships in good repair, or our men contented, or in providing the best weapons. Nothing could be worse economy than that. Let us see whether it is or is not necessary that we should have these armaments on this scale, or whether we should have these Services, on which we expend so much. And thus the question arises, is the price which we are asking for them a fair one? And what, I would ask, is precisely the point at which hon. Members on the opposite side are aiming in this debate. While some are saying that they regret the increase of our Expenditure, and are putting together a great number of figures to prove that increase, there are others who say that what they object to is not so much the particular matter of Expenditure as the policy by which it has been caused; and we have been invited by many hon. Gentlemen who have taken the latter line to enter into a discussion on the whole foreign policy of the Government. Their arguments have not been directed to the question whether we are or are not practising economy in keeping up a certain Force which we maintain to be necessary; but they say you ought not to have a policy which requires so large an Expenditure. They fall back upon the proposition, which the hon. Gentleman has put forward in his Resolution, that the Expenditure was not necessary for the interests or the honour or the safety of the country. That is a proposition which has been debated over and over again, and upon which the sentiments and the judgment of the House have been pronounced more than once, more than twice, nay, more than a dozen times. It seems to me that even to urge such views is simply to raise afresh questions which we ought to consider as disposed of or set at rest, or which, if they are to be discussed at all, should be debated on grounds rather of policy than of economy. But then my right hon. Friend the Member for Greenwich (Mr. Gladstone) and the right hon. Gentleman the Member for the City of London (Mr. Goschen) come forward, and say—"Over and above this objection to the increase of Expenditure, over and above our repudiation of the reasons you assign, we charge it against you that you have not made a proper provision in the Budget of this year for these special Services—that is to say, I suppose they make it a charge against us that, having committed the country and the House to this Expenditure, we have not put on new taxes to meet it; and, therefore, I think the House will consider my casual remark justified, that we are brought to book for not having increased the taxation of the country. Now, with regard to that matter, I think that it is one upon which it is my duty to offer such a defence as I can, for I have had some rather hard language applied to me, both by my right hon. Friend—for whose personal courtesy, however, I must always feel indebted, as well as for sharp lessons learnt—and by the right hon. Gentleman the Member for the City of London. That right hon. Gentleman has indulged in a very choice selection of epithets; and I must say that I thought he did himself injustice in borrowing his vocabulary of vituperation from the hon. and learned Member for the City of Oxford (Sir William Harcourt), and it surprised me that he should have found a difficulty in saying what he wished in his own words. Let that pass; we do not mind a few harsh words; and let us rather consider the matter in its serious aspect. My right hon. Friend charged me with having entirely forgotten and overturned and revolutionized all the principles that have guided the finance of all the Ministers of modern times, and which ought to be the pole star, and all the rest of it, of a Chancellor of the Exchequer. I do not quite follow that, nor do I really think that we are open to this objurgation. For what, after all, have we done? A year or two ago—in 1876—I found that the ordinary Expenditure of the country had grown to such a point—not, as I venture to say, through our fault, but owing to the legislation partly of ourselves, and partly of our Predecessors—that it was absolutely necessary to increase the Expenditure in order to bring about a proper balance. We did not then hesitate to ask the House to raise the Income Tax in order to bring about an equality. I considered then, and I consider now, that in raising the Income Tax to 3d., taking into consideration the other taxes of the country, we made a very fair and adequate provision for the ordinary expenses of the country in time of peace. Then we came to a time when it appeared that something more than that should be done. A state of things had arisen in the East of Europe, with regard to which we all have our own opinion, and concerning which the opinion of Her Majesty's Government is well known, and has often been declared in this House. My right hon. Friend said, with much emphasis—"A few days after you came into Office, Lord Derby"—then he paused to call attention to the name—"Lord Derby stated that everything was on the most peaceable footing, and that this country was on the best terms with all foreign countries." Well, that was perfectly true; but it had nothing to do with circumstances which did not occur till a year afterwards. I refer to the troubles in Turkey. Lord Derby, who was charged with the conduct of the foreign affairs of this country, felt himself obliged, by the consideration of the honour and interests of this country, to take a line which was the beginning of all that has happened since. It was Lord Derby who declined to join with the other Powers in the Berlin Memorandum, and it was from that date that all these changes arose, and that England began to take a distinct position for herself. My right hon. Friend is very sore, because some reference has been made to the Black Sea Treaty. He says there was nothing whatever to complain of, because all the Powers except England, and perhaps, also, except Austria, were agreed about it; and it was quite right that England should follow the