§ The Earl of Ripon
said that he did not anticipate that any objection would be made to the production of the papers for which he was about to move, 470 inasmuch as they had been laid before the other House of Parliament, and were only in continuation of some documents he had moved for in the course of last session; nevertheless, with their Lordships' permission, he would take the liberty of making a few preliminary remarks upon the subject to which those papers referred. At the commencement of this session he called their Lordships' attention to what appeared to him to be the very unsatisfactory, and, as he thought, alarming condition, in which the finances of the country stood. It then appeared to him, that they were about to enter upon a course of financial policy pregnant with danger to the best interests, if not the safety of the country, and he, on that occasion, stated the various reasons that led him to that conclusion. He showed that within the three last years there had been a very considerable excess of expenditure over the income of the country; and that that expenditure had arisen from causes over which he did not think the Government had any control, or for which the Government could be held responsible. Those causes were a state of things at home and abroad which compelled the executive government to call upon Parliament to make a large provision for the great establishments of the country. He stated that it appeared to him that, looking at the situation of the country, both at home and abroad, in its domestic and its foreign relations, there was no reason whatever to justify them in hoping that any change was likely to take place in that respect, and which would make it either prudent or safe to reduce the expenditure of the country. Since the time he took the liberty of stating those views to the House he had watched, with a good deal of vigilance, the course of those public events to which he referred as having caused the unsatisfactory and critical state of the country's finances, and it would have given him real satisfaction if he could say that anything had occurred during the last three months, since he made those observations, which would justify him in entertaining more sanguine views as to the possibility of curtailing the expenditure so as to bring it really within the regular income of the country. It might be true that, in some respects, some of the causes of anxiety and uneasiness might be diminished. There might be now a greater probability of some matters connected with our foreign affairs being settled than at that 471 time. But it was not very apparent, and at all events it remained yet in doubt. Although it might be true as regarded the internal condition of this country, that it could not be said to be in some respects in that state of alarm and anxiety in which it was at that time, yet he thought it would be the height of imprudence for any body to advise that the military force which was last year increased in consequence of the then state of the country, should be diminished, merely because some of the most unpleasant symptoms which appeared in the early part of this year had been partly removed. And certainly, as regarded another portion of the United Kingdom, he could not see the smallest ground of hope that they could dispense with any measure of precaution that Parliament had thought it necessary to establish. There was a volcano there, which might now be in a state of repose. And so it was. But it wanted nothing but the signal from those who controlled agitation and governed treason in that country, it wanted nothing but the signal from them, and God knew how soon it might be given, to burst out and desolate that unfortunate part of the empire, and expose it to all those horrors belonging to that pestilent system of agitation which had prevailed there for a length of time. Looking at these objects as grounds for maintaining our establishments at their present height, he saw no reason whatever for entertaining the expectation of a diminished expenditure. But since he first introduced the subject there had occurred another necessity for exertion on the part of this country, for which he for one, at least, was totally unprepared; and that was the impending hostilities with China. He did not know, and no one knew, what was the nature of the operations intended to be adopted with respect to China. They knew nothing of the object to be obtained —nothing of the chance of their success. Regarding all these things they were entirely in the dark, and if he did not anticipate any necessity of great exertions in that quarter of the globe at the commencement of the Session, it was only to be ascribed to the language of her Majesty's speech from the Throne. Because, although the speech referred to the unsatisfactory state of our relations with China, and contained an assurance that her Majesty's attention should be strictly applied to that important subject, yet 472 there was not one single word in that speech to lead any man to suppose that we were upon the verge of a war with that great empire, although at that very time her Majesty's Ministers must have known (though they did not think proper to tell Parliament of it) that a war with China was most probable, because at that moment must have been issued the ordinance connected with the government of India in relation to China. There was, therefore, at least the probability at that time that the result of those negotiations would be hostilities between the two countries. To talk of