Sitting of 11 July 1828

THE BUDGET.
The House having resolved itself into a committee of Ways and Means,
The Chancellor of the Exchequerrose. He said that the period was at length arrived, when the supplies being closed, it became his duty to submit to the House a statement of the finances of the country for the current year. In so doing, he was not insensible to the difficulties of the task, at all times arduous, but particularly so in a first statement; neither did he overlook the peculiar disadvantages under which he laboured. The House could not forget, that the last financial statement was made by a right hon. gentleman, unfortunately now no more, to whose great talents and public services they had more than once borne ample testimony during the present session: they could not forget, that whatever subject that right hon. gentleman undertook, he was enabled to adorn in a manner not to be surpassed. He felt no

1653
humiliation in saying, that he could not hope to give to the subject before him the same interest; but he trusted that the House would indulge him, while he endeavoured simply, and he hoped clearly, to lay before them a view of the finances of the year; concealing nothing on the one hand, nor on the other putting any matter in a more favourable point of view than the circumstances of the case justified; trusting to the good sense of parliament to meet, on the one hand, the difficulties of a defective revenue, or, on the other, the still greater difficulty of repressing the disposition to liberality, which might be created by an excess of income. In discharging the duty thus imposed on him, he possessed one great advantage beyond some of his predecessors in office. It had been the pleasure of the House, in the early part of the session, to appoint a committee to inquire into the whole of the income and expenditure of the country. That committee had applied itself so assiduously to the discharge of its duty, that its reports, the result of much patient and laborious investigation, presented ample information on almost every branch of our revenue and expenditure. These reports afforded the means of remedying any deficiencies in his statement, and rendered it unnecessary that he should trespass at any length on the attention of the committee.
He would now proceed with that statement, accompanying it with such observations as some of the details called for. In doing this, he would first call the attention of the House to the state of the income and expenditure for the year past, and next to make the best calculation in his power of those of the current year. It had been usual, on former occasions, to refer back to the state of the income and revenue, for several antecedent years, and to take a review of the state of the finances in those years, and to draw conclusions from them, not merely with respect to those of the year with which the House had then to deal, but also as to the future. It was not his intention to adhere to that practice. The vicissitudes of this country, within the last four or five years, the fluctuations of the revenue, and the variations in several of its branches, rendered it the less necessary, if at all important to the present discussion. He would therefore confine himself to a review of the finances of the year 1827.
It appeared by the papers on the table of the House, that the total ordi-
1654
nary revenue of the year 1827, not the gross revenue but the ordinary nett revenue, after making those deductions which appeared in the papers already on the table, was 49,581,576 l. There were besides this received from the Bank on account of the dead weight, 4,245,000 l., and to this was to be added, under the head of "extraordinary and miscellaneous," 660,081 l., making a total revenue of 54,486,657 l. The expenditure of 1827, taking the interest of the debt and excluding the Sinking-fund, but including the interest of Exchequer-bills, was 28,239,848 l. To this was to be added the sum paid to the trustees of the naval and military pensions, amounting to 2.800,000 l. Other charges on the consolidated fund were 2,218,218 l. making in the whole 33,258,066 l. under the head of debt and permanent charges on the consolidated fund. The supply of 1827, including the charges of army, navy, ordnance and miscellaneous estimates, amount-to 19,069,000 l. There were certain other additions that year, which made, together with the debt and charges, the whole expenditure amount to 52,690,637 l. If, therefore, he deducted from the whole income of 54,486,657 l. the expenditure of 52,690,637 l. there would remain a surplus of 1,796,020 l. From this, however, was to be deducted the sums advanced for carrying on public works, after allowing for the sums repaid on account of those advances, of 663,793 l.—leaving an actual surplus of 1,132,227 l.
In the course of this account, he had taken the sums paid on account of naval, and military pensions, as forming part of the income of the year on one side, and the repayment to the trustees on account of those pensions, as expenditure on the I other: because those sums were taken as debits and credits in the estimates of the year; but he did not mean to conceal, that the difference between the sums advanced by the Bank on account of those pensions, and the money paid to the trustees, could not, properly speaking, be considered as income, but rather as a loan made in aid of the expenditure of the year, though long before the commencement of the year's account.
Such, then, was the state of the revenue and expenditure of the year 1827. He now came to state the probable amount of the income of the present year; and it afforded him sincere gratification to be

1655
able to say, that he anticipated a considerable increase to the revenue in this year, as compared with the last. That increase taking the most moderate calculation he would estimate at 800,000 l. In order to explain the grounds of that expectation, it would be necessary to call the attention of the committee to the various branches of the revenue, and to point out why he considered himself justified in the expectation he had mentioned. The first branch to which he should advert was the Customs. With respect to this, the House was aware that the revenue which it produced in 1827 exceeded that of 1826 by about 600,000 l.: but although there had been this large increase in 1827 as compared with the preceding year, he should not be justified in assuming that the Customs' revenue in the present year would continue equal to that of 1827. The House would recollect that, in that year, the necessities of the country had caused a large importation of corn, and that it came in under a heavy duty; so that the duty paid on that commodity alone amounted to 800,000 l. He could not fairly calculate on any such importation in the course of the present year. The committee would see that on this principle, he was bound to deduct from the revenue of last year the sum of 800,000 l. derived from the duty on corn; but that there were other branches on which we should be enabled to supply the loss sustained by the non-importation of com this year. The branches on which he chiefly relied for supplying the deficiency of the corn importation were, those on which the Customs revenue was deficient last year—sugar, rum, brandy and wine. The Customs' duties on sugar fell off in the year 1827, as compared with the preceding, to the amount of 300,000 l. The crop was greatly deficient in 1826. This occasioned an increase of price, and a corresponding decrease of the consumption, and defalcation in the revenue. This year the reverse might be expected. There was an improved crop, which would create an increased consumption, and of course revenue. The amount of that increase he calculated at 300,000 l.; nor was this purely a matter of calculation; for on referring to the returns of the last six months, the duties received on sugar amounted to 100,000 l. more than was received in the corresponding six months of the preceding year. It was not, therefore, too much to assume
1656
that the increase on the whole year would amount to the sum of 300,000 l. The duty on rum had fallen off in 1827, as compared with 1826, 400,000 l. This also admitted of satisfactory explanation. It would be remembered, that in the commencement of 1826 the heavy duties on that commodity had been removed, to a considerable extent. The consequence was, the consumption increased to an inordinate extent. So much indeed, that it could not be expected to continue. This was proved by the result; for, in 1827, there was a very considerable falling-off; but, in the present year, it was fair to calculate that the consumption would amount to the mean of the two preceding years, which would make the increase of revenue on that article this year, as compared with the last, 100,000 l. With respect to brandy, there had been a falling-off in the Customs last year, for reasons which he was not competent to explain, nor was it necessary to his calculation; for it was known that the consumption of brandy bore a considerable proportion to that of rum. He, therefore, was justified in putting the increase on brandy at 50,000 l. Wine stood in a different situation from any of the articles he had mentioned. There had not been any diminution of the consumption for some time. On the contrary, the increase was steady from year to year. In 1827 the Customs' duty on wine exceeded that of 1826, by 200,000 l.; and the last six months exceeded the corresponding six months of the preceding year, by a very large proportion. He therefore calculated, that the increase on the whole year would be very considerable; and he put it down at 150,000 l. The additions to the revenue on which he calculated would stand thus:—sugar 300,000 l., rum and brandy 150,000 l., wine 150,000 l., making in all 600,000 l. This would still leave a deficiency in the Customs of 200,000 l. as compared with the amount of last year. The expectations which he had formed of the increase of revenue were founded on a review of several articles on which duty was paid; and those expectations were strengthened and confirmed by the returns of the last half year. It appeared, that leaving out the corn duties, and taking other articles, there was an increase of Customs revenue on the last six months, as compared with the corresponding period of the preceding of 300,000 l., and it was fair to assume, that