other Powers. That may or may not have been right; but certainly the fact of England always following the other Powers was not altogether calculated to place England in the position she should occupy. I remember, when we were discussing Afghan affairs—the fact will be in the memory of some of my hon. Friends—it was said that Shere Ali, when beginning to fall away from his alliance with England, said expressly that he did so from seeing that Russia could tear up a Treaty, and that England could not prevent her from so doing. But all that is by the way. We are forced into these questions, which seem a little remote from the question of the Budget, by the line which has been taken in the attack made upon us. What I wished to say was this. When matters came to such a point that we thought it necessary to call upon the country, and to call upon the House, to make provision for the possibility of England having to take part in hostilities, and raising herself into a position to speak with a more decided voice in the Councils of Europe, without being obliged to follow at the bock and call of other Powers, I came down to this House and made proposals with regard to the Expenditure. I asked the House then to adopt my proposal for meeting a portion, at all events, of that Expenditure by adding another 2d. to the Income Tax. Well, now, that was making provision for a part of the Expenditure which we were asking the House to incur. Was I bound to call upon the House to make provision for the whole of that Expenditure? I think not. I think it was not at all necessary, or in accordance with the precedent of former years, that that should be done. My hon. Friend the Secretary to the Treasury has already quoted the expression of the right hon. Gentleman the Member for Greenwich in 1860, and the language of others at other times. In 1860, the right hon. Gentleman said— We propose to apply to the sum which we still require the same principle of divided method of provision which we adopted with regard to the sums with which we have already dealt; that is to say, we ask the Committee to give authority for raising' that sum in part by taxation, and in part from sources other than taxation. In so doing, we follow the rule which is commonly applicable to war expenditure."—[3 Hansard, clix, 1970.] What was it that I proposed we should do? I proposed that we should spread the Expenditure we were about to incur over a period—I originally said—of three years. As the House knows, circumstances occurred which made it impossible to carry that plan into effect without some change, and the circumstances that have occurred are these. War has broken out in South Africa, and upon that I could not reckon. What I have proposed is that we should carry-on for another year the process of maintaining that addition of 2d. to the Income Tax, which was put on as extra taxation in the hope that we should thereby redeem and pay off the charges for that war. That does not seem to me so very unreasonable and immoral a kind of finance. I should like to say, with regard to these matters, that we must bear in mind the great alteration that has taken place in the basis of our taxation since the days of Sir Robert Peel, and oven since 1860. You have now been going on for many years cutting off one source of Revenue after another, until you have reduced them to a very small number. You have now the Income Tax, and you have a very small number of duties upon articles of consumption. It is generally admitted now that you ought not to do that which was a favourite resource of my right hon. Friend some years ago, and which used to be done whenever there was occasion to balance the Revenue and Expenditure, simply to put 1d., 2d., or 3d. upon the Income Tax. My right hon. Friend takes credit to himself because he doubled the Income Tax in 1860. [Mr. GLADSTONE: No credit.] Well, the right hon. Gentleman does not take credit for it, but he speaks of it as a very remarkable action; and when we come to consider the whole circumstances of 1860, which I will comment upon in a moment, I think it will be seen that it was a very remarkable action. I wish now to say that the principle that I have endeavoured to enforce in this House, not only since I have been in Office, but before, is this—that you ought not to use the Income Tax as a mere make-weight and balance, but, as far as possible, to keep it steady. I do not say you may not, on certain occasions, have to raise it as we did; but there is nothing more clearly laid down than this—that when you have to raise taxation it ought not to be done by raising the Income Tax only, but it ought also to be done by looking to other sources of taxation. But you have now left yourselves in such a position that you have very few sources of indirect taxation left to turn to, unless you revive some which have been allowed to disappear, and which I quite admit you might, under certain circumstances, decide to revive. I wish it to be distinctly kept in view that there is no reason why, if the circumstances of the country require it, you should not revive taxes which have been remitted. But, on the other hand, it is a most undesirable thing to be frequently tampering with taxes upon articles of trade and consumption, especially if you have only to do it for a year or two. It seems to me to be a far better, and sounder, and wiser system of finance, when we have a large and temporary increase of Expenditure, to carry on our liabilities by spreading them over two, or three, or even four years. Now that, I am told, is a very shocking thing to do. I am told that Sir Robert Peel repudiated doing anything of the kind in 1842, and I am reminded that I have myself ventured, very humbly indeed, to speak in commendation of that position. But what were the circumstances of 1842, and what was the language in which Sir Robert Peel rejected the idea of making a temporary addition to that duty? In 1842 the circumstances