Lords Sitting of 22 July 1856

MINUTES.
PUBLIC BILLS.—2aSheep, &c. Contagious Diseases Prevention; Hospitals (Dublin); Burial-grounds (Ireland); Lunatic Asylums (Superannuation) (Ireland); Joint-stock Banks.
3a Sheep, &c. Contagious Diseases Prevention; Formation, &c. of Parishes; Courts of Common Law (Ireland); Unlawful Oaths (Ireland); Nuisances Removal, &c. (Scotland); Marriage and Registration Acts Amendment.

THE CRIMEAN BOARD OF INQUIRY— EXPLANATION.
THE EARL OF LUCAN: My Lords, I wish to make a few remarks in reference to some animadversions which have been made upon me in another place, in consequence of what I addressed to your Lordships a few nights since, on the production of the Report of the Board of General Officers at Chelsea. I think the most convenient course will be to read what I did say on the occasion. I have placed it upon paper, and have shown it to several persons who were present at the time, and they all admit its accuracy. I said—
"The Minister of War, excusing himself on the last occasion for not producing the Report, stated that he was acting under the advice of the Judge Advocate General. I do not desire to comment upon the manner in which that learned Gentleman conducted himself on that inquiry, or I might say that he appeared to me to assume more the authority of the Board than the position of the legal adviser of the Board. What character he assumed during the deliberations, with closed doors, I will not say; but I cannot shut my eyes to the fact that the learned Gentleman is a colleague of the noble Lord, and is, therefore, no doubt most unfairly, open to the suspicion that he might not be more impatient for the drawing up of the Report than the noble Lord is for producing it. In passing, I must take the opportunity of observing that it is repugnant to all sense of justice that in a political inquiry a political partisan should be the officer to advise the Court. A review of the proceedings at Chelsea makes it clear that the administration of justice before military courts requires consideration on the part of the Legislature, and as I believe that consideration cannot be given to it in a more fitting place than your Lordships' House, I hope the next Session will not pass away without the attention of your Lordships being called to the office of the Judge Advocate General, the functions of that officer, his tenure of office, and the mode of procedure before military courts, which I do not hesitate to say is at present un necessarily tedious and obstructive to eliciting truth."
I believe that to be a most accurate report of what fell from me on that occasion; the learned Gentleman in another place

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put very different words in my mouth, and not wishing to detain the House more than a few minutes, I will only advert to those sentences of his speech to which I take exception. The learned Gentleman is made to say—but I hope he is misreported—that I ascribed the delay in not laying the Report on the table sooner to the fact that he had drawn up the Report. Now, I never for one moment supposed that he had drawn up the Report; nor did I in my speech say a word about his having drawn it up. The learned Gentleman is also reported to have said that I stated that he had been dilatory in the matter, for the purpose of serving the objects of the Minister for War. What I said was simply that, as there was no great impatience on the part of the Minister for War to present the Report, and that as the learned Gentleman was a colleague of that Minister, he might be open to the suspicion that possibly be was not very impatient himself about the production of the Report. The learned Gentleman went on to say that I was in constant communication with the persons who were connected with this inquiry, and he did not believe that anybody of the least authority had given him the information. Now, I ask the learned Gentleman to whom he alludes? I deny, in the most positive and solemn manner, that I have been in communication with any one individual connected with the inquiry. He stated, also, that I did not obtain the information from Lord Hardinge. Now, what does that mean?—that I did obtain it from Lord Hardinge? It is perfectly true that there is a connection between me and Lord Hardinge, through our children, but it is not the less true that I never saw so little of Lord Hardinge as during the last six months. It is a positive fact that I never exchanged words with him, in my recollection, since the 18th of April last. Nevertheless, I may be told that it is most likely a communication has taken place with Lord Hardinge through my daughter or son-in-law. I declare, in the most solemn language that I can use, that, until the last week, I never myself touched on the subject, either to my daughter or to Mr. Hardinge, whom I have not seen three times during the last fortnight. So much for the insinuation about Lord Hardinge. The learned Gentleman went on to add that I had been in frequent communication with Lord Hardinge; but never was anything so fabu-
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lously untrue. The noble Lord the Minister of War has the advantage of me, inasmuch as he happened to be under the gallery of the other House when the speech of the learned Gentleman was made, and therefore knows whether the Report I am alluding to is correct.
LORD PANMURE: I beg to say I was not under the gallery at the time.
THE EARL OF LUCAN: A gentleman came from the House of Commons, and reported to me what had been said, and he stated that he had just left Lord Panmure under the gallery. The hon. Gentleman was Mr. French, the Member for Roscommon.
LORD PANMURE: I had been in the House to communicate with Lord Palmerston, but I was not sitting under the gallery.
THE EARL OF LUCAN: It is further reported that the learned Gentleman said I imputed to him partiality during the conduct of the inquiry, and that he had abused the authority with which he was invested in order to prejudice me. I think the House will acquit me of having ever said anything of the sort. He is also reported to have said that I complained that the inquiry was a political inquiry, in consequence of the Judge Advocate being a Minister, and having attended Court. I never said anything of the kind. I called it a political inquiry, because my impression is that it was a political inquiry. I do not consider that the composition of the Board made the inquiry political, but that the subject matter which came before it did so. I say that the inquiry was partly military and partly political. I have not read much of the Report, but if I am not greatly misled—and I do not think I am, because I read it in the Daily News—it is stated that officers have exonerated themselves by throwing blame on Sir Charles Trevelyan; and if that be so, then I say the inquiry has been a political inquiry. Now, if I have cause to complain of one thing more than another which fell from the learned Gentleman, it is the last passage which I shall refer to. He said, "I am bound to say I believe that however incomplete the inquiry, and however insufficient the evidence may have been in Lord Lucan's case, yet the General Officers, looking at that evidence, have given a just verdict." Now, my Lords, this is the first time I ever heard that the evidence in my case was incomplete. I may remind your Lord-

