Sitting of 23 January 1840

MINUTES.
Petitions presented. By Lord Brougham, from Persons confined in Chester Castle for Seditious and Inflammatory language, praying for Relief.

STATE OF THE REVENUE.
The Earl of Riponsaid, the subject to which he was about to call their Lordship's attention was one of very great, if not of paramount importance; but, at the same time, he was afraid that it was a matter with reference to which the Government could not say anything very satisfactory—he meant the present state and situation of the finances of the country. In what he was about to say, he did not intend to state anything in the way of blame to the Government or to any other parties; but still he felt so strongly the unsatisfactory situation of our finances, that he should not, in his own mind, be justified if he withheld from their Lordships the statement which he should now lay before them. It was not necessary for him to show, or to waste their Lordships time in establishing by proof, how much the prosperity, the power, nay, the very existence of a nation, depended on the safe and sound state of its finances. It was equally unnecessary for him to waste their Lordships' time by demonstrating the formidable evils which inevitably arose from an opposite stale of things. It was undoubtedly the duty of a provident Legislature to pay a wise and proper attention at all times to the state of the finances, because a derangement of those finances often came on the country by slow and imperceptible degrees. It was hardly noticed in its progress, and the evils which were approaching were only ascertained to exist when those very evils themselves had become perhaps too formidable to be surmounted. Those who were indifferent to what might possibly happen after their own times, might not, perhaps, feel very anxious about such a question as this; but that circumstance did not absolve Parliament from paying a watchful and vigilant attention to a subject of this very important nature. And it was because he feared most sincerely (he rose not for the purpose of blaming any one), because he sincerely feared, that they were on the verge of a most unsatisfactory and unsafe state of the finances, that he now called the attention of their Lordships to the subject. In doing so he
498
should briefly explain to the House what those facts and considerations were which had led him to so painful a conclusion. Their Lordships would recollect, that his noble Friend, the noble Duke near him, when some years ago he was at the head of the Treasury, had introduced an act by which all the then existing laws relative to the sinking fund were abrogated, and which provided, that the sinking fund should only be assisted out of any actual surplus revenue to a certain extent, and, beyond that, that the surplus should be applied to the reduction of taxes. That was a wise and judicious measure, because it provided that, instead of a certain amount being applied to the sinking fund, under all circumstances, whether the revenue could afford it or not, there was only one fourth of a bonâ fide surplus on the preceding quarter to be applied to that purpose. At that time when the act passed there was a large surplus, which enabled his noble Friend to propose a considerable reduction of taxation. In consequence of that reduction, it might have been presumed, that a surplus revenue would not have continued. But he recollected, that his noble Friend did not contemplate the failure of a bonâ fide surplus. Indeed, he had asked his noble Friend a question on the subject. He had asked his noble Friend whether, in future, he contemplated a surplus. His answer was, that he was sure there would be a surplus, that he relied on it; and that he would not act as he had done without a surplus. During five or six years, with the exception of one year, there was a regular surplus of income over expenditure, which was applied according to the provisions of the new act. They obtained by that means for some years a reduction of the debt to a certain amount, and also a certain reduction of taxes. But now, for the last three years, the case was altered. There was not now a surplus, but a considerable deficiency of revenue, and what greatly alarmed him was, that he saw no hope at present of getting out of that vicious system which had created this unfavourable state of things. In the year ending the 5th of April, 1838, the excess of expenditure over income was 1,420,000 l.; in the year ending the 5th of April, 1839, the excess of expenditure over income was 400,000 l. making for the two years nearly 1,900,000 l., and according to an estimate for the last year, which had been laid before Parlia-