China having the power to carry on a successful war with this country, would, doubtless, be held to be the height of absurdity, but there was a vis inertœ belonging to that mighty empire which would make it exceedingly difficult for us, if only the Chinese would stand still, to impose upon them any terms whatever. Therefore nobody could tell, the most sanguine mind could not anticipate any period at which those hostilities might terminate, or could pretend to define the amount of the expense in which this country might be involved in consequence of them. It appeared to him, therefore, that the situation in which the country stood now, as regarded these matters, was precisely the same as at the commencement of the Session. There was precisely the same source of uneasiness and anxiety as existed when he formerly addressed the House. He, therefore, had watched with, he hoped no unreasonable impatience, but certainly with some anxiety, to ascertain the views which the Government might form, and take the opportunity of developing, as to the mode in which they proposed to meet the exigencies of the financial crisis in which the country was involved; and, in remarking upon this subject, he would take the liberty of stating, in the first instance, how the matter really stood— what was the actual condition of the country at this moment; what the actual condition of its financial resources; and what were the exigencies which Parliament was called upon to meet. It appeared, that in the year ending the 5th April 1838, the excess of expenditure over the income of the country was 1,428,000l., in the year ending the 5th of April 1839, the excess was 430,000l., and in the year ending the 5th of April 1840, it was 1,457,000l.; the total excess of expendi- 473 ture over the income, during those three years, being about 3,300,000l. This was rather a formidable deficiency to go on from year to year; but it became ten times more formidable, when it was looked at in connexion with the estimated deficiency of the present year. Because it appeared, from what had been stated, that the estimated deficiency of the current year ending April 1841, supposing, in the first instance, that no increase of taxation were to take place, would be not less than 2,337,000l., so that that sum added to the pre-existing deficiency of 3,300,000l. would make a total deficiency in I he course of four years of not less than 5,637,000l. Was it safe to go on in this way? Embarrassments of every description would arise, unless some check were placed upon a system at once so unwise and so dangerous. The matter stood thus:—The expenditure of the present year was calculated at 49,432,000l., exceeding in a great degree the actual expenditure of last year, and materially exceeding that of many previous years. It appeared that the income did not amount to more than 46,700,000l. Supposing the revenue to be the same as last year, the income would amount to somewhat more than 47,000,000l.; but it was stated that, in consequence of certain negotiations that had been going on with France, it was necessary to calculate upon a diminution of the revenue for the ensuing year of about 300,000l. Such being the probable result of the conditions which the new treaty with France would impose upon the country, the estimated income of the present year, therefore, being reduced to 46,700,000l. would leave a deficiency to be provided for of 2,732,000l. He did not wish to say anything upon the subject of the possible terms of a commercial treaty of which he knew nothing. It was, perhaps, not very difficult to guess upon what articles the reduction of duty would be made; but when the Government said it would cost 300,000l. to carry the treaty into effect, he took it for granted that they had considered not only the loss that would result from the reduction of the duty on the goods imported from France, but also how far that reduction upon French goods would tell upon the importation of similar goods from other parts of the world. If Ministers had only counted upon 300,000l. as the loss likely to result from the dimi- 474 nution of the duty on goods directly imported from France, he was afraid they would find that that sum would not measure the whole amount of the loss they were likely to sustain. But he could not suppose that, in making their calculations, they had overlooked so important a point of consideration. It was obvious, that the Government had very clearly seen the necessity of endeavouring to meet this state of things by an effort to bring the income and expenditure of the country more near to each other. It was accordingly proposed to impose new taxes to the amount of 2,337,000l. But the amount of the estimated deficiency being 2,732,000l., and the proposed new taxes amounting only to 2,337,000l., would still leave a sum of nearly 400,000l. unprovided for. And how was that to be met? By a vote of credit. And what was a vote of credit? Nothing; but borrowing. It was a loan of some kind, lo be obtained either by the issue of Exchequer bills, or by raising money in the market. The country, therefore, was to lay itself under the obligation of an additional loan, notwithstanding the resolution to impose additional taxes. It was said, that a portion of the expense which the country would this year have to meet was of a temporary nature; and conspicuous amongst the items of this temporary expenditure was 350,000l. for Canada, and 150,000l. for prosecuting the war with China. It was contended, that it was not necessary to raise fresh taxes