WAYS AND MEANS.

HC Deb 17 April 1890 vol 343 cc692-736

Considered in Committee.

(In the Committee.)

*(4.20.) THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN,) St. George's, Hanover Square

Mr. Courtney, once more I have the great satisfaction of being able, in presenting the National Balance-Sheet, to show that it balances largely on the right side. Once more the absence of costly expeditions or small wars has relieved me from any of those sudden inroads on the national resources which have so often marred the fairest prospects of Chancellors of the Exchequer. Again no events have occurred to put any extraordinary expenditure upon us, while, on the other hand, a steady increase of prosperity has caused those Estimates which prudence dictated to be exceeded in the result. The Estimates of Revenue have been attacked as having been put too low. Those Estimates I am prepared to defend, but as regards Expenditure I think all Parties in the House will acknowledge that the figures are most satisfactory. The Paper which I have had put in the hands of hon. Members will show that the estimated expenditure has not been exceeded by more than the very trifling sum of £116,000. I am relieved on this occasion, I hope, from the somewhat dreary necessity of wearying the Committee with many explanations of details with regard to excess of expenditure or savings, by the fact that the Estimates have been, on the whole, so extremely accurate. The aggregate result is this—I estimated for an expenditure of £85,967,000; the Exechequer Issues for the year were £86,083,000, or £116,000 more than the estimate. As the Committee are aware, there have been some Supplementary Estimates on the one hand, while on the other we have been compensated by savings; but there is not one item on which I need touch. The ground I have to cover is very broad indeed, and I hope the Committee will excuse me if I do not go more into detail than is absolutely necessary, or more than they have a right to demand. I ask the Committee in passing to note the fact that on an aggregate Expenditure of £86,000,000 we have been right within £116,000. do not believe there is any private establishment, or any great Railway Company, or any company of any kind, that could have forecast its expenditure in a more business-like manner than has been done by the Administrative Departments of the State. I think that the financial officers of the various Departments deserve great credit for this result. I think the heads of these Departments deserve credit for having so controlled the expenditure, and I think the Committee will recognise that some credit is also due to my hon. Friend the Secretary for the Treasury, who watches over the Estimates with such care and vigilance. I come now to the Estimates of Revenue. The surplus Revenue which I am able to lay before the Committee to-day does not come from any savings, nor from any cause connected with Expenditure, but from the expansion of Revenue. The receipts have exceeded my estimate by more than £3,000,000. I am bound to say that this has been made a matter of some reproach to me. It has been said that this is "easy finance"; that it is an easy process of securing the popularity of a surplus to depreciate the expansion of your probable Revenue, and so be able to put a satisfactory conclusion before the country at the end of the year. It has been said that personal motives must have induced the Chancellor of the Exchequer to take a gloomy, or too gloomy, a view of the Estimates at the beginning of the year. I have even seen it declared that I must have purposely and wilfully deceived the public in this matter. I shall be able to produce conclusive proof that this has not been the case; I shall be able to pro-due the most satisfactory proof to all hon. Members on both sides of the House, and, I think, to my censors, that I was perfectly right in the course I took. If I insist on this for a moment, I do not do so as a personal defence—I am not concerned to defend myself very seriously against having a large surplus—but I think a defence is necessary, not so much for one Chancellor of the Exchequer as for the sake of his successors, and for the sake of the public generally. It is utterly impossible to forecast a Revenue amounting to £86,000,000 or £90,000,000 so accurately that you should not be out by a few per cent., and remember that 1 per cent. upon this total of £86,000,000 means £860,000, and that, speaking roughly, an excess of 4 par cent. would be about equivalent to the £3,000,000 which represents the surplus. What we have to do, therefore, is to see that within a very narrow percentage we are able to calculate the proper Revenue of the year. Supposing we wore to be less careful as regards the Estimates, what would be the result? If any change took place during the course of the year—and who can say that a change will not take place? — you might from having taken an optimistic view of your Revenue most likely find that you were on the wrong side. I am not prepared to say that it is right for a Chancellor of the Exchequer to treat it practically as a toss-up whether he will have a deficit or a surplus. He must make sure, so far as human expectation goes, that he is on the right side at the end of the year, and I am perfectly confident that right hon. Gentlemen opposite will take the same view as I do in that respect. It is discreditable, unless there are unforeseen circumstances, that you should land the credit of this country in a deficit. I think it may be well to show the public shortly how these Estimates are framed. The Chancellor of the Exchequer does not got the Estimates placed before him simply in the gross, and then say, "Now the times are prosperous, let us put on a couple of millions." That is not the process at all. Every Department is responsible for the estimates which it places before the Chancellor of the Exchequer. The Customs and the Inland Revenue calculate, not only what each Department may fairly estimate for, but they go through every item, and they are anxious that in every item it shall be proved that they have taken a businesslike view, and that there should not be a deficit in that item at the end of the year. I uppose it has rarely happened that a Chancellor of the Exchequer has said to himself that ho would underestimate an item which had been put before him, by his responsible advisers. The temptation is all the other way. The temptation to a Chancellor of the Exchequer is to avoid the imposition of taxation, when it may seem necessary, by screwing up estimates. That is a temptation into which we may sometimes fall, but there is no temptation to under-estimate your Revenue in order to impose taxation. The phrase has been used of "easy finance." Clearly where you have to impose actual taxation in order to make the Revenue square, personal considerations would point to putting your Estimates high and not to putting them low. If I had put my Estimates higher last year I might have escaped the fierce onslaught that was made upon mo by the brewers in consequence of the 3d. addition obliged to be put on the Beer Duty, and in the same way I should not have had to impose the additional £1,000,000 of the Estate Duty. I framed my Estimates according to the best advice I received, and I shall be able to show the House, when I come to consider the details, how those Estimates have been justified. For the last two or three years we have been on the ascending curve of prosperity, and in that case there is nearly always a prospect of some increase of Revenue over your Estimates. But you must take care not to be caught half-way. When a Chancellor of the Exchequer thinks he is still on the ascending curve of prosperity, he may before the year is out have a drop and find his Estimates falsified. We have had some warnings in that respect. Several times it has been believed that we had seen the dawn of a greater prosperity, but in the East people sometimes speak of "false dawns," and there have been many occasions when prosperity seemed to be opening to us and we thought we saw the real dawn, but it has proved to be a false hope. Happily this year we seem to have come upon a greater period of prosperity, and the result is that, in some respects, but in some respects only, the Estimates show a very remarkable elasticity. The House will be startled when they come to consider in detail the cause of the very considerable excess of Revenue over Estimates. Nearly £2,500,000, out of a surplus of £3,250,000, were due to absolutely extraordinary circumstances. The £2,500,000 have been due to an extraordinary rush to alcohol and to an operation in silver which was not con- templated when I presented my Budget last year. The increase in the comsumption of alcohol last year, as compared with its predecessor, produced an increase of duty exceeding £1,800,000. Let me remind the House that for eleven years the Revenue from spirits had been declining, and that for two years it had remained stationary. Speaking of forecasting the Revenue, if I had come before this House and had stated that I believed the increase on alcoholic beverages for the year would be £1,800,000, I believe I should have been considered either a lunatic or a libeller of the consuming classes of the country. Let me analyse the details of the Revenue of the past year. I think the House will admit that the figures are interesting. The net receipts from all consumable articles except spirits, wines, and beer actually fell short of my Estimate by, in round numbers, £130,000, surely an exceedingly accurate estimate. The net receipts from these articles—namely, tea, driedfruits, tobacco, and coffee—were £14,488,000, as compared with the Estimate of £14,617,000, and as compared with a net produce in the previous year of £14,468,000. As to alcoholic drinks, I am bound to admit that I have a different tale to tell. The net receipts from all alcoholic drinks amounted to £29,265,000, as compared with my Estimate of £27,430,000 and with a net produce of £27,157,000 in the year before. If I deduct the produce of the change made in the Boer Duty it shows an increase of £1,778,000, which I have roughly called £1,800,0000. The Beer Duty exceeded my estimate by £270,000; the duty on foreign spirits by £421,000; on home spirits by no less than £1,010,000; and on wine by £120,000. It is on drink, and on drink alone, as regards consumable articles, that the Revenue was under-estimated in the past year. I may have been wrong in not foreseeing this increase in the consumption of alcoholic drinks, but I think I should have been wrong in disregarding the previous opinion of every person who has studied the course of consumption during the last few years. The Committee will notice that there has been a universal rush. Some have rushed to the beer barrel, others to the spirit bottle, and others to the decanter. All classes seemed to have combined in toasting the prosperity of the country in largely increased quantities of alcohol. I call the special attention of the Committee to this extraordinary circumstance—a circumstance which must be deplored by all—and which places upon the House of Commons and the Government an increasing liability to deal with the question of the consumption of alcoholic liquors. A closer examination of the separate items in the list of alcoholic beverages will not diminish the surprise which I think the House and the public will feel. Of all beverages in the world, the one that shows the greatest increase during the last year is rum. I have taken some pains to find out who drinks the rum. I am told the consumption takes place mainly in seaport towns; and London, being a port, has also contributed largely to this extraordinary increase. The consumption of rum has increased by 12 per cent. in the last financial year. British spirits follow with an increased consumption of over 7 per cent. Brandy follows with an increased consumption of nearly 6 per cent., and other sorts of spirits show an increased consumption of nearly 5 per cent. I cannot exaggerate the impression which these figures make on myself. The more you deal with them the more extraordinary they seem to be. I have attempted to ascertain what this consumption of 12 per cent. additional of rum means if reduced to intelligible proportions. I understand that rum is generally asked for in public houses by the half quartern or half gill, both of which mean about one-eighth of a pint. The retailer is allowed to mix water with the