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ship that Colonel Tullock was taken ill, and could not support his charge. My case lasted, with the intermission of a day or so, three weeks, and I never yet heard that any one point required further elucidation. Indeed, I understood that if ever there had been a case thoroughly investigated it was mine. I, therefore, do not think it is too much to say that that insinuation is baseless; and, if the learned Gentleman did make it, it is base. I shall now content myself with leaving it to the House and the public to form their own opinion as to the party to whom the charge of uttering unmitigated untruths applies; and I will give this advice to the learned Gentleman, namely, that holding as he does a judicial situation, and being, therefore, supposed to have the benefit of judicial immunity, he should be a little more careful in the language he uses in speaking of others.
LORD PANMURE: Having heard the observations which have been made by the noble Earl, I think I cannot do better than give him the advice which he has just given to the learned Judge Advocate—to be a little more careful in the language he uses to other parties. I certainly understood the noble Earl to say that the Judge Advocate General had drawn up the Report of the Commissions, and that he had used his position to delay the production of that Report. He was so understood not only by myself, but by those members of the Board who have seats in this House. The noble Earl has now entered into an explanation in answer to the statement of the Judge Advocate, and I can only say that it is extremely to be regretted that the noble Earl should have availed himself of his position as a Peer of Parliament to cast grave reflections on the highest judicial authority of the army—the individual who administers its criminal law, and advises the Sovereign in various judicial matters relating to the army. This is bringing into contempt a high authority, not only of the Crown, but a high authority as a civil member of that service to which the noble Earl belongs. My Lords, I will enter into no controversy with two parties, carried on in two different Houses of Parliament—but this much I must say, that if a high officer of the Crown is to be attacked, and has charges made against him in this House of Parliament, your Lordships must not be surprised if, being entirely innocent of those charges, he takes an op-
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portunity of vindicating himself in the only place where he has the opportunity of making his defence.
THE EARL OF LUCAN: I challenge the noble Lord to produce any newspaper in which it is reported that I said that the learned Gentleman had drawn up the Report. I said nothing of the sort. What I did say was, that "the learned Gentleman was a colleague of the noble Lord, and was therefore, no doubt most unfairly, open to the suspicion that he might not have been more impatient for the drawing up of the Report than the noble Lord was for producing it."

BUSINESS OF THE HOUSE.
On Motion that the Sheep, &c., Contagious Diseases Prevention Bill be read a second time,
LORD REDESDALE LORD REDESDALE rose to call attention to the state of the business before the House. That was the last day on which a second reading could be given to any Bill; fifteen Bills had been read a second time yesterday, and there were only four more, which were upon the paper to-day, now waiting for a second reading. Although other circumstances had, no doubt, tended to shorten the Session, he thought the rule which their Lordships had laid down with regard to second readings had contributed to bring the Session to a close earlier than usual. He would also observe that a full attendance had been kept up to the latest period of the Session, and that every Bill of any importance which had been brought before their Lordships had received due consideration and had been fully discussed. The rule which had been adopted having been eminently successful, he hoped their Lordships would adhere to it in future years.
LORD STANLEY OF ALDERLEYentirely concurred with the noble Lord that the state of the business before the House and the manner in which that business had been conducted were most satisfactory.

CONSOLIDATED FUND (APPROPRIATION) BILL.
House in Committee (according to Order).
LORD MONTEAGLE: My Lords, there are peculiar circumstances connected with the financial condition of the country, as well as with the provisions of the Bill now before the House, which induce, and I hope justify me in calling your

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Lordships' attention to the position in which we stand at the present moment. We are now in a state of transition from war to peace. After a period of tranquillity unexampled in its duration, we found ourselves compelled to enter into one of the most formidable contests in which England had ever been engaged. And at that very time, my noble Friend the Secretary of State for War, and the noble Duke who preceded him, were induced by the force of public opinion and by the judgment of Parliament to undertake a task which would have been difficult under all circumstances, but which, in the midst of an actual campaign, must to many have appeared rash, if not actually impracticable. I allude to the reconstruction of the War Department, and the consolidation of the Army and Ordnance Departments. That this great change should not have been successful in all its details casts no reflection on my noble Friend (Lord Panmure) or on his predecessor the Duke of Newcastle. It is only wonderful that the measure should have been even as successful as it has been, and my noble Friend may, without risk, allow me to call the attention of your Lordships to two cases arising in his department, in one of which his expectations have already been disappointed, and in the other I must be permitted to doubt his ultimate success. Both cases, however, relate to the civil and financial administration of the army, rather than to its military government. Even if I am right in the objections I am about to urge, that circumstance ought not to make us forgetful of the difficulty of the task undertaken by the Government, namely, that of reorganising our War Department whilst in a state of war. These difficulties entitle the Minister for War to the utmost consideration and forbearance. The first subject to which I shall direct your Lordships' attention is the new arrangement made between the War Department and the Treasury, carried into effect by the Minute of the 22nd December, 1854 (Sessional Papers, 1855, No. 10), by which the administration of the Commissariat, including its financial duties, was removed from the Treasury to the Secretary of State for War. This change was announced in the following words:—
"As the Commissariat chests will be under the charge of officers appointed by and acting under the direction of the Minister of War, the arrange-
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ments for providing, holding, and disbursing the funds required for all branches of the public service abroad, and the various remittances and transfers connected therewith, will hereafter be conducted on the responsibility of the War Department. My Lords do not doubt that this duty will receive the attention its great importance deserves"
The whole of these miscellaneous duties connected with the Army, Navy, Ordnance, Commissariat, and Civil Services throughout our Colonies, the contracts for stores and victuals, the convict, and the liberated African services were at once transferred from the Treasury to the Minister for War, together with the multiplied payments of the Commissariat chest. By the Minute of the 22nd December, 1854, the Treasury direct that "the entire responsibility of superintending the war expenditure, and of seeing that it is properly accounted for, will hereafter rest on the Secretary for War, the direction of the Commissariat being transferred to him, and the correspondence addressed to the Under Secretary of State, and instructions being received through him." Such were the changes made in 1854. Your Lordships may perhaps do me the honour to recollect that on the 10th August of the same year I had taken the liberty of adverting in this House to the proposed change of system, and had pointed out the many dangers which I could not but anticipate as its inevitable consequence. I then described the financial duties of the Commissariat to consist in "providing funds for the public service, purchasing bullion, drawing and negotiating bills, and acting in all respects as bankers." "These," I urged, "were functions with which a Secretary of State for War had no necessary connection, possessing neither the means nor the knowledge for exercising a due control over their administration." I considered that such duties could only be performed by the Treasury as the supreme financial department of the State. My noble Friend (Lord Panmure) did not oppose my argument at that time, though he was not prepared to assent publicly to my conclusions. I had not alluded to the duties of the Commissariat in the field, but to its financial functions only, which I contended could never be safely separated from the Treasury, the supreme authority in finance. The experiment was, however, tried. I may now conclude that it has failed, as Sir Charles Trevelyan, in a Treasury memorandum, dated 13th October, 1855, now