were wholly different from what they are on the present occasion. There was no exceptional Expenditure required; but there had been for a series of years a falling Revenue, and a series of deficiencies. Sir Robert Peel came into power with the object, and very much for the purpose, of rectifying that which had been going on so long. What he did was to apply a radical remedy to the evils which he met. What was his remedy? He found a load of taxation. He found that the whole system was bad. He found that it was pressing on the springs of industry, and that it was important to relieve those springs, and to revise the whole of our tariff. He found that our system of taxation was of an indirect character; and in order to carry through the alterations he wished to make, he proposed the imposition of the Income Tax, for a limited time only, and in order to bring about that great reform. When he was examining all the different methods open to him to meet the deficiency of which we have spoken, he said— Shall we, in time of peace, have resort to the miserable expedient of continued loans?.…Shall we have recourse to any of those expedi- ents, which, call them by what name you please, are neither more nor less than a permanent addition to the Public Debt. We have had a deficiency of nearly £5,000,000 in two years; is there a prospect of reduced Expenditure? He goes on to say that there is not, and that they could not anticipate, the year after the next, the possibility, consistently with the honourable safety of the country, of reducing the Public Debt. He says, again— Is this a casual deficiency for which you have to provide a remedy? Is it a deficiency on account of extraordinary circumstances? Is it a deficiency for the last two years? Sir, it is not. This deficiency has existed for the last seven or eight years. It is not a casual deficiency."—[3 Hansard, lxi. 429–30.] Sir Robert Peel, in fact, was dealing with a wholly different state of things. We are dealing with that which, according to our contention, is a casual and a temporary deficiency, a deficiency arising out of the circumstances of the wars in which we have been forced to engage, and the Expenditure on which we hope to see the end of in the course of two years, or, at the most, three. I do not mean that we expect that the wars will last as long as that, but that we hope that the Expenditure to which they have given rise will be at an end by that time. I say, then, that it is perfectly legitimate and reasonable for us to take this course, instead of increasing the burdens of the people at this moment and putting upon them the weight of additional taxation. It would depress the commerce and trade of the country at the very time when we seek to enliven it. The right hon. Gentleman the Member for the City of London (Mr. Goschen) found a little consolation for the present state of things by pointing to the cheapness of the various articles of consumption. Are we, then, to do away with that advantage by putting taxation on them? But I am told that what I am doing is unprecedented. Now, I wish the House to kindly hear what has been done in former years; and I especially wish to refer to this remarkable year of 1860. It was in that year that the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) made one of the most brilliant, perhaps the most brilliant, of all the many brilliant Budget speeches he has made. It was one of the most remarkable character, of great ingenuity, and it embraced a great variety of topics. That was the year in which the Long Annuities fell in, and the country was relieved of a charge of£2,600,000 of Debt. It was the year in which the French Treaty was concluded, and the year in which a large amount of reduction was made in the taxation upon various articles of consumption. It was also the year in which my right hon. Friend, having expected it to be the time when the Income Tax was to be swept away, found it necessary to raise it from 5d. to 10d. It was a year in which the taxes that were taken off exceeded the taxes that were put on by no less than £2,500,000 or £2,600,000; and, therefore, it was a year which brought great credit to my right hon. Friend. But how did he get that £2,500,000 of taxation which he was able to remove? He took advantage of the falling in of these Long Annuities; he also took advantage of certain casual payments—there was one, for instance, from Spain—he shortened the long credits, and brought into the year certain payments; he shortened, also, the period in which the Income Tax was payable, and so brought in three-quarters of a year instead of a-half; and, strangely enough, in that very year he postponed, by a stroke of his pen, and hardly noticed it, £1,000,000 of Exchequer Bonds. All this was done with great applause, because it enabled him to reduce the taxes upon a large number of articles. I do not say for a moment that my right hon. Friend was not justified in taking that course; but I think it is a little hard, when he has done such things as this himself, that he should turn round upon me, and say that this spreading of Expenditure over three or four years—assuming it to be a right and proper Expenditure for a right and proper purpose—is such a very great offence. But there was one thing above all which was done in this year to which I wish to call attention. There was a Fortification Loan proposed in that year, and what was its history? It was set on foot for the construction of a series of fortifications round our Dockyards, and it was to cost £7,500,000, and it has cost—[Mr. GLADSTONE: No, no, £5,000,000.] Well, if it was £5,000,000, that makes it so much the worse. In this year of great prosperity, when there was all this money to be given away, and when the National Debt was so greatly reduced by these wonderful Long Annuities, and all these other matters had been pressed in aid, this sum of £5,000,000 was provided, not all at once, as my right hon. Friend now