499
ment, such was the state of our finances, that the deficiency of revenue to meet expenditure was set down at 900,000 l. Since that estimate was made, other and great expences had been incurred, so that he feared they would find on the 5th of April next, that the expenditure for the year would exceed the revenue by not less than 1,000,000 l. Here, for three consecutive years, there was a clear, avowed, unmitigated excess, of expenditure over income to the amount of nearly 3,000,000 l. He could see no ground upon which to found a hope for getting out of what he must call this perilous situation. His apprehension would be less if it could be shown that the deficiency arose from a decrease of revenue, because such a deficiency might be transient. Taxes imposed at one time might not, in consequence of various causes, be so productive at another. In all years taxes would not produce the same amount. They fluctuated, and what was deficient in one year might be made up in another. But the evil in this case did not arise from a defalcation of revenue. As a proof of this he need only state, that the revenue of last year exceeded the revenue of 1836 by 1,500,000 l. That statement was, in this respect, satisfactory, because it showed to what an extent the resources of this country, under all circumstances, could be worked up. But, paradoxical as it might appear in him, still he confessed that this circumstance frightened him, and he would tell their Lordships why—because, if the deficiency which he had pointed out did not arise from a falling off of the revenue, it must be attributed to an increase of expenditure. And the excess of expenditure for this year would, he believed, amount to 3,200,000 l. over the amount of expenditure for 1836; and he saw no likelihood of a reduction of that expenditure. Now, if it could be shown to him that this increase of expenditure arose from any profusion or extravagance on the part of the Government exclusively, he should feel comparatively comfortable, because he could rely on the vigilance, zeal, and anxiety of the House of Commons to exercise their powers, and to prevent, by their interference, an improper and wasteful expenditure of the public money. That was not, however, the case. What, then, did this increased amount of expenditure consist of? A considerable portion of it arose from the addition made to the
500
public debt within a few years; partly (but not much) by the funding of Exchequer-bills; partly by the interest which was to be paid on the debt incurred in consequence of the deficiency of last year; and lastly, by the immense operation, in 1833, by which the emancipation of the negroes was effected at the expense of 20,000,000 l. Great, however, as was the sacrifice, he must say, that if the act were to be done over again, he would be a party to it, because he thought that it was a politic, wise, and humane proceeding. They could not, however, help paying for it; and that was one of the great items thus added to the expenditure of the country. Of this 3,200,000 l. a considerable portion was applied to the augmentation of the army, navy, and the departments connected with those services. Such being the case, he should like to ask any man who looked forward beyond the present moment to demonstrate to him that a single reason existed for hoping for a curtailment of this heavy expense. The unfortunate state of parties in this country and elsewhere, had forced on Ministers the painful duty (and he was sure that it was a most painful duty) of coming down to Parliament and asking for 5,000 fresh forces. Now, he believed there was not any man who had watched the proceedings which had taken place since that time, and marked the circumstances that had occurred, who would not say that the existing state of things imperatively demanded the continuance of the same amount of force. Ireland, indeed, was said to be quiet. But that quietude, it was asserted, depended on a contingency, which contingency was neither more nor less than the continuance of her Majesty's Ministers in office. What reliance, then, could be placed on a state of tranquillity which rested on so doubtful an event—which depended on a mere circumstance, that circumstance being whether her Majesty should please to exercise her prerogative in a particular way with respect to her Ministers? It was not in the present state of parties in the country worth the snap of a finger. Therefore, to hope for any thing on account of the present situation of that country, of such a nature as would enable the Government to reduce the amount of the army there, appeared to him to be absurd and extravagant. But those who had animadverted on this point forgot a material fact—namely, that

501
though you withdrew troops from Ireland, you had raised another army there—he spoke of the constabulary force, which was appointed as an army, and officered as an army, and which, in some respects, was far more efficient than an army. So much, then, for the state of things in Ireland. But they had a large army in Canada. He was happy to think that the circumstances of that country were much improved. There was not the same danger there now as had some time ago called forth so much anxiety and alarm. Still, he did not think that it would be consistent with common prudence, under existing circumstances, to diminish the army which was now employed in that colony. It was true that America manifested the most pacific intentions towards us: but still it should be recollected that there was a question, the boundary question, that remained in dispute between the two countries. He hoped and trnsted that it would be amicably and satisfactorily settled; but it ought not to be forgotten that the matter was still under negotiation. Here he must say, that there were one or two phrases in the President's speech which gave him some alarm. The President said, speaking of the boundary claims, "They must be settled." When he used such language to a proud and high-spirited nation, ardent and eager in the pursuit of what they conceived to be their just rights—their just claims—when he emphatically said, "they must be settled"—such language ought not to be overlooked or disregarded, as manifesting a certain tone of feeling on that side of the water. In this same message there was another disputed question mentioned, of which they had not heard for a great length of time; and, in addition to these two, there was a third boundary question, relative to territory to the west of the Rocky Mountains, which at any time might be raised, and would require arrangement and negotiation. It was true there was a treaty existing on that point at present, but that treaty would expire within a twelvemonth. He had no jealousy of the American government; God forbid that he should do otherwise than believe that they were disposed to maintain the most friendly relations towards the Government of this country, but those grounds of discussion must arise; they were in existence now, and of course rendered it naturally imprudent for
502
us to reduce our army in that quarter. No country had such an immensity of foreign possessions as we had, but throughout the whole, could any man put his hand upon one and say, that there was too much garrison? On the contrary, he believed that many of them were too weak. Circumstances might arise which would imperatively demand an increase of our army abroad, and so certain as those circumstances did arise, if not directly, certainly indirectly, they would demand an increase of the army at home, otherwise it would be impossible to keep up that system of relief—which was necessary in order to keep the minds of men at ease by knowing that they were not banished from their country for ever. He next came to the navy. Many discussions had taken place recently as to the efficient state of that force, and great complaints had been made of a want of energy and activity in that important department. It was in answer to those complaints stated by Ministers, that many vessels were built, or were building, that a great quantity of stores were provided, and that various ships were placed in commission. This was all very satisfactory; but, undoubtedly, these objects were not, and could not, be attained, except at a great expense; and much difficulty was, he believed, experienced in the other House in obtaining the necessary supplies. For the last three or four years attempts had been made to lower the expenditure; but it had been found necessary recently to tolerate a fresh and more extensive expenditure, and, certainly, the circumstances which demanded that expenditure did not now press less heavily on the country than they did at the time when it was proposed. It would be wrong, in his opinion, to shut their eyes to what the governments of other states were doing with respect to their naval force. He was not one of those who entertained any great fear or apprehension as to the naval force of Russia. Still, when they considered the uses to which that force might be applied, it was impossible not to consider the matter as one of deep national interest, and to ask, "Are we prepared, if necessity should demand it, to take such a position as will enable us effectually to counteract any hostile movement of that force? "So again, with respect to France. The report made by the French minister of Marine—a most able and well-drawn reports-could