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before the House, states that by this unfortunate change—
"The financial system of the country was dislocated at one blow, and the only function left to the Treasury was stated by the Chancellor of the Exchequer to be the task of providing the ways and means demanded by the departments."
The Assistant Secretary of the Treasury stated also (30th November, 1855), that—
"By the change made the year before, the two principles which bad previously regulated these departments had been violated, the Commissariat continuing to be its own banker and paymaster, freed from the control of the Treasury, and an alarming tendency appearing towards a return on the part of each branch of the public service abroad to take its own measures to raise funds for the services entrusted to it."
Such having been the first results of the change, it is with great satisfaction I now perceive from a Treasury letter of the 30th November, 1855, which I moved for in the present Session, that—
"Directions have been given by the Chancellor of the Exchequer to the Minister at War to make the necessary arrangements for replacing, under the immediate direction of the Treasury, the financial duties performed by the officers of the Commissariat."
I can assure your Lordships that I do not refer to this coincidence between the resolutions adopted by the Government, March 30, 1855, and the opinions I had expressed in this House, from any absurd vanity of proving that I was then in the right. I do so solely because I may thereby obtain some additional weight in favour of recommendations of a similar kind, which I shall subsequently submit to your Lordships this evening, or that I may at least free myself from the imputation of presumption in now urging my opinions on your notice. Pending the war, I abstained from raising a discussion on many of these questions; but such reserve is no longer required, more particularly when the papers I have moved for show the important and satisfactory improvements which have already taken place, by retracing our false step.
In the first instance, however, I ask permission to notice the Estimates of the present year, which on their first presentation struck me as being, as well in form as in substance, open to very serious objections. The combination of the Army and Ordnance Estimates, now for the first time united, presented to Parliament no less an amount than £34,998,000, entrusted to a single department, being the
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largest sum ever placed at the disposal of a Minister for War. The Army Vote was put under the almost unchecked control of my noble Friend (Lord Panmure); for, with the help of a Treasury warrant, sums voted for the army might have been applied to the erection of barracks in the Park, or of Ordnance works at Portsmouth, and vice versâ, the Votes might have been dealt with interchangeably. This most dangerous and unconstitutional power is now, I rejoice to see, corrected in the Appropriation Act before us. The Army Estimate having been reduced from £34,998,000 to £20,747,000, is separated into two distinct Votes; the first, a Vote of £8,789,000 for Works, Stores, Fuel, Forage, and materiel of war; and the second, a Vote of £11,680,000 for the charge of the land forces, including the personnel of the Army, Artillery, Engineers, and Militia. These two sums are now kept distinct not only as Votes, but in expenditure; they cannot be intermingled or interchanged by any authority of the Crown, the Treasury, or the War Department, nor even by the authority of these three Powers combined. They are kept as separate as the old Votes of the Army and Ordnance had been, or as the Army and the Navy still are by law. The Admiralty Estimates have also been reduced by no less a sum than £3,308,000; and thus the Government of their own accord, and without the exertion of any Parliamentary pressure, have made a saving of £17,559,000 in the two military Departments, giving to the people of England a sure pledge of the further economy that we may trust will be exhibited in the Estimates of the ensuing year. But much as I rejoice at the reduction of the Vote, I rejoice still more at the assertion of the strict principle of Parliamentary appropriation in the Act now on the table. Whilst the Ordnance and Army Departments were kept distinct before the late consolidation under the War Minister, there could not be, without a violation of the law of the land, an application of Army monies to Navy services, or of Navy money to the Army services. But when the Estimates for the two Departments became as it were fused into one Vote, sums might have been transferred, with the consent of the Crown and of the Treasury, from the one to the other of these services without restraint. It would have been highly unconstitutional and a very great abuse to have done so, it is