to meet an expenditure of this temporary character. If he (Lord Ripon), were perfectly satisfied that this was a temporary expenditure, referable solely to the present year, he might be disposed to admit the truth and validity of the argument; but their Lordships would perceive, that if the difficulties in Canada and in China, should not this year be overcome, a state of things might continue in those countries which would render a similar expense necessary in the ensuing year, in which case another loan would be necessary; and thus, from year to year, the country would be reduced to the wretched condition of raising loans— of annually borrowing sums of money to meet the deficiency of the revenue in the excess of the expenditure over the income. He looked upon this, not only as highly inconvenient, but as exceedingly dangerous. He feared that the winding up of the financial year of 1841 would show 475 a deficit of not less than 850,000l., all of which must be obtained by the process of borrowing — a process which would still further increase the expenditure of the country (because money could not be borrowed without paying interest), and still further widen the difference between the income and the expenditure. Even if he were satisfied that this was a temporary expense, and that the country could calculate upon its not being continued, he confessed he should still feel very uneasy at the state in which things would be left; because it appeared to him that the principle upon which the Government had determined that the finances of the country should stand in future, was that of a deliberate rejection of any systematic plan for securing an habitual surplus. This seemed obvious from the fact, that the taxes to be raised were just enough to meet the ordinary expenditure, but not one farthing more. He thought that this was a very unsatisfactory state of things in which to leave the country—a state of things under which our power was likely to be most materially crippled, and all our relations, both at home and abroad, impaired. He knew that many persons were of a different opinion. He knew that many persons thought it a useless thing to attempt to maintain a surplus. It was said, that the money that might be devoted to the reduction of the debt by means of a surplus would be infinitely more beneficial to the community if left to "fructify" in the people's pocket. That was a species of fructification which he (Lord Ripon) confessed he did not understand. It was a principle from which he totally differed, being satisfied that the finances of the country could never be based upon a sound, safe, and wholesome footing unless, in time of peace, there was an habitual surplus. He did not say to what extent the principle of maintaining a surplus should he carried. People might differ upon that point; but that a surplus of some kind should be maintained appeared to him to be indispensably necessary. He begged their Lordships to consider for a moment the consequence of not having a surplus. If the income and expenditure of the country were to be kept upon an exact balance, it was clear that there could be no means whatever of meeting any sudden demand that might be made upon the finances, without borrowing money. This inconvenience would be 476 completely avoided, if it were the policy of the Government to maintain an habitual, systematic surplus. Suppose, for instance, that there was a surplus at the present moment of 2,000,000l. there would then be no necessity to borrow money to meet the expenditure necessarily incurred in Canada and China. It was perfectly true, that if the surplus were applied to meet these sudden and unforeseen demands, it would not be possible to go on reducing the debt; but then it was to be remembered, that the debt would not be increased; and when other countries saw that we had the power of making sudden exertions to protect our honour or defend our rights, without increasing the burthens of the people, they would be less disposed to offend the one or encroach upon the other, than they would be if they saw us perpetually crippled and kept down by the paltry and ill-advised policy, which rendered us incapable of making any exertions whatever without the immediate necessity of borrowing money. Again, with a revenue so complicated as ours, it might be very desirable, from time to time, to modify the high taxation which pressed upon the country, and to reduce it; but changes of this description must always be accompanied with some uncertainty as to the result, and most probably with some temporary loss to the revenue. Under such circumstances, how great must be the advantage of a surplus. He might point to an instance which occurred within his own experience, as an illustration of the advantage derived from the practice of maintaining an habitual surplus. In the year 1823, there was a real surplus of a very considerable amount. A question arose of infinite importance, as regarded the well-being of Ireland, connected with the revenue of the country. The duty on spirits had been raised, from time to time, during the war until it amounted to an enormous sum. But it did not produce the amount of revenue that it might have done, because it gave rise to a most extended and most alarming system of illicit distillation—a system productive of the greatest possible evils, and leading to the demoralization of whole districts. The people all turned to smuggling; and everybody knew that when men were once habituated to a violation of the law in one respect, they soon