1657
the consumption would continue for the rest of the year, and furnish the revenue on which he calculated.
The next great branch of revenue to which he would call the attention of the committee, was the Excise: and, looking at the returns before him, he felt justified in expecting that it would be more productive in the present than in the preceding year. In 1827, 700,000 l. less had been paid into the Exchequer, on account of Excise duties, than in the preceding; but this was a deficiency which could not give alarm to those who were acquainted with the finances of the country; for it could be accounted for on one article—that of malt. There were circumstances last year which had greatly diminished the manufacture of malt, and in the same proportion decreased the duty; so that the falling-off on this one article alone amounted to 850,000 l. This was to be accounted for by very obvious causes, amongst which he might mention the deficiency of the crop of barley, and the state of apprehension and alarm in which the persons engaged in that manufacture were placed, in consequence of the alterations in the law, which prevented them from pursuing their occupations at the particular periods when the greatest quantity of malt was usually manufactured. The alarm which had been felt was now, however, entirely dissipated, and he had every ground for anticipating a large augmentation of duty on that particular article. The duty on the article already received exceeded that of last year by somewhat more than 300,000 l.; but he had even a more correct criterion by which to judge of the duty likely to be derived; namely, the large additional quantity of the article sent to charge, on which the duty had not at present been received. In the Excise duties of last year, there had been a deficiency, with respect to some important articles. In the duty on beer there was a deficiency of 170,000 l. The returns showed, that upon this article there had been a considerably increased consumption, as compared with the last. To this quarter, therefore, he was entitled to look for an augmentation of revenue. Upon other articles, too tedious to mention, under this head, with the exception of two; namely, hops and auctions, there had been an increase of duty, as compared with the antecedent year. It should
1658
however, be remarked, that the decrease of the auction-duty was as positive a proof of the prosperity of every other branch of industry as could be found in the increase of duty on every other article. He estimated the increase under the head of Excise, in the present year, at about 750,000 l. Deducting from this the deficiency in the Customs, he felt justified in taking the surplus on the two branches at 550,000 l.
The next branch of revenue he came to was the duty on stamps; and here he had to congratulate the committee on a considerable increase. It was obvious that this duty, which depended so much on the value of every species of property, must necessarily improve and decline, in proportion as the value of property was raised or depressed. At the same time, he should be doing great injustice, to those who presided over the conduct of that department, if he did not, in a great degree, attribute the augmentation of that branch of the revenue to the able and active discharge of the duties of their office, which had raised the revenue above what, in ordinary circumstances, could reasonably be calculated on. He would calculate the increase on Stamp duties for the present year at 200,000 l; being a sum rather short of that actually realized up to the present moment. In the assessed taxes also, the augmentation had been considerable. The increase under this head, in the last half year, had been no less than 81,000 l. As the produce of these taxes was subject to great variation, he was content to calculate on no larger an increase than 50,000 l. With respect to the Post-office, pensions-duty, hackney-coaches, small-branches surplus and poundage-fees, he would merely suppose that they would produce the same amount as in last year, and estimate them accordingly. The whole augmentation under the different heads which he had enumerated amounted to 800,000 l. He begged to remind the committee, that in the two quarters already past, the augmentation on the articles he had mentioned in Great Britain alone, was 856,000 l., which exceeded the sum he ventured to calculate on, as the increase for the whole year. On the other hand, as the corn-duty was principally received in the latter part of the year, some deficiency might be expected in the subsequent quarters, which could be made good by the present surplus,

1659
He had hitherto spoken only of Great Britain. It now afforded him pleasure to call the attention of the House to Ireland, which presented a no less favourable picture than the other part of the kingdom. The revenue of Ireland had increased, during the period to which he had referred by the sum of 150,000 l.; and he might fairly calculate that a further augmentation would take place. The result of what he had stated to the committee was, that the total ordinary revenue of the year 1828, might be considered as amounting to 50,381,530 l., to which was to be added the sum to be received from the trustees of naval and military pensions, 3,082,500 l. and extraordinary and miscellaneous payments, 438,000 l.; making a grand total of 53,902,030 l.
He now came to the expenditure of the present year. It would be found that the interest of debt, exclusive of the Sinking-fund, but including the interest on Exchequer bills, amounted to28,038,000 l.; to this was to be added, 1,692,870 l. for naval and military pension money and other charges on the consolidated fund, 2,213,606 l.; making a total of 31,944,476 l. The votes which the House had agreed to for the army, navy, ordnance, and miscellaneous services amounted to 18,028,046 l., which, added to 31,944,476 l., made a grand total of 50,104,522 l. Deducting the total expenditure from the total income of 53,902,030 l., there remained a surplus of income over expenditure of 3,797,508 l. From this he had to deduct the advances to public works 708,800 l.; which left a clear surplus of 3,088,708 l. When this surplus was compared with that of 1827, which was 1,132,227 l., it would be seen that there was a balance in favour of the present year of nearly 2,000,000 l.
That being the surplus of revenue above expenditure, it would be obvious to every one, that if we were to provide according to the forms now prescribed for the annual payment of the Sinking-fund, the sum required for that purpose would be, in addition to the surplus, little short of 3,000,000 l. If it were considered necessary to comply strictly with the existing law with respect to the Sinking-fund, there were but two courses which he could recommend the committee to adopt; namely, either to attempt to raise the sum required, together with surplus revenue for the Sinking-fund, by adding to the burthens of the people, or, as had been
1660
done on other similar occasions, to supply the deficiency by creating fresh debt, either funded or unfunded. With respect to the first course, he did not believe that in the present circumstances of the country, any one would profess himself the advocate of it. He did not apprehend that there was any necessity (arising from the natural desire of maintaining the public credit) imposed either on those who administered the finances, or on parliament, to adopt that mode of supplying the deficiency of the Sinking-fund. The deficiency in the Sinking-fund had not occurred now for the first time. It was a matter of which parliament had long been cognizant, and which it had long permitted to exist. He then took it as admitted, that it was not necessary to resort to a course for supplying the deficiency of the Sinking-fund, which in the present circumstances of the country was inconvenient, and indeed impracticable. The other course by which the deficiency might be supplied was, to recur to the practice of borrowing the money wanted. To that course he felt considerable objection. He had long felt, what he was sure must have been a general feeling, that to borrow money in time of peace to discharge debts which the country had already incurred, was a measure objectionable in principle, not defensible with reference to reason, and calculated to create delusion, without affording any substantial advantage. He stated this without any fear of being supposed to impugn the principle on which the Sinking-fund was first established. It was not established on the principle of borrowing money for its support. When Mr. Pitt introduced the measure he contemplated that the means of reducing the debt would arise entirely from surplus revenue. It was in order to secure that surplus that Mr. Pitt sacrificed much power, patronage, and popularity, by retrenching all unnecessary expenses to which the country at that time was, perhaps, somewhat attached. Mr. Pitt felt that the only sure mode of obtaining an alleviation of the burthen of debt was to keep up a Sinking-fund, formed of surplus revenue only. In refusing to lend his sanction to the borrowing of money for the purpose of maintaining the Sinking-fund, he thought he was adhering strictly to the principles laid down by Mr. Pitt, and to which, but for the occurrence of unfortunate circum-

