Sitting of 3 April 1862

MINUTES.
PUBLIC BILLS.—2° Moveable Property (Scotland); Summary Jurisdiction (Ireland); Charitable Uses Act (1861) Amendment.
3° Pier and Harbour Act Amendment; Chancery Regulation.

THE WELLINGTON MONUMENT.

  QUESTION.
  LORD LOVAINEsaid, he wished to ask the First Commissioner of Works, How soon it is expected that the monument of the late Duke of Wellington, in St.

  445
  Paul's Cathedral, will be finished; and whether the surplus of the sum voted for the Duke's funeral will be sufficient to defray the whole cost of the work?
  MR. COWPERsaid, the artist to whom the commission had been given to prepare the model had received his instructions on the subject in November, 1858. Three years and a half had, therefore, elapsed since the order had been given. The model, however, was not yet completed. He was sorry that so long a delay should have occurred in the matter; but he presumed the time had not been wasted, and that the artist was preparing himself by preliminary study for the better execution of his design. He was not able to inform the House when the model would be ready, but he had no doubt that the sum voted would be found sufficient for the purpose for which it was intended

SHIP STREET BARRACKS, DUBLIN.

  QUESTION.
  SIR EDWARD GROGANsaid, he would beg to ask the Secretary of State for War, Why the ground at the corner of Great Ship Street and Upper Stephen Street, in the city of Dublin, which the War Office purchased several years ago is permitted to remain for so long a time in its present ruinous and dilapidated state; if it be still in contemplation of the War Office to build an addition to the Ship Street Barracks on this ground; and, if so, when the works will be commenced?
  SIR GEORGE LEWISsaid, that steps in the matter would be taken as soon as there were any funds applicable to the purpose, and as soon as more urgent works were completed. From information he had received, he was inclined to believe the ground in question was not in a more unsightly state than Downing Street went was and had been for some years.

CHURCH BUILDING ACTS.

  QUESTION.
  MR. HENRY SEYMOURsaid, he rose to ask Mr. Attorney General, If he will state to the House what steps the Government intend to take with a view to the consolidation and amendment of the Church Building Acts?
  THE ATTORNEY GENERALsaid, that instructions had been given to Mr. Stephens to collect the various statistics on the subject, with a view to framing a Consolidation Bill.
  MR. HADFIELDsaid, he wished to inquire at what time it is likely the Bill will be introduced?
  THE ATTORNEY GENERALsaid, there was no prospect of its being ready to bring before the House during the present Session.

MALT AND HOPS.—QUESTION.
MR. LOCKEsaid, he wished to ask the Secretary to the Treasury, When the Returns, moved for on the 17th of February, respecting malt, hops, &c., will be laid upon the table of the House?
MR. PEELin reply said, the Return ordered on the 17th of February, as to malt, would be laid on the table in the course of the week. With respect to the Return ordered at the same time as to hops, it would be ready shortly.

IRISH BUSINESS.—OBSERVATIONS.
SIR ROBERT PEELsaid, he wished to state, for the convenience of Irish Members, that it would not be possible for him to proceed with the Fairs and Markets, the Poor Law Relief, or the Registration of Births (Ireland) Bills, before the Easter recess.

THE EASTER RECESS.—QUESTION.
COLONEL WILSON PATTENsaid, it would be convenient to the House if the noble Lord at the head of the Government would state when it was proposed to adjourn for the Easter holydays.
VISCOUNT PALMERSTON: There are many questions. Sir, asked in this House the answer to which is not so interesting as that which is now put. What we propose is that we should adjourn for the Easter holydays either on Friday, the 11th, or on Monday, the 14th inst., our arrangement as to which day it should be being made dependent on the state of public business at the time. We propose that the adjournment should be to Monday, the 28th, which will give hon. Members a clear fortnight.

THE BUDGET—FINANCIAL STATEMENT—WAYS AND MEANS.
Order for Committee read.
House in Committee of Ways and Means.
MR. MASSEY in the Chair.
THE CHANCELLOR OF THE EXCHEQUER: Mr. Massey, the statement which I have to submit to you on the present occasion is in some respects of a simpler character than those which, on former oc-

447
casions, it has been my duty to offer to the House. At the same time there is, after a period of extensive legislative changes in finance, commonly a residue of questions—perhaps of secondary importance—requiring, or thought to require, readjustment, or seeming to flow by way of consequence from, those of which Parliament has already disposed. I must on this account, I fear, trespass for some time—if not for as long a time as in former years—on the indulgence of the House. I feel, however, that the duty of a Minister of Finance in submitting to this Assembly his annual statement may be variously viewed. If he were to confine himself strictly to laying before the Committee the balance-sheet of the past and that of the coming year, his office would be a very simple one. But, for my own part, I cannot help thinking that it is more agreeable to the House—I have at least found it so in my experience of your indulgence—that hon. Members should be put in possession of such information as the Government is able to afford on matters of importance; which, although not immediately belonging to the balances of the year, yet directly bear on the state and condition of the country, on its revenue and expenditure, and on the amount of its resources as compared with that revenue and that expenditure. That being my interpretation of the feeling of the House, I shall proceed on this principle, losing no time, and wasting no time, so far as it is in my power to avoid that error, but at the same time endeavouring to lay before the Committee as full and impartial a view as I am able to present of our financial position, and the relation of that position to the general condition of the country.
Beginning, then, as usual, with a retrospective glance at the revenue and expenditure for last year, I shall, with the permission of the Committee, first call its attention to the latter. The expenditure for the year which has just closed was estimated by me in the month of April, 1861 at £69,875,000; and, in order to avoid confusion, I will state at this point—as I believe I stated at the time—that over and above that expenditure it was necessary to issue from the Exchequer, in respect of what are termed excesses in the expenditure of previous years, sums amounting to between £200,000 and £300,000. Those sums have, I may add, in point of fact, amounted to £278,000, and I wish the Committee clearly to understand that they must appear in the account of the Exche-
448
quer issues for the year, but that the money which they represent was money which had been already expended, and that the balances in the Exchequer were, consequently, so much the lower. As that is the case, they constituted no part of the effective expenditure of the year, and no provision was made for them in Committee of Ways and Means. It is not necessary, and it would be tedious if I were to attempt, to explain at this moment the nature of the mode in which those irregular charges are dealt with and provided for. Suffice it to say, in general terms, that they are provided for in the department in which they occur by anticipation of the coming and prospective grants for the ordinary services, until provision is regularly made for them by a vote of the House of Commons. They therefore constitute a mortgage, so to speak, on these ordinary grants, and the effect of a vote in excess, when passed by the House, is to release those ordinary grants from the mortgage by an addition to the Exchequer issues, but not to the cash expenditure. Those ordinary grants, therefore, when so released, remain available in full for the expenditure of the year. I have thought it necessary to say thus much, in order that hon. Gentlemen may bear in mind that I have now in view, in the figures which I am about to quote, the effective expenditure for last year. That expenditure was estimated, as I have already said, in April last, at £69,875,000, but I regret to say it was considerably more. Since the financial statement of the Government was made, and since the measures founded on and connected with it came into operation, considerable supplementary grants have been made for various purposes. A portion of these grants was made in the Session of 1861, to the extent of £526,000. A larger portion was made in 1862, principally in connection with the recent despatch of troops to British North America, but likewise as regards a comparatively small sum on account of China. The joint amount was £973,000. These sums constituted an addition to the original estimated expenditure of the year of £1,499,000, and raised the total expenditure to £71,374,000. The actual expenditure of the year, still, of course, deducting the excesses of previous years in this case as I have done in the former one, was £70,838,000, or less by £536,000 than the estimated expenditure. But I am bound to say, that although that margin is

449
not an inconsiderable margin, yet it is a less one than in many former years we have been able to congratulate ourselves upon possessing. So much, then, for the actual expenditure of the year, as compared with the sums voted and the net of the estimated charge.
Now, Sir, I would briefly call the attention of the Committee, in the next place, to the expenditure of the past year as compared with that of the two former years. The expenditure of 1859–60, as it was represented in the Exchequer account at the time, was £69,523,000; but there were excesses in the expenditure of that year not brought to account at the time—principally portions of the excesses of which I have just spoken—which increased the; expenditure of 1859.60 to £69,748.000. Comparing with that expenditure of 1859–60 the expenditure of 1801–2. we find the difference between £69,748,000 and £70,838,000 to be £l,090,000, which constitutes the increase upon the expenditure of the year which has just expired as compared with 1859–60, the year next but one before it. Comparing, again, the expenditure of the year which has just expired with the expenditure of the year immediately preceding it, the account stands as follows:—The expenditure of 1860–1 was £72,504.000, the expenditure of 1861–2 has been £70,838,000, so that there is a decrease in the expenditure of 1861–2 as compared with 1860–1 amounting to £1,666,000.
I now proceed to state the condition of the revenue of the past year, and, first of all, of the revenue as compared with the expenditure. This comparison will be a comparison of the revenue, both with the original estimate of expenditure, which was the basis of the financial measures adopted by the House, and likewise with the final expenditure, including the supplemental charges, to the amount of about £1,500,000. The expenditure of the year 1861–2, as I have stated, was £70,838,000; the revenue was £69,674,000. The deficit upon a comparison of these two figures is £1,164,000. The supplemental charges subsequent to the financial arrangements for the year were £1,499,000; and, deducting the deficit as it stands of £1,164,000, it follows that, according to the original financial arrangements, there would have been a small surplus of revenue over expenditure amounting to £335,000. I now wish to approach an interesting and, I think, a satisfactory portion of the subject.
450
It is a part of the subject with which the Committee are already in a great degree acqainted—the comparison of the revenue of the year just expired with the revenue of the year immediately foregoing. The year 1860–1 produced £70,283,000; 1861–2 produced £69,674,000. There was, therefore, a decrease in the revenue of 1861–2 compared with 1860–1 amounting to £609,000. But, Sir, as I remember to have provoked a smile last year by pleading on behalf of 1860–1 that it was short of the preceding year by one or more days; so, in order to make a more exact comparison, I add for 1861–2 two days of that portion of the revenue which is daily, at the rate of £100.000 per day, to this deficit, to make a full equalization between the two years. When this has been done, the amount of the deficit so augmented in 1861–2 as compared with 1860–1 will be £809,000, which I take to be a fair representation of the real difference of the revenue. Now, Sir, I think the Committee will consider that these figures are eminently satisfactory, when they bear in mind the following fact:—that in 1861–2 as compared with 1860.1 we parted with three important items of revenue. We parted with a penny of the income tax for three-quarters of the year, or not less than £850,000; we parted with the paper duty for six months of the year, which was estimated to entail a loss of £665,000, and I take it so for my present purpose, though, as I shall explain further on, the actual loss has been greater; and we did not enjoy in 1861–2 the malt credit winch had been taken up in 1860–1, and which added to the resources of the Exchequer in that year to the extent of £1.122,000. We, therefore, in point of fact, lost in 1861–2 revenue which we had enjoyed in 1860–1 to the joint amount of these three items—namely, £2,637,000; and, deducting from that amount the real decrease of revenue, which I take at £809,000, we find that the improvement in the remaining sources of revenue, apart from the three which we have lost, yielded to us last year no less a sum than £1,828,000, This is the more remarkable because whatever drawbacks we had to anticipate at the time the financial measures of last year were laid before the House, have proved in the event to be even more serious than we had supposed. These drawbacks were two. In the first place, we had to look for a great loss in the export trade to America; and the loss has been very great. In the year 1860—I