ceased to yield obedience to it in all other respects. So it was in Ireland. The whole 477 country was in a state of the greatest disorder. He thought the most unjust, the most unconstitutional laws had become necessary to put down the tremendous evil that had arisen. The army had been occupied, much to the detriment of its discipline, hunting all over the country in small detached bodies, not for a hidden enemy, but for concealed stills. As he had said, the whole country was in the utmost confusion; and the state of things became absolutely intolerable. What was done? There was but one remedy. All others had been tried, and had failed, and that remedy was a reduction of the duty on spirits. It was reduced, he thought, one-half, entailing a possible loss upon the revenue of not less than 800,000l.; though it certainly was not anticipated that the actual loss would be so great, because, if the plan succeeded, the duty, instead of being paid upon a comparatively small portion of the whiskey distilled in Ireland, would be paid upon the whole of it. But, at all events, the necessity of the case was so strong, that it was requisite to run the risk even of losing the whole of the 800,000l. This he was enabled to do without difficulty and without danger, because he had a considerable surplus. He maintained that it was an immense advantage to be enabled to carry into execution, without hesitation and without doubt, so great a change, without risk or danger of embarrassing or deranging the finances of the country. Suppose we had a surplus now—suppose, instead of being in the unfortunate predicament of having an excess of expenditure over our income, we had an actual surplus, in that case the Government night have carried into effect the project for the reduction of the postage, without imposing any new burden upon the country. If that reduction were to increase the comfort and happiness of individuals, to promote the diffusion of knowledge, and he knew not what besides, what an advantage it would have been to have conferred all these benefits upon the public, without the necessity of imposing other taxes. Of all things in the world, he believed that nothing could be so unsatisfactory as the imposition of a new tax, as a substitute for one taken off. And why? Because those who benefitted by the repeal of a tax, very soon forgot the obligations they were under to the government who made the repeal; but those upon whom a new tax was imposed, 478 felt always pinched and screwed, and would never let the government alone until the burden was removed. The wisdom or policy, therefore, of substituting one tax for another, he considered as very problematical. There was another point upon which the advantage, of maintaining a surplus was, he thought, apparent. He referred now to the unfunded debt, and to Exchequer bills. Exchequer bills were a very convenient security to the persons who held them, and at the same time afforded a very convenient mode to the Government of raising money. Perhaps in some respects they were too convenient, because the facility of obtaining money upon them, held out a great temptation to stretch a point or two in expenditure. It was for that very reason that he thought it of vital importance that we should always be able to have the Exchequer bills in hand—always have it in our power, by means of a surplus, to check, controul, and limit this species of security. If there were no surplus, there was always the danger of being involved in very great inconveniences, and very great expenses with respect to Exchequer bills. This had occurred very lately. Last year 4,000,000l. of Exchequer bills were funded; but the effect of that funding was not to keep the Exchequer bills at a high premium and a low rate of interest; on the contrary, the premium which before had been 3l. or 4l. per cent., ultimately sunk to a discount; and what was the consequence? Why, that the Government was compelled to raise the interest upon the Exchequer bills that stood out, in order to prevent their being paid into the revenue, and this led to an expense of 150,000l. If there had been a surplus, the Government would not have been compelled to resort to such a measure, and an expenditure of somewhere about 180,000l. would have been saved to the country. He held that the possession of a certain surplus was the only means of preventing a perpetual derangement of our finances, and the only means of keeping them in a sound and healthy state. In respect also to the circulation of the country, he thought it highly desirable that the Government should strive to avoid the necessity of coming annually to Parliament in the manner it was now doing. Every Exchequer bill that was issued was, pro tanto, an extension of the circulation of the country, and an exten- 479 sion of a species of circulation over which trade and commerce had no influence. It might happen that the issue of Exchequer bills—which the necessities of the Government, in a fiscal point of view, might render imperative—would take place at the very moment, when in a commercial point of view, an increase of the circulation was the least desirable thing in the world. Hence would arise many difficulties of a most embarrassing nature. Taking all these things together, it appeared to him that it would be a most unfortunate circumstance, if he were to understand (he might be mistaken, and sincerely hoped he was), that the principle upon which the Government intended lo administer the finances of the country was that of the rejection of a