1661
stances he was convinced that statesman would have adhered. The long and extraordinary wars which occurred interfered with the whole of Mr. Pitt's projects, and compelled him to depart from the principle he had laid down, of maintaining a Sinking-fund solely by surplus of revenue. In the difficulty in which he was placed, Mr. Pitt had to choose between two alternatives—either to abandon the system of a Sinking-fund altogether, or to maintain it, by the assistance of borrowed funds, contrary to the principle on which he originally founded it. Mr. Pitt chose what he considered the lesser of the two evils, and abandoned the principle on which he originally established the Sinking-fund. He (the chancellor of the Exchequer), moreover, felt, in addition to the general objections against the borrowing of money to maintain the Sinking-fund, and which would be found stated in the report of the Finance Committee, that it would, at the present moment, be peculiarly objectionable to resort to the course heretofore adopted, of making up the deficiency by an issue of Exchequer-bills. He was not insensible of the advantage of that kind of security; he was not blind to the fact, that in consequence of the measure of last session for making up the deficiency of 1827, an increased profit had actually been derived from the sale of those securities in the market; but all arrangements of that sort must have an end. Exchequer-bills possessed certain advantages which he did not mean to undervalue, but they also created corresponding hazards. Though he did not anticipate any thing, in the present circumstances of the country, which would make the existing amount of those securities an object of apprehension, yet in the various changes of the world, who could tell what events might occur, which would render it necessary for the government to borrow money? and if that were the case, how could they effect it, except to great disadvantage, with a market encumbered to a greater degree than it Was at present with Exchequer-bills? He therefore thought he was acting en a sound principle in proposing to the committee, even if they were prepared to approve of the principle of borrowing money to support the Sinking-fund—that they should not effect that object by any addition to the unfunded debt of the country. Instead of increasing the amount of that species of debt, it was rather
1662
the duty of those who administered the finances to seize every occasion that might occur for effecting its reduction. He would not go the length of saying that it would be advisable to hasten the absorption of those securities in the market by precipitate proceeding, which would prejudice the interests of the commercial community, but merely wished to state, that it was the duty of government and parliament, rather to diminish than augment the amount of those securities.
If then, it was impossible, in the present circumstances of the country, to supply the deficiency of the Sinking-fund by means of additional taxation, and if, on the other hand, it was considered inexpedient to add to the funded or unfunded debt, it appeared to him, as it appeared to the Committee of Finance, that we had no alternative open to us but to commence, from the present period, to reduce the nominal amount of the Sinking-fund to that of the real surplus of revenue. In stating this, however, he begged not to be understood as supposing that we could presume to abandon the principle, which he conceived to be essential to the maintenance of the character of the country, and the stability of public credit, of making constant efforts for the reduction of the national debt. Though he reduced nominally the amount of the Sinking-fund, he would still, in reality, have as much money to apply to that purpose as heretofore. The only difference would be, that instead of redeeming an apparent larger sum by borrowing money and creating a fresh debt, we should in future redeem a certain sum annually without incurring any new debt. The amount of debt redeemed in the course of the last eleven years was 29,000,000 l. If the House should acquiesce in his proposition, they would in future apply 3,000,000 l. to the redemption of debt, which he believed to be equally for the advantage of public credit and the best interests of the country. It must be acknowledged, that the existing system of incurring debt with one hand and redeeming it with the other, was liable to the charge of delusion.
Having stated generally the amount of the income and expenditure, and the manner in which he proposed to apply the surplus revenue, it only remained for him to call the attention of the House to the state of the supplies, and ways and means for the present year. In the present year,