451
speak now of the natural year—our exports to America had been £21,667,000; in 1861 they sank to £9,058,000, showing a diminution of £12,609,000. But what was more serious than the loss in our export trade to America was that which arose from the cotton crisis as it was termed. In the spring of last year we had no means of knowing in what degree that crisis would affect us. War was impending, and though I do not recollect that it had actually commenced, still for all practical purposes it was virtually begun, and it was obvious that a blockade would be instituted. It was well known, however, that such blockade would have to cover an immense extent of coast, and ideas prevailed that the changes in modern navigation, especially the use of steam power, would tend to render blockades far less effectual than in former times. Under these circumstances it is certainly singular that during last year we should have seen an example of a blockade which, while, perhaps one of the most extensive, has certainly in practice proved to be, for an extensive blockade, one of the most stringent and efficacious ever instituted. A remarkable proof of that fact is seen from the best of all indicators—namely, the price of cotton at different periods. The price of ordinary American Cotton—Uplands, Alabama, and Mobile—in Liverpool, in March, 1861, ranged from 5¾d. to 7¾d. per lb. In March, 1862, the price of the same descriptions ranged from l0¾d. to 13 d. per lb.; that is to say, in round numbers, the price has been all but doubled, exhibiting in the main the difference between the estimate of the severity and efficacy of the blockade before it had actually been felt, and the results as they are now within our knowledge and within our experience.
Again, the harvest of this country, although it was a good harvest in quality, was yet a deficient harvest in point of quantity. The proof of this is to be found in the amount of our importations of corn. It is true that it falls somewhat short of the importations of the foregoing year; but these had been enormously in excess of the importations of ordinary years. The average importations of corn are taken to yield to the revenue £500,000 in corn duties; but the receipts in the financial year which has just expired from corn amounted to no less than £802,000. Take also the price of corn. The average price of corn in the financial year 1860–1 was
452
55 s. 10 d., per quarter; in 1861–2 the average price was 56 s. 7d., showing on the face of the figures an increase in the last year as compared with the previous year of no more than 9d. per quarter. Undoubtedly, these figures, to a certain extent, require correction, because we are referring to British corn exclusively, and the quality of the corn brought to market in 1862 being far superior to that of the corn sold in 1861, we may fairly say that bread was somewhat cheaper last year than in the year before. But there was no great or marked improvement in the condition of the country in that respect, while as respected our American difficulties everything has turned out at the very worst that could with reason have been anticipated. Under these circumstances it appears to me to be one of the most striking and satisfactory indications we have ever had of the amount and elasticity of the resources of this country, of the industry and energy of the people, and of the beneficial results of the course of legislation for the last twenty years, that at such a time, after parting with £2,637,000 of revenue no less than about £1,828,000 of it should return to us from other sources.
But, Sir, I am bound not to part with this portion of the subject until after warning the Committee against the danger they would incur from a cursory inspection of the revenue returns printed in the journals of Tuesday. Those who cast a hasty glance at those figures will say, that while they report a decrease of £609,000 upon the year, they also report an augmentation of a very large sum — I think about £1,000,000—on the quarter. The apparent inference from the figures would be that the revenue of the quarter was improved; but, Sir, that is not the case. On the contrary, as we had to expect, and as in some degree we must expect until a change in the causes of the mischief takes place, the revenue of the country is, not in an alarming, but yet in a sensible manner, declining. The excess on the April or fourth quarter of the last financial year over the corresponding quarter of 1860–1, was owing, not entirely, but mainly, to these two circumstances—first, to a very large collection of income tax within the closing quarter of the year; secondly, to a receipt of money in respect of China indemnity, forming part of the Miscellaneous Revenue of the year. The best indication I can give to the Committee, in a very simple form, of the relative course of the revenue during the latter

453
part of the financial year, is by referring to the Customs; which, upon the whole, undoubtedly, as our laws now stand, form by far the readiest and most nearly accurate indicator of the consuming power, and, therefore, of the material condition of the people. The first three quarters of the financial year 1861–2, ending with December, exhibited an increase in Customs revenue amounting to £468,000; but the last quarter of the year, ending on the 31st of March, exhibited a decrease of £100,000, and reduced the net increase of the year to £368,000. The point, therefore, at which the revenue diminished towards the close of the year 1861 marks out the point from which we may do well to look onwards rather for some slight decline of the revenue than for the full continuance of its buoyancy.
It is right, again, that I should not pass from considering the revenue of last year without remiuding the Committee of the estimates of revenue laid before them; because, although I do not know that this has been a usual part of financial statements, it is useful that reference should be made at the close of the year to the estimates exhibited to Parliament at its commencement. The revenue of the year has fallen, as a whole, below the estimate by £609,000. The particulars stand as follows:—The Customs duties have exceeded the estimate by £104,000. The stamps have exceeded the estimate by £130,000. The taxes have exceeded the estimate by the small sum of 10,000. The income tax has exceeded the estimate by the small sum of £15,000. The miscellaneous receipts have exceeded the estimate, apart from the China indemnity, by £81,000. The Crown lands have fallen short of the estimate by the insignificant sum of £5,000, and the Post Office by the insignificant sum of £10,000. In point of fact the balance under these heads being on the whole, decidedly in our favour on each item as compared with the estimate, we have to look to two heads, as those under which the receipt has fallen short. The first is the Excise. That has fallen short of the estimates by £456,000. I need not refer to minor matters. There were one or two proposals yielded or modified in the course of the financial discussions of last Session, and by these the revenue was affected, but not so materially as to have a serious influence on the main result. Generally the state of the Excise has been this:—There has been a
454
considerable gain on the estimate with reference to malt, in consequence of the very favourable nature of the barley harvest for malting purposes. There has been a considerable loss on spirits, the causes and circumstances of which I shall presently have further occasion to notice. There has been a considerable loss on hops, about £100,000 or more, referable, of course, to the accident of the season; and there has been a considerable loss on paper, referable chiefly to a great excess in the sum we were called on to pay for drawback over and above what had been conjectured. I say conjectured, because the Committee should be aware that there is a great difference between the estimate formed of drawback where the Revenue Department have the means of making the investigation for themselves, and the estimate of a drawback where they are of necessity dependent on such general accounts and information as it is in the power of the trade to give. Proceeding on that information, and no doubt it was the best of which the nature of the case admitted, the paper drawback was estimated at somewhere about £150,000, or a trifle over it; instead of which it has been £350,000; and if you add that to the defalcation on hops, you will find that the failure in Excise revenue, as compared with the estimate, is accounted for.
Now, the other head on which I must make an explanation to the Committee is the China indemnity. The estimate of the China indemnity laid before the Committee last year was £750,000. That estimate was based mainly, perhaps I should say entirely, on the opinion of our representatives in China, that the whole amount we were to receive—namely, 6,000,000 taels, or about £2,000,000 sterling—would be forthcoming, by annual instalments pretty equal among themselves, in from four to five years. It was also based on the intention of Her Majesty's Government to pay the merchants nothing, as I may say-out of the State indemnity, there being a separate sum of 2,000,000 taels intended for them, which would be paid up for them, pro ratâ, in the same proportion as the other sum for the State. We had in hand, before I made the financial statement of 1 861, two preliminary payments, amounting to about £300,000; and adding them to the four or five quarterly payments, at the rate of about £100,000 per quarter, we reckoned the gross amount at not less than £750,000.

455
Now the facts are as follows:—We have no precise account of any receipt, owing to some accident, later than the 30th of September last. That circumstance does not at all imply any irregularity in the payments, because the payments are made with perfect regularity and facility, so far as the Government is informed; but it is, as I have said, probably owing to some accident that we have not received any account for the December quarter. Up to September 30 the whole receipt Was equivalent in English money to £478,000. I state the receipt in English money for the convenience of the Committee, although it is impossible to give it with perfect precision, because the rate of exchange between China and England varies from time to time. The whole receipt to September 30 was, in English money, £478,000. Two quarters down to April, at the same rate, would give £149,000; but we have every reason to believe that we shall have a gross receipt down to April of about £627,000. The whole of that amount, the Committee will observe, becomes immediately available for the public service; and stands, in fact, from the moment it is received in lieu of funds which must otherwise be obtained by negotiating bills or remittances from this country. But, in the course of last summer, when the whole case of the merchants came to be stated to Her Majesty's Government, we thought it equitable to make an arrangement with them which gave to them a larger amount than the pro ratâ payment to which they would have been entitled, and somewhat abridged in that manner the receipt immediately forthcoming on behalf of the Exchequer. That makes, of course, no difference in the ultimate account, but merely anticipates to a certain extent in favour of the merchants the payment of their own portion of the grant by drawing on the Imperial portion of the indemnity. We paid the merchants one-half of their substantiated claims, amounting, as well as I can reckon, to about £193,000. The whole available receipt up to April, 1862, would thus be reduced to £434,000. But as we have no positive account of the last two quarters, although we have no doubt of the receipt, and although the money has been applied to the public service, we thought it best not to take credit for them in the present year, but only to take credit for what had been received up to the 30th of September. From that sum of £434,000, therefore, the two quarters of £149,000 have to be deducted,
456
leaving £285,000, which, making allowance for the difference of exchange is reduced to £266,000. This sum is somewhat less, perhaps, than we might warrantably have taken to the credit of the year; but it is the only sum which we have actually carried to the credit of the Exchequer account for the year. We might have been justified in taking credit for £400,000, but I think the course we have pursued is, perhaps, the most regular and the most convenient. The material point, however, to which I desire to draw the attention of the Committee is this, that apart from the question of the excess which we have paid over to the merchants, it must be admitted that the expectation originally entertained in China as to the yield of the customs duties, has been somewhat too sanguine, and has not been supported by the accounts we have since received. Instead of four or five years, it now appears that a period of seven or eight years from the first payment will be necessary to realize the whole indemnity, unless some arrangement shall be made in the mean time for anticipating the payments and shortening the time.
Under these two heads, therefore, of Excise and China indemnity, the difference of £609,000 in the actual revenue of the year as compared with the estimate is more than accounted for, the results of the other branches of the revenue having been, on the whole, in excess of the estimate laid before the Committee in April 1861.
I pass now to the balance-sheet for the coming year, on which it will not be necessary for me to dwell at any great length. The expenditure, as it is now estimated, for the year 1862.3, stands as follows:—The charge for the Public Debt will be £26,280,000. In that charge there is included for the first time the payment to the Bank of England on account of the labour and expense incurred by that establishment in the management of the debt. In this manner it comes about that there is an apparent augmentation of charge; but it is not a real augmentation, the only difference being this:—The charge itself has been made before. In point of fact there is a saving upon it amounting to £50,000 a year, of which we shall have the benefit this year for the first time. But for the first time also it appears in our accounts as a charge paid directly to the Bank, instead of being dealt with by them in their books by way of set off against the amount standing there to the