503
not but excite attention. That minister, proud of his nation, suggested matters in that report for the increase and improvement of the French navy, which it was very reasonable for him to make, and very proper for the Sovereign to adopt, but to which our attention ought to be anxiously directed. Without accusing France of any hostile design whatever, he did think that the mere fact of the framing of that well-digested, well-considered, and most judicious report by the French minister, demanded the serious attention of this country. No person ought to treat it with carelessness or indifference. It was true it contained nothing that could be made the subject of complaint or of remonstrance; but it was of such a nature as did call upon them for serious consideration, and the more they reflected on it, the more important and the more worthy of attention it would appear. With regard to America, its fleet was found everywhere, and still, without showing any remarkable jealousy, that fact justified him in saying that it was not possible for them, in the present state of things, to diminish the expenditure for the Navy. These were the grounds which made him feel so exceedingly uneasy for the state of their finances. But there were still one or two other things as affecting the state of our revenue to which he would allude. The first was the unintelligible state of thiugs which existed with respect to the government of China. Nothing had been laid before Parliament with respect to the views of her Majesty's Government upon that question, or as to what were the steps they had taken, or intended to take, with respect to it; but one thing was quite clear, that it was an interruption to our commerce, and no one could say how long it might last. But it was an interruption to a most important branch of commerce, and seriously affected our finances, because it involved in its effects not only the mere question of the opium trade, and the expenses and ruin of merchants by the loss of that trade, if we were to lose it; but, besides that, a loss of no less than 3,500,000 l. of our revenue, as derived from the article of tea; and if this interruption should go on, there was another cause of dangerous diminution of our revenue. The price of tea was already very much enhanced in the anticipation of its quantity being diminished, and in consequence the quantity consumed would de-
504
crease, and there would be a material diminution in that important branch of our revenue In the midst of all this came another measure which appeared more than anything else calculated to fill them with apprehension—he alluded to the Post-office measure. He was not going into that question at all as to the policy of it, or as to the possibility of its succeeding in giving to the public the benefits anticipated. As to its failure or success, the time which had elapsed had been much too short to enable them to form any judgment; but he really did think, and he had said so last year, that it had been an ill-timed experiment, and he did not think that there was anything in the state of our finances at that time which could warrant the making of such an experiment, and at the same time to be prepared to meet the inconveniences and evils as regarded the finances of the country, which that plan might entail. It was true, that in the passing of that bill Parliament had given a pledge that it would make good any deficiency which might arise. That pledge, when it was redeemed, he should consider undoubtedly to be very satisfactory indeed; but their Lordships would observe that that pledge did not apply to any deficiency of revenue except that caused by the new Post-office plan; and though Parliament was bound to obey that pledge to make up that deficiency, yet with regard to the other deficiency of 3,000,000 l. in three years which he had named, would Parliament make up that, and do away with that great evil, an habitual borrowing of money in time of peace? These considerations and facts, which he believed to be facts, and those considerations which appeared to him to follow naturally from those facts, had led him to take the liberty of troubling their Lordships on the present occasion, and to call their attention to the subject. It could not be for him to suggest any remedy; he had no business to suggest it, or right to suppose that any suggestion of his would be listened to. But he felt the case so strongly, and thought the interests of the country involved so much in our present condition, that he could not abstain from calling their Lordships' attention to it; and if he had attracted the attention of those who had the power and the will, he hoped to deal with it in a satisfactory manner, he should be quite satisfied. He should conclude with mov-