1663
the sum voted for the army was 8,049,938 l. He had already explained, that that sum was less than the vote taken for the same purpose in the preceding year by nearly 145,000 l. The vote for the navy in the present year was 5,995,965 l., which was less than the vote of last year by 130,000 l. The vote for the ordnance this year was 1,597,196 l., being a reduction of 50,000 l. below that of last year, and the miscellaneous estimates this year were 2,184,961 l. being 90,000 l. less than those of last year. The total reduction on these several estimates amounted to nearly 418,000 l. Add to that the vote of credit given last year, but now no longer necessary, and the reduction on the estimates would be about 1,000,000 l. The whole of the charge for the public service of the present year was 18,628,060 l. To meet this charge, he proposed applying the surplus ways and means of the last year, amounting to 352,000 l.; the payment from the East India Company 60,000 l.: repayments on Exchequer-bills issued for public works 120,000 l.; annual duties on sugar 3,000,000 l.; the trustees of the naval and military pensions (which payment would not again occur) 2,134,630 l.; surplus of the consolidated fund for the present year, 10,190,000 l.; ways and means of 1827 to be applied to 1828, 3,012,650 l. making a total of 18,869,280 l. to meet an expenditure of 18,628,060 l.
Having now stated these particulars to the committee, he was not aware that he had any thing further to address to them. He had purposely forborne from indulging in any anticipations, as to what the resources of the country might produce.—He could not, however, content himself without expressing the satisfaction he felt at the general appearance of the country. If he looked at the state of our trade, he found in the increase of exports during the present year, as compared with those of any of the five antecedent years, matter to excite astonishment at the exertions of the manufacturing interests. If he looked to our shipping interest, he perceived an augmentation of tonnage corresponding with the increase in the amount of articles exported. He saw, from the smiles of some hon. members, that they considered this a controverted point. It had been so he knew; but the papers before the House established the fact, that there had been an augmentation of tonnage corresponding with the increase of
1664
exports. The Excise revenue presented a most gratifying picture possible of the increased prosperity and comfort of the people. An augmentation was apparent on every article which the lower classes consumed. On the article of candles there was an augmentation of four per cent.; on paper of twenty per cent.; on printed goods of forty-two per cent.; on spirits of nine per cent.; in short, on all exciseable articles which formed the great branches of consumption of the lower orders, the augmentation of duty had varied from four to twenty-four per cent. He beheld this improvement not only in this, which was considered the favoured part of the United Kingdom, but he also found it prevailing equally in the sister kingdom. From the extension of manufactures, the increased exports, the improvement in the comforts of the lower classes, which was indicated as truly by the augmentation of the Excise, as the prosperity of the rich was by that of the assessed taxes, warranted him in anticipating an increase of revenue, and additional happiness and stability to the empire. He concluded with moving.—"That, towards making good the supply granted to his majesty, there be issued and applied the sum of 3,012,650 l., out of the Ways and Means in the Exchequer, or to be raised, on the 5th Jan. 1828, for the service of the year 1827."
Mr. Maberleysaid, that the right hon. gentleman had dealt with the whole subject fully and fairly. The amount of surplus upon which the right hon. gentleman had calculated in 1828, was at the outside 2,000,000 l. If we went on with an appropriation of 4,000,000 l., it must be by borrowing 2,000,000 l. He was ready to coincide with the right hon. gentleman, as to his estimate of the surplus this year. He did not think his statement exaggerated. The right hon. gentleman now proposed to do away with the dead-weight, a bill to that effect having been introduced; and parliament would have to deal with the Sinking fund with reference to that alteration. The report of the Finance Committee, in alluding to the question of the 2,000,000 l., which were to cease next year by act of parliament, stated that in its opinion, "there was no clear surplus revenue to such an amount."—It advised that a sinking fund of 2,000,000 l. should be kept up; if it could be done without w imposition of new

1665
taxes; and that it would be desirable to increase it to 3,000,000 l.; but that it would be unadvisable to do so, unless the additional million could be made up by regulations and modifications of the revenue, or by a reduction of the expenditure. The report went on to say, that if there were not 2,000,000 l. of surplus revenue to form the basis of this arrangement, the deficiency was to be obtained by borrowing. Such was the opinion on which the right hon. gentleman had founded his measure. The right hon. gentleman had argued, rather too confidently, that the principle of the sinking fund had been kept up, which was not the fact. For, even in Mr. Pitt's time, as soon as his project of a sinking fund was acceded to, those annuities created by it, which were at first limited to forty-five years, were made perpetual. The late lord Castlereagh started on a new principle, and after he had taken the sum of 5,000,000 l. as that which would be requisite to be raised for the sinking fund, he proceeded to load the country with the additional charge on account of the dead-weight. This delusion went on from year to year until at last Mr. Canning candidly admitted that which he (Mr. M.) and his friends had so long maintained to be the fact. The delusion, he was glad to hear, was not to continue. From 1792 the original principle of the Sinking fund had been violated. There could be no question that the public had sustained great loss on the debt; although there were differences of opinion as to the extent of that loss. It was well worth their while to examine, even now, how the Sinking fund had operated. It appeared that, between 1792 and 1828, the amount of annuities sold was 36,429,000 l., and of annuities redeemed 14,439,000 l. The first was sold at 60 l. 13 s. 9d., but redeemed at 66 l. 8s. 6d. for every annuity. The loss must therefore be immense. Dr. Hamilton had estimated it at 20,000,000 l.; but he should estimate it at 27,344, 096 l. But this was not the only consequence resulting from this system of mismanagement; for, in consequence of the delusive representations then made, we had gone on, since the year 1816, expending 3,000,000 l. a year more than we ought. Taking 3,000,000 l. a year at 40,000.000 l., and the loss upon the annuities at 25,000,000 l. 65,000,000 l. had been lost. Was it to be wondered at, under these circumstances, that our income was not sufficient to meet
1666
our expenditure? Placed in this situation, what had they recently done?—They had voted the first portion of a grant of three millions for the Canadas, and asum of 400,000 l. for surveys in Ireland. Another dangerous course pursued was, the allowing so large an amount of funded debt to remain hanging over their heads, redeemable at a moment's notice. The amount deposited in the different savings banks might not, perhaps, be so likely to create inconvenience, but the unfunded debt, in the shape of Exchequer-bills was most dangerous. In the affairs of the deadweight, there had been an issue of paper to meet the occasion to the amount of 8,000,000 l., over which they had no control. Yet it had been recommended to bring these Exchequer-bills, which occasioned this issue, into the market for sale; and had it been followed up, who would undertake for the consequences? That it would come, no one could doubt: and a period of distress would be that in which it was almost certain it would occur. The Bank would then be compelled to disgorge either the Exchequer-bills or the dead-weight. Mark the consequences: the Bank would, of course, extinguish Bank-notes to the same amount, and thus the circulation would be diminished. He was quite sure that the present chancellor of the Exchequer would act with caution and prudence; and the more so when he saw that he had yet a long time to prepare against the danger. The financial system hitherto pursued had brought this country to such a pass, that it was not in a situation to avail itself of a time of peace to recruit its exhausted resources. Ministers had gone on increasing their difficulties year after year, notwithstanding the warnings which had been held out to them from his side of the House; but now that a more straight-forward chancellor of the Exchequer was appointed, it was found that he, (Mr. M.) and those who acted with him, were right, and their measures were about to be adopted; but not until the country had sustained enormous losses by their rejection. If the country had a surplus revenue, there would arise a question, as to how it might be most beneficially applied. Some were of opinion that it would be best to apply it altogether to a reduction of the public debt; while others—and he was one of them—thought it would be most advisable to apply a portion, say one half, of such surplus, to the