spirit as long as it is not reduced to below 25deg. under proof. Taking these facts into consideration, and bearing in mind that the price of a half gill of rum is about 2½d. or 3d., you will see that the rum consumed in the United Kingdom during the year 1888–9, if it was all drunk in this way, was 245,000,000 drams, and that enormous amount has been increased by 30,000,000 drams during the course of the last financial year. I hope the Committee will feel that this is a matter we ought to look fully in the face. We ought to understand not only what 12 per cent. means when you put it in the bulk, but how it works out in detail. It is an extraordinary his- torical fact that in the year 1875‖6, which was the greatest drinking year on record, there was precisely the same rush, in precisely the same proportions, to these different classes of spirits. At that time, too, the consumers of wine followed generally in the wake of the consumers of spirits and beer. So if appears that, notwithstanding all our efforts in the cause of temperance, increased prosperity does not mean an increased consumption of other great classes of articles, but unfortunately has meant, and does mean, a great increase in the consumption of alcoholic liquors. Wine, which had been at a standstill for a few years, last year exceeded by nearly 10 per cent. the amount consumed in previous years. The consumption of beer has increased about 4 per cent., which is considerably larger than the increase in population, although there has been increase of duty. I saw a somewhat remarkable statement coming from a country brewer, who asserted that if the impost was maintained, the quality of the beer would be deteriorated. Whether that is so or not I cannot say, but at all events the taste for it has not decreased. Let me now descend from these stupendous, these sensational figures, into the more ordinary figures of the Budget. If I run through, as is customary, the various items of Revenue, comparing the receipts with my Estimate, there is a decrease of £17,500 on chicory, coffee, and cocoa; an increase on dried fruits of £49,000; an increase of £421,000 on foreign spirits; a decrease on tea of £220,000; an increase on to accoof£152,000,andonwineof£120,000, the net increase being about £410,000. Coffee and cocoa are as disappointing as they always have been. I do not think we need pay much attention to the case of dried fruits, as that depends so much upon the crops. The deficiency in the Tea Duty is due to two circumstances. It is due in a great part to the transfer of the purchases from China to Indian tea. That accounts for a very considerable amount. But there is also another circumstance, and that is that the traders have refrained from taking tea out of bond during the last two months, owing to the belief—as to the justification for which, at this moment, I will say nothing —that the duty would be reduced. But taking the Customs as a whole—and I draw attention again to those critics who speak of under estimating the Revenue—the result is that with an income of upwards of £20,000,000, the total increase is only £400,000, due practically to foreign spirits. Passing now to Inland Revenue, I come to Excise. The excess of Receipts over Estimates is, in the Beer Duty, £270,000; and in spirits, £1,010,000. The Railway Duty shows a small increase of £12,000. In Licences there is a decrease of £32,000. The total receipts from Excise are £24,133,000, as against the estimate of £22,870,000, the increase being entirely due to spirits and wines. I now come to the Death Duties. The Probate, Legacy, and Succession Duties yielded £6,056,000, against an estimate of £5,940,000. The new Estate Duty yielded £784,000, as against an estimate of £800,000. I think, looking at the uncertainty of life itself, it is a remarkable fact that there is no estimate more certain of being proved correct at the end of the year than the estimate framed upon Death Duties. It appears to me to be a extraordinary fact that we are able so accurately to estimate what is really a double sum, namely, the number of people who are likely to die in the year, and the fortunes which they will leave, and I may almost say the manner in which they will leave them. But, taken altogether, our Estimates of the Death Duties have been wonderfully correct. The last item under the head of Stamps is general stamps. This item is more difficult to gauge than any other, because, this being upon the transactions of the living, who can foretell at the beginning of the financial year whether speculation will continue on the same basis as it assumed at that time? It would have been difficult to foresee that the rush for forming companies would have been as continuous as it had been during the past year. There are various circumstances which modify the result from stamps, and there is no more uncertain item in the whole of our Revenue. As the result, I am glad to be able to announce that the increase on the whole of these general stamps was £357,000. It may interest the Committee to know that, as regards the Com- panies' Capital Duty, which I imposed in 1888, and which, I may say, is paid with marvellous cheerfulness by the sanguine promoters of companies, it amounted to £290,000, against an estimate of £180,000, although I had allowed for an increase of £50,000 over the estimate of last year. It has passed through my mind sometimes whether it might not have been better to have put a tax of 2 per cent. instead of 1 per cent. upon this form of industrial activity. I wish the Committee to note that the chief increase took place in the first three quarters of the year. The general stamps have not been so productive during the last quarter. There has been a check in trade, there have been symptoms which do not point to that increase of transactions which has been so useful to the Revenue during the last year. Therefore, though the total for the year is as satisfactory as I have indicated, I think it will be seen that caution will be required as regards general stamps next year. The receipts from the Post Office have exceeded the Estimate by £100,000—a very close calculation. When hon. Members talk of underestimating the Revenue, they should remember that no credit is due to me, but that great credit is due to the Post Office Authorities for having been able to estimate a Revenue of £9,000,000 within £100,000. In Telegraphs there is an excess of £90,000 on the aggregate sum of £2,230,000. I have one more item. I said that there were two abnormal causes in the receipts of last year. One was the Drink Bill. I spoke of £2,500,000, which leaves a margin of £700,000. I will explain to what cause this is due. It is a windfall which cannot be expected to recur. It is duo to the increased profit of the Mint upon the circulation of silver. Practically, the whole is due to that cause. It could not be anticipated at the beginning of the year, because the action which was taken, and which has brought in a profit of £774,000, was not contemplated at that time. The actual profit derived from silver is £774,000, against an Estimate of £200,000. The Committee will remember that there have been continual complaints of an insufficient silver circulation. On the other hand, there was plenty of silver at the Mint, and at the Bank, and every desire to put it into circulation. But somehow or other the conduit pipes by which it passes into circulation seemed to be stopped. The public wanted more silver; we were prepared to issue it, but something seemed to be amiss. On looking carefully into the matter I found that there was a charge of ¼ per cent. upon the freight of silver from London to the provinces, or a charge of ¼ per cent. made by the Bank of England in respect of the transmission of silver from London to provincial banks. And bankers, having no special interest in supplying their customers with silver, shrank from paying the ¼ per cent., and consequently the silver did not flow. I can almost prove that that is the case by showing what occurred when the hitch was removed. Seeing that it was desirable, as the country wished for silver, to let the country have the silver, I authorised the payment of the ¼ per cent. by the State. It was an infinitesimal sacrifice, but the removal of the charge set the How of silver free, and has put us in the position of being able to show such a satisfactory result at the end of the year. There was also an increase in wages, which made the moment favourable for an increase in the circulation of silver. I do not think that there have been many complaints that too much silver was put into circulation. On the contrary, I occasionally hear still of the want of shillings and sixpences in various parts of the country. The Committee will remember that it is not the duty of the State to supply people with silver, but that silver must be asked for through the banks, or through the ordinary channels, before it is obtained. There is no State process for the issue of silver except so far as we can pay it out to our own workmen. That is what we have done, to some extent, taking care that there should be no complaint or abuse. We also prevented the increase, to any great extent, of the most expensive coin in the world—namely, the half sovereign. We have been charged with diminishing the amount in circulation of that most useful coin, but we have not diminished the amount. All that we have done is rather to check the fresh issue of a coin on which the annual loss is as great as it is on the sovereign itself. We have made a profit on silver, and thus lightened the work which we have to perform with regard to the withdrawal of light gold. The total amount of silver issued in 1889–90 was £2,304,000. Without being carried into detail, the Committee may like to know the comparison of the total Revenues of the past year with those of its predecessor, in order to see what expansion there has been. Apart from those, special causes which I have enumerated, apart from the non-tax Revenue, and making the necessary allowances for the increase in the Beer and Esttes Duties put on last year, the result of the comparison is as follows:—The Customs show an increase of £453,000; the Excise, an increase of £1,326,000; stamps—so far as regards the Death Duties—an increase of £354,000; and the remainder an increase of £516,000, which is due to general stamps. The Land Tax and houses show an increase of £44,000, and the Income Tax an increase of £295,000. The total increase is £2,988,000, or, in round figures, £3,000,000. I want to call the attention of the Committee to these figures. In the composition of that sum of £3,000,000 they will observe that the increase in the Customs and Excise receipts counts for £1,800,000, while the increase in what we call direct Revenue, that is, Stamps, has been £870,000, and in the Income Tax £295,000—figures small in comparison to the great increase which has taken place in the amounts derived from indirect taxation. I have now completed, and, I hope made clear to the Committee, the results of the past year as far as Expenditure and Revenue are concerned. I now put the two amounts together. We allowed for a margin of Revenue over Expenditure of £183,000, and the Revenue exceeded the Estimates by £3,154,000, an excess altogether of £3,337,000. On the other hand, the Expenditure exceeded the Estimate by £116,000, so that the real surplus of last year is £3,221,000. I am also able to make a satisfactory statement with regard to another important part of the finance of the year. I wish to say a few words about the general reduction of the Debt of the State. I suppose the story to be told in that respect will be satisfactory, unless, indeed, there be Members of this House, or of the outside public, who think that money may be better spent than in reducing the enormous liabilities which still lie upon us with regard to our National Debt. We have diminished our liabilities during the last three years, I think I may say, "by leaps and bounds." Last year I was able to inform the Committee that the round sum provided out of taxation for the reduction of the Debt in the years 1887–88 and 1888–89 had been £15,000,000, or an average of £7,500,000. I have more than kept up the average during the past year. I am able to show a reduction in the Debt of upwards of £8,000,000. In the year the Funded Debt was diminished by £20,944,000; on the other hand, the Unfunded Debt was increased by £16,159,000; so that the two Debts together were reduced by £4,785,000. To