457
credit of the public. Next, the Consolidated Fund charges for the year will be £1,900,000. The Army Expenditure stands at £15,300,000; and the Militia is likely to cost very nearly the sum of £700, 000; making together £16,000,000. There is here again, Sir, an apparent augmentation upon the corresponding grants made during the last Session. The corresponding grants made last Session were £15,571,000, so that there would be an apparent excess under the head of the army, amounting to about £429,000. But, then, we bring into charge on both sides of the account this year for the first time our estimated expense on account of the Indian effectives. The amount of that charge is £730,000, which was never presented to the House of Commons at all before, either in the Estimates of Expenditure on the one side, or the Estimate of Revenue on the other, but which now appears in both. In order, therefore, to make a fair comparison between the Estimate for the Army and Militia in the present year, and in the last, we must deduct from the total expenditure for the Army and Militia in the present year—namely, £16,000,000—the sum of £730,000, leaving £15,270,000 as against £15,571,000; so that the Estimate shows in fact, a small reduction of about £300,000, instead of an increase of£429,000. The Estimate for the Navy for the present year is £11,800,000. I beg pardon, but I am sorry to be obliged to go back to the Army Estimate again. When I said the Estimate for last year was £15.571,000, I mistook the expense, and; the Committee will be good enough to substitute for that sum the sum of£l5,481,000, which was the Estimate given last year for the charge of the Army. It is this year, after deducting the item for the Indian effectives, £15,270,000, so that the real decrease on the charge for this year is £210,000 or £211,000. The Estimate for the Navy in the present year, as laid on the table and voted by the House, is £11,800,000; last year it was £12,276,000 including a sum of £250,000 voted towards the close of the Session for building iron ships. There is thus a reduction on the Navy Estimates of £476,000.
I come next to the Miscellaneous Civil Services, the apparent charge for which will probably amount during the present year to £7,890,000. Of this sum Estimates for £3,500,000 have been already presented to the House, and others for about £4 500,000 still remain to be presented. The total Estimate for these ser-
458
vices last year was £7,693,000; but in the Estimate for the present year there are included sums amounting to £357,000, which relate to matters not lying within the previous control of the Treasury, nor within the ordinary scope of the expenditure under the head of Miscellaneous Services. There are, in point of fact, Votes which will be asked from the House to defray an expenditure already incurred abroad. There will he a Vote of £218,000 in respect of the loss upon the exchange in China between British and Chinese currency; there will be £35,000, or only part of a Vote—for I am sorry to say it is not the whole sum that will have to be taken—for tracing the British North American boundary; £79,000 in like manner has already been paid abroad on account of British Caffraria; and there is a sum of £25.000, forming a portion of a Vote of £55,000, on account of Vancouver's Island, which has also been already paid. £357,000 is the total amount of the several sums which we are obliged to ask for the Miscellaneous Estimates, to satisfy, in fact, charges which have already been incurred in various quarters of our extended empire. I do not attempt at present to enter into a particular explanation of these Votes, because it would lead to too great an expansion of the statement I have to make. I leave them to the proper opportunity; and, no doubt, they will attract due attention on the part of the House when they come to be discussed. They are, however, partly in the nature (to use the technical term) of excesses; and though they must appear in the accounts, they do not form port of the effective charge of the year. In truth, there is, with regard to prospective charge, a small decrease on the Miscellaneous Estimates.
The Estimate for the Revenue Departments is £4,754,000, while the Estimate for the Packet Service is £916,000. China, I am sorry to say, will again appear in the accounts of the year. I do not know that I shall have again, in point of form, to ask for a Vote of Credit; but China will make a further claim upon our funds, on account of the war expenditure to an extent which we estimate at £500,000. I will revert to that subject before I sit down, but my statement of our expenditure has already advanced so far that I think it well at once to gather into one view the material facts connected with it. The total estimated expenditure to 1862.3 is £70,040,000.

459
I have now to call the attention of the Committee to our estimates of the revenue; and in speaking of those estimates I will also mention in passing that I include in them certain small sums which will probably accrue from some minor changes, of no great importance, which I have to propose to the Committee, and which it is not worth while to bring separately into account and thereby to confuse and complicate the figures. The Estimated Revenue for the financial year 1862–3 stands thus:—The Customs we reckon will yield £23,550,000; the Excise, £18,340,000; and the Stamps£8,625,000. In this revenue from Stamps is included, for the first time, a payment of £60,000 from the Bank of England on account of their composition in respect of the Stamp duty on their issue of notes. The Land and Assessed Taxes we calculate will produce £3,180,000; the Income Tax is estimated in all likelihood to yield £10,000,000; the Post Office, £3,650,000; and the Crown Lands, £300,000. The Miscellaneous Revenue will be exceedingly large, mainly because it is swelled by bringing to account what has hitherto never appeared in our accounts at all, and what I have already charged on the expenditure side. There is the payment for the Indian effectives—namely, £730,000, and there is also the share which the Government receives of the profits of the Bank's circulation of notes, or £130,000. Neither of these items have ever appeared in the balance-sheet of income and expenditure before. Then there is a sum of £255,000 for the Indian non-effectives, the whole of which, except £60,000, appears for the first time in the account of the year that has just expired; and there is a remaining sum of £1,160,000, which may be taken to represent our ordinary receipts under the head of Miscellaneous Revenue. The gross amount of these various sums is £2,275,000. We come next to the Chinese indemnity. From that indemnity, in the year on which we have now entered, I do not think it is safe to anticipate a net sum of more than £170,000. I will state very briefly the grounds of that computation. Whereas we took the quarterly payments last year at somewhere about £100,000, we cannot take them now—seeing they have come in at a slacker rate than was expected—at more than £80,000. And as we paid last year to the merchants a sum of, I think, £193,000 as one moiety of their substan-
460
tiated claims, we shall have to pay them not less than another £193,000 during the present year in full satisfaction of those claims. This will make the net receipt for the year which has begun very low, and I do not think we can reckon it at more than £170,000, although if we were to take as sanguine a view as appears to have been taken in the budget on the other side of the Channel in respect to the probable receipts of France from her share of the Chinese indemnity in the coming year, we might venture to place our return from this source at a somewhat higher figure. Calculating it, however, Sir, at £170,000, the total probable revenue of this country for the financial year 1862–3 will be about £70,190,000, against an estimated expenditure of £70,040,000. [Sensation.]
Under these circumstances, although it is impossible for me to interpret into articulate sound and meaning the general buzz I have heard around me, yet it is not difficult to define the general purport of the question which each man has put to his neighbour, and that is, whether new taxation is to be proposed? That is a question, I need not say, which it has been our duty to put to ourselves; and it is a question with respect to which, during the course of the past year, my mind, at least, has undergone material fluctuations, in obedience to changing and fluctuating circumstances. Four or five months ago I should have ventured to entertain, not an anticipation perhaps, but a hope of being able to propose to the House fresh remissions of taxation. It would not be true, indeed, to say of the coming year that it will be totally without the benefit of a remission of taxation, because with respect to some portion of the taxation which was repealed last year the full practical effect of such repeal will only be felt this year for the first time. Again, about three months ago there was a universal anticipation in this country that we were about to be involved in largely-increased expenditure, and that new taxes to a considerable extent would have to be proposed.
Her Majesty's Government have endeavoured to give the most careful consideration in their power to the question, what would be their duty in the circumstances which they have foreseen for about two months—namely, the circumstance of a close balance between the coming revenue and the accompanying expenditure. The first point to be taken into consideration before deciding

461
upon the course which it behaved them to follow was the nature of the cause which had exercised a depressing influence upon the revenue. That cause is at once expressed in the single word "America." Everything else is rising, growing, flourishing; but America, both with regard to trade, and still more as to the supplies of raw material for our manufacturing industry, exercises a depressing and lowering influence upon the vital circulation of capital and labour in this country. This subject is of such moment that it may deserve more particular notice.
If we look simply to the export trade of this country with America, it is material and not unsatisfactory to see that the case is improved and improving; and here I will give the Committee the latest accounts it is in my power to present— namely, down to the end of February last, or within five weeks of the present time. Our exports to America during the month of September amounted in value to only £483,000; in October, they were £709,000; in November, £739,000; in December, £805,000; in January, £1,086,000; and in February, £1,253,000. Thus, as far as mere trade is concerned, there has been a very considerable recovery. But the main question, as I ventured to state—and I cannot too strongly impress it upon the Committee—the main question is not the decrease of our export trade, vast as it is, not even when £9,000,000 or £10,000,000 have been taken from it—that is an evil, but an evil within bounds—the main, the grand question is this, whether a large portion of the population of this country is, or is not, to be supplied during the coming year with the one raw material of its industry without which that industry is brought to a standstill, and that portion of the population deprived of the means of subsistence. I am sorry I cannot represent that there is any improvement whatever in that respect.
Our condition, notwithstanding, in all other respects is healthy. And here I must refer for one moment to another subject. As this is the first occasion upon which I have addressed the House of Commons since the commercial treaty with France came into full, or what may be called full, operation, I may take the opportunity of stating what thus far, and without any prediction as to the future, have been the results of the treaty. I will take the same six months to which I have already referred in the case of
462
America, because they are the latest in respect to which it is in my power to make any statement. I make the comparison between six months in 1859–60 and the same six months of 1861–2. I pass over the six months of 1860–1, because that was a period during which the treaty was in partial operation—that is to say, it had taken effect on the side of England only. I compare six months of the first year of the full operation of the treaty with the same period of the very last year before that treaty came into operation at all. In these six months I include September, though the new duties only began with October, because September, as the immediately foregoing month, represents the shipments of goods in anticipation. Well, Sir, the exports of British produce from the United Kingdom to France in the six months from September to February in 1859–60 amounted in value to £2,196,000, and in the six months of 1861–2 they had risen to £6,091,000. The apparent increase from these figures is £3,895,000, being, in fact, not far short of 200 per cent. But it is fair to bear in mind that there is one important item which ought to be deducted—the item of corn, because the extraordinary necessities of France, from the failure of the last harvest, led to a demand for corn from this country that was quite exceptional. In general, our exports of corn to France are altogether insignificant, but in these six months they rose to a value of between £800,000 and £900,000. But after deducting the article of corn, in order to get a fair comparison, what may be called the real increase in the exports to France of British produce stands at £3,039,000. There is also, I am glad to say, an increase in the export of Colonial and foreign produce from this country to France, which adds to the trade of this country, and adds also really, although not immediately, to the exercise of our productive power. When I put together the gross amounts of the exports to France of British, of foreign, and of Colonial produce, I find that in the six months of 1859–60 they amounted to £4,572,000, and in the same period of 1861–2 to £10,312,000, showing an increase of £5,740,000, and giving rise—1 will not say to a certainty, I will not even say to a confident expectation—but, at least, to a hope that the commercial relations between these two great countries, valuable as they are in themselves, and still more valuable as they are the pledges,