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true, and by a most judicious amendment, which I rejoice to see the Government have introduced into the present Appropriation Act, the danger is averted. This strict principle cannot be too steadily enforced, though I much fear that during the late pressure of circumstances it has been brought into jeopardy, as Sir Charles Trevelyan admits "the recent events have blown all calculation to the winds." The difficulties necessarily incidental to war on a great scale, in which an excess of expenditure of £53,000,000 is shown in the year 1855–56, as compared with 1852–53, and in which the total expenditure for the two years of war has exceeded £155,000,000, would not but be most formidable, and these difficulties were inevitably increased by the consolidation of the two Departments of Army and Ordnance. It was probably from a wise anticipation of such difficulties that the late and the present Chancellor of the Exchequer obtained from Parliament during the last two years and the present, two Votes of £3,000,000, and one of £2,000,000 with a further credit of £2,000,000, freed from all appropriation except that the whole should be applied to the exigencies of war. I take upon myself to say, and I do not think the noble Lord at the head of the War Department will contradict me, that but for these Votes of Credit for extraordinary expenses, it would have been found utterly impossible to carry on the late war efficiently. But this enormous amount of money thus confided to Her Majesty's Government has rendered it of the utmost importance that a strict and efficient system of audit should be applied to the expenditure in the Crimea. Never before was such a check more indispensably requisite. No delay should be allowed to intervene in the execution of these controlling duties. Never were the duties of the auditors so important. And here I must be allowed to say, that I observe with dismay and regret, the removal of the army accounts from the control of the constitutional Board of Auditors at Somerset House, to the control of my noble Friend the War Minister (Lord Panmure); I consider this change to be indefensible in principle, and dangerous in practice. I consider this alteration to be one of the same nature as that to which I have already adverted in the transfer of the Commissariat functions from the Treasury, and I apprehend its result will be the same also. This latter attempt, as I have already shown, has failed, and has been abandoned.
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In this second instance also, I am Confident the Government will have yet to retrace their steps. The opinion of Parliament has not yet been pronounced on the subject; but I affirm, unhesitatingly, that any audit to be effectual, and to deserve public confidence should be independent and wholly disconnected from the department whose expenditure is to be controlled. In any other form an audit is but a delusion, which cannot possess public confidence, or serve any useful purpose. It is not in this House that I feel called upon to waste time in proving this proposition. During three successive years this House did me the honour of supporting measures introduced by me to enforce an independent audit of railway accounts. It was not our fault that so salutary a principle was not applied to all the railways in the empire. The measure was defeated elsewhere. But, surely, it is still more requisite, that an independent audit should be applied to the complicated and difficult transactions carried on in foreign countries, for the multiplied services of Army and Navy in the Baltic and the Black Sea. I may, perhaps, be told, that the Parliamentary audit, as introduced by Sir James Graham in the Navy, will still subsist and will be enforced. True, but the object of that special audit was only to compare the expenditure with the Vote of Parliament, and the full efficiency of that special audit in time of war, with Votes of Credit amounting to £8,000,000 or £9,000,000 sterling, is yet to be ascertained not having been as yet fully tested. Sir Charles Trevelyan does not seem very confident on this subject. He observes:—
"Useful as this Audit has been, it may be made still more so. The Auditors should have the power of commenting on this account as they do on accounts rendered from their own office. They should also point out irregular or objectionable transactions, and call for information before the result on the vote, or on the aggregate of votes, is arrived at, for the great object is to prevent expenditure, not to certify to the fact that it is gone. But the truth is, the Audit Board has not sufficient weight; for I well know from experience how crushing the feeling is that you have to contend with departments that are too strong for you."
Such are the significant words of Sir Charles Trevelyan. The remedy for what he describes would seem to be the strengthening the powers of the Auditors; the course adopted seems to be, to dispense with their services altogether. The reason assigned for the step taken, appears to me as extraordinary as the act itself. I am

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told that, because the Minister of War issues the order, he is the best person to examine into its fulfilment, and into the consequent expenditure. With the utmost respect for my noble Friend, I am inclined to believe that the order of the Secretary of State may require examination as well as the act of his subordinate officer. The general audit has been removed from the judicial tribunal at Somerset House to the War Department, and I cannot help expressing my opinion that this abandonment of an independent audit, must be destructive of what ought to be the best security for the just distribution of the public money, and for the making due provision for the public service. I appeal on this subject to the authority of my noble Friend below me (the Marquess of Lansdowne). It was to him that the country owes the establishment of the Auditors acting judicially, and made independent by holding office for life. He knows well the condition in which he found the public accounts, and the motives which induced him, as Chancellor of the Exchequer, to recommend this great measure of financial reform. Why then was the Audit Office, so established, so confided in, and so commended, to be relieved from the army accounts? Why should those accounts be placed under the control of the very department which had incurred the expenditure, thus establishing the absurd principle of allowing the War Department to audit its own war accounts. This is a point to which I entreat my noble Friend to turn his intention before Parliament meets again, for I can assure him that the present time is that of all others when it is most dangerous to depart from the just and reasonable principle of enforcing an independent audit applicable to all branches of our public accounts, and more especially to those relating to the military expenditure incurred in the late war. I refer him to the authority of official papers on the table, to the authority of Mr. Romilly, Chairman of the Board of Audit, to the authority of Sir C. Trevelyan, and of others. I do not now press my noble Friend to give me any distinct pledge on this subject, but I entreat him to consider the question attentively before we meet again.
I shall now proceed to observe on the prospects of our future income and expenditure, which are somewhat peculiar. We have just closed an honourable but most costly war, and we are, as I have already said, in a transition state, passing from a
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lavish expenditure to a more economical system. This change is one not very easy to accomplish. It is dangerous to do too much; it is fatal to do too little. A wise economy steadily enforced, adopted by the Government itself, is what is safest and most effectual: it will be found the best protection against that false economy that, under the pretext of saving, would break down our national establishments, rendering them unequal to our wants, and to their destined services. This will always be found, in the long run, the most false of all economies, because it compels us to larger expenditure hereafter. I accept with acknowledgment and with praise the large reductions made by the Government since the peace. I rejoice, also, to observe that the subject has been taken up in another place, and been enforced in powerful arguments, and not in a rash and heedless spirit—not by loose inquirers without skill and knowledge, but by wise and prudent men who have brought high abilities and mature official experience to bear upon the subject. This cannot fail to lead to a wise review of our financial condition, of our income and expenditure, of the receipt, issue, and custody of our public moneys. I have already stated that the excess of two years war expenditure has been no less than £53,088,711, being the difference between £155,121,307 and £102,032,596, to which should be added an excess of £24,500,000 for the present year, making in all £77,588,000 applied to the expenses of the war. This, I think, has been wisely met by the Chancellor of the Exchequer. The increase of taxation has been estimated, as I perceive, by the best authority, at £17,182,522, and the increase of funded and unfunded debt at £33,604,263. But these figures will not fully exhibit the peculiarity of our present position. During the war, loans have been made, and oppressive taxes have been imposed on a pledge solemnly given, that at a fixed and definite time these taxes should decrease, and should be finally withdrawn. The income tax continues at its present rate, Is. 4d. in the pound, till 6th April, 1858. By a happy fatality for the Treasury, connected with the date of the Treaty of Peace, the Chancellor of the Exchequer preserves this war tax for nearly two years beyond the close of the war, or till 6th April, 1858. This cannot bring into the treasury less than £24,000,000; and from April, 1858, to April, 1860, the property tax is further continued at the reduced rate