1667
reduction of the debt, and the other half to an annual reduction of taxation.
Mr. Leycesterwas delighted to find that that glorious piece of nonsense, the Sinking fund was about to be extinguished. The evil of our system was, that we had too much capital and too little income. The Sinking-fund operated like a sumptuary law, crippling trade and limiting commercial speculation.
Mr. Humesaid, he was happy to address the House that evening on this subject under an altered state of things. How often, within the last five years, had they heard within those walls the sentiments which had now come from the mouth of the chancellor of the Exchequer reprobated and denied, when issuing from his (Mr. H. 's) lips? The right hon. gentleman had admitted, that the established system was erroneous, and the Finance Committee had censured it as too bad to be continued any longer. He should not now go into an examination of Mr. Pitt's system of finance. He contended, that no government could benefit by trafficking in its own securities. There had been no budget presented for many years, without his making this statement. But how had it been met by government? By nothing but a mere denial. He had flattered himself, that in the Finance Committee the Treasury would allow it to be ascertained, how far his allegation of loss to the public was correct. He had made up an account of the surplus revenue which we had had since 1816; thinking that that account would lead to the simplest mode of ascertaining the loss which we had sustained. He had laid that account before the committee, and had called upon the government, if it were incorrect, to point out where the incorrectness lay. He would now state to the House what had been the loss by the Sinking-fund since the year 1816, from which year we had had a surplus revenue. From 1816 to 1828, there was a surplus revenue of 35,000,000 l.—What he now complained of was, that more than 29,000,000 l. of this sum was not accounted for. He had laid this statement before the Finance Committee, but the committee had refused to inquire into it. indeed, the Finance Committee had refused to make any statement upon that subject. We had borrowed one hundred and six millions since 1816, to keep up the Sinking-fund; though we bad no occasion to have borrowed a farthing, having
1668
a surplus revenue of 35,000,000 l., which if it had been applied to the reduction of the debt, would have made the annual charge less by more than one million.—In 1824 and 1825 the government had made an issue of 8,000,000 l. of Exchequer bills. For every Exchequer bill of 100 l. which they issued, they received 100 l. cash. The government paid over that cash to the Commissioners of the Sinking-fund. The commissioners applied it to purchase three per cent stock; and they purchased a stock which produced a permanent charge of 3l. 5s. 6d. for every 100 l. The committee must now take it into consideration, that when the government was called upon to fund these Exchequer bills, it gave 107 l. 4 per cent stock for every 100 l. it had borrowed. It thus lost 18 s. 10 d. on every 100 l. in perpetuity. He had made a statement respecting the transactions between the government and the Bank, which it was the business of the Finance Committee to have verified. In the labour of compiling that statement he had been assisted by Mr. Marshall, who had disinterestedly unravelled all the complex accounts between the government and the Bank, without expecting from him either fee or reward. He showed that in the last seven years we had suffered a loss of 13,000,000 l., in consequence of the practice of the government borrowing from the Bank. In 1822, Mr. Vansittart, in concert with the late lord Londonderry, brought forward a plan, by which he proposed to borrow 13,000,000 l. of the Bank, to keep up the delusion of a Sinking-fund, without the imposition of fresh taxes. He sold a variable annuity of forty-five years to the Bank, for which they paid him in round numbers 13,000,000 l., by sixteen instalments—They gave him 73 l. cash for every 100 l, stock, and the money thus raised was expended in the following manner:—In 1823, the commissioners laid it out in purchasing stock at 85 l. 10 s.; sustaining a loss of twelve per cent. In 1824, they laid it own in purchasing stock at 94 l. 3s. 6d.; sustaining a loss of twenty-one per cent. In 1825, they purchased at 90⅛, incurring a loss of seventeen per cent. In 1826, they purchased at 79 l. 8s., incurring a loss of six per cent. In 1827, they purchased at 84 l. 12 s., incurring a loss of nearly twelve per cent. And in 1828, they had purchased at an average of 85 percent. In this way the public money

1669
had been invested, and great loss sustained. The chairman of the Finance Committee had commissioned Mr. Finlayson to ascertain the amount of that loss, and he was happy to say that his statement differed from Mr. Finlayson's only by 10,000 l. Mr. Finlayson made it amount to 4,275,740 l. This was the way in which the finances of the country were wasted, and an endless debt incurred.—He contended, at considerable length, that every financial operation of the government since 1816 had injured the country to the enormous extent of a permanent charge of 1,300,000 l. a year. He was therefore delighted at the prospect of a change in our proceedings. He had been told, that there were still on the Stock Exchange, some intelligent men, who thought that this humbug scheme of a Sinking-fund was productive of good.—He was sure that the abolition of it would show them the folly of such notions. One word as to the debt. The right hon. gentleman had stated, in strong terms, the danger arising from a permanent unfunded debt; but he had not stated what he would do with the present unfunded debt, after the first of January next. He contended that, on the fifth of this month, the government could not have paid the dividends on the debt, had it not been for a loan of 8,343,000 l. from the Bank. Now, suppose the exchanges had gone against the country, and the Bank had felt it necessary to limit its issue of paper, the Bank must have said to the government, "We will not increase our circulation, for the exchanges are already against us, and by making this loan to you, we shall only turn them still more to our disadvantage." What must have been the result? Either the government would not have paid the dividends, or it would have got the money to pay them on condition of giving a guarantee that it would protect the Bank against all consequences by procuring a new Restriction act. Was that a state of things in which the country ought to remain? He insisted that more harm had arisen from the connection between the government and the Bank than from any other cause. The whole of the bonuses which had been made at different intervals to the proprietors of Bank Stock, had been made at the expense of the public. How was the government situated at present, with respect to the Bank? The Bank now held 3,000,000 l. of Exche-
1670
quer bills, which it had received as security from the government—it held 6,000,000 l. of Exchequer bills, which it had purchased on its private speculation—it had to pay 11,000,000 l. for the deadweight—and it now held 8,000,000 l. of Deficiency bills; so that the Bank had got 28,000,000 l. of capital locked up in the hands of government. Capital, did he say? The Bank had no capital, but what was in the hands of government.—With 28,000,000 l. thus locked up, we might suddenly be stopped short in the midst of our operations, by a defect in our machinery. He thought that the chancellor of the Exchequer ought to give a pledge to the House, that he would set the capital of the Bank at liberty for banking purposes. He contended, that much of our present distress arose from the ruinous connexion between the Bank and the government. Many persons were weak enough to think, that that connexion was productive of benefit to the Bank directors; but he considered it to be so baneful, that he had no hesitation in saying, that parliament ought immediately to pass an act, preventing the government from receiving from the Bank of England any loan beyond a certain amount. Such a regulation would render it necessary for the government to call parliament together, whenever it wanted to take a vote upon credit. He wished to see the words "Sinking-fund" abrogated from the language of the House. By such means we should get rid of an evil which pressed heavily upon the country. There might be a surplus of 3,000,000 l. as a fund to which government might apply in seasons of emergency; but he doubted the propriety of the recommendation of the committee, that such a surplus should be applied to the reduction of the debt. He then pointed out, at much length, the delusion under which Mr. Canning laboured, when he stated, that there was a surplus last year; and pledged himself, on a future occasion, to show that Mr. Robinson had-been equally erroneous in the statements' which he had propounded in bringing forward his various budgets.
Mr. Monckcontended, that every reduction of debt ought to be accompanied by a suitable reduction of taxation. It was quite plain that by paying at the rate of eighty-eight and ninety, a debt, the greater portion of which had been contracted at the rate of sixty-two, a deal of