this total we have to add the diminished liability in respect of Terminable Annuities of £3,510,000, thus leaving the total reduction for the year £8,295,000. We have also diminished our liabilities in other respects. The Savings Bank deficiency is reduced by £260,000. On the other hand the Exchequer Balance, to which I shall have to refer hereafter, is reduced by £270,000; so that the total amount by which our liabilities were reduced last year is £8,200,000. I will also state what will be the amount paid out of Revenue in the last financial year in reducing our capital liabilities, or applicable to that purpose. By Annuities and the Sinking Fund we have diminished the Debt in 1889–90 by £5,062,000. We have further to apply in redemption of the Debt the balance of Revenue over Expenditure in 1889–90, which constitutes the old Sinking Fund of that year, amounting to £3,221,000. So that the total cash applied, or applicable, belonging to 1889–90 amounts to £8,283,000. The amount of Debt which we have reduced in three years is £23,323,000—the largest amount that the Debt has ever been reduced in three consecutive years. This statement, however, is incomplete without an explanation of the position of the balances. Our balance at the commencement of the year was £5,592,000; on March 31 it stood at £5,220,000, or less than at the beginning by £372,000. Yet we received £3,221,000 by the excess of Revenue over Expenditure. This requires explanation. In order to meet the temporary requirements of the War Office and the Admiralty under the Imperial Defence Act, we have temporarily taken out of the balances £500,000 for the War Office, and £337,000 for the Admiralty. We have also taken for redemption and conversion purposes about £1,678,000. We did not fully replace the Exchequer Bills presented for payment by £192,000. We advanced on account of bullion purchases more than we repaid by £150,000. On the other hand, there was paid into the balances, in respect of the Sardinian Loan, £53,000. The Revenue exceeded the Expenditure by £3,221,000. If we deduct this amount paid into our balances from the amount taken out, the result is that we arrive at the £372,000 already mentioned, which is the sum by which our balance has to be restored. It will be seen that the large excess of Revenue over Expenditure has assisted us in the redemption operations, and has enabled us to defray the Expenditure under the Imperial Defence Act without borrowing. Of course, I need not tell the Committee that we do not intend to deplete our balances permanently by the amounts I have mentioned. We shall have to borrow the sums issued under the Imperial Defence Act, in 1888–9 and 1889–90, for the Army and Navy, amounting together to £1,497,000. We shall also have to make good a portion of the money taken out of balances for redemption and conversion purposes. I am sorry to trouble the Committee with these banking details, but these financial statements are sometimes referred to in the future, and it is customary to explain the balances. But it is a somewhat tedious process, and leaving these details, I come to some larger and much more interesting figures. It may be remembered that at the close of the Conversion operations in 1888 we were left with a balance of Three per Cent. Stocks which had to be dealt with in accordance with the notice given in July of that year. The amount of the old Three per Cent.-Stock out- standing on November 5, 1888, was, in Consols and Reduced Threes together, £42,325,000. In the course of the next eight months, by the action of the Sinking Fund, the amount redeemed was £1,356,000. Therefore, the amount which had to be specially dealt with was, in round figures, £41,000,000. This was the sum we were pledged to deal with under the Notice of July 6, 1888. I admit it looked a very formidable operation to oblige one's self to pay off £41,000,000, unless they should be converted into new Stock, and as by that time the new Stock stood 1 or 2 per cent. below par, it was doubtful whether any large portion of that £41,000,000 would be automatically converted. I will not say I did not pass through some moments of anxiety. At one time the Money Market made me rather uncomfortable. I will admit that sometimes the large proportions of that sum did cause me some feelings of anxiety; but the resources of the country were so great and its credit was so enormous as to enable me to borrow any sum which might be necessary. The resources of the National Debt Commissioners especially were exceedingly useful. I am now in a position to state how we dealt with the £41,000,000 which has been finally disposed of and wiped out altogether. We paid off in cash £24,378,000, of which the National Debt Commissioners supplied us with £10,800,000; and I had no difficulty in borrowing the remainder. There were exchanged for new Stock by the National Debt Commissioners on the 5th of July, 1889, £8,164,000—an amount which they had bought from their own resources in the course of the year with a view to their conversion into new Stock, and whereby I was relieved from the necessity of paying cash to that amount. There were automatically converted into new Stock on the 5th of October, 1889, £8,426,000. Thus, out of £41,000,000 about £8,000,000 were concerted, and the balance of the old Stock, £41,000,000, has now finally and completely disappeared. The Committee will like to know how much the Unfunded Debt in the hands of the public has increased in consequence of the Conversion and Redemption operations. On the 30th of March, 1888, about £14,000,000 were so held, and there are now held by the public about £23,500,000. In other words, our liability towards the public in respect of short or Floating Securities has been increased by £9,500,000. On the other hand, during these two years the Funded Debt has been decreased by £28,500,000; and as the amount of Stocks held by the National Debt Commissioners is larger by £13,000,000 than it was two years ago, our liability towards the public in respect of Funded Debt has been decreased by over £40,000,000. I do not pass away from this subject without offering a tribute of gratitude, not only to the Governor and Deputy Governor and Directors of the Bank of England, who have seconded our efforts with unwearying care, but also to the staff of that establishment, in which these gigantic operations have been carried out without a single hitch, and, as I believe, without a single error and with the fewest possible complaints. I have completed my review, I hope not entirely uninterestiug, of the finance of the past year. Before I finally close the history of the last year I wish to state how I propose to deal with the question of light gold. The Committee will remember I stated we had had a windfall in a profit on silver, a sum of from £600,000 to £700,000. I think that nothing can be more proper than to allow the silver to pay for the gold. We propose to establish a Coinage Fund and to credit it with the £600,000. I propose in a few days to introduce a Bill to carry this out. I will just state, what bankers will be anxious to learn, what has happened with regard to the pre-Victorian coins. When it was determined to take these coins in hand it was estimated that there were in circulation 4,295,500 sovereigns and 314,000 half sovereigns. It was expected that there would be sent in for exchange 2,169,800 sovereigns and all the half-sovereigns; and the cost of renewing these coins was estimated at £50,000, for which a Vote was taken last summer. The amount of coins received by the Bank of England up to the 2nd of April was 2,071,000 sovereigns (nearly the exact Estimate) and 210,000 half-sovereigns. The greater part of these coins has been sent to and weighed by the Mint, and, according to the present calculations, the loss per sovereign proves to be 4.7d., as against an estimated loss of 4.6d., and per half-sovereign to be 6d., as compared with an estimated loss of 5.9d.; and, accordingly, the total deficiency to be made good on the coins presented at the Bank for exchange has been £44,000, against an Estimate of £50,000. I am now able to approach what is a more interesting subject—namely, that of the Revenue and the Expenditure of the coining year. The Committee are acquainted with most of the Expenditure, as I have given the figures of the Expenditure of the coming year in the Paper in the hands of hon. Members, so as to facilitate reference. The total Consolidated Services amount to £28,308,000, being £18,000 more than last year; the addition in the Supply Service, gives a total of £58,319,000, being £568,000 more than the Exchequer itself issued last year, so that the whole calculated Expenditure amounts to £86,627,000, as against £86,083,000, being an excess of £544,000. I have nothing new to say with regard to this Expenditure. The House knows that the chief excess is due to the Army Estimates. The Post Office and Telegraph Services account for £150,000 more Expenditure, but this increased Expenditure is more than compensated for by the estimated increase of Revenue. I ought, perhaps, to say that the Expenditure would be £265,000 larger but for the tact that the Scotch grants have been dropped in consequence of the transfer of Scotch licences to the Scotch Local Authorities. When I come to the licences it will be seen that there is a corresponding or larger decrease, owing to the transfer of these licences to the Scotch Authorities. The House will also call to mind that this is not the total expenditure, because you have to add to the items of expenditure £160,000 in respect of the Contagious Diseases (Animals) Bill, and also £40,000 as representing the gain to which Ireland is entitled in common with England and Scotland, as her share derived from the transfer of licences to the Local Authorities. There is also an Estimate of £30,000, which some hon. Members may have seen, for additional requirements in Bechuanaland. That brings up the total Expenditure to £86,857,000, and that is the Expenditure which we have to meet. Now, I ask the Committee in what spirit am I to approach the Estimates? I have now the duty of fram- ing my Estimates for the coming year. Am I to approach them in an optimistic spirit or to proceed with the same caution which I am blamed for having displayed on previous occasions? I have made many inquiries in many quarters as to the prospect of trade and industry and of general commercial activity for the coming year, and I am bound to say that the answers I have received recommend caution rather than sanguineness. [Opposition cheers.] I ask those hon. and right hon. Gentlemen opposite who cheer that sentiment, to be good enough to remember next year, if I again have to present a satisfactory balance-sheet, that they share at the moment when the Estimates are framed, the temper in which I consider the Estimates ought to be drawn up. Seriously, I think that it would be an error to say that we can prudently count upon a continuance of that progressive prosperity which I trust we may continue to enjoy, and of that speculative activity which has characterised a part of the past financial year. We know that the price of iron has largely fallen, and we know that there has been a check in the shipbuilding trade. We know that the Stock Exchange transactions are not so many; we know that speculation for the moment has calmed down, and though we may hope that the relations between capital and labour, which were so strained at one time during the past financial year, may continue in a state of harmony and concord; still trade is disorganised occasionally by the strikes which take place; and, indeed, I am told that blows have been struck in some parts of the country to industrial enterprise by the unfortunate differences which have taken place. I do not dwell upon that particular circumstance, but I do dwell upon the whole circumstances of the position, and I say that, while I trust we may have prosperous times, we must proceed with caution, because it is possible we may not have that progressive prosperity with which we have been blessed during the past financial year. It is clear that we must look upon the great articles of consumption with caution. As regards tea and tobacco, and the other items, we cannot count upon any large increase. I ask again, then, in what spirit are we to frame the Estimates? As regards alcoholic beverages, I decline to increase the Estimate over the result of the receipts of the past year. I may be wrong. It may be