505
ing for a return of "The statement of the net income for the last five years; a statement of the funded and unfunded debt for the last five years; and a copy of the Post-office minute of the Treasury issued in last September."
Viscount Melbournesaid, the noble Lord had called public attention to what he rightly held to be a subject of the most pre-eminent importance. He could not but express his entire concurrence in nearly all that had been stated by his noble Friend, and almost in all the facts that he had stated, in that sort of general view which he had taken of the state of the affairs of the country both at home and abroad. He entirely agreed in the general principles laid down by his noble Friend both political and financial. He entirely agreed with him in the approbation which he had expressed of the sinking fund, as it was in the administration of the noble Duke, and he entirely agreed with him in the extremely disagreeable state of the financial affairs. He had, however, no great fear as to the deficiency. The noble Lord said, that the noble Duke conceived it to be a necessary principle that the state of the finances of this country should always show a surplus of revenue over expenditure. He did not entirely agree in that. It depended, in his opinion, entirely on the amount. If there were a small deficiency, he should say it was not wise to call on the country to make exertions to make up that deficiency; but to trust to the natural strength of the resources of the country, to do away with that, and satisfy that deficiency. But at the same time he admitted to his noble Friend, that that deficiency continuing year after year, growing and increasing, was a state of things which could not be permitted to go on, and it was a financial state of the country, which it was necessary for the country to look boldly in the face, and to take such measures as were necessary for avoiding of the the evil, and removing the danger. It was impossible to entertain a doubt about that; but it must, at the same time, be felt that in financial difficulties and in financial perils and dangers, as in all other dangers, it was necessary to have a certain degree of boldness, and confidence, and courage; it was necessary not to act entirely at all times by rule in the course they thought it necessary to take from the circumstances of the country.
506
His noble Friend had stated very truly, that the deficiency was caused, not so much by any falling off of the revenue, not from any failure of the productive powers of the country, but from circumstances which had produced a pressure on the finances—a pressure from which this country, or any other country, might recover by its own exertions, and by the operation of natural causes. But it must be admitted that the expenses of this country had been growing, in a very great degree, from the causes which his noble Friend had mentioned; and he was afraid it must be admitted, that not being able to look into futurity, and looking at the affairs adverted to by his noble Friend, there could be no material diminution upon any of the points to which he had alluded. He did not think it necessary to follow his noble Friend through all the question to which he had called their Lordships' attention, but he (Visc. Melbourne) must unquestionably fairly admit many of the causes of expenditure which the noble Lord had stated. He did not fairly see any probability of any Government being able greatly to diminish the expense of the military or the naval force. These establishments had increased. They were placed very low in 1816, when his noble Friend was in the Government; they were placed on a scale then unequal to the exigencies and growing difficulties of the country; they were placed on a scale which had from that time at various periods called for continual increase; and unquestionably he did fear and apprehend that there was much truth in all the arguments which his noble Friend had stated, and which he did not mean to controvert; nor did he think that his noble Friend had taken at all an unfair or unjust view of the state of affairs, or that he had exaggerated any point, or stated anything so as to excite alarm, or to produce a greater idea of danger and difficulty than that which really existed; but he thought he had shown that he was not possible consistently with the due regard to the safety and interests of the country to make any great reduction in its establishments, or in the extent of them. Unquestionably, the embarrassment which existed in the internal affairs of the country would pass away, and there would not be the same demand for exertion in that respect as unfortunately had existed of late years. With respect to Ireland, he had certainly the strongest hopes that tranquillity, which his noble Friend did not seem to doubt, was