says money ought to be provided, but it was spread over a series of years, while the works were being constructed; and it was spread, not over four years or over five years, but over 25 years. The Expenditure of that sum has never been of that enormous character that the amount could not have been met out of the Revenue of the year, for the largest sum paid in any one year has been something less than £1,000,000. Well, but is that moral or immoral finance? It may have been all very right and very proper; but there certainly was a case in which you were borrowing money. For what? To put the country in a proper state of defence. Well, then, we say, we have been borrowing this money to put the country into a proper state of defence; and we say that it is rather hard to find fault with us for raising money, and for having done that which it was considered perfectly legitimate for my right hon. Friend and the Cabinet of Lord Palmerston to do. The re-payment, too, is pressing upon us now more than it did at the beginning, because in the first year of the Terminable Annuities you pay very little capital, and the greater part is interest. But the interest diminishes, and the payment of the capital increases, and we are now paying some £500,000 or more on account of that Loan in 1860. These were the transactions of 1860; and I can only complete the history of that remarkable year by saying that it ended with a deficit of £2,500,000. I shall not trouble the House by going into further figures. My right hon. Friend the First Lord of the Admiralty has put our case remarkably well, and the right hon. Gentleman the Member for Pontefract (Mr. Childers) has criticized many of those figures. I think that my right hon. Friend's figures will bear examination, and that, upon careful comparison of them, they stand good. But I am not at the present moment prepared to trouble the House with a detailed examination of the minute points which have been raised. I admit—for there can be no doubt about it—that the Expenditure of the country has been considerably increased since the present Government took Office, and we say that it could not be otherwise. We say, in the first place, that it was due to new Services introduced, or to the increasing amount of the new Services for which we were not responsible, but which we have done our best to administer according to the obligations laid upon us. Hon. Gentlemen opposite know, and we all know, what the general outline of these Services is. The increasing expense of education, the advance of payments to local bodies—which can hardly be called additions to Expenditure, because they are a relief to the ratepayer—are among these; but I do not think it would be convenient at this time of night that I should enter into a discussion of these questions, or that I should follow the right hon. Gentleman the Member for Pontefraet into his discussion of the County Government Bill, or the general system of local expenditure. The broad ground upon which we rest our case is that it was our duty, and we felt it to be our duty, to make adequate provision for placing this country on a footing on which it might sustain the position it holds in the Councils of Europe. You may say that the time has come when we can no longer wish to maintain that position. We know very well that it has been said—and extremely well said—that Expenditure depends upon policy. But, though I entirely agree with that sentiment, I hope that we shall not invert the sentiment, and say that our policy ought to be determined by the Expenditure which we make. If the policy is wrong, by all means let it be censured and abandoned. If it be right, you must take the consequences of our carrying it out. If England, being, as it is, the centre of a great Empire, which is widely spread, and which touches at all points those whom she has to watch, and, in some cases, against whose jealousies or hostility she has to guard, then there is no option—it is necessary that England should maintain herself with credit in the position in which she is placed. If we are prepared to withdraw from that position, let us withdraw from it. Let us close the chapter, as I think, the glorious chapter, in the history of England; let us frankly say that we can no longer afford to maintain the attitude which we have hither to endeavoured to maintain. It is not an attitude of aggression. It never ought to be an attitude of aggres- sion, because the policy of England is necessarily a policy of peace and the development of commerce all over the world. It ought not to be a policy of aggression, because the system of English government is the application of the English system of government amongst Native races in distant parts of the world, and demands, above all things, that there should be tranquillity and prosperity in these countries. But yon cannot maintain that tranquillity, and you cannot maintain that prosperity, unless it is founded upon respect. Unfortunately, we must admit that respect in this world will not be given, or cannot, at all events, be relied upon to be given, to those who are not strong, who do not show their strength, or who do not show, at any rate, that they are ready, if necessary, to use their strength. I trust that the sad conjuncture, which we all deplore, of our having simultaneously to defend our possessions, or to take steps to prevent interference with our possessions, in different parts of the world at the same time—a conjecture complicated, no doubt, by the attitude we have been obliged to take in the face of Europe—will shortly pass away. I think that there are symptoms that it is passing away, and that when our children come to look back upon the history of this period, they will say that this generation did not do an unwise thing, and did not do an unpatriotic thing, in endeavouring, by a judicious expenditure of money, and a judicious demonstration of our strength, to avert war and to preserve peace.