1671
money was wasted. There was only one way by which the present ruinous system could be avoided; and that was by determining in future to make moderate loans, so that the borrower would not be at the mercy of the lender.
Mr. Wardsaid, he was desirous to express his opinion with regard to one point; namely, the promise invariably held out to the holders of funded property relative to the maintenance of the Sinking-fund. He would recur to the words of lord Liverpool, relative to this fund, and would then leave the House to judge, whether the fundholder should be left without the protection of the Sinking-fund, when the landed interest had obtained a Corn-bill. The words of lord Liverpool were—"So much profit will accrue from the remission of taxes—but, at what loss? No less than the abandonment of the Sinking-fund, which I maintain is the great support of public credit, whatever may be its amount." In a subsequent paragraph his lordship stated: "The next object to which government has directed its attention, is the maintenance of a Sinking-fund of five millions; and it is my sincere hope and belief, that we shall have a surplus revenue sufficient to accomplish that desirable object." He did not read these extracts with a view to embarrass government: but he felt it his duty to ask, on behalf of the fundholder, that the House should declare what he was to expect.
Mr. Herries, after defending the late Mr. Canning from the charge brought against him by the hon. member for Aberdeen, of inaccuracy, in the budget which he had introduced last year, observed, that the hon. member had alluded to the Dead Weight act. Now, he would distinctly say, that the members of government, who belonged to the Finance Committee, had gone as far as any others to put an end to that system. With respect to the Sinking-fund, no one could have been more anxious than he was, to arrive at the true principle of that fund divested of all the intricacy which had been interwoven with the subject. When the subject came before the Finance Committee, opinions were divided on the subject, and he believed he might venture to state that the proposition for the abolition of the present Sinking-fund proceeded from one of the members of his majesty's government. At the same time, while he expressed these sentiments, he was anxious to discounte-
1672
nance the proposition that had been advanced on the other side of the House; namely, that they should abandon all idea of reducing the debt The government would undoubtedly appropriate 5,000,000 l. annually to the reduction of the debt, if it were possible to do so, without increasing the burthens of the country; but seeing that that was not possible, they had diminished the amount; at the same time that their opinions were decidedly favourable to the application of as large a sum, as the circumstances of the country would permit, to the reduction of the debt, on the principle of the Sinking-fund. He dissented from the proposition of the hon. member for London, that this country was pledged to any special amount of a Sinking-fund, or indeed to any Sinking-fund at all, with one single exception. There was one particular stock, in reference to which a distinct compact had been made, that one per cent per annum should be appropriated to its reduction; he meant the 3½ per cents.: but that exception, only proved the rule for which he was contending; and, with that exception, he felt that the public creditor had no other claim upon the government than any other subjects of the realm, and that he possessed no distinct interests from theirs, in what the state did with the public revenue. Their real interest consisted in seeing that parliament did that which was most conducive to the public credit. Now, he did not think it conducive to the public credit, that we should continue to borrow money for the purpose of paying off our debt. It might so happen, that some benefit would accrue to the public by borrowing in one kind of funded securities, and paying in another: but, upon principle, the old system of the Sinking-fund was objectionable. Its continuance was attended with great expense. It might for some time, produce a rise in the price of stocks; but in the end, the public creditor would experience considerable inconvenience from the re-action necessarily consequent upon such a system.—The right hon. gentleman proceeded to defend the views which induced Mr. Pitt originally to institute the Sinking-fund, in 1792. That great statesman did not, at the time, contemplate that the war in which this country was then engaged would continue for more than four or five years; and, if it had terminated within that period, the country would have bad an ample surplus

1673
revenue to redeem the debt.—The hon. member for Aberdeen had made an attack upon the Finance Committee, and he was inclined to leave their defence in the hands of their chairman.—After observing, at some length, on the confined manner in which the hon. member for Aberdeen's motions for accounts were drawn up, the right hon. gentleman said, he would address a a few words to the committee, on the subject of the unfunded debt. From what had been stated on the other side, it would seem as if his right hon. friend had been understood to say, that from this time the surplus at the rate of three millions was to be exclusively appropriated to the extinction of the unfunded debt. Now, whether or no this was the view that had been taken of his right hon. friend's statement, he would say that it was an incorrect one: for his right hon. friend had clearly stated that it was to be applied to the extinction of the unfunded as well as the funded debt. He repeated, that if circumstances allowed the reduction of the debt through the means of the Sinking-fund, it would be more expedient at the present moment to effect that reduction through the means of the funded than the unfunded debt. He would indeed say, that this was not the period for effecting any reduction through the means of the unfunded debt. Looking at the present state of the circulation of the country, and at the arguments which had been very lately adduced upon the subject of the danger to which the country was subjected from the withdrawal of the one-pound notes of country bankers; and looking, moreover, at the feverish restlessness which resulted from those arguments—a restlessness and feverishness which ought to have been completely dispelled by the statements of his right hon. friend—but which, he was sorry to say, still prevailed among a certain class of the people—he thought it would be very wrong to adopt any measure respecting the unfunded debt, which could produce an of- feet upon the circulation. The hon. gentleman had made some allusions to the terminable annuities; and undoubtedly it was true, that a Sinking-fund was as indispensably necessary for that, as for any other portion of the debt. The subject had been brought under the consideration of the Finance Committee; and the committee had recommended that whenever the Sinking-fund arising from a sur-
1674
plus of revenue was to be fairly applied to the reduction of the debt, a portion of that fund was to be at the same time applied to the purchase of these terminable annuities. He doubted very much, however, whether that recommendation could be profitably carried into execution. At no period of time were these terminable annuities a very marketable commodity. For the last thirty years government had made various attempts to dispose of these annuities; but they had uniformly failed to get rid of them, unless upon the most disadvantageous terms. The committee had, however, recommended the purchase of these annuities; and, as far as fair and equitable bargains can be made in the market, the government were disposed to comply with the recommendation. He admitted that the chancellor of the Exchequer had throughout his statement, considered the life annuities as forming a portion of the Sinking-fund; but that in reality those annuities subjected the country as much to a charge as any other portion of the debt, and that, supposing there was no real surplus of income over expenditure, they must be considered as forming a real deficiency. When, therefore, his right hon. friend called the surplus 3,8007000 l. it undoubtedly included a sum of 617,000 l. on the head of life annuities; and, deducting that amount, the whole real surplus would, therefore, appear to be about 3,200,000 l. He denied, however, the charge of there being any error in the accounts, from the adoption of this mode of statement.
Sir Henry Parnellsaid, he did not rise for the purpose of objecting to the statement of the chancellor of the Exchequer, on which he founded the ways and means of his budget: it appeared to him to be a perfectly fair statement, and that he might have even gone further in estimating the probable revenue for this year. The same fairness had marked the conduct of the right hon. gentleman, and the Master of the Mint, in the Finance Committee, and had very much contributed to save the time of the committee, and to advance the objects for which it had been appointed.—The first observations he had to make on the subject under debate, he should apply to the new plan of a Sinking-fund: he thought the chancellor of the Exchequer had not correctly or sufficiently explained: this plan to the House, at least the plan I recommended by the Committee of Fi-