that there will be still a continuance of the increase produced by rum, brandy, and other intoxicating liquors. I will go further, and say that I believe there will be an increase during the next few months in respect of those articles. That is highly probable, but I do not think that such increase will extend over the whole year. When we come to those months where the greatest increase took place last year, I do not think that there can be a cumulative force in this tendency to spend so much of our increased prosperity in augmenting the general drink bill of the country. As regards wages, it is generally true that there is not a, decline in the rate of wages directly prosperity begins to flag, and it may be said that you can count for some time up in a continuance of those high wages which have enabled the working classes to consume largely during the past year. But the sum of the wages to be expended does not only depend upon the rate of wage, but upon the continuance of employment of the workmen, and although we may all hope that there may be that continuance of employment, still I say it is in a spirit of caution with regard to the future that I think we ought to act. Let me run through the various heads of Revenue. I have not framed these Estimates in any pessimistic spirit. I will only suggest that it is just possible that we shall only have to mark time. As regards the Customs Receipts on coffee and its satellites, I am not permitted to expect any increase. The history of the past shows that it would be injudicious to do so. In fact, my advisers say that we should estimate about £3,000 less for coffee and £3,000 more for cocoa. On dried fruits I estimate an increase of £14,000. Tobacco, looking at its history for the last two or three years, I estimate to give an increase of £213,000, that is about 2 per cent. on the present importation, while the increase of the population is only at the rate of 1 per cent. As regards tea, I assume that there will be a further transfer from China to Indian and Ceylon tea. I assume that 10,000,000lb. of China tea will be displaced by 7,000,000lb. of Indian and Ceylon tea—a very satisfactory prospect for India, and also a very satisfactory prospect in this respect—namely, that this Indian tea makes so many more cups of tea per pound, in the proportion of ten to seven, so that, practically, tea has been cheapened to the working classes by the displacement by Indian of China tea, if the middleman would only give sufficient influence to this greater cheapness owing to the discovery and development of this great branch of our Indian trade. That diminished consumption of tea is equivalent to about 3,000,000lb., representing a loss of £75,000 in Revenue. On the other hand, we have the fact that tea was not withdrawn in its usual quantities during the last two months of this year in anticipation that the Tea Duty would be reduced. ["Hear, hear," from the Front Opposition Bench.] I hear a smile passing over the face of the right hon. Grentlemen opposite. [Laughter.] It was an audible smile. [Laughter.] During those two months we estimate that tea was not withdrawn to the amount of £140,000, which, if it had been paid, would have swollen the Receipts of the last year. Now it, will come in in the current year. Looking to these two counterbalancing effects, I add about £220,000 to the Estimates. On wine I will take an increase of about £10,000. But spirits, for the reason that I have mentioned, I decline to put at a higher figure than the enormous amount realised last year. In fact, foreign spirits I put at £80,000 lower than the amount received last year, while, on the other hand, British spirits I expect to increase by £40,000, with the reason for which I will not trouble the Committee. The Total Receipts from Customs I put at £20,836,000, or about £375,000 more than last year. I now approach the Excise. Beer has been expanding, and I believe that we are justified in reckoning upon a slight further expansion. I place the Estimate at £9,650,000, which is £240,000 more than the net Receipts of last year. While I have taken off £80,000 from foreign spirits I put on £40,000 on British spirits, putting my Estimate at £13,900,000. The Rail way Duty I estimate at £330,000. When I come to the licences, I find that the miserable remnant left me by my right hon. Friend the President of the Local Government Board is still further reduced by £318,000, which I had to take off for the Scotch licences, and I am only left with £220,000 under this head as a source of Imperial Revenue. The total Excise Revenue I put at £24,108,000, against the net Receipts of last year of £24,133,000, or less by £24,000. But for the loss of licences there would be an increase of £286,000. Again, I think the Committee will see that I have proceeded with caution, but not with undue caution, in my Estimates, unless they take a different view from me as regards alcohol beverages. I now pass to the Death Duties and the duties from general stamps. The new Estate Duty last year yielded £784,000, but it did not come into operational the beginning of the financial year, and, therefore, it will give more in the coming year. I expect to receive £1,070,000 from this source. The Probate Duties I put at £2,400,000 for half the duty; the other half goes to the Local Authorities. Here, again, I must congratulate my right hon. Friend the President of the Local Government Board on the good bargain that was made for his Department. The original estimate of the half of the Probate Duty that we parted with was £2,130,000—that half now is £2,400,000; so that the Local Authorities derive a benefit from the progressive nature of the tax in these two years of £270,000. By a strange coincidence that is the precise amount which the Wheel and Van Tax was expected to realise. The Legacy Duty is put at £2,840,000 as compared with £2,770,000—an increase of £70,000. The Succession Duty is naturally creeping up under the changes that have been made. The proceeds last year exceeded those of the previous year by £144,000. I assume an increase of £100,000 next year, and I put the amount at £1,150,000. Now I come to general stamps, and after the remarks that I have made on the general state of trade, on the position of the Stock Exchange, and the best forecast I can make, I find that I should not be justified in calculating upon any increase of Revenue from general stamps. The general stamps last year amounted to £6,157,000. I take the round sum of £6,140,000 as the general stamps for next year. The total Stamp Duties, including the Death Duties, I put at £13,642,000, as against the Receipts last year of £13,040,000—an increase of £600,000, of course entirely due to the increase put upon the Death Duties. The Land Tax I put at £1,030,000, or less than last year by £18,000, and the House Duty of £2,000,000—an increase of £22,000. I come now to an interesting item—the Property and Income Tax—and there I think I am justified in being more sanguine than I have been with regard to most of the items through which I have passed, because there we have safer grounds to go upon, as we have the advantage of the three years average. My forecast is not only prospective, for I can take a review of the general situation of the last three years, and I find we have now come upon an average of good years and are beginning to get rid of the bad years. That being so I put my estimate at £13,200,000, which is £430,000 more than last year. When I put this before the House last year I said I framed my estimates with some hesitation. I considered I was doing rather a bold thing in putting the yield of 1d. Income Tax from £2,020,000 to £2,100,000. This estimate has been more than justified by the expanding prosperity of the country, and this year I feel justified, from all that I have seen and heard with regard to this source of Revenue, in putting my estimate at £2,200,000, which gives a total for the 6d. of £13,200,000. The vast increase in the proceeds of the 1d. as compared with the estimate put upon it by the late Sir Robert Peel in 1844 of £800,000 will be apparent to the public at large. It denotes the enormous power of this great fiscal engine—the Income Tax—which enables us, by the increase of 1d. alone, to find a source of Revenue equal to upwards of £2,000,000 sterling. As regards the non-Tax Revenue, I have conferred with the Post Office Authorities, and I feel justified in putting my Estimate at £9,750,000, an increase of £300,000 on the Exchequer Receipts of last year. Of course, it is not all profit, though it goes to swell the Revenue. You must deduct the corresponding item of increased charge on the other side. Telegraphs I propose to estimate at £2,470,000, which is £150,000 more than last year. Crown Lands remain the same as before— £430,000; and the interest on advances I put at £240,000. So far, the Committee will see that I have made good progress. When I come to the Miscellaneous Revenue I lose that profit on silver which I had last year. Stripped of that Revenue, I am not able to put it higher than £2,700,000, which is less than last year by £711,000. The decrease under Miscellaneous Items affects the whole of our receipts from non-Tax Revenue, and the non-Tax Revenue altogether I can only estimate at £15,590,000, as against last year £15,890,000, a decrease of £300,000. If I now add all the non-Tax Revenue and the Tax Revenue together, I get a total estimated at £90,406,000, against the Exchequer Receipts of last year of £89,304,000, which shows that I build upon an increase of £1,102,000. A more interesting comparison is obtained by setting my estimated Revenue against estimated Expenditure. The estimated Revenue is £90,406,000, and the estimated Expenditure is £86,857,000, and I find that I am left with a surplus of £3,549,000, of which I have to dispose. Now, I come to what is, perhaps, as embarrassing a part of my task as if I had to impose taxation, namely, the use of this excess of Revenue over estimated expenditure. I propose, in the first instance, to deduct from this amount the sum which my right hon. Friend the Secretary of State for War tells me he can spend on barracks during the coming year. This brings me to explain how we propose to deal with that matter. The Committee will remember that there is a Bill before the House for spending £4,000,000 011 barracks. I have conferred with my right hon. Friend as to how this sum shall be met. We have taken powers in the Bill for borrowing money in future years, but not in the present year. What is wanted this year will come out of the annual Revenue. But as regards the following years and the bulk of the expenditure we shall deal with it on the analogy of the Military Forces Localisation Act of 1872. That Act contemplated barracks, storehouses, and buildings of that kind; and the amount, if I remember rightly, was £3,500,000. The reason then given for proceeding by loan—for under the Act power was given to borrow the whole—was that the Government had incurred at that time a very heavy abnormal charge for Army Purchase. My right hon. Friend the Member for Mid Lothian, speaking at Chester the other day, said— He would not grudge a large expenditure upon barracks, but he hoped resort would Dot be had to the somewhat cowardly practice of casting the burden on coming years. That had been done before, but it had been done when an enormous expenditure had been incurred out of the Annual Votes upon the abolition of purchase. Bat the largest annual Vote under the abolition of purchase was about £900,000, and the heavy annual extra payment incurred last year for Naval Defences was larger than that sum by £500,000, so that we, too, are precisely in the same position as the Government of 1872–3. That is, that we have undertaken this large work for the improvement of our barracks at a time when we are making special efforts in another direction. But the Revenue was as prosperous then as it is now. At that time, too, there was a surplus, and the circumstances are thoroughly analogous. But we do intend to spend such an amount as can be spent this year, out of current Revenue, and therefore I trust my right hon. Friend will not think that we are cowardly in this respect. My right hon. Friend the Secretary of State for War tells me that what he can spend this year is £300,000. L have not asked him to cut down the sum to a minimum, but I asked him to tell me frankly the maximum; and he states that £300,000 will be as much as will be likely to be spent