Question put.

The House divided:—Ayes 303; Noes 230: Majority 73.

AYES.
Agnew, R. V.	Barne, F. St. J. N.
Alexander, Colonel C.	Barrington, Viscount
Allcroft, J. D.	Barttelot, Sir W. B.
Allsopp, C.	Bates, E.
Allsopp, H.	Bateson, Sir T.
Arbuthnot, Lt.-Col. G.	Beach, rt. hn. Sir M. H.
Archdale, W, H.	Beach, W. W. B.
Arkwright, A. P.	Bective, Earl of
Arkwright, F.	Bentinck, rt. hn. G. C.
Ashbury, J. L.	Beresford, Lord C.
Assheton, R.	Beresford, Colonel M.
Astley, Sir J. D.	Birkbeck, E.
Bagge, Sir W.	Birley, H.
Bailey, Sir J. R.	Blackburne, Col. J. I.
Balfour, A. J.	Boord, T. W.
Baring, T. C.	Bourke, hon. R.

Bourne, Colonel J.	Galway, Viscount
Bousfield, Col. N. G. P.	Gardner, J. T. Agg-
Bowen, J. B.	Garfit, T.
Bowyer, Sir G.	Garnier, J. C.
Brise, Colonel R.	Gathorne-Hardy, hn. A.
Broadley, W. H. H.	Gathorne-Hardy, hn. S.
Brooke, Lord	Gibson, rt. hon. E.
Brooks, W. C.	Giflard, Sir H. S.
Bruen, H.	Giles, A.
Brymer, W, E.	Gilpin, Sir R. T.
Bulwer, J. R.	Goddard, A. L.
Burghley, Lord	Goldney, G.
Burrell, Sir W. W.	Gooch, Sir D.
Buxton, Sir R. J.	Gordon, W.
Cameron, D.	Gore-Langton, W. S.
Campbell, C.	Gorst, J. E.
Cartwright, F.	Grantham, W.
Castlereagh, Viscount	Greenall, Sir G.
Cecil, Lord E. H. B. G.	Gregory, G. B.
Chaine, J,	Hall, A. W.
Chaplin, Colonel E.	Halsey, T. F.
Chaplin, H.	Hamilton, Lord C. J.
Charley, W. T.	Hamilton, I. T.
Christie, W. L.	Hamilton, rt. hn. Lord G.
Clive, Col. hon. G. W.
Close, M. C.	Hamilton, Marquess of
Clowes, S. W.	Hamilton, hon. R. B.
Cobbold, T. C.	Hamond, C. F.
Cole, Col. hon. H. A.	Hanbury, R, W.
Coope, O. E.	Harcourt, E. W.
Cordes, T.	Hardcastle, E.
Corry, hon. H. W. L.	Harvey, Sir R. B.
Corry, J. P.	Hay, rt. hn. Sir J. C. D.
Cotton, W. J. R.	Heath, R.
Crichton, Viscount	Hehnsley, Viscount
Cross, rt. hon. R. A.	Herbert, hon. S.
Cubitt, G.	Hermon, E.
Cuninghame, Sir W.	Hervey, Lord F.
Dalkeith, Earl of	Heygate, W. U.
Dalrymple, C.	Hick, J.
Davenport, W. B.	Hicks, E.
Deedes, W.	Hildyard, T. B. T.
Denison, C. B.	Hill, A. S.
Denison, W. B.	Holford, J. P. G.
Denison, W. E.	Holker, Sir J.
Dickson, Major A. G.	Holland, Sir H. T.
Digby, Col. hon. E.	Holmesdale, Viscount
Douglas, Sir G.	Holt, J. M.
Dyott, Colonel R.	Home, Captain D. M.
Eaton, H. W.	Hood, Capt. hn. A. W. A. N.
Edmonstone, Admiral Sir W.	Hope, A. J. B. B.
Egerton, hon. A. F.	Hubbard, E.
Egerton, Sir P. G.	Isaac, S.
Egerton, hon. W.	Jervis, Col. H. J. W.
Elliot, Sir G.	Johnson, J. G.
Elliot, G. W.	Johnstone, H.
Elphinstone, Sir J. D. H.	Jolliffe, hon. S.
Emlyn, Viscount	Jones, J.
Estcourt, G. S.	Kavanagh, A. Mac M.
Ewart, W.	Kennard, Col. E. H.
Ewing, A. O.	Kennaway, Sir J. H.
Fellowes, E.	King-Harman, E. R.
Finch, G. H.	Knightley, Sir R.
Floyer, J.	Knowles, T.
Folkestone, Viscount	Lacon, Sir E. H. K.
Forester, C. T. W.	Lambert, N. G.
Forsyth, W.	Lawrence, Sir T.
Foster, W. H.	Learmonth, A.
Fraser, Sir W. A.	Lechmere, Sir E. A. H.
Fremantle, hon. T. F.	Legard, Sir C.
Freshfield, C. K.	Legh, W. J.
Gallwey, Sir W. P.	Leighton, Sir B.