463
guarantees, and mainstays of those friendly feelings between England and France which must always be the best security for the general peace and tranquillity of the world —these figures give rise, I say, to a hope that the commerce between these two great countries is at last about to approach a scale something like what nature intended it to be, and something like what it was intended to be by that greatest of all Peace Ministers, Mr. Pitt, but as unlike as possible to what the obstinacy, the follies, and the prejudices of other men had made it.
Of course, this increase is unequally distributed, and the benefit of it has been felt in some portions of the country more than in others. The most remarkable instance, perhaps, is in the woollen trade, including in that term worsteds; and it would appear as if that trade had been actually created by the change that has taken place, for whereas our exports of woollens of all kinds to France in the six months of 1859–60 was only £134,000; in the same months of 1861–2 they have risen to the value of £1,181,000. Perhaps it is a secondary fact which I am now about to mention, but it is neither unsatisfactory nor unimportant, because the more intercourse we have with other countries the better the feeling that will prevail between us; I am apprised by the Post Office that in the number of letters which pass between this country and France there is an average increase from year to year of 4 per cent, but that since the treaty came into operation the increase has been 20 per cent. It is not necessary for me, Sir, to reiterate in his presence to the author of this treaty, my hon. Friend the Member for Rochdale, the congratulations which have so repeatedly been paid to him in his absence, for the history of that transaction, I may venture to say, is written in the history of the world.
Now, Sir, it has been material for the Government to consider what would be the fate of any proposal they might make—if they determined to make it in the present circumstances—for increased taxation. Suppose the Government were to ask the House to give them, instead of a mere equal balance, or little better, a surplus of half a million or a million of money—and in many respects it would be desirable that they should have such a surplus—I should like to know what probability there would be of their succeeding in any such proposition. Nay, even suppose that we had a surplus, and that we did not need to ask the House to make one for us—sup-
464
pose that we had a surplus actually in hand, what probability would there have been of our keeping it? I think I need not go far back for an illustration of this question. One glance, passing no more than forty-eight hours backward by the clock, will suffice to demonstrate what I say. For within that limit of time, a majority of this House, wholly unaware whether there would be a surplus or not, sanctioned by their votes, in opposition to the strong appeal of the Government, a Bill for the abolition of a portion of an existing tax. I am sorry to reflect that in these circumstances the only security for a Chancellor of the Exchequer lies in his utter destitution —
"Cantabit vacuus coram latrone viator."
If he does not possess a surplus, you cannot take it from him; or, according to an old proverb current in the northern portion of this Kingdom, which I will translate for fear of offending Scottish ears by a defective accent, "It is difficult to deprive a Highlander of a particular garment which he does not wear." Now, Sir, what is, perhaps, more material, and what certainly touches deeper topics, is this. I have referred to the one threatening and ominous circumstance in our position—namely, the deficient, the increasingly deficient, supply of cotton. No surplus that we could ask for from the House would enable us to encounter the evils that may arise from a further and greater privation of that supply; and therefore if, on account of the prospect of that deficiency, we made a demand upon the House, even if we succeeded in obtaining that demand, we still could not feel the slightest confidence that we had made an adequate provision for the deficiency that might be, that may be, impending. Considering therefore that, on the one side, if that cause of difficulty be removed, we have not the slightest reason, to despond or to fear concerning the ample sufficiency of our means; and considering, on the other hand, that any provision which we could in propriety and decency ask the House to make, might fail to meet the contingencies which connect themselves with that one particular difficulty,—Her Majesty's Government have come to the conclusion that it is not their duty, in the circumstances of the present juncture, to ask the House to impose any new taxes. At the same time, in the event of a great change, and a great aggravation of a pressure which is now still tolerable, they reserve to themselves a full discretion to

465
consider in what mode it may be right to meet the exigencies of the public service, according to the circumstances which may then present themselves.
There are other reasons to which I shall presently advert, but which I shall pass by for the moment, which lead me to the same conclusion. In the mean time I may observe, that the years through which we have been recently passing have, in point of fact, been exceptional years. It is impossible to regard them as subject to the ordinary financial conditions of the country. In years of war, which are recognised as years of war, you do not think of the balance of your revenue and expenditure, but you get what revenue you can, and make large loans to meet the exigencies of the public service. And in years of peace, which fully answer the description of years of peace, you expect, on the other hand, to have, and if finance is prudently conducted, you usually have, a considerable surplus of revenue available for the reduction of taxation. But between these years of peace, on the one hand, and years of war on the other, fully and justly so described, there are certain intermediate years, in which you have war in remote quarters of the globe, and in which you endeavour to avoid going into the money-market for loans, though the national expenditure is almost too heavy to be met entirely by taxation. That is the category to which the present and the three years last past belong, and in these years it seems well to struggle as long as we can against the necessities of borrowing, even though we may not be able to present to the House such a balance-sheet or such a prospect of a surplus revenue as, in ordinary circumstances of expenditure and of prosperity, it is considered, and justly considered, to be the duty of the Government from year to year to present.
I have said thus much about the imposition of taxes. Is there any one who will put the question whether there is to be a remission of taxes? It is quite plain that there can be no remission of taxes upon the figures which I have laid before the House—that is no remission by new legislation, although in virtue of the legislation of last year the burdens of the present year will be lighter by about £800,000 or £900,000 in respect of paper duty and income tax than they were in 1861–2, There can be no remission of taxes; and yet at the same time it is necessary that I should refer to various demands which
466
have been made upon the Government; because, as we live in a country where happily it is free to all men to urge their particular claims, so the right and convenient course is, that these claims should be brought into the face of day and discussed in the free Parliament of England, in order that, whether we give or whether; we withhold—whether we act, or whether we refuse to act—we may do so under the cognizance of our countrymen and under all the circumstances and conditions of free discussion and of perfect publicity, which carries with it the assurance of fair play.
Now, various changes have been demanded from the Government. They form that kind of residue of questions to which I adverted at the commencement of my statement as usually remaining after periods of active legislation in masters of. finance, and which may, perhaps, be compared to the swell upon the sea when the tempest has subsided. It is urged, for example, by those who are interested in the distilling trade that the duty upon spirits should be reduced. It is urged by, a certain portion of those connected with the sugar trade that the duties upon sugar should be altered—I do not speak of a general reduction, but of an alteration in the scale and adjustment of the duty. I Again, it is urged by those who are engaged in the most useful occupation of making malt, that we should give back to the maltsters a portion of the credits which in two successive years we withdrew. It is urged by those connected with the export trade of the country that we should remove from that trade the minor charges upon imports and exports which were imposed as matter of financial necessity two years ago. It is urged by those who are connected with the wine trade that we should make some alteration in the system established in 1860; and, besides some minor changes, it is also urged from year to year that the duty upon hops should be reduced.
I shall refer to these various topics if the Committee will permit me; but in the first place I will dispose of what I would describe as the minor changes which we propose to make in our fiscal laws. I hope the Committee will not think it a very serious matter that we propose to reduce the duty upon playing cards from 1s. to 3d. per pack. This change is not at all with a view to extended consumption; the object is to obtain the duty and put an end to a system of evasion, which it is totally

467
impossible to stop as long as the duty continues at its present rate and in its present form. Then we propose a change in the inventory duty in Scotland, which corresponds with the probate duty of England. There is at present a peculiarity in the law, under which it appears that if a person residing in England or Ireland owes money upon bond to a Scotchman, and if the locus of the bond happens at the time of death to be in Scotland, no inventory duty is payable upon it. That is an anomaly which ought to be removed. We propose also to apply to foreign and colonial bonds and loans of all descriptions the moderate charge of one-eighth per cent, which is at present generally applicable to loans raised in this country for English purposes, and which is also chargeable upon loans raised by the Government of India. The Committee will perceive that this is not a very important measure financially, but it is, in point of fact, a corollary to the measure by which we removed from foreign bills of exchange the exemption which they had long enjoyed to the prejudice of British bills of exchange. Foreign bills of exchange now pay the same charge as British bills, and we propose to place foreign loans upon the same footing as loans contracted in England for English or Indian purposes. I have no doubt that this change will commend itself to the approval of the Committee. The only other change we propose is one of no great fiscal importance, but which is rather important as a question of policy. We are given to understand that it is desirable by a supplemental licence to permit publicans to supply their commodities at various public gatherings, for which there is now no legal provision. Such a measure will bring the publicans under the cognizance of the police, and we propose, therefore, to allow them to take out a supplemental licence, for a period limited to three days, and thus give the trade at those places a regular character, and subject it to the same control as in other cases.
With respect to the spirit duty, that is a fiscal question of very great interest and importance. I have stated to the House the results for the last twelve months, and those results, as they appear upon the gross figures given, are but partially satisfactory. I estimated that we should receive £10,000,000 of revenue from British spirits. We have only got about £9,600,000. It is true that there is an increase of £359.000 upon the previous
468
year; but still it is not so large an increase as we thought we might receive. Now, Sir, the question is, from what cause has this revenue fallen short? Is it from illicit distillation, or is it from diminished power of consumption? If it were from illicit distillation, I think the wisest and easiest course would be for the Government to propose a return to the 8s. duty; but if it arises from diminished power of consumption, we have no cause to retrace any of our steps. Now, all the evidence before us—absolute demonstrative evidence is difficult to get— but all the evidence before us shows, as far as it goes, that this diminished consumption arises not from an increase of illicit distillation, but from a diminished power of consumption, from the temporary and local prevalence of distress combined in some degree with the increased and increasing sobriety of the people. I will endeavour to illustrate this in the best and simplest manner I can. If the partial failure of the spirit revenue arise from diminished power of consumption, it is manifest, under the circumstances which I before described, that the diminution or the failure will be most visible in the latter part of the year through which we have just passed; because the pressure upon the people, undoubtedly, has undergone a great increase in the latter part of the year. Now, how does the case stand? It stands thus:—In the first quarter of the financial year we had an increase of £218,000, which was perfectly satisfactory. In the second and the third quarters we had an increase of £118,000 and £147,000 respectively, showing some tendency to give way. In the fourth quarter there was an actual decrease of £101,000, so that the decrease of revenue exactly corresponds with what we believe to be the increasing pressure upon the consuming power of a considerable portion of the population. We will now look at the several parts of the United Kingdom. The pressure of distress has been much less in Scotland than in England; and Scotland gave us a revenue in 1860 of £2,754,000, but in 1861–2 of £3,065,000 from British Spirits. In like manner Ireland in 1860–1 yielded £2,269,000, and in 1861–2 £2,461,000. Both of these returns in a fiscal sense would be perfectly satisfactory, but England on the contrary, shows no increase whatever, having yielded in 1860–1 a revenue of £4,462,000 and in 1861–2 only £4,442,000. It will