in the present year. One word as to the general charge that some right hon. Gentlemen made against us, that we are having large recourse to borrowing. Whatever may be our plans, at all events up to the present we have not incurred any censure in that respect. We have estimated the Naval Annuity, which amounts to £1,429,000 in every year, over a moderate number of years. But in this first year it has proved, as we knew it would prove, more than enough to cover the expenditure of the year; and, in fact, under the Naval Defence Act we have levied from the taxpayer in the past year about £1,000,000 sterling more than the Admiralty were able to pay out. Therefore, so far from having incurred any debt up to the present, we have paid our way with regard to the naval defences, and have carried a certain sum, forward to next year. Hon. Members will now deduct the £300,000 required by the War Office, and they will find the surplus reduced to £3,249,000. I now come to a matter which will, perhaps, interest hon. Members more deeply even than the barracks scheme, looking to the interest which has been taken in all parts of the House in the question. It is connected also with the Services. The House recently agreed to a Resolution calling upon the Government to supply to the Volunteers certain articles of equipment, and on fall consideration of this decision we now propose to accept the Resolution, and to set aside a sum of £100,000 out of the surplus to meet that demand. I leave it to my right hon. Friend the Secretary of State for War to find a further sum of £50,000 out of his resources; and it appears to us that the sum of £150,000 will enable us substantially to give effect to the Resolution which has been passed by the House. Rut until certain inquiries are completed it will not be possible to give full details. The Government are glad in this way to be able to meet the wishes expressed by Parliament for further assistance to this valuable Force; but I think it is right to remind the Committee that every new grant made to the Volunteers must necessarily carry with it some corresponding increase of Government control, and that Parliament, in sanctioning increased expenditure, will require to be satisfied that it obtains a fair return in the improved efficiency and heightened value of the Force. I have therefore deducted another sum of £100,000 from the surplus, and I have asked myself how I should deal with the remainder. If we were to look simply to popularity, I believe there is nothing we could do that would more satisfy, I will not say legitimate, but illegitimate public opinion than if we were to spend a very large portion of the surplus. I call to mind all the demands made upon us from various quarters. I call to mind what the men of science have asked us to do. I call to mind what the artists have asked us to do, and what the educationists have asked us to do. If any collection of pictures is offered for sale we are denounced if we do not immediately purchase it. Every collection I am told is one which ought to be at once secured for the nation. If we have valuable sites we are told it is niggardly on our part if we do not erect magnificent public buildings upon them at the earliest possible moment. We are asked more largely to endow Universities. We are asked more largely to endow Technical Institutions. We are asked more largely to endow Intermediate Education; and now we shall be asked what we propose to do with regard to assisted education. To meet half the demands made upon us, I believe £2,000,000 of this surplus would soon be scattered. Possibly the money would be well employed, but it would soon be scattered, and the burdens of the people would not be lightened. We think that we have done a great deal in meeting the fair demands that have been made upon us. The other day we bought land at Kensington for £100,000. We have taken a new departure in giving sums to a number of new and valuable colleges. We have been more generous to the National Gallery and the British Museum. We have done a great deal. Though there may be at this moment rather a How of opinion in the direction of extravagance and an inclination to call everything niggardly which does not correspond to the wishes of those who desire this expenditure — notwithstanding this, I think it would not be right to allow all these claimants to dip their hands ad libitum into the Treasury chest. As long as I retain my office I shall think it my duty, on the whole, to sit tight upon the lid of that chest. But it may be said that we have been extravagant in other directions. There are men who think that while we have been economical in some respects we have been extravagant as regards the Army and Navy. ["Hear, hear!"] I am glad to hear that that cheer was not a very general cheer. We have not been extravagant as regards the Army and Navy, if we have only done those things which were imperatively necessary in the interests of the country. I Would frankly say that when I leave my office I shall look back with some pleasure on having diminished our national liabilities through the conversion of the National Debt; but I shall also look back with pleasure, and with no apology whatever to the fact that, notwithstanding that I have been Chancellor of the Exchequer, I have agreed to large proposals which I believe will have the effect of strengthening the defences of this country. I think a Chancellor of the Exchequer is one of the last Ministers who ought to be indifferent to the absolute security of our shores and the security of our commerce. What would be the effect upon our Revenue of even panic preparations? What would be the waste of money and the expense the moment the slightest panic occurred? But if the panic should be of a more real character, then every one knows that in a country like this, dependent as we are on other countries for our food supply, and dependent, too, upon that credit which is the mainspring of our commerce, I think it almost baffles the imagination to think of the consequences of a real, serious panic at the present moment when the whole edifice of our commerce and trade is built up upon credit. I think myself, and I say it in great frankness, that our bankers and merchants trade with too little reserve, and I think that the reserves of the supplies in this country are also reduced to an insecure amount. Looking to all this, I believe the Government have done no more than their duty in availing themselves of a portion of the great resources which the country has placed at our command in doing what we can to strengthen and improve our Army and Navy. We have done much. I will not recapitulate what we have done with regard to the Navy. As regards the Army, we have armed the infantry with a new magazine rifle. We have supplied the artillery with new guns. We shall have fortified our coaling stations by the end of this year. We shall have improved the defences of our Imperial Ports. We shall have done all this, and I say we have no apology to make for the large sums which we have had to impose upon the people for all these purposes, although we would gladly have used them to reduce the burdens which the people cheerfully bear. We must admit them to be heavy burdens, and we will lighten them as soon as it is possible for us to do so. I have slid that, notwithstanding our surplus, we do not intend to listen to any proposals of extravagance. But I believe that in the proposal I am now going to make I shall have cordial support from all Members of the Committee. We propose, if we can persuade other interested parties to do so, to deal with the question of the postage to India and our colonies, and to reduce all rates, by whatever route, to 2½d.—not ocean postage only, but postage by the quickest route. The existing rates to Australia, India, China, and the Capo range from 5d. to 6d., and the House is also aware that in the case of some of these letters they would be transmitted cheaper to their destination if they were posted abroad. No doubt it is a great anomaly that if letters are sent to Calais they can be posted to our officers at Quetta or in Burma more cheaply than if they were posted at a British post office. We propose, therefore, to remove these anomalies if we can persuade the other interested parties to join us, because we cannot act in this matter without the cordial co-operation of the colonies themselves. The ocean penny postage has been recommended very much on the ground that it would draw us closer to the colonies; but it would be a very unsatisfactory beginning to such a proceeding if we were to embark upon a cheapening of postage to which the colonies themselves were opposed. My right hon. Friend the Postmaster General will place himself in communication at once with the Agents of the colonies, and he will see, with every hope of success, whether they can be induced to reduce the postage in the future to 2½d. by whatever route the letters may be sent. The loss which would be incurred by this process would be £80,000 in the present year. It would be £105,000 in a complete year. But I think £80,000 will cover it in the present year, looking to the negotiations which will take place. Now, I intended to explain to the Committee how this loss would arise. But, looking to the ground which I have still to traverse, they will excuse me if I do not defend the proposal more than by making this statement. I can only say this: that we must assume this loss, because we cannot recoup ourselves on letters which go by the quickest route by any increased correspondence. We have to pay an amount equal to 1d. for the foreign transit, and the cost of the letter in this country and in the colonies or in India is taken to be even more than l½d. Thus, if you add 1d. to the l½d., the cost of the postage will be more than 2½d., or at least fully 2½d., and we cannot expect to recoup ourselves. But I have little doubt that the Committee generally will be prepared to make this sacrifice out of Revenue for the purpose of removing anomalies and securing cheaper communication with India. India will also have to be consulted on the proposal. We are at present in communication with her on the subject. So far I have spoken of increased expenditure, namely, that for barracks, Volunteers, and postage. I now come to the point of remissions of taxation. But, still, I must ask hon. Members to be patient while I deal, only in a word or two, with some very humble claims for relief. The Committee will think that it is the duty of a Chancellor of the Exchequer quite as much to look to humble claims to relief, if there is any hardship or injustice, as to deal with larger questions. Apprentices have to pay a stamp of 2s. 6d. on their agreements, provided no premium is paid. If a premium is paid they have to pay the heavy duty of 5s. for every £5. If there is a premium of £20 they must pay £1. This appears to me a great hardship, and I propose that on no agreement of apprenticeship shall there be a higher stamp than 2s. 6d. Then, take the case of insurance policies. Life insurance policies are only subject to 1d.; but health insurances, which provide that if a man falls sick he is to receive a certain sum during his illness, have to pay a 6d. Stamp Duty. It has been represented to me by the Societies interested that this is a hardship, and I propose to remove it by putting health policies on the same footing as other policies, I mention these matters, not as being of fiscal importance, but to give them the publicity they deserve. Quite apart from larger questions, I propose a slight change in charging the Income Tax as between different schedules. Complaints have been made that when a man loses under Schedule A he is not allowed to set off that loss under Schedule D. So it happens sometimes that a man who has lost heavily on his farm has to pay full duty on the profits of his business without being allowed to deduct the loss on his farm. That I intend to put right by allowing the loss under one schedule to be set off against the profits of another schedule. There will be no appreciable loss under these heads, and I merely mention them for the purpose of giving them publicity. The first serious inroad which I propose to make on my surplus is a change in volving the remission of the duty on gold and silver plate—a change which, I believe, has been expected, and I. will not conceal from myself that it is not pleasant for a Chancellor of the Exchequer to part with a tax which is paid with the greatest