§ I turn now to the National Debt. Our total gross liabilities on the 1st of April 1895 were £660,160,000, made up of £586,016,000 Funded Debt, £53,583,000 estimated capital value of terminable annuities, £17,400,000 Unfunded Debt (of which £10,272,000 was in the hands of the public), and £3,161,000 loans raised under the Naval Defence Act, the Barracks Acts, and other Acts. Our total gross liabilities 1067 on March 31, 1896, stood at £652,026,000—a reduction of £8,134,000 on the year—composed of Funded Debt, £589,147,000; estimated capital value of terminable annuities, £49,218,000; Unfunded Debt, £9,976,000 (all except £51,000 in the hands of the public); and £3,685,000 raised under special Acts. The reduction of £8,134,000 is the largest reduction ever made in any year except the year 1894–5. I hope my right hon. Friends—the Members for the University of London and for Liskeard, who objected to the financial proposals of the Naval Works Act—will be reasonably satisfied with what has actually been done. ["Hear, hear!"] Now I will explain how this has been effected. Of course, there has, in the first place, been the normal reduction in the capital value of the terminable annuities, but the amount of the Unfunded Debt has been reduced by £7,424,000, while the Funded Debt has been increased by £3,131,000. This is due to the funding, by the right hon. Gentleman opposite, of a sum of £4,974,000, which was borrowed on short loan by my right hon. Friend the First Lord of the Admiralty in order to provide for paying off those holders of Consols who refused to convert. It was borrowed from the National Debt Commissioners at Consols rates of interest, and it has been funded by the creation of £4,630,000 of stock. On the other hand, however, through the operation of the life annuities, Land Tax redemption, and similar ways, the Funded Debt has been reduced by £1,499,000, leaving a net increase in the Funded Debt of £3,131,000. As I have said, the Unfunded Debt has been reduced by £7,424,000 by the operation I have named, and by the remainder of the sums borrowed on bills and bonds for the purposes of the Imperial Defence Act of 1888, amounting to £2,450,000, having been paid off by the appropriation of the Sinking Fund under the Finance Act of 1894. The Unfunded Debt, I think the Committee will be glad to hear, now stands at a lower point than it has reached for 21 years. ["Hear, hear!"] The operation of funding which I have alluded to has materially simplified the debt. I hope still further to simplify it by issuing, so Ear as may be necessary, Treasury Bills 1068 in lieu of Exchequer Bills, as the Exchequer Bills fall due. ["Hear, hear!"] I hope the Committee will agree that that is not an unsatisfactory account of the position of the National Debt as compared with last year. [''Hear, hear!"] But let us consider for a moment what we have done with regard to the National Debt in the course of the last 40 years. The National Debt—the Funded Debt—has not been materially increased since the Crimean war. On April 1st 1857, the Debt stood at £842,000,000. This year it stands at £652,000,000. [Cheers.] We have paid off in 39 years £190,000,000 of debt—[cheers]—and £100,000,000 of that has been paid off in the last 13 years. [Cheers.] Some may think that our efforts have been wasted—[An hon. Member: "Hear, hear!"]—and that we should have done better if we had allowed the money to fructify, as it is said, in the pocket of the taxpayer. That is not my view. [Cheers.] By this self-denying course the Parliament and the people of this country have raised up a reserve fund of incalculable importance—["hear, hear!"]—a reserve fund which, if the time of need should come when this country should again have to fight for its life, would enable us, without imposing a single extra penny of taxation, to raise a couple of hundred millions for the defence of the country, and without imposing, either, an atom more debt upon the people of that day than our predecessors bore without a murmur in 1857. [Cheers.] That is a thing which, I think, this country may be proud of. [Cheers.] It is a source of incalculable strength to this country, and, although it may sometimes be necessary, even in time of peace, as it was necessary in 1885, when I was last responsible for the finances of the country, to postpone temporarily the operation of the Sinking Fund, yet I trust that Parliament will never permanently depart from the wise and prudent policy in this matter which it has hitherto pursued. [Cheers.] I have drawn a picture—I hope in not too bright colours— of the present financial condition of the country. I have pointed to increasing receipts from productive taxes; I have dwelt upon the high condition of the credit of the country; and the steady, I, may say the rapid, diminution 1069 of the Public Debt. I might go on, as my predecessors have often gone on, to call the attention of the Committee to the improvement in the condition of the great masses of our population, testified by the increased consumption of dutiable and non-dutiable articles, the comforts and the necessaries of life, and by the increased deposits in the Savings Banks. But I will not detain the Committee on that point, because it is unnecessary to dwell upon it. We know it already.