469
be obvious, that if illicit distillation were the cause, it would be more in Scotland than in England, and more in Ireland than either, that such a cause would operate. Whereas, on the contrary, even in Ireland; which is the dangerous and weak point of any system of high spirit duties, we have an increase from spirit revenue which is perfectly satisfactory. It is, indeed, quite true that at a certain period of the year—I mean during the last months of 1861—there was a considerable increase in the number of prosecutions and convictions for illicit distillation in Ireland; but the constabulary authorities tell us that this symptom was only temporary, and that an effectual stop has now been put to their growth. I will not trouble the Committee with the details, but that is the clear upshot of their report, and the clear deduction from the figures, which show a positive increase of consumption in Ireland. Now, with respect to the effect of distress upon this consumption. I have endeavoured to obtain such information as could be had by inquiry from the manufacturing districts. I find that in Liverpool, where there has been considerable distress connected with the slackness of the cotton trade, a certain number of rectifiers—sixlarge rectifiers, who sent out in 1861, under the increased duty, 429,000 gallons, this year only sent out 321,000 gallons—a decrease of 25 per cent. In London a very large rectifying house, which has an immense connection in the manufacturing districts, sent out in 1861 853,000 gallons, but in 1862 sent out only 645,000gallons, showing a decrease of 25 per cent. Nay, I am able to state that the real decrease is much larger, because the London portion of their trade has greatly increased, while an aggregate decrease of 25 per cent on their entire trade is produced by the diminished power of consumption in the manufacturing districts. Under these circumstances, it appears to us plain that it would be quite an error if we were to feel the slightest doubt or hesitation in maintaining the spirit duty at the present rate.
With respect to the duties on sugar, that is a question into which I need not minutely enter. The Committee is aware that in old times, when we were wholly dependent on colonial sugar, the range of differences in the intrinsic value of that colonial sugar was not very great. There were, of course, differences, but they were on the whole within certain moderate
470
limits. It was at any rate found practicable to levy one single rate of duty on all descriptions of unrefined sugar, and one other rate of duty on refined. But when a freer trade in sugar was established, and when a stimulus had been given by the introduction in various places of improved machinery, then we had to deal with every possible variety of quality and value in unrefined sugar. About the year 1846, I think, it was found necessary to have two rates of duty for unrefined sugar instead of one, and in the year 1853, when I was Chancellor of the Exchequer, with the aid of our lamented Friend Mr. Wilson, I introduced a further modification into the law, and established a system by which there were three rates of duty on unrefined sugar. This being done by classification, of course, like all classifications, it is, to a certain extent, unequal in its operation. It appears to bear with not inconsiderable hardship on certain qualities of sugar which happened to come near the dividing line, and there the difference of duty sometimes absorbs, or more than absorbs, the difference in price. On this account a certain portion of the sugar growers, particularly those interested in the Mauritius and the East Indies, demand of us that we should abolish this difference. But we are encountered by a variety of other interests. We have the growers of the Mauritius and the East Indies from one point of the compass, the West Indian growers from a second point, the refiners from a third; and the interest of the consumers may be found to stand apart from any one of these. The West Indian growers are perfectly satisfied, and are protesting parties against any change, and I venture to say they have on principle much to urge in support of their protest. The refiners are equally a protesting party against a change, and these parties urge that the revenue thrives under the present system, and that the consumer obtains a supply increasing from year to year. The conclusion, therefore, which I draw is this, that if a change is to be made in this matter, it must be made after careful deliberation and a protracted investigation, in which all interests should be represented. If those who are connected with the Mauritius and the East Indies call on the Government to give their sanction to an inquiry by a Committee of this House for the purpose of ascertaining the operation of the present system, to that proposal I should not have a word to object; but it is plain to me, from the statements laid before

471
me within the last fortnight or three weeks —for it is only within that period that any representation has been made—that it would be impossible, or, if possible, most improper, for the Government to make any precipitate proposal in regard to a question so complicated, and where such a variety and diversity of interests are concerned. Therefore that question may for the present moment go by.
I am afraid that I must discourse also, but very briefly, of another question—that of the malt credits. The maltsters, or those at least, who call themselves the maltsters, and who, at any rate, represent a considerable portion of the trade, demand that we should give them six weeks' longer credit for the payment of the duty than they now have allowed to them. I really must say that that is a question which ought to have been considered when the old credit was first withdrawn. Whatever disadvantage was to arise from the withdrawal of that credit was just as plain when it was done as it can possibly be now. Further, the members of this trade are divided upon it among themselves. A portion of them wish us to restore it, and a portion of them say it is better that it should remain as it is. The maltster, if, is true, labours under some peculiar disadvantages. The manufactureof the article is confined to within seven or eight months in the year, whereas the consumption is spread, with more approach to equality, over twelve months, and it follows that at certain periods the maltster must have a larger stock in hand than suits him. But, on the other hand, he has a compensation in the fact that he has an average credit from the Government all the year round of from nine to ten weeks after the malt is charged. That, I think, is a fair compensation all the year round for the particular inconvenience which at a particular portion of the year he undergoes. My hon. Friend the Member for Hertford shakes his head; the Hertford maltsters, I know, have been very active in asking for this extension of credit; but if I could only see the representatives of other malting interests—if I could catch the eye, for instance, of my hon. Friend the Member for Newark—he, I know, would encourage me with a nod of assent as emphatic; at least, as the nod of dissent I have just received from the hon. Member for Hertford. There is another practical mode of putting the question, which for the time may, perhaps, be thought of
472
itself conclusive. To restore the six weeks' credit to the maltster would deprive the revenue of the coming year of £1,300,000, and I apprehend the Committee would not give its countenance to the Government in making any proposal of the sort which would have that effect.
In like manner, I shall be brief with regard to what are called the minor charges. The penny levied upon imports into this country is a charge which I feel entails on the trade of the country an amount of labour more than is fairly commensurate with the fiscal benefit derived from the impost. I think there is no claim upon the Exchequer — when once it is in a condition to yield to any claim —which ought to take precedence of the claim which may be made for the repeal of this charge. But this charge together with the charge of 1s. 6d. on bills of lading, amounts, to £182,000; of this sum the penny inwards produces about three-fourths; and with the accounts which I have presented to yon— which only leave us a surplus of £150,000 —I need not say it is impossible to propose the repeal of this charge on the present occasion. With regard to the charge made, not on imports, but upon exports, in the shape of an imposition of a duty of 1s. 6d. on bills of lading, I must state that the question is not so much fiscal as statistical. The authorities of the revenue department declare it to be the result of their experience, as it was their original expectation, that great advantage has resulted to the statistics of our trade from the imposition of that charge, by the means it gives of obtaining most valuable and comparatively at least most accurate information. But here, again, I must say that if there be a desire, as far as that charge is concerned, that there should be an inquiry— and though I do not know that a Committee of this House would be the best organ for such an inquiry, on account of the extremely technical character of the subject, yet I think an organ of inquiry could easily be devised composed partly of representatives of the Executive Government and partly of some gentlemen of high commercial standing in this House, whose assistance I do not doubt could easily be procured —1 should be perfectly willing that an impartial examination should be made into the charge, and into the amount of statistical and fiscal benefit obtained compared with the trouble which it gives.
Thus far I have stated cases, in which

473
we do not make a financial or legislative proposal; but the next point which I shall mention to the Committee is one with regard to which I do not feel any difficulty. I have done now with those matters on which I propose no change; and I have now to propose some changes which, as the Committee will see, are not without importance, though, of course, after the description I have given of the state of the account, it will be readily believed that they are not of much fiscal importance. That which I have first to mention is the existing scale of wine duties. Ami here, Sir, I may begin by stating that, according to the conviction of the Government and the experience of the revenue department, the difficulty of introducing a fundamental alteration into our system of wine duties by allowing what may be called natural wines—though, of course, I use the word only in a popular sense as distinct from highly brandied wines—to enter into our market at a low rate of duty—by which I mean one shilling per gallon—has been in substance solved by the introduction of what is called "the alcoholic test;" and I have no doubt that the alcoholic test will continue to be a permanent and satisfactory basis for the administration of our system of wine duties. The proof of this is to be found in a very few figures. I take the mean deliveries and the mean revenue from wine in the last two years under the old system, and compare them with the new. This comparison is, in fact, unfair to the new system, because in one of what I have called the two last years of the old system are included two months following the date when a 3s. duty had just been established; and, consequently, there was a rush of wine into the market. Therefore the new system stands in reality somewhat better than it would seem to do by this comparison. With this preface, I proceed to state that the mean deliveries during the last two years of the old system, 1858–9 and 1859–60, were 6,552,000 gallons, and the mean revenue derived from wine amounted to £1,697,000. The actual deliveries during the last financial year, 1861–2, were 9,732,000 gallons. Those figures are not precisely accurate, because a day or two at the end of the year has been taken by estimate only; but they are substantially accurate, and they show an increase of 3,180,000 gallons, or about 50 per cent. I think that fact is conclusive as to the following points:—that a great
474
stimulus has been given to the trade in wine; that increased facility of access to that valuable commodity has been afforded to the people; and that an immense extension has been imparted in a short time to the commerce in connection with the article. When we look at the fiscal effects, we find, that whereas the mean revenue of the last two years of the old system was £1,697,000, the revenue of the first complete year under the new system was £1,105,000. That is to say, there has been a decrease of £592,000; but the estimated loss was £890,000, so that the real loss is very much less than the loss which was estimated. But, while considering that the general results are entirely satisfactory, that state of facts does not absolve me from the duty of also considering whether the application of the scale of duties is not capable of being materially improved in detail. What we want under a system of this kind is to attain, as far as possible, the greatest simplicity of operation; the most extended application we can manage to secure of the low duty of 1s. to what I have called natural wines; and, finally, a most material object—the protection of the great revenue of £12,000,000 which we derive from British and imported spirits. Those are the objects which we must desire to attain, and the question is what changes can be introduced into the system compatibly with their attainment.
In the autumn, with a view to the solution of this question, we despatched several intelligent officers of the Department of Customs to the wine-growing countries of Europe; to France, Switzerland, Germany, Hungary, the Peninsula, Italy, and Sicily. The object was to ascertain, as far as possible, the most material facts as regards the natural strength of wine in those places where it is produced at its greatest natural strength. When I speak of natural wine, I mean wine with only so much spirit added as is necessary to make it a merchantable commodity for the general markets of the world; and the distinction which I draw between that and another class—a brandied wine—is, that in the latter class considerable quantities of spirits are added to certain wine to produce peculiar qualities, principally for the purpose of adapting it to the English market. I do not wish to speak of those strong wines with any disrespect. Brandied though they be, the makers have generally, or at least often, succeeded in producing a very ex-