Leighton, S.	Salt, T.
Lennox, Lord H. G.	Samuda, J. D'A.
Leslie, Sir J.	Sanderson, T. K.
Lewis, O.	Sandon, Viscount
Lewisham, Viscount	Sclater-Booth, rt. hn. G.
Lindsay, Colonel R. L.	Scott, Lord H.
Lindsay, Lord	Selwin-Ibbetson, Sir H. J.
Lloyd, S.
Lloyd, T. E.	Severne, J. E.
Lopes, Sir M.	Shirley, S. E.
Lowther, hon. W.	Shute, General C. C.
Lowther rt. hn. J.	Simonds, W. B.
Mac Iver, D.	Smith, A.
M'Garel-Hogg, Sir J.	Smith, F. C.
Makins, Colonel	Smith, S. G.
Mandeville, Viscount	Smith, rt. hon. W. H.
March, Earl of	Smollett, P. B.
Marten, A. G.	Somerset, Lord H. R. C.
Master, T. W. C.	Spinks, Serjeant F. L.
Merewether, C. G.	Stanhope, hon. E.
Miles, Sir P. J. W.	Stanhope, W. T. W. S.
Mills, A.	Stanley, rt. hn. Col. F.
Mills, Sir C. H.	Starkey, L. R.
Montgomerie, R.	Starkie, J. P. C.
Montgomery, Sir G. G.	Steere, L.
Moray, Col. H. D.	Stewart, M. J.
Morgan, hon. F.	Storer, G.
Mowbray, rt. hon. J. R.	Sykes, C.
Mulholland, J.	Talbot, J. G.
Muncaster, Lord	Taylor, rt. hn. Col. T.E.
Naghten, Lt.-Col. A. R.	Tennant, E.
Newdegate, C. N.	Thornhill, T.
Noel, rt. hon. G. J.	Thwaites, D.
North, Colonel J. S.	Thynne, Lord H. F.
Northcote, rt. hn. Sir S. H.	Tollemache, hon. W.F.
	Torr, J.
O'Donoghue, The	Tremayne, A.
O'Neill, hon. E.	Tremayne, J.
Onslow, D.	Turnor, E.
Paget, R. H.	Wait, W. K.
Parker, Lt.-Col. W.	Walker, O. O.
Peek, Sir H.	Walker, T. E.
Pell, A.	Wallace, Sir R.
Pemberton, E. L.	Walpole, rt. hon. S.
Pennant, hon. G.	Walsh, hon. A.
Peploe, Major D. P.	Warburton, P. E.
Percy, Earl	Watney, J.
Phipps, P.	Watson, rt. hon. W.
Plunket, hon. D. R.	Welby-Gregory, Sir W.
Powell, W.	Wellesley, Colonel H.
Praed, C. T.	Wells, E.
Praed, H. B.	Wethered, T. O.
Price, Captain G. E.	Wheelhouse, W. S. J.
Puleston, J. H.	Wilmot, Sir H.
Raikes, H. C.	Wilmot, Sir J. E.
Read, C. S.	Wilson, W.
Rendlesham, Lord	Woodd, B. T.
Repton, G. W.	Wroughton, P.
Ridley, E.	Wyndham, hon. P.
Ridley, Sir M. W.	Wynn, Sir W. W.
Ripley, H. W.	Wynn, C. W. W.
Ritchie, C. T.	Yarmouth, Earl of
Rodwell, B. B. H.	Yorke, J. R.
Round, J.
Russell, Sir C.	TELLERS.
Ryder, G. R.	Dyke, Sir W. H.
Sackville, S. G. S.	Winn, R.

NOES.
Acland, Sir T. D.	Anderson, G.
Adam, rt. hn. W. P.	Ashley, hon. E. M.
Allen, W. S.	Backhouse, E.