507
established, though his noble Friend had questioned the basis on which it was established. He should hope that it would not be shaken. He saw no possibility of diminishing speedily the military force employed in Canada. With respect to the boundary question, he could not but entertain, from the tone held on this subject by the Government of America, strong hopes that it would be brought to an amicable termination. The navies of other powers had been, he admitted, increased. He did not think, therefore, that England should keep up a force equal to the united force of all the navies of the world, but that it would be sufficient if she had a corresponding force. With regard to China, he would not enter into any explanation; it could only be unnecessary, and might be in some degree injurious. That empire was one of a very strange and singular nature. A crisis had taken place; it had been often feared, and it was very likely to arrive—a crisis pregnant with all these commercial difficulties, and with all those financial consequences, and threatening that loss of revenue, which had been pointed out by his noble Friend. The noble Lord also pointed to a loss of revenue likely to be sustained by the bill of last Session for the reduction of the duties in the Post-office department. A large diminution of revenue was always anticipated from the carrying out of that plan— a plan adopted bonâ fide by her Majesty's Government; and, notwithstanding what he had seen written by a faithful Councillor of the Crown—in a pamphlet signed by a Gentleman who considered himself as a faithful Councillor of the Crown—that that measure was not brought forward under the expectation that they should pass it, but that they should be relieved of the disadvantage of that by its being thrown out by the noble Lords opposite; he did think that faithful Councillor of the Crown was a man of very lively impressions, and apt to take the pictures of his own imagination for realities. It was often the case, that persons of very lively imaginations had a fault of conceiving that what they suspected was certainly true, and then setting down that supposed truth as the basis on which they acted. That was a frame of mind which he had found in more persons than one to be productive of very great mistakes. To assume the motives that others acted on, and then to set it down, that they did act on them, was
508
productive of great errors. Unquestionably it was very well known by all who recommended and by all who adopted that scheme, that it involved a very great loss to the revenue. The noble Lord said, a pledge had been given by the House of Commons to make up that loss to the revenue, but that pledge extended only to the loss by the Post-office project, and did not extend to any loss of revenue which might be caused by those other expences and those other events to which his noble Friend had alluded. He begged leave to say, that he neither feared the deficiency which was to be incurred by the Post-office project, nor indeed which might arise from any other necessary expense. He felt confident with respect to that deficiency, or with respect to any other, that the energies of the country, that the patriotism of the House of Commons and of the country, from a due regard to the validity of contracts, from a due regard to the honour of the country, and to her station among nations, would be amply sufcient to induce them to meet the financial difficulties of the country boldly and firmly and in such a manner as should be adequate to the occasion, whatever the occasion might be which might arise. Therefore it was that he felt so confident with respect to any deficiency which might arise from other causes, as also to the deficiency which might be incurred by the adoption of this measure, which the House of Commons had distinctly pledged themselves to make good. He thought that the noble Lord had done his duty in calling thus early in the Session the attention of their Lordships to a matter of so much importance. He perfectly admitted the greater part of the facts of the noble Lord. He unquestionably saw the difficulties of the country in this respect; and unless the country was prepared to exert itself, it must lose its place among nations. He felt fully confident in the energies of the country to carry itself through its own difficulties.
Returns ordered.

CHARTIST PRISONERS.
Lord Broughampresented a petition from two persons who were confined in Chester Castle since August last, on a conviction for having used inflammatory language at a meeting, and for which they were to be imprisoned for twelve months, after being duly convicted in due course of law. The

509
petition stated a variety of things, but not to trouble their Lordships, he would only recommend it to their best attention. He begged to state that it was committed to him in a letter from a respectable solicitor residing at Manchester, and the statements rested only on his authority, and, therefore, he was not answerable for them. If true, it would appear the Justices present were not well advised, that the practice of the law required that the person to be committed, should be present at the examination of the witnesses against him, that he might hear the evidence and have the power of cross-examining them. This it was stated, the magistrates did not do; but the petitioner, who was a medical man, said the witnesses were severally introduced, and instead of being examined in the usual way, and giving their answers subject to cross-examination, a paper was read over to them by the magistrate's clerk, and they were asked whether the statements which purported to be evidence taken down before was true. This was not the proper way, for the examination was not taken in the presence of the parties, and it was one thing to read over a paper, and another to examine, and thus subject them to cross-examination. The other ground of complaint was, that the party, when called upon, was proceeding to state his defence, but was told he must speak so slow that the clerk, who could not write short hand, might take down every word he said, that it might be used in evidence against him. That was a very great mistake; for the use to be made of the defence was not that of having evidence against him, but to influence it in his favour; and he really hoped no party would again be required to utter his defence in such a way, since many would thereby be obliged to hold their peace. No person was more cautious than himself in interfering with the administration of justice; but he had thought it proper to state these facts to their Lordships, and he submitted they were well worthy of their consideration.
TheMarquess of Normanbysaid, that he had a considerable correspondence with the sitting justices on the subject. As far as the case had come before him, he thought the magistrates were justified in the course they had taken. He would, however, make further inquiry on the
matter, and lay the results before their Lordships.
Adjourned.