475
cellent compound. But as it is an essential part of the new system to defend the spirit revenue; and, indeed, to defend our distillers against an unfair and indirect competition, it is absolutely necessary to impose a higher duty upon these highly brandied wines, containing a much larger quantity of spirit, than we impose upon weaker or natural wines. The result of the inquiries, which we directed to be made in the countries I have named, is rather curious and interesting. The information to be had from the trade in this country, though as far as it went, it was first-rate, was confined within somewhat narrow limits; it was, naturally enough, to the few wines brought into this country, and to the few districts where those wines were grown. We obtained, in the course of our inquiries in every quarter after the strongest wines in their natural state, about 125 carefully selected samples. Of those 125 samples, 103 were below 26 degrees of alcoholic strength; 22 only were above 26 degrees of strength, and out of those 22 15 belonged to Spain; and I have no doubt, as regards those 15, that they do not so much represent the natural strength of the wine at the time when it was first made, as the strength attained by some considerable period of keeping, because it may be within the knowledge of the Committee that white wines gain in alcoholic strength by keeping, while red wines do not. Under those circumstances it appears that 26 degrees of alcoholic strength is the point and marks out the limit where, upon the Whole, we may safely distinguish between the two classes of stronger and weaker wines. And this proposition is illustrated in a remarkable manner by the recent experience of our fiscal system as to the admission of wine into this country at several strengths. The entries at the several strengths since the scale of duties was established, have been as follows:—

Degrees of alcoholic strength.

Gallons.

Between

17

and

18

918,000

"

18

"

19

467,000

"

23

"

24

48,000

"

24

"

25

30,000

"

25

"

26

48,000

"

26

"

27

52,000

"

27

"

28

147,000

"

28

"

29

171,000

"

29

"

30

344,000

"

34

"

35

2,225,000

"

35

"

36

2,019,000

"

36

"

37

2,373,000

Thus it will be observed that about 26 degrees we find the minimum of imports, while almost exactly from that point up-
476
wards there is a large and rapid increase m the quantities admitted. The result of this state of facts is, that by taking our division of duty at 26 degrees of alcoholic strength we shall attain these several objects—we shall admit at a shilling duty almost everything which can be properly called natural wine, and we shall insure the power of abolishing the practical application of the test in a very large number of instances, because the great proportion of the stronger wine which will be offered will at once be offered by the parties at the highest duty, and being offered at the highest duty, it will not be necessary to apply the test, although it must he distinctly understood that we shall still require the samples, which can be given with perfect facility, and we shall retain and exercise the power to apply the test whenever necessary.
What we propose to do under these circumstances is as follows. At present there are four rates of wine duty. Under an alcoholic strength of 18 degrees wines pay 1s.; from 18 degrees to 26, 1s. 9d.; from 26 degrees to 40, 2s. 5d.; from 40 degrees to 45, 2s. l1 d. Wines above 45 degrees of strength cannot be entered. I propose to reduce the four rates to two. I propose to admit at 1s. duty all wine up to 26 degrees of strength. There I draw the great dividing line. From 26 degrees up to 42 I propose to place the duty at 1s. 6d., and above 42, where we have really attained the limit beyond which we may fairly say that no legitimate wine is introduced, to impose a virtually prohibitory duty of 3d. for every additional degree of alcoholic strength. That will be the nature of the Wine Duties Resolution which I shall propose, and the financial result of it will be as follows:—By carrying the 1s. duty up to 26 degrees the revenue will lose £20,749; but by the additional penny—by the rate of 2s. 6d. instead of 2s. 5d. per gallon—upon wines above 26 degrees it will gain £36,458. Of course I propose that bottled wines shall pay the same rate of duty as wines between 26 and 42 degrees of alcoholic strength. The total net gain will be about £15,800. That is the proposal which I shall have to make with respect to the wine duties, and I feel the greatest confidence that it is a proposal affording a combination of advantages which it is very seldom in the power of fiscal legislation to attain—namely, a, change which is highly beneficial to the public, and at the same time eminently acceptable to the great

477
body of the very intelligent and able men who are engaged in carrying on the wine trade.
The only other subject which I mentioned just now under the head of changes either proposed or to be adopted, is the subject of the hop duties. My hon. Friend the Member for Sussex (Mr. Dodson), who with so much ability has led so many campaigns, followed, I must say, by a gallant army, which he has proved himself on all occasions well worthy to command, against successive Chancellors of the Exchequer, has not this year anticipated the Budget by forcing on his Motion. But, at the same time, I apprehend it is a safe opinion to give, that if the Government could have said or done nothing upon the subject, it would not be very long before we should have heard some note of assault from the same or from some other quarter. The case against the hop duties is, I think, very much exaggerated, and naturally so, by those who plead the cause of the hop growers. But I have never denied that there is a considerable amount of strength in their ease. I recognise the force of arguments founded upon the unequal amount of the duty in different districts; the severity of competition with foreign hops brought upon a trade which had been the child —the darling child of protection and monopoly; the aggravation of an uncertainty in itself and from natural causes extremely great, and the anomaly in some degree of imposing an excise upon the growth of a raw material that too being one which is of old standing in the country. And, lastly, I must admit the great evil on principle of committing to the Executive Government—what has been forced on them from time to time in this matter— the decision on constant applications for postponement of payment. I find myself from time to time discharging functions more fitting for the Home Secretary—I mean more fitting his functions of advising Her Majesty upon the exercise of the prerogative of grace and mercy, because it is absolutely necessary for the revenue departments to push for payments of the duty, and I am ever and anon besieged with applications for the remission of legal proceedings which, as well as I can, I have to take into consideration. But that is not a description of duty which it is desirable to place in the hands of any Chancellor of the Exchequer.
Another argument which my hon. Friend, the Member for Sussex is fond of urging, is founded upon the uncertainty of the
478
amount receivable by the Exchequer from year to year. Now, this is inconvenient, as far as it goes; but if we do not get the amount one year, we get it the next, and, considering the large scale of the revenue accounts, we do not suffer from that course as much as is supposed.
Again, Sir, I must in candour admit that the opinion of this House has been shown on many occasions to be one eminently favourable to the removal of this duty, if it could by any means be effected. We have every desire to respect the opinion of the House of Commons, when ever circumstances place it in our power to show our respect for that opinion, not by hollow professions and mere high-sounding and empty phrases, but by measures in their nature practical, and not injurious to any weighty interest of the State. But the Committee must have been convinced, by the great eloquence of the figures which I have already submitted to them, that we have no means to remit the hop duty; that is to say, we want the money it produces. With a surplus already entirely nominal—a surplus, taken at the outside, of not more than £150,000, we cannot part with the proceeds of a duty which even at the reduced rate yields us, between Customs and Excise, £300,000 a year on the average. [Sir JOHN SHELLEY dissented.] I beg my hon. Friend's pardon but in the year just concluded—a year of marked failure—the duty produced £260,000— namely, £150,000 from Excise and £110,000 from Customs. I am naturally: unprepared, having regard to the slenderness of the surplus, to part with the proceeds of a duty which produces £260,000; but the question arises how far it may be possible to substitute, with equity to all parties, some other form of impost, by way of commutation, which would secure to the revenue the greater part of the money it now gets, constitute a relief to the growers from the payment of the duty, and entirely set free the foreign trade, as well as the British trade, in hops. That is no easy matter; but I wish to state to the Committee in the most distinct and unmistakable terms that we have before us but one option. Let us commute the duty if we can; but if we cannot commute it, we have no option but to keep it, unless we mean to rush with our eyes open into a manifest deficiency. Aut Caesar, aut nihil—it is either commutation, or standing as we are.
I will now communicate to the Committee the proposal which we think it worth

479
while to make, and which may meet with the approval of the Committee; but to make it intelligible I must refer for a moment to another subject, not immediately connected with the hop duty. That subject is the anomalous state of the present scale of charges for brewers' licences. As it now stands, the, charge for brewers' licences is arranged on an ascending scale; but the ascending scale is adjusted in a manner which, on the slightest inspection, will be seen to be eminently burdensome to the small tradesmen, arid in favour, 1 must say, beyond all bounds, of the larger. If a brewer brews for sale less than 20 barrels of beer, he pays 10 s. 6d. for his licence; and that licence imposes on his 20 barrels of beer a tax of 6¼d. a barrel. If he brews 50 barrels, his licence costs £1 1s., or a tax per barrel of 5¼d; and if he brews 100 barrels, his licence is £1 11 s. 6d., and that is a tax of 3¾d. per barrel. But if he brews 1,000 barrels, he pays for his licence £2 2s.: and so, instead of being taxed at the rate of 6¼d. or 3¾d. barrel, he is only taxed a halfpenny per barrel. If he brews 80,000 barrels, he pays £78 15 s., being only a farthing a barrel and if, brewing beyond all bounds, he mounts up to 300,000 barrels, he only pays the quarter of a farthing. That is a state of things with respect to Which common justice and fairness call on us, or at any rate, warrant and justify us in making an alteration. What we propose as an admissible commutation for the hop duty, in the present circumstances of the revenue of the country, is contained under the following heads. That we should re-adjust the scale of brewers' licences on the principle of including in them generally an equivalent, or nearly an equivalent to the charge in respect to the present hop duty from which they will be released. The charge would be fixed so as in the first place to relieve the small brewer as compared with the larger one, who is now hardly dealt with, by putting on him an additional sum considerably less than the minimum of hop duty paid by him in the price of his hops. Speaking generally, the charge would be fixed on the basis of imposing on brewers, in respect of each barrel of beer, the sum of 3d., an as equivalent for the hop duty, from which the article they purchase will be released. Those who have examined the technical details of this trade are aware that a duty of 3d. represent 2lb. of hops; and 2 lb. of hops—the smallest quantity which, so far as I
480a
am able to ascertain, is ever used with two bushels of malt—represent in a fair way, together with the two bushels of malt, a barrel of beer, containing 36 gallons. Three pence in the form of hop duty is the minimum which the brewer now pays as an element in the price of his hops; and that minimum we propose to charge in the shape of licence duty, but with a certain deduction with regard to the lower portion of the scale. In the case where, in lieu of 3d. which I take to be the minimum duty, a greater amount of hop duty is now paid by the brewer—as for example, when, in the manufacture of that incomparable and most wholesome article which we term bitter beer, he uses more, perhaps even very greatly more, than 2lb. of hops—the difference must, of course, be borne in the shape of a loss to the revenue. By such means as I have now summarily described, we shall get, not the whole amount of the tax, but by far the greater part of it; and while we place on a solid footing, as I hope, a branch of revenue which has heretofore been perpetually in question, we shall establish at the same time perfect free trade in British and foreign hops. I must observe, however, lest some should think that this must be hard on the brewers, that there is no doubt at all that the brewer, the consumer of hops, has already received a very great boon from the changes in the law which have already taken effect. We lowered the hop duty from 20 s. to 14 s. per cwt. Whatever may be thought of that reduction as a boon to the growers, it was, beyond all doubt, an important boon to the brewers. But we did much more than that on their behalf, for we admitted the foreign article on the same footing as the British. There is not the smallest doubt that a thoroughly active and effectual competition has been established; for, whereas the excise duty on the article of hops for the last year amounted to £150,000, the Customs duty reached no less than £110,000, being more than two-fifths of the whole of the duty on hops taken for consumption in this country. There are few, indeed, of the articles in our tariff list with respect to which, on the establishment of free trade, the foreigner has obtained even, in a year of scarcity, so large a share of the British market. No doubt the brewers will obtain, though not, perhaps, at the very moment, the whole further benefit of the reduction of the hop duty which we now propose.