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of 5d. in the pound. In 1860 it expires. The tea duties, the duties on coffee and sugar, decrease gradually till they fall to their former amount as peace taxes in 1857 and 1858. The war malt tax has already ceased, on 1st July, 1856, not only withdrawing revenue, but encumbering us with a payment of £1,000,000 in drawback. Thus our income will be in a gradual state of reduction for the next four years. But the engagements we have entered into for the repayment of our loans will come into operation during this time. £2,000,000 a year for successive years is to be applied for the redemption of Exchequer Bonds; we pay so much for an unfortunate and unsuccessful experiment; an annual million for a sinking found is also provided to meet the loans contracted in 3 per cents;—these form inevitable obligations, which we cannot postpone or evade—the pledge was given by the late and the present Cabinet, and he would indeed be a bold Minister who would dare to propose to violate so solemn an engagement. To the public creditor we have promised to redeem our bonds, and to extinguish our loan. To the people of England we have likewise promised a relief from oppressive taxation, willingly submitted to by them to meet our war expenses. This double contract is ratified by Parliament. Good faith must be kept with the people who, by their readiness to submit to heavy burdens without complaint or murmur, have shown an enduring patience and fortitude not unworthy of the bravery of their countrymen at the Alma and Inkerman. The Chancellor of the Exchequer has exercised a wise discretion in not relying exclusively on one mode of raising the ways and means for the war. He has partly resorted to war taxes, and partly to borrowing. In this he has clone right. But he must adhere to his engagements, if he seek to deserve our entire confidence. I have no doubt he will do so. We shall then only have cause to regret his adherence to the mistaken system of endeavouring to raise money on long dated bills, payable at a fixed time—an error which I regret to see continued and extended by an alternative power of issuing Exchequer bonds as well as Exchequer bills, unfortunately granted in the present Session.
There is another question which it would be inexcusable to pass over. It is a question daily increasing in importance, and one to which I have repeatedly called your Lordships' attention. I allude to the
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transactions between the Government and the savings banks, transactions which have now become daily and habitual. In objecting to the course which has been resorted to so largely, I must guard against two inferences which might possibly, through mistake, be deduced from my remarks. I am far from attributing to the Government any violation of the law in what they have done. They have authority for their acts, I admit, but I seek vainly for any sufficient justification. In disclaiming any attack on the Government, I am still less willing to be considered as raising any argument which can by possibility affect the credit of the savings' banks or the security of the depositors. They are safe under all circumstances, and have the faith of the country pledged for the repayment of the principal and interest due to them. But the system acted upon by the Government is one which demands a searching Parliamentary inquiry which I trust it may receive here or elsewhere in the ensuing Session of Parliament. I feel convinced that the powers now exercised by the Treasury over the stock of the savings' banks cannot be used without danger to the public credit. The extent to which these practices have been resorted to is hardly known or understood. It is not of an occasional act, during a time of exigency, that I complain. The practice which I denounce is not only resorted to year by year, but month by month, week by week, and day by day. The Treasury do this without a shadow of pretence; it cannot be suggested that the millions of stock which they sell are disposed of in consequence of any demands on the savings' banks by the depositors; this is done solely to facilitate and promote the financial operations of Downing Street. These powers of selling stock were not originally given to the Chancellor of the Exchequer for such purposes. The practice now is, that the Chancellor of the Exchequer, if he finds that his Exchequer bonds or bills are low and unsaleable (which during the greater part of the last year has unluckily been the case), sells out savings' banks stock, invests the proceeds in the depreciated bills and bonds, thus making the whole transaction subservient to his own views as a Minister. These are operations which, as habitual practices, appear to me unjustifiable. Observe the consequences. The holders and dealers in stock and Exchequer bills may and must meet the competition of