possible cheerfulness by those who have to pay it. There is a positive alacrity on the part of the chief members of the trade in paying the Plate Duties, and they are protesting in advance against their abolition, and I must, therefore, make out some case why we propose the abolition of these duties. The first shake was given to them by the Report of the Select Committee of 1878–9, of which I was myself a member. They recommended as follows:—That Whenever the condition of the Revenue will permit the duty upon silver plate should he abolished. The Committee were moved to make this recommendation by the consideration of the unequal incidence of the duty and the great proportion it bore (nearly 40 per cent.) to the raw material, and the importance of promoting the use of silver as an article of manufacture. The Indian community soon fastened on the suggestion of the Committee. I think myself that India has attached almost undue importance to the abolition of these duties. But the fact remains that they do attach enormous importance to the abolition of the Plate Duty. They consider it will have an effect upon the price of silver, and will enable them to send more articles of manufactured silver to this country, though I think they are rather sanguine in their expectations. It might be contended, and I have heard it argued, that we ought not to look to the wishes or expectations of India, but to British interests alone. But the argument had been rather cut away from under our feet by the recollection in India of a transaction which they consider to have been unfair to themselves, justly or unjustly I will not say. But they consider that the duty upon the imports of British cotton goods was promoted and carried rather with a view to British interests than to Indian interests, and they have made a kind of passionate claim in return that in this matter of Plate Duties we should consider the interests of India. Now, they have had a good deal to go upon with regard to declarations made by various Chancellors of the Exchequer. The abolition of the duty was recommended without hesitation by the recent Royal Commission upon Gold and Silver as a practical measure for diminishing the difficulties of India. It is difficult in the face of a recommendation of that kind, coming from a strong Commission, to resist that pressure. I mention it because, as I say, we must have strong arguments for the repeal of a duty, the repeal of which is opposed by the trade of silversmiths in England itself. The right hon. Member for Mid Lothian handled the subject in 1881, and proposed to reduce the duties gradually. He would have preferred an immediate reduction, but he shrank from it on account of the drawback, which then was estimated to amount to £170,000. The right hon. Gentleman subsequently withdrew his proposal, but referred to the matter again the next year. From that time to this the matter has been in suspense. My right hon. Friend, speaking of this duty, said— The state in which it was left perplexes the market, places transactions upon old plate on an embarrassed footing, inflicts much mischief and limitation on the industry, and possibly tends to lower the standard of our manufactured goods, whilst obstructing the taste in design. With all these declarations before us, I said last year that I should wish to adopt the recommendations of the Royal Commission to abolish the Silver Plate Duty, but that I had no means at my command to make up for the loss and also to meet the demand on the drawback. Now that the moment has come, I consider we are practically bound, by all that has occurred in the past, to take the bull by the horns and to deal with the duty on this footing. Viceroys of India and ex-Viceroys of India have all attached the greatest importance to this matter; and it would create a serious disappointment in India if we were not to deal with the matter. But, it may be asked, if we propose the abolition of the duty on silver plate, why should we abolish the duty on gold plate? The duty on gold articles amounts to a very small sum. The House will be amused to learn that the greatest portion of the duty on gold plate is paid by wedding rings. Three-fourths and more of the duty, amounting to £23,300, on gold plate come from the duty paid by this most necessary article of civilised society. Otherwise gold plate is so small an item that, practically, no revenue whatever is derived from it. Nor would the question of drawback arise in the case of gold plate, and I propose no drawback. As regards silver plate, the amount of drawback involved I put at £120,000, which I add to the £80,000 we shall lose by the abolition of the Gold and Silver Plate Duties. The drawback used to be estimated at £170,000. But the uncertainty of the trade has prevented the accumulation of stocks, and I feel confident that £120,000 is a fair sum. But we do not propose to pay any amount of drawback which may be claimed. We shall take £120,000 as a maximum, and arrangements will then be made, which shall be stated later in detail, for paying the drawback on the stocks in the hands of dealers, provided they have not passed into use. I am told that it will be possible to get a perfect statement of the whole of the silver plate on which drawback may be claimed. If the claims should exceed £120,000, then a corresponding diminution will be made upon the drawback claimed, so that the sum which the State will have to pay shall in no case exceed £120,000. The Royal Commission said that we should not pay more than three years' drawback, and it will be seen that £1 20,000 is about two years' drawback upon silver plate, because the amount of Silver Plate Duty is about £60,000. I have now arrived at a point when I must attack the bulk of my subject. I trust that hon. Members will not feel that I have unduly trespassed upon their attention in explaining these smaller items of remission. I have, of course, to think not only of the audience listening to me now, but also of those outside who are interested in silver plate or any of the other matters which I have touched upon. They require a rather full statement, and I was therefore bound to make it, although it may be somewhat wearisome. I now come to the larger remissions. After deducting the barrack expenditure my surplus stand at £3,249,000. I have further disposed of £100,000 for Volunteers, £60,000 for reduced postage, and £200,000 for silver plate, leaving me in possession of £2,869,000, but after having read so much during a portion of this year about the gigantic sums that would be at my disposal, I confess that the proportions of that surplus appear to me to be very modest, when I have to set against this amount the number of claimants who have already put forward their claims to remission. There are the advocates of the abolition of the Tea Duty, but the abolition of that duty would mean a sacrifice of revenue of £4,900,000. Then someone spoke of a reduction of 2d. on the Income Tax. That would mean a sacrifice of £4,000,000. Then there are others who are not only anxious for a free breakfast table, but for free pudding as well, and who desire the abolition of the duty on all dried fruits. Then there are my friends who are interested in the brewing trade. They consider that they are entitled to there mission of the 3d. per barrel imposed last year. Then there are the County Councils, who ask that we should hand over to them the House Duty, there are other persons asking for this modest trifle of £2,000,000, and others suggesting that the whole of the duty should be remitted. Well, I ask, what is my surplus amongst so many? I will proceed to consider the various claims that may be met; but instead of approaching the task with the feeling that I am going to give satisfaction to any of the claimants, I feel that the amount to be divided is comparatively so small that I shall create much disappointment in apportioning it. I first turn to the question as between direct and indirect taxation. It has been suggested that the present Government have favoured more than they ought the payers of Income Tax. A right hon. Gentleman opposite considered that we had unduly favoured the payers of Income Tax by reducing the tax from 8d. to 6d., but I hold that in having done so we have simply restored the status quo. The extra 2d. was imposed for a special purpose at a special time when there were spacial exigencies, and it should be remembered that at that time a proposal had been made to increase indirect taxation, which proposal was, however, withdrawn. Therefore, I consider that we have in no way altered the status quo as regards direct and indirect taxation or favoured direct taxation by the course which we have taken. Again, it must be remembered that we imposed an additional duty, the Estate Duty, upon real and personal property. Looking, then, at all the circumstances I do not think that we have altered the status quo Hon. Members may ask, what is the opinion that ought to be held with regard to the status quo before these reductions of taxation and these increases of taxation take place? That is a speculative question which would lead us very far a field, and on which there might be very great differences of opinion. I approach the question in a simpler fashion, and ask myself how the surplus of this year has mainly been produced. Has it been produced mainly by the increase of direct taxation, or by the increase of sources of indirect taxation? When the subject is considered from that point of view, it will be seen that we owe the greater portion of the surplus to the increased consumption of articles which pay duty and contribute towards indirect taxation. Out of the sum which remains to me, nearly £2,000,000 has been yielded by indirect taxation, and the Government have determined as indirect taxation has mainly produced the surplus, that mainly to the relief of indirect taxation shall the surplus go. Now, the surplus has been mainly produced by the consumers of alcoholic beverages, but no man in the House would be prepared to say that they should be relieved. The sum which they have contributed, which amounts, after deductions, to about £1,500,000, we propose to apply to the reduction of the duty upon tea by 2d. in the £1. The tipplers shall relieve tea. The loss upon the Tea Duty will amount to £1,500,000. I know that it has been said that a reduction of 2d. will not benefit the consumer; but I am not prepared to admit that argument. We have to look to our own responsibility, and we must bear in mind that a duty of 6d. upon tea represents a very large proportion of the primary cost of the article. If tea were sold to the consuming classes at anything like the cost price, it would appear at once what an enormous relief would be given by a reduction of 2d. in the £1. But the amount of the relief is concealed by the fact that the middleman walks away with so large a proportion of the price which is paid by the working classes for their tea. In many villages the working classes pay as much as 2s., as 2s. 6d., even as 3s. for tea, while much tea can be bought at a cost price, 11d. or 1s If you take the price at 1s 6d., a price at which good tea can be bought and sold, and realise that from that price you are going to make a reduction of 2d., you will see that you are conferring an appreciable boon upon the consumer. It would be very satisfactory if full advantage could be taken of this reduction by consumers, so that they should receive their full share of the relief. Let them, therefore, consider whether through better organisation, or by other means, it may not be possible for them to buy on better terms this article of primary necessity, this article so important to the whole of the working classes. I will here frankly say that I am opposed to the total abolition of the Tea Duties. There is no doubt that tea is the one article through which those who neither smoke nor drink contribute to the Revenue, and therefore I think it right that a Tea Duty should be maintained; and I should, besides, be sorry to think that we were going to cut off altogether any of the sources of our Revenue. But looking at the way in which the surplus has been created, and bearing in mind the circumstances to which I shall have to call attention hereafter, I think that justice demands the application of this portion of the surplus in the manner which I have indicated. I proceed now to another article, in respect of which I propose to grant remission—I refer to the duty on currants. It is