480b
Under freedom of competition the amount of a duty must go to the man who buys, and not to him who produces. To illustrate this I might, if it were necessary, refer to the evidence taken before the Committee in 1857, where one of the most competent witnesses—the hon. Member for Derby (Mr. Bass)—stated explicitly in answer to a question, that which is a sound principle alike of political economy and of common sense. He said that there could he no doubt whatever that in the long run the consumer would have the full benefit of the reduction of duty, and by the consumer he evidently in this case means the brewer. There is also another boon which in this way we are enabled to give the brewers. I will proceed to explain a hardship under which they at present labour. The brewer makes an article in which hops and malt, on both of which there is an excise duty, are included; and, on exporting his beer, he receives a drawback compensating him for the malt duty, but not for the hop duty. We propose to add 3d. per barrel to the amount of drawback on the export of beer, in order for the first time to compensate the exporting brewer for the duty on the hops entering into the composition of his beer. In the new scale of brewers' licences we propose, in respect to a brewer under 20 barrels, to add to the price only 2s., or about l¼d. (the hop duty being 3d.) per barrel; under 50 barrels the addition to the licence would be a similar sum of l¼d. per barrel. When we come to 100 barrels, we propose to charge for the licence £2; from 100 to 1,000 barrels the charge will be 15 s. for every 50 barrels; 1,000 to 50,000, 14 s. for every 50 barrels; from and above 50,000, 12 s. 6d. for every 50 barrels. The general principle, therefore, of our proposal is an addition of 3d. per barrel to the brewer's licence, being the minimum of hop duty he now pays. it is, however, as I have said, qualified by two consideration. First, as regards the lower portion of the scale, we have thought it right to propose, considering the anomalous condition in which we find it, a considerably smaller addition than 3d.; while, in the second place, we have somewhat reduced, with respect to the upper portion of the scale, the sum to be imposed in addition, in order to maintain the principle that we shall not impose on the brewer a larger amount than he now pays in the aggregate, partly for his brewer's licence, and
480c
for the whole of the hop duty included in the hops he purchases.
There is one other point which is material, and which I must mention. It refers to the date at which this proposal is to come into operation. If the Committee does not approve the plan of commutation which I have just sketched, we must, of course, remain as we are, and commit the hop question, with others, to the contingencies and vicissitudes of future years; but if, upon the contrary, you accept our plan when we submit it in the shape of a preliminary Resolution, imposing the new scale of duty on brewers' licences, then we shall propose in the Bill we shall subsequently have to introduce, a clause to repeal the Customs and Excise duties on hops. That repeal we propose should take effect from the 15th of next September, by which time the greater portion of the hops now in the country will, we calculate, have passed into consumption. If any of the holders of these hops are not satisfied to retain them, and sell them in open market after the duty is abolished, of course we cannot object to their exporting them in the mean time, under the powers they now possess, with a drawback, to foreign markets; we shall, however, ask the House to make provision that no hops thus exported on drawback shall he reimported for consumption during the six months following the repeal of the duty, except upon payment of a sum equal to that duty; and further 1 have to state that we do not think this is a case in which either public expediency or justice to individuals calls us to admit the principle of being bound to give anything in the nature of a drawback on the stock in hand, the commodity we are dealing with being a commodity produced, and in the main passing off, from year to year; and a considerable time, moreover, being allowed before the repeal of the duty is to take place.
There is yet one other point to which, although it is a matter of detail, I wish to advert. I allude to the mode in which we propose to deal with private brewing. It would not, I think, be quite just to the regular brewer when called upon to make an equivalent payment in respect of the hop duty that the private brewer should be allowed to go scot-free. To institute minute investigations in connection with private operations of the kind would, I feel, upon the other hand, be extremely obnoxious. I need not say we desire to do justice as far as we can.) What, therefore, under the circumstance, we propose to do

480d
is, in the first place, to exempt from the necessity of being carried on under licence all private brewing carried on by the labouring classes or very small farmers; we consider that we should not, in short, call upon any person to take out such a licence who lives in a house, not being a farmhouse, of less than £20 annual value, or, if a farmhouse, situated on a farm of which the rent is less than £150. If, however, a person occupying a house above £20 in value, or being a farmer paying above £150 rent, should brew privately, then we must call upon him to take out a licence uniform in amount; because to make any distinctions in the amount in such cases would be scarcely worth while and would, perhaps, be open to exceptions, owing to the necessity which might in consequence be created of instituting an inquisition into private arrangements. What we propose, therefore, is that every person inhabiting a house or farm of the value and under the conditions I have mentioned should be bound, if he intends to brew, to take out a licence—as a man is now bound to take out a licence to shoot, if he intends to shoot—and that he should pay for that licence the sum of 12 s. 6d. [Laughter.] I do not understand why the mention of the particular sum of 12 s. 6d. should have so magical an effect in exciting the risible muscles of some hon. Gentlemen; but if it should appear to be the universal opinion of the Committee that that is too small an amount, I am bound to tell them that the Government will by no means absolutely insist on closing the door against its increase.
According to such calculations as we are able to make, the financial effect of the proposed plan would be as follows:— I have stated that the average receipts from the Excise duty on hops, taking a period of ten years, and reckoned upon a duty of 14 s. per cwt., were £250,000 per annum; the average receipts from the Customs duty, similarly reckoned at 15 s., the rate now payable, have been about £30,000; and the amount derived from brewers' licences at present scale is about £70,000; making a total of £350,000. The cost, however, of collecting the present duty is £5,000 per annum, and therefore the real product of the two duties— the Customs and Excise duties, together with that derived from brewers' licences— as paid into the Exchequer, on an average of ten years, must be taken to be £345,000. The brewers' licence, on the other hand, on the scale on which we propose to place
480e
it, together with the licence to be taken out by private brewers, will, we anticipate, yield a sum of £300,000 annually, so that there would be a loss to the revenue, under the circumstances, of £45,000; while a further sum—I do not think it would be very large, but the amount cannot be defined by estimate—would have to be paid in the shape of drawback on such an extra exportation of hops as may take place between this time and the 15th of September, when the present duty would cease and determine.
Sir, I have now occupied the Committee for a lengthened time in going through the details immediately connected with the operations of the present year, and I trust I have been enabled to place hon. Members clearly in possession of the views of the Government and of the proposals which we desire to make. I feel, at the same time, that the prominent features in ray statement are, in the first place, the announcement of an intention to commence the year without a real surplus of revenue over expenditure; and, in the second place, that we have recently been passing through a period which must be regarded as in many respects exceptional. I have for the last half-hour been dealing with matters which are extremely dry and technical —except in the eyes of those who for particular reasons take an interest in them— but I will now, with the permission of the Committee, call their attention to questions of larger concern and to a more comprehensive view of our position. I wish to do so because I am anxious the Committee should understand that, when we propose to them to proceed on the year that we have just begun without an evident and considerable surplus of revenue, it is because we think such a course, upon the whole, adapted to the present state of our Revenue and expenditure, inasmuch as that state is in many respects a state wholly exceptional. The better to accomplish the purpose which I have in view I would ask the Committee to recollect what has already taken place, and to bear in mind that the last two or three years have been years of important financial changes, and of an expenditure never before maintained in this country in what we term a time of peace. Now, I am anxious to give the Committee, if they allow me, a view as comprehensive in its outline and as impartial in its character as it is in my power to present of the financial results of, if I may so call them, the last three years taken together;

481
for when we come into circumstances of difficulty such as recently beset us, when we are called upon not only to maintain vast establishments in deference either to the wants or to the feelings of the nation, or to both, but likewise to meet very considerable charges of an extraordinary character; and when, as the result of these operations taken from time to time in obedience to immediate necessity, there ensues a deficiency in the revenue at the end of the year, it is, I think, most important that the facts of such a period should be gathered into a focus for the inspection of the House of Commons— that we should take stock, if I may use the phrase, of our condition, and ascertain how we stand; for nothing can be of so much advantage to us as information derived from experience in order to enable us to determine the course which it is our duty to take for the future.
Now, Sir, an impression prevails that the public expenditure of the country is growing. That is not true at the moment when I speak. I have, indeed, already shown that the expenditure of last year was very considerably less than that of the year which preceded it. Let me now compare the expenditure of the year last past with the estimated expenditure of the year; coming. The actual expenditure for 1861–2 was £70,838,000. The estimated expenditure for 1862–3 is £70,040,000, showing an apparent estimated decrease of £798,000. That, however, is not the whole decrease, for we have a charge in the estimated expenditure of the coming year of £920,000 which has never appeared in our accounts before now, and which forms nominally, but not really, a portion; of the expenditure of the country, inasmuch as it is balanced on the other side by an; equivalent receipt. If, therefore, you wish to institute a fair comparison between the estimated expenditure of the year before us and the actual expenditure of last year, you must take both as follows:—Actual expenditure for 1861–2, £70,838,000, estimated expenditure for 1862–3, £69,120,000, showing a total estimated diminution of expenditure to the extent of £1,718,000. Now, I have been anxious to say thus much, because although I deemed it to be my duty to make the Committee fully aware of the liabilities which it might be incurring and the vast scale of our charges, yet I thought it but just to make you likewise aware that we seem to have established at all events the
482
commencement of some downward movement in our expenditure.
While, however, I do not hesitate to make this statement, I am bound also to say that the present high level of our expenditure is such a level as ought to attract the serious and careful consideration of the House. It is a higher level than can be borne by the people even in their present state with comfort and satisfaction. It has been borne with exemplary patience, but it is too high to be borne with comfort. It is higher than is compatible with perfect health and soundness in a financial point of view, because if it were compatible with perfect health and soundness, I should now be asking you to let me begin the year with a sensible surplus, and not with a barely equalized income and expenditure. Whether there is a fault chargeable on any one in the state of things which I am describing, and to whom that fault belongs, are matters which it is entirely unnecessary to examine. But as to the causes I take them to be the following: — In the first place, it is due in some considerable degree to the growth of real permanent wants of the country—wants which it is desirable to supply, and to which if you were to deny fitting supply, you would be doing great public mischief. In the second place, it has been due to apprehensions prevailing with respect to the security of the country, and to a natural anxiety to make full provision for that security. In the third place, it is impossible that there should not be some description of relation between the state of establishments and expenditure in other countries generally, and the state of establishments and expenditure in this country. In the fourth place—and this is the point to which of all I am most anxious to call the attention of the Committee —it is due to special demands, which are in substance, and in everything except the name, war demands, demands of such extent as to give them great significance, and lying altogether and entirely outside of the ordinary demands and exigencies of the public service.
The two last points are matters upon which I wish to make a few remarks. With respect to the state of establishments and expenditure abroad, I do no know whether bon. Members, in their perusal of the journals, and in their observation of the condition of other countries, have fully comprehended what a race the Governments of the world are running, and at what a fearful pace outside of England