1675
nance. The right hon. gentleman had said he intended to keep up a Sinking-fund of 3,000,000 l. a-year, without mentioning any of the conditions by which that amount might be diminished according to the plan of the committee. This way of stating the case would lead the House to suppose that there was to be a fixed Sinking-fund of 3,000,000 l. a-year; and that the whole change to be made in the existing system was, to apply 3,000,000 l. instead of 5,000,000 l. as a Sinking-fund. But the committee had positively refused to recommend a fixed Sinking-fund. It was proposed to them to adopt such a fund, but on two divisions which took place upon it, the majority of the committee was against this plan of a fixed sum, and the members of it belonging to the government then adopted the views of the majority, and proposed themselves the clauses which are in the report for applying in future only the real surplus of revenue over expenditure as a fund for redeeming debt.—But, besides these clauses, there was an understanding come to in the committee, that government should proceed in the first instance, as if there was a real surplus of 3,000,000 l., and provide, if there was not so large a surplus, the money wanting by deficiency bills; and that, if at the end of the year it should appear that the surplus did not amount to 3,000,000 l. the difference should be made good out of the surplus of the succeeding year.—As the right hon. gentleman, the Master of the Mint had been pleased to say, that all those members who opposed a Sinking-fund were to be considered as abandoning all efforts to redeem the debt, he begged to say that this was a very incorrect representation of their motives or opinions. Some of those members who had been the most strenuous in opposing the existing plan of applying 5,000,000 l. a-year, were the most anxious to introduce an efficient plan of redemption.—No one was more constant in opposing the Sinking-fund of 5,000,000 l. a-year, than the late Mr. Ricardo, but in his speeches and in his writings, he laid down in the strongest manner the expediency of reducing the debt, if a proper plan could be devised, and even proposed a plan for paying off the whole of it. He, as well as those members who say there ought not now to be any Sinking-fund, found their opinions upon considering the nature of the plan
1676
proposed to be acted upon, and the circumstances of the country with respect to its being able to bear the taxes which are required for maintaining it.—At this moment the reason for not agreeing to have a Sinking-fund is, that those taxes which must be continued to provide the fund, will do a great deal more harm than this Sinking-fund will do good. The error committed by government in urging a Sinking-fund, and by those members who supported them consists in their not paying due attention to the injury which the existing taxation does to the public interest.—This is little thought of, and a Sinking-fund is voted as a mere matter of course; as if it was of no consequence whether 3,000,000 l. of taxes were continued or repealed. But if some attention were given to the effect of (the taxes, it could not be doubted that a different course of conduct would be followed by the House.—It appeared by an account which he had called for in the Committee of Finance, that there was no less a sum than 6,000,000 l. a year, raised by taxes on raw materials. It was not possible more effectually to obstruct the progress of industry and wealth, than by thus taxing the raw articles on which industry was employed. In one respect it exposed the country to the greatest misfortunes that could befal it; namely, the loss of a foreign market for its manufactures; because as these taxes raised the price of raw materials, they added necessarily to the price of the goods made with them, and thus diminished the means of carrying on a successful competition in the foreign goods. Although we had as yet preserved a great superiority over foreign countries in manufactures, we should not place an unlimited confidence in our being able to maintain it. They were daily making great progress in skill, in improvements in machinery, and in acquiring capital; but what will most contribute to place them upon a level with us, is the general introduction of the representative system of government, which will establish among them a perfect security of property, and thus impart to them that which has been to us the main cause of our great superiority over them. Under these circumstances, it was a subject of the gravest importance to determine what means should be taken to relieve our manufacturers from every charge which added to the cost of production; and, when it is considered what the conse-

1677
quences would be to the country of losing the foreign market, in impoverishing our manufacturers, in depriving the workmen of employment, and in diminishing the revenue, it surely was fit to examine whether it would not be more expedient to repeal 3,000.000 l. of taxes than apply; them to a Sinking-fund.
Besides these taxes on raw materials, there were taxes on manufactures themselves, which were exceedingly injurious, such as the Excise duties on leather, glass, and paper. These manufactures were not only injured by the additional prices which these duties occasioned, and the consequent diminution in consumption, but also by the vexatious regulations under which they were carried on. The manufacturers were not allowed to follow those modes of working which were the best calculated to produce perfect goods, and, at the same time, with the least cost to themselves; but they were obliged to perform each operation by a plan laid down in a clause of an act of parliament, and under the inspection of an Excise officer. So that no taxation could be more opposed to any sound principle of finance, or more injurious to all parties than these Excise duties on manufactures.
Another class of taxes which ought to be reduced considerably, is that which creates smuggling; for this evil is a pure creation by act of parliament; the profit to be derived from it being wholly in proportion to the duties imposed. It has been proved before the Finance Committee that a sum of 700,000 l. a-year is expended annually, in the vain attempt to suppress smuggling; and that an immense sum had been spent in building barracks for Coast-guards and the Preventive-service, round the whole of the coast of the United Kingdom: but when government are urged to put an end to this great nuisance and disgrace to the character of the nation, the excuse always is, "we cannot do so, because we shall lose a million or two of revenue:"—how can any one hesitate to say, that a much greater advantage would be gained to the public, by applying the surplus revenue to put down smuggling, than will be gained by applying it to pay off any insignificant portion of the public debt? Another class of taxes which ought to be repealed is that which by being so very high greatly diminishes the consumption of the articles
1678
on which the taxes are imposed. In this way there is probably a loss of revenue, by not reducing them. But ministers are of a different opinion—and when they are called on to make the experiment, they say, we cannot afford to risk the loss of a million of revenue. There are not less than from 9,000,000 l. to 10,000,000 l. of taxes which are most particularly injurious to industry, and even to revenue, and which ought to be revised, so as either to secure their repeal or modification. But, in addition to these taxes, there are others which are specially imposed in order to encourage our colonies.—The effect of the present arrangement of the duties of timber, is a loss of from 800,000 l. to 1,000,000 l. a-year of revenue.—The hon. member said, he held in his hand, calculations which had been made by a gentleman conversant with the trade, which left no doubt of this fact: the same calculations proved, that if the duties were equalized on colonial and foreign timber, and reduced 15 s. a load, the consequence would be an augmentation of revenue.—In consequence of the mode by which the duty on deals was charged, 1l. 18 s. only was paid, if they came from Archangel, and 3l. 0s. 3d. if they came from Norway—on the same quantity. The existing system acted as a most severe tax on the public by raising the price of timber; while it did not benefit the public revenue. Similar observations were applicable to the whole of the duties which were higher on foreign than on colonial goods.
Now when such was the system of our existing taxation, and it became a question, what had best be done with the surplus of the revenue, he had no hesitation in saying, that it ought to be applied in reducing those taxes which fell on industry. For, whatever hon. members may say in favour of a Sinking-fund, or any other scheme for improving our finance, what ought above all things to receive the constant attention of the House is, the means of securing and assisting the progressive accumulation of the national wealth. It was in proportion as this was extended that all our incumbrances were heavy or light. The pressure of the revenue and the pressure of the debt were only relative with respect to the means of the country to pay taxes. Every thing depends on the progress of industry, and the accumulation of new wealth; and nothing should be left undone to remove obstructions in the way of them. It was