Balfour, Sir G.	Forster, rt. hon. W. E.
Barclay, A. C.	French, hn. C.
Barclay, J. W.	Fry, L.
Barran, J.	Gladstone, rt. hn. W.E.
Bass, A.	Gladstone, W. H.
Bass, H.	Goldsmid, Sir J.
Beaumont, Colonel F.	Gordon, Sir A.
Bell, I. L.	Gordon, Lord D.
Biddulph, M.	Goschen, rt. hon. G. J.
Blake, T.	Gourley, E. T.
Brassey, H. A.	Gower, hon. E. F. L.
Brassey, T.	Grant, A.
Briggs, W. E.	Grey, Earl de
Bright, Jacob	Grosvenor, Lord R.
Bright, rt. hon. J.	Hankey, T.
Bristowe, S. B.	Harcourt, Sir W. V.
Brogden, A.	Harrison, C.
Brooks, M.	Harrison, J. F.
Brown, A. H.	Hartington, Marq. of
Brown, J. C.	Havelock, Sir H.
Browne, G. E.	Hayter, Sir A. D.
Bruce, Lord C.	Henry, M.
Burt, T.	Herschell, F.
Cameron, C.	Hibbert, J. T.
Campbell, Lord C.	Hill, T. R.
Campbell, Sir G.	Holland, S.
Campbell-Bannerman, H.	Holms, J.
	Hopwood, C. H.
Carington, hn. Col. W.	Howard, E. S.
Cartwright, W. C.	Howard, G. J.
Cave, T.	Hutchinson, J. D.
Cavendish, Lord F. C.	Ingram, W. J.
Chadwick, D.	Jackson, Sir H. M.
Chamberlain, J.	James, Sir H.
Chambers, Sir T.	James, W. H.
Childers, rt. hn. H. C. E.	Jenkins, D. J.
Clarke, J. C.	Jenkins, E.
Clifford, C. C.	Johnstone, Sir H.
Cole, H. T.	Kensington, Lord
Collins, E.	Kingscote, Colonel
Colman, J. J.	Knatchbull-Hugessen, rt. hon. E.
Colthurst, Colonel
Conyngham, Lord F.	Laing, S.
Corbett, J.	Laverton, A.
Cotes, C. C.	Lawrence, Sir J. C.
Courtney, L. H.	Lawson, Sir W.
Cowan, J.	Leatham, E. A.
Cowen, J.	Leeman, G.
Cowper, hon. H. F.	Lefevre, G. J. S.
Cross, J. K.	Leith, J. F.
Davies, D.	Lloyd, M.
Davies, R.	Lowe, rt. hon. R.
Delahunty, J.	Lubbock, Sir J.
Dilke, Sir C. W.	Lusk, Sir A.
Dillwyn, L. L.	M'Carthy, J.
Dodds, J.	Macdonald, A.
Dodson, rt. hon. J. G.	Macduff, Viscount
Duff, M. E. G.	Mackintosh, C. F.
Duff, R. W.	M'Arthur, A.
Dundas, hon. J. C.	M'Arthur, W.
Earp, T.	M'Clure, Sir T.
Edge, S. R.	M'Lagan, P.
Edwards, H.	M'Laren, D.
Egerton, Adm. hon. F.	Maitland, J.
Errington, G.	Maitland, W. F.
Evans, T. W.	Marjoribanks, Sir D. C.
Fawcett, H.	Marling, S. S.
Ferguson, R.	Martin, P.
Fitzmaurice, Lord E.	Massey, rt. hon. W. N.
Fitzwilliam, hon. W. J.	Meldon, C. H.
Fletcher, W.	Mellor, T. W.
Foljambe, F. J. S.	Middleton, Sir A. E.
Forster, Sir C.	Milbank, F. A.

Monk, C. J.	Samuelson, H.
Montagu, rt. hn. Lord R.	Seely, C.
Morgan, G. O.	Sheil, E.
Morley, S.	Sheridan, H. B.
Mundella, A. J.	Sherlock, Serjeant D.
Muntz, P. H.	Simon, Serjeant J.
Mure, Colonel W.	Smith, E.
Murphy, N. D.	Stansfeld, rt. hon. J.
Noel, E.	Stanton, A. J.
Nolan, Major J. P.	Stevenson, J. C.
Norwood, C. M.	Stewart, J.
O'Beirne, Major F.	Stuart, Col. J. F. D. C.
O'Brien, Sir P.	Sullivan, A. M.
O'Byrne, W. R.	Swanston, A.
O'Conor, D. M.	Talbot, C. R. M.
O'Conor Don, The	Tavistock, Marq. of
O'Donnell, F. H.	Taylor, P. A.
O'Gorman, P.	Tomple, right hon. W. Cowper-
O'Shaughnessy, R.
O'Sullivan, W. H.	Torrens, W. T. M'C.
Otway, A. J.	Tracy, hon. F. S. A. Hanbury-
Palmer, C. M.
Palmer, G.	Trevelyan, G. O.
Parker, C. S.	Villiers, rt. hon. C. P.
Pease, J. W.	Vivian, A. P.
Peel, A. W.	Waddy, S. D.
Pender, J.	Waterlow, Sir S. H.
Pennington, F.	Wedderburn, Sir D.
Perkins, Sir F.	Weguelin, T. M.
Playfair, rt. hon. L.	Whitbread, S.
Plimsoll, S.	Whitwell, J.
Potter, T. B.	Whitworth, B.
Power, R.	Williams, B. T.
Price, W. E.	Williams, W.
Ralli, P.	Wilson, C.
Ramsay, J.	Wilson, I.
Rashleigh, Sir C.	Wilson, Sir M.
Rathbone, W.	Yeaman, J.
Richard, H.	Young, A. W.
Roberts, J.
Robertson, H.	TELLERS.
Russell, Lord A.	Baxter, rt. hon. W. E.
St. Aubyn, Sir J.	Rylands, P.