surplus as a part of the system. He believed that if they acted upon that principle, they would create much disappointment, and give rise to many difficulties of a most serious character. He was confident, that if Ministers thought that satisfaction would be given to the country by adopting the principle of rejecting a surplus, in order to avoid what undoubtedly would be a pressure upon the people, namely, the imposition of a further amount of taxation, in order to create a surplus; if they thought that by this means they could conciliate the nation, and procure for their measures a favourable reception, he was satisfied they would be extremely disappointed. If any emergency should arise which should compel them to come again for an additional loan, the country would not fail to condemn the unwise and impolitic course that they had pursued. Although they might raise the money that they now wanted, they might depend upon it, that if in the course of two or three years it should be necessary to call upon the public to make still further sacrifices, they would find it infinitely more difficult to obtain the money, than if they were to try to get it now, when it would be so much more advantageous to our finances, and therefore more satisfactory to all who looked not merely to their own interests, but to those of the country in general. The noble Lord concluded by moving for certain returns relating to the revenue.
§ Viscount Melbourne
said, his noble Friend seemed to admit that the state of affairs, both at home and abroad, was somewhat better than it was at the time that he called the attention of the House 480 to the condition of the finances at an early period of the Session. His noble Friend said, that there now appeared to be a probability that some of the questions which at that time appeared to him to be menacing and threatening, and to be involved in great difficulty, would be settled without much further delay. His noble Friend admitted, that the state of affairs at home was more tranquil, and that even in that part of the empire which he likened to a volcano that only required a signal to break out into a frightful irruption—it was difficult, perhaps, to imagine how a signal was to be given to a volcano, but even in that part of the empire his noble Friend admitted that there was a temporary calm; though he described it as one upon which the Government had no right to rely. He would not hazard any predictions, nor would he pass any praise or panegyric upon the present state of affairs. He would not say more than that which was obvious, plain, and manifest. He was always very much afraid of predictions: they were very apt to be falsified, and to be followed by events directly the contrary of them. But he thought that, even upon the showing of his noble Friend, her Majesty's Government were entitled to thanks for the alteration and improvement that had already taken place, and that a well-founded hope of further improvement might be entertained, without expressing any very confident prediction upon the subject. But his noble Friend said, that matters had occurred abroad of which he was not aware at the commencement of the session, which had led to great difficulties and to great expenses, and to which he thought the attention of Parliament was not properly called in her Majesty's speech. Now, if his noble Friend would consider the words of her Majesty's speech, which he had quoted but partially, he would at once perceive that nothing could more distinctly point out the circumstances which had taken place, and the measures that were likely to be adopted in consequence of them, than the terms in which the subject was referred to in the speech from the Throne. These were the words:—Events have happened in China which have occasioned an interruption of the commercial intercourse of my subjects with that country. I have given, and shall continue to give, the most serious attention to a matter so 481 deeply affecting the interests of my subjects, and the dignity of my Crown.It was perfectly impossible, speaking with the usual reserve of speeches from the Throne, that the attention of Parliament could have been more directly pointed to the subject, Parliament being, of course, aware of what had happened in that part of the world. Alluding to the excess of expenditure over income which had of late years been growing up, his noble Friend said, "This is very alarming; it is impossible that such a state of things can go on; it is pregnant with danger, and calls for very great exertions on the part of the Government and the country." It was for that very reason that Government had adopted the measures that they had adopted, for that very reason that they had proposed the measures that they had proposed. It was from a strong sense that the excess of expenditure over income, and the system of borrowing money every year could not be sustained with honour and credit to the Government, nor with safety to the interests of the country, that the Government had proposed the measures which they considered adequate to the circumstances in which the country was placed. His noble Friend had stated very clearly the whole of the financial difficulties against which the country had to contend, and had pointed out some further defalcations in the revenue, which he thought ought to be calculated upon. His noble Friend said, that it would be improper for him to go into any consideration of the articles of a treaty which was not yet concluded, and of which he knew nothing; but he trusted that