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their rivals in the market. They may calculate likewise on their means of information and their authority in making stock bargains; but of the motives and objects of the Chancellor of the Exchequer they know nothing. He may seek to keep up the value of his own securities when they are rejected by the public. He buys, and thus gives these securities an unnatural and artificial value. He ceases to buy, and the same securities suffer an artificial depression. He alone is aware of his own intentions and plans. He therefore buys and sells to an advantage. The holders of stock have not the same control over the Chancellor of the Exchequer which they possess over their rivals in business, who are bound by the ordinary ties of self-interest. The Chancellor of the Exchequer, as proprietor and director of the savings' bank stock, has the power of wielding a capital exceeding £34,000,000. The trustees are stated on the face of the public accounts to be at the present time holders of £5,000,000 or £6,000,000 of Exchequer Bills. It is hardly possible to calculate what might be the effect of buying and selling on this enormous scale by the Government, that is by parties who are not bound by the ordinary laws of mercantile profit. The power of funding Exchequer bills so held by savings' banks, without passing them through the market, aggravates this danger. In the year 1855, the stock sold for savings' banks amounted to £3,260,000—the balance between purchases and sales of Exchequer bills was £3,063,000. These operations had been of late carried on to an extent which I believe is without example. There has been a continued action on the part of the Chancellor of the Exchequer on the Stock and Exchequer bill market, and such action cannot take place without producing an actual effect on the price of public securities. The public creditor has no protection against these operations; I earnestly hope, that as the exigencies of war can no longer be urged as an excuse for all this official connection between the Treasury and the Stock Exchange, that the practice may be discontinued. I now conclude, having performed the duty I undertook, and I must apologise to your Lordships for having detained you by arguing on a subject which doubtless you will consider uninviting. But your Lordships will remember that it may be important for this House to weigh and consider well these questions;
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for though we are restrained from voting taxes, we have our full share of responsibility in passing legislative measures which affect the finances of the United Kingdom and the interests of all classes of our fellow countrymen.
LORD PANMUREsaid, that into the general subject so ably entered into by his noble Friend he should not attempt to enter; but there were one or two points in connection with military finance to which reference had been made upon which he wished to make a few observations. In the first place, his noble Friend had touched upon the retransfer to the Treasury of the financial branch of the Commissariat. Now, both his noble Friend at the head of the Government and himself had certainly been of opinion from the commencement that the financial arrangements connected with the Commissariat ought not to be vested in the Secretary of State, but should return to the Treasury, who had the control of those arrangements, both with regard to the army and ordnance. The transfer of that department was now going on. It was not quite so easy to separate the two branches of finance and supply as was at first imagined, but the separation would take place in a short time. With reference to the audit of the public accounts, he thought his noble Friend must be mistaken in some of his impressions on this subject. In the War Office, as it was formerly constituted, and in the Secretary of State's Office as it now existed, the detailed audit of the expenditure took place under the eye, formerly of the Secretary at War, and now of the Secretary of State for War. It was transacted in the departments, and it would be utterly impossible to conduct that audit upon a proper system if it were conducted in the Audit Office, as his noble Friend suggested. What was done with regard to the navy? The whole expenditure of the navy was audited under the authority of the Admiralty; it was only the appropriation audit which passed through the Board of Audit. It was the same in the Ordnance. When the Ordnance was a separate Board the whole detailed expenditure was audited under the supervision of the Master General and the Board. In fact, if the audit of the detailed expenditure of either army, navy, or ordnance were put upon the Audit Board, that Board would find themselves utterly at sea with regard to 99 out of 100 of the items which would come before them, and would

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have to give up the whole matter. With regard to the appropriation audit, that was properly performed by the Audit Board. In the same way with regard to the Commissariat, the audit of the accounts for the supply of that department was formerly performed in the Treasury; but it was found inconvenient to conduct that audit by Treasury clerks under the Treasury roof, and it was consequently undertaken by clerks in the Audit Office, specially employed upon that work. After the Commissariat was transferred to the Secretary of State's Office the detailed audit was transferred with it, which was only following out the system adopted with regard to the audit of the general expenditure of the country. He felt assured that to act on the suggestion of his noble Friend, and have the audit conducted under an individual and an independent Board, ignorant of the details, would be to establish a system which would utterly break down.
Bill reported, without Amendment, and to be read 3a on Friday next.

COAST-GUARD SERVICE BILL.
Order of the Day for the House to be put into Committee read.
Moved—That the House do now resolve itself into Committee.
LORD STANLEY OF ALDERLEYstated that the object of the Bill was to supply for the service of the navy a body of trained seamen who should be ready for any emergency, but which at present they had no means of doing. At the commencement of the last war it was found that it was not possible to raise the required number of men by bounties; and this Bill was intended, in conjunction with other measures, for supplying this great deficiency. He should not wish to see impressment entirely abandoned, but at the same it ought never to be resorted to until every other means had been tried. On the other hand, an increase of bounty produced a ruinous competition with the merchant service. The Bill was calculated to give a great additional force of seamen to the country, and would prepare the way for the raising of a much greater one. It would put the coast-guard in a position to supply a body of trained seamen to the navy when necessary. The coast-guard was transferred from the Customs to the Admiralty, and it would form a complete naval force, subject to the regulations of the navy, liable to be called into active service at
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any moment. The present number of the coast-guard was 5,000 men, and by the Bill it was proposed to raise the number to 10,000. When on shore they would be made available for the prevention of smuggling along a great extent of the coast which was now entirely without any stations of the coast-guard. Ships of war were to be stationed at different points of the coast for the purposes of instructing boys and men in seamanship and naval gunnery; and there would also be places of instruction in gunnery at stations on shore. A certain number of gunboats would be attached to those instruction ships which would be available for revenue purposes. With the naval pensioners who were available for service there would, therefore, be always a force of 15,000 men, trained sailors, ready for service in the navy, which would, it was hoped, prevent our being again in so helpless a state as we had been for manning the navy in an emergency.
LORD COLCHESTERagreed that the present mode of manning the navy was inefficient for the purpose of meeting any sudden emergency, and that it was highly desirable that some steps should be adopted for improving it. With this object, he had no doubt that it would be an advantageous arrangement to transfer the management of the coast-guard from the Customs to the Board of Admiralty. The Bill proposed to introduce an additional number of trained men into the coast-guard as a nucleus for manning the navy; but he did not exactly comprehend how they could get much training on board ships in harbour and gunboats attached to revenue cruisers. What was required in the event of a sudden emergency was, that we should be able to send to sea a sufficient number of officers and men to fill up the complement of ships which were put in commission, who were acquainted with one another, so that they might possess that mutual confidence which was so desirable when a ship's company was going into action. An advisable course would, he thought, be to have something of the French system, where in every port there were a number of seamen registered and liable to be called on to serve on board ships of war.
THE EARL OF ELLENBOROUGHsaid, he was glad to hear that the Government had under consideration, and had made progress in preparing, other measures ancillary to this, with the view of rendering