at present 7s. per cwt., and I propose to reduce it to 2s. The loss of Revenue, after allowing for a very substantial increase of consumption, will probably be £210,000. I am not prepared, looking to the further remissions which I have in view, to increase the amount of this remission on dried fruits by making it applicable to all. The Committee will ask why I have selected currants for this special benefit, while the tax on raisins remains as before. Well, currants come chiefly from Greece, and Greece attributes such immense importance to this reduction that she is prepared in return to make a substantial offer of reduction on British manufactured goods. To Greece, the exportation of currants under most favourable circumstances is a question of life and death, and besides the pleasure of reducing the duty on an article of general consumption in this country, it is a matter of sincere congratulation to Her Majesty's Government that we are at the same time able to propose a fiscal change which will be eminently advantageous to that little Kingdom, in whose fortunes the British people have always taken so warm an interest. Let me now mention the change in her tariff which Greece on her part is willing to make, which I think will be received with considerable satisfaction by certain of our exporters. On herrings there will be a reduction of 33 per cent., on cotton yarns 16 per cent. on single grey yarns up to No. 21 English; simplification of classification in bleached and dyed, coupled with reduction of duty of about 25 per cent. The extra duty on dyed yarns will be abolished; common grey cotton tissues reduced by 12 per cent., and for other cotton tissues a simplification of classification on the same principle as that for yarns, while for cotton goods specially mentioned in the Greek tariff, such as embroidered goods, cretonnes, and men's clothing, the reductions range from 20 to 50 per cent. On linen, hempen, and jute tissues, the reductions range from 18 to 50 per cent.; on carpets and certain other mixed woollen fabrics, an average reduction of 20 per cent. is made. On indigo, the duty of about 1s. in the £1 is reduced to a nominal charge of about 1d., and the duty on acids is reduced one-half, to a nominal charge of about 1d., while on non-refined acids the duty is entirely abolished. These reductions will relieve the British trader from duties which are calculated at from £50,000 to £60,000 a year. The Committee will see, from what I have stated, why currants have been specially selected for fiscal favour this year. I should be extremely glad if the countries exporting raisins, such as Spain and Turkey, should see their way to meet us in a similar manner on a future occasion, when the Chancellor of the Exchequer might again be able to achieve the double object of cheapening raisins to the home consumer and securing lower duties on British exports to those countries. One piece of warning, however, I must give. I have been told that there is every probability that with the greater cheapness of currants, they will be used for the manufacture of wine in this country. I do not mean the innocent currant wine that used to be made in simple English homes, but wine manufactured out of dried currants and worked up into claret, or what is sold as claret. In France, dried currants are, I believe, largely used for the manufacture of wine. There is, of course, no harm in wine being made out of currants, but if that be done the Excise might have something to say on the subject. It would not do to have such wine manufactured at home escaping from Excise Duty, while imported wine had to pay duty. But I may go further, and warn the manufacturers of British wines that they are, in some cases, sailing dangerously near the wind, and that some of these wines are brought very near the standard of alcoholic strength which is taxable. Indeed, I am compelled to add to the Budget Resolutions one for imposing a duty on imported wine rendered sparkling in this country. I now come to another article, which is also one of universal consumption—I mean the duty on beer. I admit that last year, by changing the standard of gravity, I practically increased the duty to the extent of 3d. a barrel. I also admit that I stated, in reply to urgent pressure from the brewers, that the tax had been increased for a special purpose, and that the tax having been increased for a special purpose a fair case would be made out for consideration if a surplus should arise which should permit an all-round reduction of duties. Beer would then have a claim side by side with other consumable articles. Has the case arisen? Who has paid the tax? Some brewers have declared that this additional impost has been a kind of Income Tax upon them. But is this so? Have they paid it, or have they recouped themselves by a slight deterioration of the article they have sold? I will not attempt to decide this point. I cannot admit that when a tax is put on a great article of consumption it must be regarded as a tax on the producer. However, looking to the whole circumstances of the case, I am prepared to part with the additional 3d. per barrel as an item of Imperial Revenue. As Chancellor of the Exchequer I will forego this additional 3d., though it makes a gap in my surplus of £386,000. At the same time, I must ask my hon. Friends who are interested in the brewing trade not to indulge in any premature congratulations. They must share in the fortunes and responsibilities of the liquor trade generally, and if special appeal should have to be made to that trade and to that interest they must share in the burden. I have now disposed of £1,500,000 as remission on tea, £386,000 as the loss on beer, and £210,000 as the loss on currants. Adding these together they make a hole of £2,096,000 in my surplus, and all that remains to me is £773,000 for remission and for the necessary balance to be carried over at the end of my account. The direction in which I now look to give relief is a class upon which I have always looked as being heavily taxed as compared with the rest of the community—I mean the class just above the working class, the class, if it is not offensive to say so, that begins to wear the black coat, who have a very hard battle to fight, and who have demands made upon them in many respects severer than those falling upon the ordinary working men. I refer to men with incomes ranging from £150 to £400 a year, men of the poorer trading class,; small tradesmen, and clerks, men who generally live in houses of the value of between £20 and £60 a year. Upon these, who have to pay in addition rates and taxes, the House Duty falls with special severity. If they have shops they pay 6d. on their shops and they pay 9d. on their houses. Houses below £20 are exempt. Following, to a certain extent, the principles adopted as regards small incomes, I propose to reduce the duty on houses between £20 and £10 from 6d. and 9d. to 2d. and 3d., and on houses between £40 and £60 to 4d. and 6d. The Committee will perhaps scarcely realise the number of persons whom this will affect. The Committee scarcely realises, I think, the extent to which both the Income Tax and the Inhabited House Duty are paid by men of comparatively humble means. I thought at one time it might be reasonable to allow every Income Tax payer to deduct £400 from his income before paying Income Tax, but I was staggered to find that this would involve a loss of £4,700,000 out of a total receipt of £13,000,000. To allow every Income Tax paver to deduct £200 would involve a loss of £2,500,000. This shows to what an enormous extent the Revenue is contributed to by people of small incomes. The relief which I propose in regard to Inhabited House Duty will, it is calculated, affect some 800,000 persons of humble means and will cause a loss of upwards of £500,000, or a full quarter of the whole of the tax. But it is a relief which I am glad to propose, and which I believe the House will be glad to sanction. I have two other minor proposals in regard to this tax. I have endeavoured to see whether lodging-house keepers could be relieved from the hardship of which they complain of having to pay on their houses as if they were residences, when they are really places of business. I propose that, in future, lodging houses shall pay on the lower rate as if they were shops or places of business. We propose, also, to meet a wish which has been widely expressed, and with which I have every sympathy. We propose to extend the definition of structural separation, so that if a house of the value of about £20, let in tenements to the working classes, shall be certified by the proper Local Authorities to have been constructed so as to be fit for the separate habitation of the families of the working classes, it shall be treated as houses below the value of £20, which are now exempt on the ground of structural separation. I have endeavoured to relieve the pressure of the House Tax at those points where it seems most to weigh with heaviness upon that portion of the population who have the greatest difficulty in meeting the burden of taxation. Now, it will be seen that if we deduct the £540,000 which those changes and remissions in the House Duty are estimated to cost from the sum at my disposal, £773,000, I am left with a balance of £233,000—as small a margin as I think circumstances will justify me in retaining. I ought now to have come to my peroration, and to have all but concluded the long statement which I have been making to the House. Under ordinary circumstances, indeed, I should now have completed my task, but the circumstances are not ordinary, for two years ago we were called upon to deal not only with Imperial, but with local finance, and to local finance I must apply myself for a still further short space of time. In 1888 I endeavoured to settle the question as between the ratepayers and the rest of the community, and I made large transfers from Imperial Funds to Local Exchequers. Somehow or other, the large amount of those transactions has not been sufficiently realised. I have been charged, and the Government have been charged, with not having fulfilled our pledges to the ratepayers, the County Councils, and the Local Authorities. It is said that the Local Authorities have not received that degree of relief which they expected. Well, if they have not gained, the Imperial Exchequer has, at all events, had the loss. I have practically handed over £2,750,000 to the Local Authorities. The question is, how would the Local Authorities have been faring now if no change had been made connected with local finance, and how are they actually faring? I will take the three kingdoms separately. England has received a gain of £2,236,000; Scotland, £282,000; and Ireland, £256,000. Accordingly, we are giving to the Local Authorities of the United Kingdom, this year, £2,774,000 more than they received before Local Government was taken in hand. But let me put in this caveat. If the Probate Duty should not continue to yield the amount expected, the Local Authorities must take their chance with the Imperial Exchequer as to the amount which the duty may yield. We assigned certain sources of Revenue to them, but we did not pledge ourselves to the amount. They will note, however, that this tax on personalty is generally progressive. But it is said that we are indebted to the Local Authorities for £800,000. A claim has been put forward by Local Authorities belonging to all political parties that we should make good this £800,000. I noticed the other day that, in the other House of Parliament, Lord Ripon, Chairman of the Yorkshire County Council, spoke with as much warmth about the gap made in the finances of the County Councils by the loss of the Wheel and the Horse Taxes, as my hon. Friends behind me have often spoken in this House, as if I were supposed to be pledged to make up the sum in question; but I have always denied, and I do deny, that pledge. The Government was not pledged to any specific amount, if the House did not accept the means by which we proposed to raise it. Suppose I were to say to the Agricultural Committee of this House, or to the Central Chamber of Agriculture, "I will renew my offer; I will pay my debt in the same coin in which I contracted it—I will re-introduce the Wheel and Horse Tax, and ask you to pass it." Would that be a satisfactory solution? And yet no one can deny that I should have redeemed the pledge which I am supposed to have given. Hon. Members would not be grateful