due consideration had been given to all the matters to which the treaty related, and to all the circumstances which might render the loss to the revenue, in consequence of an alteration of the rate of duty on certain articles, greater than was at present expected. He believed that full and complete calculations had been made upon the subject, that all the circumstances to which his noble Friend referred had been carefully taken into consideration, and that the loss that the revenue was likely to sustain had been placed at the highest probable sum. It was very possible, and he trusted it would turn out so, that the loss would not be so great as had been anticipated by the statement of the Chancellor of the Exchequer in the other House of Parliament. His noble 482 Friend stated that the expenses which the Government considered of a temporary character only, were to be met by Exchequer bills—by a vote of credit, which it was impossible to deny was nothing more nor less than asking for a loan. That was perfectly true; but the Government, when it took this course, made a distinct statement, that, according to the best of its belief, these expenses would only be of a temporary and occasional nature, and ministers did not think that they would be justified in laying a permanent tax upon the country to meet expenses which they trusted would not continue another year. If these expenses should continue, if they should grow up to a larger amount, or if they should be succeeded by other expenses of a similar character—an event which, amidst the complicated interests of this country in every part of the world was but too likely to occur—it would then be for the Government to determine what course it would pursue to meet the difficulty; but under the present circumstances ministers did not think that they would be justified in calling upon the country to load itself with a permanent burden for the purpose of meeting an expense which they trusted would not continue beyond the present year. But the great objection which his noble Friend made to the whole system in which ministers conducted the financial affairs of the country was, that they did not proceed upon the principle of retaining or imposing such an amount of taxation as should secure a surplus of income over expenditure. This was a very great question in financial affairs, and a very difficult question, and one which it was of great importance should be decided correctly and justly. The principle upon which the Government of this country acted for many years, was that of receiving and maintaining a surplus. He did not remember in what year it was, that Mr. Huskisson moved a resolution in the House of Commons, to the effect, that there ought always to be a surplus of 5,000,000l. [The Earl of Ripon: 1819]. Well, the resolution was carried by a very large majority. But great difficulties followed— great financial pressure—great pecuniary trouble spreading itself over the whole of the country. As these difficulties increased, it was found to be quite impossible to maintain the principle of always providing a surplus; and it appeared to him to be a very difficult question whether it was wise 483 to propose taxes for the purpose of creating and sustaining a surplus, or whether it was not better to impose no more taxes than were absolutely necessary to meet the expenditure of the country, and to leave the capital not required by the exigencies of the state, to fructify (using a term that had been much ridiculed, but not on that account the less apt) in the pockets of the people. That was a question of very considerable importance, and one upon which at different periods a great deal of political feeling had existed. His noble friend had passed many eulogiums upon the advantage of having a surplus. No doubt it was a great advantage to have more money than one wanted to spend, whether in public or private affairs. It did not require much eulogium to prove that. But in reality the question was a very serious one. Taking all the elements of Government into consideration—taking the feelings of the people into account— looking to the circumstances in which the nation stood, and also to the politico-economical bearings of the subject, it did not appear to him to be a clear question whether it would be wise or prudent to impose taxes upon the country for the sake of producing a surplus. At the same time, it was not a question upon which he would undertake or presume to give a decided opinion at present; but he said that, under the present circumstances of the country, and in the present situation of the country, the measures that the Government had prepared appeared to him to be sufficient for the occasion, and the best that could be proposed. Of course, he had no objection to the production of the papers for which his noble Friend had moved.
§ Lord Ashburton