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more efficient the naval service on the outbreak of a war, because taken by itself the present measure would not effect that improvement in the service which we had a right to expect. He believed the question of the management of the coast-guard had been the subject of controversy between the Admiralty and the Customs, probably from the commencement of the two departments, but the Customs, with the assistance of the Treasury, had hitherto succeeded in retaining it. He had no doubt that the Admiralty were capable of making that force more efficient that the Customs; but if the Admiralty were to make it more efficient than it had been hitherto, they must proceed in a totally different manner in the selection of the officers they employed. He had always observed in reading the Navy List that the more aged officers were employed in the coast-guard, and it was only that morning that he had had the curiosity of looking into the List for the purpose of seeing what were the dates of the commissions of some of the officers at present in the service. He found that five of those gentlemen were lieutenants who had had the good fortune of obtaining their commissions in 1814; that twenty-nine of them had obtained their commissions in 1815, and that altogether there were no less than ninety-two who had been lieutenants twenty-six years. Now, in all probability, there was not one of those gentlemen who was less than fifty years old, whilst those who stood at the head of the list must be considerably above sixty. It was well known, in fact, that when an officer entered the coast-guard, he was practically shelved. He either had an intention of marrying or was already married; and no doubt, in a moral point of view, it must be very delightful to him to find himself sitting in a comfortable dwelling with his wife and family around him; but at the same time nothing could be less conducive to professional efficiency. There was no doubt that in the long nights and extremely bad weather which prevailed during the winter—that particular season which was most favourable to the smuggler, and certainly least likely to be attractive to the gentleman with a large family—the launching of a boat through the surf in pursuit of some tight little smuggling craft was not the most agreeable occupation when a half dozen children might be clinging to his knees and a wife hanging round his neck. These things must
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be reformed. The service could not be rendered efficient without a thorough reform. Still he would not recommend harsh measures with regard to these old officers. Quite the contrary; and probably it would be better to issue a Royal warrant, permitting every one of them who had been in commission twenty-five years to retire on full pay rather than retain them longer in the service; for it was impossible, if they were retained in the service, to have the efficient force that was desired. He approved of the intention to let all the men be borne on the ships' books; for if some were borne on the books and others were not, the practical inconvenience to the service must be very great indeed. Another question of importance was that of the men's pay. The pay of the coast-guard at present was greatly superior to that of the men on board Her Majesty's ships. He wished to know, therefore, whether these men, when they were employed on board ship, were to receive ship pay or coast-guard pay? If they received the coast-guard pay, they had now, and were at any time employed, as during the late war, on board of the same ship with other men who had inferior pay, performing the same duties—and very possibly not performing them on all occasions quite as well as those who had the inferior pay—then dissatisfaction would be sure to follow. In the course of the last war this was submitted to, because the coast-guard men were men of experience, and were useful in teaching the others their duties. Their numbers also were few; but it was impossible that 10,000 men could be employed in the fleet receiving double or treble the pay of their shipmates. He wished to know, also, where the power of the Admiralty was to cease and that of the Customs to begin; because, though the Admiralty might succeed in organising a more efficient corps than we now possessed, they had not the knowledge which would enable them to distribute that force in the best manner along the coast. That was a knowledge possessed only by the Customs. Consequently there must be a constant communication maintained between these two departments, or it would be impossible for the revenue service to be efficiently discharged. In his opinion, the Bill ought to give power to create an officer—call him Director General of the Coast-guard, if they pleased—whose duty it should be to keep himself in constant communication