to me if I renewed those proposals. But, though I deny the pledge, I should much like to find the means for removing all complaint at the hands of the County Councils. I should wish to see them start on their difficult task thoroughly satisfied as to their financial position. More than that, connected with the question of rates and local finance is a matter of supreme importance — the question of the superannuation of the police, both in town and country. Hon. Members are aware of the most unsatisfactory footing on which this matter stands. In London the Police Superannuation Fund already stands at a figure which absorbs £150,000 out of the total raised for police purposes, and the police are not content, but are urging that their superannuation should be put upon a more satisfactory footing, on principles which have been embodied in Bills submitted to Parliament on several occasions. In the country the question stands in an equally, if not still more, unsatisfactory position. Some Superannuation Funds are insolvent, others are constructed on such arbitrary principles that no satisfaction whatever is given to the police. Bill after Bill has been introduced, but has been withdrawn, because the ratepayers shrank from facing the necessary cost, and there was no other source of Revenue to be found than the overburdened rates. It would be a great satisfaction if we could find means for dealing with this superannuation of the police. I wish I could find a further sum to relieve the County Councils from the drawbacks to which they declare the failure of the Horse Tax and Wheel Tax has exposed them. But more than this, I wish I could find a sum to enable the Local Authorities to buy up some of that enormous multitude of licences which has so largely contributed to the drink bill of the nation. I wish I had a million and a quarter to dispose of for this purpose, aye, a million for England and a quarter of a million for Scotland and Ireland. Yet in what direction may I turn? I have stated that, as between personalty and the ratepayers, the transfer of the Probate Duty closed the account, as far as my own action would go. The Horse and the Wheel Taxes would be difficult to carry, nor would their aggregate amount cover the needs which I should like to meet. I am sure that the Committee are with me in my objects. Will they support the Government in its effort to find the means? The objects are great; they are overwhelmingly important; but to accomplish them I must raise £1,250,000. To find that sum I turn to alcohol. I propose a surtax on all spirits, British and foreign, of 6d. a gallon, to be specially paid over to local taxation account, to be used generally for the purposes I have indicated, and to be distributed as I shall presently describe. A tax of 6d. a gallon on spirits will yield £918,000 on the number of gallons which I have calculated in my Imperial Budget. But, Sir, we must be fair. It would not, I think—and I believe the House will concur with me—be fair to put 6d. on spirits without taking toll of beer. I told my hon. Friends connected with the brewing interest that we might have to meet again before I closed my speech. If alcohol is to be taxed for local purposes, in some of which the brewers are as much interested as the distillers, beer can scarcely escape; and so I fear I must ask them to contribute the 3d. per barrel of which they have been relieved in the Imperial Budget, as their share towards that Local Taxation Fund which I have been so peremptorily and universally called upon to reinforce. I will not press the argument that there is nothing inappropriate in the consumer of spirits contributing in some slight measure to the maintenance of the police and of those local funds out of which the cost of pauperism has to be met. If the gigantic proportions of the drink bill of the nation are but half as responsible for police work and pauperism as is sometimes alleged, it is certainly not out of place that the consumer of spirits should contribute, in some slight measure, to the cost of those local purposes. But if the brewers contend that it is out of their pocket, and not out of that of the consumers, that this 3d. a barrel is paid, I respectfully point out to them that in our proposals we include the assignment of a sum equal indeed to their contribution for the purpose of diminishing the number of existing licences, a process in which, I believe, they will find much compensation and consolation. I do trust that the Committee, if they agree to the objects, will support us in the means which we require to carry them into effect. I admit the struggle may be severe. We may have to deal with great interests, but if they are not shortsighted they will co-operate with us in the task we have undertaken. If we can settle this great licensing question—we cannot do so in one year, but if we can make progress towards solving that question—we shall have done something with which, I believe, all parties in the House will be satisfied. Let me place before the Committee the special distribution of the sum to which I have referred. The Beer Duty, on its present basis, is expected to yield £9,650,000. The 3d. per barrel assignable to local purposes will produce £386,000. After making an allowance for some watering, foreign spirits, if subjected to a duty of 10s. 10d. instead of 10s. 4d. per gallon, are expected to yield£4,822,160, and 6d. out of the 10s. 10d. will produce £223,000. I have made an allowance in my Imperial Budget for the reduction likely to follow on the increase of 6d. per gallon. The Customs and the Excise expect some decrease in consumption, not perhaps in the total amount drunk, as measured by measure, but because further watering may take place in consequence of the increased duty. If that should occur, possibly a large number of persons will not be so very much disappointed or dissatisfied. Home spirits, if subjected to a duty of 10s. 6d. instead of 10s. per gallon, are expected to yield £14,595,000, and 6d. out of the duty of 10s. 6d. will produce £695,000; and if the Committee add together the additional duty on foreign and home spirits the total amount will be found to be £1,304,000. Therefore, the total further amount assigned to local taxation will be £1,304,000, and will be divisible according to the proportion fixed for Probate Duty, and distributed among the Three Kingdoms as follows:—England, 80 per cent., £1,043,200; Scotland, 11 per cent., £143,440; Ireland, 9 per cent., £117,360. I propose to allocate the English portion as follows:—To the Metropolitan Police Superannuation Fund, £150,000; to the County Police Fund, £150,000; to Local Authorities, for the purchase of licences, £350,000; and the remainder—£393,000, or whatever it may be—for reinforcing the funds of the County Councils; making a total of £1,043,000. If I now add together what I have already given to Local Authorities—namely, £2,774,000 and the further amount I propose to give—namely, £1,304,000, less the amount to be appropriated for licensing purposes, £438,000—the amount will be £866,000, or a total altogether of £3,640,000 as the relief to local taxation. I may here state that it would certainly be useless to give money for the purchase of licences if at the same time we did not stop the issue of new licences. We propose, therefore, and we shall hope to carry, if the House takes a real interest in this question, as I believe it does, notwithstanding the tasks which are placed upon us and the duties we have to perform, at least this suspensory measure that, until the whole question can be dealt with, there shall be no further issue of licences at all, unless in exceptional circumstances, such as the development of new populations or new wants which may appear here and there. Again, I say if the licensed victuallers take a broad view of their position they will see that this is a matter in which the temperance party and they have one and the same interest. Licensed vituallers do not object to a diminution in the number of new licensed houses, and, certainly, the temperance party desire it ardently. Eighteen years ago, on the introduction of Lord Aberdare's Bill, the licensed victuallers themselves suggested that they should be taxed to contribute to a compensation fund. We hope that we shall combine both parties and be able to reduce, or at all events to restrict, the issue of licences. As I have had the opportunity, through the courtesy of the noble Lord the Member for South Paddington (Lord Randolph Churchill), of learning what he has been doing in a very assiduous study of the licensing question, I shall be guilty of no breach of confidence when I say that he would also propose in his Bill that there shall be a cessation of the issue of new licences. I am glad that we may find common ground in that respect on which we may work. The House will see that we have taken a comprehensive view of the question of Local Finance, dealing with it broadly and in all its aspects. We may be embarking on great difficulties. But the House will, I hope, relieve me from the necessity of explaining those proposals in further detail. [The First Lord of the Treasury here made a, communication to the right hon. Gentleman.] The transfer of old licences to new licences would continue. That is a further step which we consider to be necessary. As to the superannuation of the police, I omitted in my statement to say that, of course, while we find the new system of superannuation, and while a special portion of the tax is raised for dealing with this Superannuation Fund, we shall make it conditional on the Local Authorities receiving those funds that they on their part shall deal satisfactorily with them. We are not going to hand over this money unconditionally to the Local Authorities; advantage must be taken of this occasion to put the superannuation of the police on a sound and satisfactory basis. With regard to distribution in Scotland and Ireland those funds cannot be distributed precisely on the same footing, the circumstances being so different, and a future occasion will be taken to explain how the money falling respectively to those portions of the country will be assigned. Now, at last, I have achieved my double task. I have dealt with the Imperial Budget, and I have had to deal with a supplementary Budget, and possibly in the opinion of some hon. Members they may find the supplementary Budget almost as interesting as the Imperial. We have opened up and are touching a large number of questions, and we have endeavoured to solve some of them without seeking any violent measures. We believe it will be seen that if we are imposing a new burden on the consumers of drink we at the same time believe that great consequences may flow from the steps we have taken. I feel that I may have created in the breasts of many some disappointment. The fabric of our finance is so vast and so gigantic that even a surplus of these respectable dimensions seem scarcely enough with which to work wonders, though I hope much good may flow from its judicious and equitable employment. I venture to hope that if the County Councils, reinforced by the funds which are placed at their disposal, are able to enter with fresh energy upon their task; if the police is improved, if licences are diminished; if, on the other hand, looking to the reductions of taxation, consumers of tea find some reduction in the price of the article they buy; if humble householders find that the tax paper which they receive at Christmas, and which so often mars their festivities, shows even by a small sum a diminution in the House Tax; if other classes feel the benefit of the remissions, which, though not heroic, we have made, I hope there may be some satisfaction, and that some portions of the community may look back with gratitude on the Budget of this year. Above all, I breathe an earnest hope for the continuance of that prosperity which we enjoy, a hope that a further freedom from foreign complications may continue, that a strengthened harmony between employers and employed may, during the year upon which we are now entering, be developed and fostered, and that all may tend to increase those sources of revenue of which I am for the time the humble steward, and to which we must look for the means of satisfying both the demands of national defence and the constantly increasing demands of progressive civilisation, as well as for that continuous lightening, if it may be, of the burden which rest on the shoulders of the people.