was understood to say that the doctrine of the noble Lord would encourage the idle in every part of the country to enjoy the present time without care for the future. If they looked back to the declaration of almost every Minister who had directed the financial affairs of this country, they would find the same principle maintained throughout, that had been so clearly stated in the speech they had heard from his noble Friend. At the close of the American war, when the country came out of a most unfortunate contest with a deficiency of between five and six millions, what did Mr. Pitt recommend? Not what would be recommended at the present day—not the course of com- 484 mon and low popularity of reducing the taxation, and leaving the burden upon our children; but he boldly met the difficulty, and immediately a sinking fund was created, which amounted to something like the same thing as a surplus revenue. Unless this country returned to that sound and honest principle—for there was nothing but roguery and swindling in the opposite system—it would put itself in a position to be insulted by every nation in the world, and would find itself without means and resources. The principle laid down by Mr. Pitt was followed until late years by almost every statesman who had occupied himself with the financial affairs of the country. He would recommend the noble Viscount to read some of the speeches of Mr. Huskisson on the subject. Mr. Huskisson said, that it was absolutely impossible that any country could be independent in her power and resources unless the principle were observed of having some amount beyond the ordinary expenditure. A resolution passed in the House of Commons, to the effect, thatFor the reduction of the national debt, and to provide for future relief from part of the present burdens, it was necessary there should be a clear surplus of income beyond the expenditure of not less than five millions, and with a view to attain that important object it was necessary to increase the income of the country by additional taxation,That was the resolution of the House of Commons in 1819, and he had never heard any one express any other feeling than that of extreme reluctance at not being able to act upon that principle. What would happen to this country if it was called upon for any warlike exertion—and no country, however pacific, can answer for what might come upon them from another nation? The consequence would be, that, to meet the expense of a war requiring eight or ten millions of money, they must have recourse to one of two means—they must either borrow, or lay on taxation for the purpose. Suppose they went upon the principle of borrowing —and every minister would say that the necessity was merely temporary, and that peace would probably be proclaimed before the following session. Well, borrowing was justifiable, provided the principle was laid down that there should be some surplus for a sinking fund which in a given number of years should extinguish the sum borrowed: that was a sound 485 principle. If they looked to other countries they would find that principle acknowledged by our children—if he might so call them—the Americans. They borrowed, but did not lay on any taxes on the people for carrying on their war. There was nothing more justifiable and sound in finance than to borrow for such a purpose; but it was not only not sound, but not honest, not to make provision for the gradual payment in time of peace. Now, the Americans did not owe one sixpence, and he doubted very much whether they would be caught by the notion of the money "fructifying" in their pockets, and whether they would not continue to think, that their honour was concerned, in paying off during- peace the debts they had contracted in time of war. The noble Viscount had got China and Naples upon his hands, and there was a quarrel, about what he (Lord Ashburton) did not know, with Portugal. Then, the noble Viscount had the boundary question in America to settle. Any Minister for Foreign Affairs would be unfortunate in having so many affairs of the kind upon his hands; and if, with all the pacific disposition of the noble Lord who at present filled that office, he found those difficulties grow upon him, it was only necessary to remind their Lordships of the fallacy of considering those events of unfrequent occurrence. The surplus, moreover, independent of the objects for which the necessity had been pointed out, was necessary to make provision for the ordinary fluctuations in the revenue which necessarily must occur; and Mr. Huskisson had said that, with a revenue of fifty millions, it was necessary to be prepared for a fluctuation of ten per cent. He had too good an opinion of the honesty and common sense of the English people to doubt their willingness to submit to any provision which was necessary to secure the independence and honour of their country. With respect to the treaty with France, no one would see with greater pleasure than himself a commercial intercourse established between the two countries. If the project were entertained in a really good spirit on the part of the two countries, he knew of nothing more likely to give general satisfaction; but the little experience he had had, left him in considerable doubt whether anything effectual would be done. With regard to the Exchequer, it had been shown by his noble Friend, 486 that the effect of having no surplus with which the Exchequer bills in the market, which were too much for the circulation to carry, could be bought up, was they were saddled with an expense of 150,000l. while the money concerns of the country were deranged, because the Government had an unfunded debt more than the market could bear. If there were a surplus, all that confusion would be prevented, and the difficulties of Exchequer bills obviated. Questions of finance did not very often come before their Lordships, and thanks were due to his noble Friend for calling their attention to the subject. It was one of the most important considerations that could occupy the minds of the Government and of the country. He would conclude by asking the noble Lord if provision for concluding the treaty with France would be made during the present Session?