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with the Board of Customs, in order to become acquainted with the requirements of the service and the points at which the men might be employed, so as to be of most service to the revenue. Let it be understood, however, that the gain to the service would not be 10,000 men: in fact, the gain would be about 8,000, and some of these would be employed on shore whilst others were on board. Those on shore he was confident would not form an efficient reserve; it was only as long as they were on board ship that they could be properly trained in naval duties. But supposing, then, that the gain would be a reserve of 10,000, the question was, would they get that reserve in the most efficient state for the service? And how was the revenue to be protected under this plan in time of war? Their Lordships must not suppose that the country had never before had a naval reserve. In 1828–9, during the Duke of Wellington's Government, when the war between Russia and Turkey broke out, Lord Melville, who then presided at the Admiralty, said that at a week's notice he would produce twelve ships of the line, fully armed and manned; and it was his (the Earl of Ellenborough's) firm conviction that if they required twelve at that period they required at least twenty-five sail-of-the-line at present. As had been remarked by the First Minister of the Crown, they were now joined to the Continent of Europe by a steam bridge. Almost all the advantages of the insular position of this country were gone; and they should therefore accommodate themselves by increased naval and military force to the new state of things. This country could not be secure unless it commanded the steam-bridge, and this it could not do, unless we were able at any time, to put twenty-five sail of the line in the Channel in a week. He regretted very much to have heard the so-often-repeated statement of the Government that impressment ought not to be had recourse to, for the holding of this opinion by the Executive was calculated to do much practical damage to the power of this country. Circumstances might arise under which it might be absolutely necessary—not after trying other measures but at once—to have recourse to this system for the purpose of manning the ships of Great Britain. He therefore regretted that Her Majesty' Ministers should have taken credit to themselves for not having adopted that system in the late war, and have exaggerated
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the dangers and objections which attended the exercise of the power of the Crown in that respect. Certainly it was the conviction of the public mind that the protection of the coasts of the country in times of danger would be sufficient to justify impressment. He very much regretted that they had not had some general statement from the Government, not only as to what it was proposed to do with regard to the naval force, but also as to what they proposed to do with regard to placing the country in a position of strength as regarded having a strong military force capable of protecting the shores of this country in case the naval force would not be sufficient—through the accidents of weather or any other cause—to effect that great object. He had at all times thought seriously on this subject; but now he could not but feel that the country had been placed in a new position altogether, and that her rulers must revise all her establishments, and determine, however reluctantly to make England a great military as well as a great naval power. He would not enter into details as to the steps which Her Majesty's Government should adopt for that purpose, but merely make this observation—that the larger they made the bases of their military preparations the safer the country would be. They should extend their system of military instruction, and encourage the disposition to enter into the military service. Then he trusted that no notions of economy would prevent them from maintaining their militia force in a state of efficiency. He trusted not only that the present militia establishments would be maintained, but that the force would every year receive the advantage of drill for a period of not less than two months, so that it would be at any time available for the purpose of national defence. Let them depend upon it that the question of invasion, was one which they must always have before their eyes; and this was not a question that would be decided in weeks, or in months, or in a year, or after long preparation, for which ample time might be allowed to them; but it was a question which if it ever came to be decided would be decided in five days. He, therefore, said that there was no Government deserving of public support or public confidence which did not place this country in a position to march out armed men raised on the soil of England to protect her against invasion in case the British navy, through any unforeseen accident,

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should not have succeeded in preventing the passage of a hostile army from a broad.
MARQUESS TOWNSHENDthought that if the country had such a naval force as it ought to have there would be no necessity for so large an army as the noble Earl desired to see maintained. He hoped that the present Bill would be carried out to its fullest extent. This excellent measure had for years been rejected by successive First Lords of the Admiralty, and the present senior naval Lord at the Board—Admiral Berkeley—had both written and spoken repeatedly in its favour, and to him especially was the credit due for its adoption.
LORD STANLEY OF ALDERLEYsaid, it was a great mistake to suppose that the Government had surrendered the right of impressment, which they at present possessed; they only wished to abstain from having recourse to it when all other means should be found to have been exhausted. With regard to the employment of officers the coast-guard who were too old for active service, his right hon. Friend, the First Lord of the Admiralty, had, he believed, already explained in another place, that it was intended gradually to pension off all such officers, and to supply their places with efficient men, who would be at once placed upon the naval books, so that after a time the whole force would be brought under the control of the Admiralty. He believed that there would be no difficulty in maintaining a communication between the coast-guard and the Customs department for the purpose of protecting the revenue. There would be some difference in the pay and treatment of the men afloat and the men on shore; but care would be taken that the whole of the force should be men of high character and efficiency, and, as the ships in which they might be serving were paid off, they would be turned over to the coast-guard until their services were again required afloat, when they would resume their duties on board in the same situations as they had previously filled. The coast-guard would always be available for the protection of the revenue, and when any of their body were taken away for the naval service, their places would be supplied by others.
THE EARL OF ELLENBOROUGHwas at a loss to see how they were to make a satisfactory arrangement as regarded the difference in the pay. Could they have two ships beside each other, and performing the same duties, with the men in one receiving
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coast-guard pay, and those in the other receiving that of ordinary seamen? He wished to say a word with regard to a new corps which had been attempted to be raised. He believed that corps to which he had alluded was styled the Naval Coastguard Volunteers. There were on its staff six captains and six paymasters. Each captain received £500 a year, with £100 a year for a residence, and £10 a year for stationery, besides, he (the Earl of Ellenborough) believed, some allowance for travelling expenses. Yet there had never, perhaps, been a more absolute failure than that measure of forming the Naval Coastguard Volunteers, though the House of Commons had lately voted £8,000 for the staff. He thought that there should be an amalgamation of the officers of this corps with those of the coast-guard service which it was now proposed to form.
LORD STANLEY OF ALDERLEYwas afraid that the Royal Coast-guard Volunteers had not been so successful as could have been wished, and it was intended to amalgamate the staff of that force with the officers of the coast-guard. He did not think there would be any more difficulty in establishing a different rate of pay for the men afloat from that of the men employed ashore than was experienced now in the case of the men who were employed on board the revenue cruisers. It was also to be recollected that in a great degree the difference between the pay of the naval service and that of the coast-guard was made up by a system of pensioning, into the details of which he need not enter.
Motion agreed to.
House in Committee accordingly.
Bill reported without Amendment; and to be read 3a on Thursday next.
House adjourned to Thursday next.