Bill read a second time, and committed for Thursday.

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-nine, in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act of the sixteenth and seventeenth years of Her Majesty's reign, chapter thirty-four, the following Duties of Income Tax (that is to say): For every Twenty Shillings of the annual value or amount of Property, Profits, and Gains chargeable under Schedules (A), (C), (D), or (E) of the said Act, the Duty of Five Pence; And for every Twenty Shillings of the annual value of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act,— In England, the Duty of Two Pence Halfpenny; In Scotland and Ireland respectively, the Duty of One Penny Three Farthings: Subject to the provisions contained in section one hundred and sixty-three of the Act of the fifth and sixth years of Her Majesty's reign, chapter thirty-five, for the exemption of persons whose income is less than One Hundred and Fifty Pounds, and in section eight of 'The Customs and Inland Revenue Act, 1876,' for the relief of persons whose income is less than Four Hundred Pounds.

MR. GLADSTONE

I do not propose to initiate any new discussion at this time of the night, or rather of the morning; but I wish to give a Notice, with reference to what has just fallen from the Chancellor of the Exchequer. He referred to some criticisms of mine, which I am aware were strong—stronger than I should have desired to make them had it been a matter of free choice. I could not complain of that. But he referred to certain matters, which are matters of fact, with regard to the financial proceedings of 1860, and I think him so entirely wide of the mark, that it will be necessary for me to offer an explanation to the House. I will take an opportunity of doing it at some future time, and probably the occasion of Committee of Ways and Means will be the most convenient one. I bog to move that the Chairman report Progress.

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

THE CHANCELLOR OF THE EXCHEQUER

said, of course, it would be impossible to proceed with these Resolutions if they really were objected to; but he was not aware that that was the case. He did not suppose, for instance, that there would be any objection to passing the Resolution for the Income Tax, which stood at the same rate now as it did last year. It was very in convenient that these Resolutions should I remain in abeyance for any length of time. Unless, therefore, there was a serious intention to challenge these Resolutions for the imposition of Parliamentary taxes, he hardly thought it was necessary to oppose their passing. Of course, on the other hand, if there were I a serious intention of opposing these Resolutions, the Government would not oppose the Motion for reporting Progress.

MR. GLADSTONE

said, he thought it was understood that he wished to clear up some misunderstanding as to his financial policy, and to explain the true state of affairs. He wished to do that in the most regular mode, and it certainly ought to be done at the earliest possible opportunity after the statement was made. At the same time, he was aware of the inconvenience to which the Chancellor of the Exchequer had referred, and he would be sorry to interfere with the passing of the Resolution. There would, he presumed, be a subsequent Resolution of a different nature.

SIR HENRY SELWIN-IBBETSON

said, there would be one to amend the Customs and Inland Revenue Bill.

MR. GLADSTONE

observed, that that Resolution would give him the opportunity he wanted, and, therefore, he should have no objection to taking the Resolutions now.

SIR WILFRID LAWSON

asked if there would be any further opportunity of discussing the whole financial policy of the Government?

THE CHANCELLOR OF THE EXCHEQUER

replied, that there would be at least four or five opportunities, because it would be necessary to bring in a Bill to carry out these Resolutions, which would have to go through the usual-stages.

SIR WILFRID LAWSON

said, there were a great number of hon. Gentlemen below the Gangway on that side of the House who thought this question to be a most important one to bring before the House, and who were very anxious to express their opinion upon it. They had been anxious to speak on the Resolution just defeated, and, having failed, they were still most anxious to express their opinion on the financial policy of the Government.

Motion, by leave, withdrawn.

Main Question put.

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 nine, in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act of the sixteenth and seventeenth years of Her Majesty's reign, chap- ter thirty-four, the following Duties of Income Tax (that is to say): For every Twenty Shillings of the Annual value or amount of Property, Profits, and Gains chargeable under Schedules (A), (C), (D), or (E) of the said Act, the Duty of Five Pence; And For every Twenty Shillings of the annual value of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act,— In England, the Duty of Two Pence Halfpenny; In Scotland and Ireland respectively, the Duty of One Penny Three Farthings; Subject to the provisions contained in section one hundred and sixty-three of the Act of the fifth and sixth years of Her Majesty' sreign, chapter thirty-five, for the exemption of persons whose income is less than One Hundred and Fifty Pounds, and in section eight of "The Customs and Inland Revenue Act, 1876," for the relief of persons whose income is less than Four Hundred Pounds.

House resumed.

Resolution to be reported To-morrow;

Committee to sit again upon Wednesday.