1679
by the prodigious accumulation of wealth subsequent to 1792, that the country was able to surmount the difficulties of the last war: and, if it is left to go on without the interruption of bad taxes, and absurd resolutions, it will become sufficiently wealthy to bear any new financial difficulties which may arise—all that the right lion, gentleman has said against repealing taxes, and in favour of a Sinking-fund, amounted to mere assertion: he did not attempt to explain in what way a Sinking-fund would be of use; he contented himself with saying it was necessary for the safety of the country: others had said it was necessary to support public credit; and a great many similar assertions had been made in the Committee of Finance, which he was glad to find, were not repeated this evening in the House. Now, with respect to maintaining public credit, it was a complete mistake to say that public credit depended on having a Sinking-fund of 3,000,000 l. a-year, it might be said, with just as much reason, to depend on any thing else. Public credit depended upon the regular payment of the dividends on the debt, and on the general notoriety of the country being perfectly well able to pay them. The hon. baronet said, his feeling, with regard to a Sinking-fund, was this—if they would place their taxes on a proper footing—if they would adopt a moderate system, which ought long since to have been done—if they would let the country feel the benefit of an ample revision of all the taxes at present levied—then, if there was a likelihood of a continued surplus, or if the country appeared to be growing more rich and prosperous, he would give his support to a plan for redeeming the debt on a much larger and more extensive scale than was now proposed. After such a reformation had been agreed to, and the country had recovered a healthy tone, he would not object to taxes to the amount of 5,000,000 l. or 6,000,000 l. a-year, or even of a still larger 'sum; a fund which would be calculated to make some impression on the debt. Therefore, whether he was in the committee, where he took an active part in order to get rid of the Sinking-fund, or in his place in that House, where he voted against it, he was not to be considered as abandoning and giving up every attempt to lessen the debt. On the contrary, he proposed a course which would have a much better effect than any attempt that had hitherto been made.
1680
His opinion was, that in the present state of the country, their object should be by all means to avoid adding to the debt. It seemed to him to be idle to talk about relieving future generations as to a Sinking-fund of 3,000,000 l., while those who proposed it had no plan by which additions to the debt might be avoided.—There was no member who was an advocate for a Sinking-fund, who was not an advocate at the same time for providing the expenditure of a future sum by new loans. But if we only paid off 3,000,000 l. a-year in peace, and borrowed only 30,000,000 l. a-year in war, it was too evident, from the experience we have had of the duration of peace in other times, that the result of this system must be a great addition to the debt.—Suppose a war was to take place, and according to this system, 30,000,000 l. a-year was raised by loans—ten years of such a war would add about 15,000,000 l. a-year, of permanent taxation.—It would require a permanent property tax of ten per cent to pay the incurred dividends on the debt—another ten years of war carried on in the same way, would require a further addition of 15,000,000 l. of permanent taxation—this would make it imperative to tax the necessaries of life as was done in Holland, and it would no doubt be followed by the same consequence, namely bankruptcy.—This is what the system, of a Sinking-fund, raised by taxes on industry in peace, and large loans in war, would inevitably end in. In place of this system, he wished to see all obstructions arising from taxation on industry, and from regulation and restriction in way of industry and the accumulation of wealth, removed, and the country placed in such a state with respect to its means of paying taxes in future, that when a war should arrive, the whole expenditure of it might be defrayed by war taxes. Now, that we are said to be entering upon a new era of finance, we ought to do something more than merely patch up a budget, and then let every thing go on without any regard to consequences. We ought to begin to examine what course of measures is necessary, first for preparing for war, and then for carrying on a war.—It is while we are at peace, that this business ought to be attended to, for if we become involved in war without such a preparation, we may be sure that we shall run, from one error into another, just in the: same way as those ministers did who had

1681
the management of the last war. If there was too large an unfunded debt, it ought to be reduced; if the Bank were too much in advance to government, they ought to be repaid a part of what is due to them. If government have produced any danger by making the Bank holders of the Dead-weight annuities, they should interfere to remedy it.—These are all difficulties that will yield to proper efforts to get rid of them; but time ought not to be lost in making these efforts after: thirteen years of peace—the probability of war is so strong that we ought to expect and prepare for it. Every thing in point of fact depends on good management: formerly great errors were committed, and the country was able to surmount them; but now we have made so great an approximation to the limits of taxation, that a single error may prove fatal.—We can no longer afford to lose our money by millions in the way the hon. member for Aberdeen has shown the public money has been lost.
With respect to the policy of having recourse to war taxes, for war expenditure, this was greatly illustrated by an account which he had obtained in the Finance Committee—showing what would have been the actual excess of expenditure beyond revenue in the last war—if Mr. Pitt had commenced with war taxes, and if no debt had been created subsequent to 1792. It appeared by this account that the whole excess would have been 172,000,000 l., although by the operation of borrowing, the actual excess had been nearly 500,000,000 l. in principal money.
It now seems to be nearly certain, that if Mr. Pitt had imposed a property-tax in 1793, instead of waiting to raise war taxes till 1798, the war might have been carried on without any loans.—With this experience, and with a greatly increased means of paying taxes, there should be no hesitation in making the attempt of carrying on a future war wholly by war taxes. If this object could be secured, then we should no longer have any alarms about the debt. For the same reasons which would enable us to carry on a war in this way, would enable us to make in peace a proper effort to reduce the debt—a property tax of from ten to twelve per cent to include Ireland, and without the exemptions in the last tax, would alone produce nearly 20,000,000 l.; at the same time that it would not be productive of any
1682
derangement of industry. If 20,000,000 l. were not sufficient, then it would be better to have a property tax of fifteen per cent; sooner than have recourse to new loans. But whether these opinions were or were not well founded, every thing ought to be done that can be done, by means of an early consideration of the subject to avoid adding to the debt—as the revision of an existing system of taxes was a fundamental part of a system of measures for securing this object, he hoped that when the Committee of Finance re-assembled next session, such a revision would be the first subject of its deliberation. It was most impolitic to allow such a load of injurious taxes, to remain, without making every effort to obtain the same amount of revenue that they produced, guided by means more consistent with the interests of the revenue, and the conveniences, comforts and commercial profits of the public.
After a few words from Mr. P. Thompson, the resolutions were agreed to.

EAST RETFORD.
On the motion of Mr. N. Calvert, the further consideration of the report of the East Retford Disfranchisement Bill, was deferred to the 22nd instant, and the East Retford Freeman Bill, was ordered to be committed on that day three months.