483
national obligations are now in course of accumulation. It would be invidious to mention a particular country if it were not that nearly all countries are in the same predicament—nearly all the great countries in the world. The fact is, indeed, that the only flourishing Budget I have recently seen — the only Budget showing a considerable surplus at least upon paper in a prospective estimate of the revenue and charge for the coming year—is the Budget of the Ottoman Empire. If we look to other countries, the circumstances are really extraordinary, considering that the period is not one of general war. Look at the great and magnificent country of France, with resources perfectly equal to the discharge of any obligations and the enduring of any burdens. France, in the last twenty years, has added more than £250,000,000 to her debt. If we put down £70,000,000 of that for war expenditure in Italy and the Crimea, there is still the sum of £180,000,000 which cannot be ascribable to either of these causes. Austria has added to her debt a sum short of that which France has added, but not very far short, amounting probablyto£200,000,000, and while absolutely less than the addition made in France, yet were greater than that addition if estimated with reference to the wealth and resources of the country. Italy, of necessity, labours at this epoch of her reconstruction under heavy financial deficits. Russia has added to her debt, in consequence of the Crimean war and otherwise, to a very large amount, which I am not able to state, but I have no doubt it may be moderately stated at £100,000,000. If we look at the year 1861, or—as the national financial years do not always coincide—if we look at the financial year which was current in each country at the end of 1861, I believe it might be asserted with perfect truth that that single financial year added to the State debts of the great countries of the world, without including the smaller ones, a sum not less than, and probably exceeding, £200,000,000. Of course, America stands for a large portion of that sum, but very large additions have been made in France, Austria, Italy, Russia, and smaller ones in other minor countries. This is not a matter, I admit, which will afford a justification for any folly of ours. It is of secondary moment in our discussions, but still it is of considerable weight and interest. We do not deserve any sort of
484
credit for not having made a similar addition to our debt. We have sown our wild oats long ago. The state of this country with reference to its disposition to bear taxation has long warned and admonished us for all time coming that pranks like these must here, at least, not be played.
But let us now look at what we have actually been about during the last few years. As it has been my fortune in two successive years to present to the Committee an account showing a deficiency of income as compared with expenditure, so I wish to bring fully and clearly into view the expenditure we have borne during those years, the nature of the charges we have had to bear, and the means we have used for defraying them. In the first place, it will be interesting to the Committee that I should tell them what has been, up to the present time, the cost of the China war. The Votes of Credit taken for China up to the present time amount to £5,206,000, but we have not as yet expended the whole of these Votes. The sums we have expended are as follow:— In 1859–60, £850,000; in 1860–1, £2,600,000, besides £444,000 which belongs to a former war, and therefore forms no part of the cost of the late war; and in 1861–2, £1,230,000, a sum considerably larger than, until within the last few weeks, I had any reason to anticipate. It thus appears that on account of the Votes of Credit we have spent £4,680,000, but that does not represent the whole charge. The navy has expended for China, out of its ordinary grants, as nearly as can be estimated by the Admiralty, £2,000,000. The army charges against China only £300,000 out of its ordinary grants, but then it is fair to say that the principle adopted by the Department in the computation is as follows:—Supposing the army had 5,000 or 10,000 men in China, it has only charged the extra expense of these men, and has not entertained the question whether, if the men had not been in China, it would have been necessary to keep them on the establishment. It maybe assumed, therefore, that the account I am presenting is materially less than the real charge. The loss on exchange has been in all, I believe, not less than £340,000; so that the expense to March 31, 1862, has been £7,320,000, which—after deducting the indemnity we have actually got, and which amounts to the sum of £266,000,—leaves £7,054,000. The probable addition to our debit for 1862–3 will be not

485
less than £500,000, making £7.554,000, which, I trust, will be the end, strictly speaking, of the charge for the China war.
Let me now more at large, present to the Committee, gathering together the transactions of the last three years, the amount which in those years we have had to defray of what may fairly be called war expenditure. The account for China up to March 31, 1862, as I have just stated, is £7,054,000; but, in addition, we have had to pay for a former war £444,000, making a total, in round numbers, of £7,500,000. With respect to New Zealand, we have only brought to charge at present £250,000, but that does not include any consideration of the question how far the 5,000 or 6,000 men who have been in New Zealand would have been kept on the establishment of the army, if not wanted for service there. I ought like wise to state that the sum I have named is only what we have paid up to March 31, 1862, and I am bound to say it does not cover the whole of the direct charge for war expenditure in New Zealand. Again, the despatch of troops to British North America, which alike answered the necessity of the case and the feeling of the country, cost £850,000. Hence, the total of the war charge we have incurred in the last three years is £8,600,000 even when estimated upon a principle which I think undoubtedly places it below its real amount.
Sir, I now wish to bring into one view the real extent of our transactions during the last three years with respect to extraordinary charges and extraordinary resources, because, if we have had a great deal of extraordinary charge to bear, we have likewise used a great amount of extraordinary resources to meet the demand, and it is only when we see the bearing of the one upon the other that we can either estimate the financial history of the past three years or judge fairly of our resources in future years. I shall first give the figures which appear to be necessary for full information on the subject, and then I shall state to the Committee what I think is their general result. The total public debt of the country, funded and unfunded, on March 31, 1859, was £805,078,000; on March, 31, 1862, it was £800.757,000, showing a difference of £4,321,000 in our favour. The total annual charge of the debt on March 31,1859, was £28,170,000; on March 31, 1862, it was £26,043,000, making a difference of £2,127,000 in our favour. That difference, however, is due
486
to the lapse of the Long Annuities, which terminated in 1860. Then there are the public balances. The public balances on March 31, 1859, were 7,789.000; on March 31, 1862, they were £5,288,000, showing a reduction of £2,501,000; in other words, we have applied out of the public balances thus far a sum of £2,501,000 towards meeting expenditure. The debt on account of fortifications, up to March 31, 1862, for these three years, is £1,170,000: the whole residue of what was granted by Parliament in 1860, or £830,000, remains yet to be expended. That debt is created in the form of an annual charge, but I have estimated it, for the convenience of the Committee, by the amount of the capital we have raised. Again, Sir, we have taken up two malt credits, and the produce of this head of extraordinary resources, which were applied to meet extraordinary charges, was £1,972,000. On the hop credit I need not dwell, because at the time when it was taken up the crops were so defective that the proceeds of two years were not equal to the average of one. We further obtained from Spain a payment of £500,000. And there is yet another item that must be taken into view—I mean the item of what are termed advances and repayments. The advances are made under established legislative machinery, and they go, within certain limits and conditions, out of the Exchequer from quarter to quarter; while the repayments, in like manner, come back into the Exchequer from quarter to quarter. When they have thus returned, they simply form part and parcel of the Consolidated Fund, and become applicable, like all other monies standing to the credit of that Fund, to meet all legal demands upon it. Now, the amount of repayments during the last three years has exceeded the amount of advances by £1,554,000, the advances being £3,364,000 and the repayments £4,918,000, and that excess, therefore, has been a further addition to the extraordinary resources, or monies not dependent on the taxes of the year, which we have consumed during those three years.
Now, Sir, I am anxious at this point to remove a misapprehension. There is an impression abroad that we have been guilty of a very unwise and excessive squandering of public revenue by the repealing of taxes; that a great number of taxes have been repealed over and above what have been imposed, and that this is the cause which has made us so poor at the present

487
moment. I therefore wish to give the Committee roughly, as it needs must be but as well as the nature of the case admits, the balance of the taxes imposed am repealed since 1859. First comes the income tax. In 1859 the income tax was virtually 6d. in the pound—that is, it was one half of the year at 7d., and the other half at 5d., which yielded at the mean a 6d. duty for the year. It is now 9d. Each penny per pound produces about £1,100,000. We have therefore imposed under the head of income tax £3,300,000. We have imposed on spirits an additional tax which may be taken at £1,400,000 and in various minor duties about £650,000 —making a total of taxes imposed o £5,350,000. Then I come to the taxes reduced. The taxes reduced in the Customs Department may be taken at £2,840,000. In the Excise Department and Assessed Taxes—between paper, hops, and some minor duties—we have reduced £1,460,000. The taxes reduced, then, have been £4,300,000. The taxes imposed have been, as I stated, £5,350,000; so that we have imposed, in fact, these three years £1,050,000 of annual taxes over and above those we have reduced. I do not at this moment defend the policy which has been pursued; my object is simply to state the facts.
Now, let me endeavour to present in very few words to the Committee the balance of these various operations. I make a debtor and creditor account. I take credit, on the one hand, for the war charges we have defrayed, and for the debt we have redeemed. I debit myself, on the other hand, with the whole of the extraordinary resources we have consumed; and I cannot say how important it is that the Committee should have the matter of the account clearly in its mind, because these extraordinary resources are at an end. They exist no longer. I know not where to find any more of them except it be in the China indemnity, which will come in, I hope, to a certain extent, sensible, but limited, after the present year. It is, I say, most material to have these things in full and clear view, in order to consider with effect what is to be our position for the future. First I take the debit side of the account. The extraordinary resources consumed within the last three years stand thus: taken from the balances— £2,500,000; excess of payments over advances, £1,554,000. Technically, it would be more accurate to put these two
488
together, for in reality there is no distinction, but I separate them for the information of the Committee. Further, there are the malt credits, £1,972,000; Spanish payment, £500,000; in all, a total of £6,526,000 of extraordinary resources applied in aid of our charges during the last three years. Now, I credit myself with the charges we have met and the balance of debt we have redeemed. The extra war charges amount to £8,600,000. The debt redeemed is £4,321,000, the debt created £1,170,000, and the balance or excess of debt redeemed is £3,151,000. Added to the war charges, the total I am entitled to put down to the credit side is therefore £11,751,000. Of that £11,751,000 £6,526,000 has been met by extraordinary resources, and the balance, £5,221,000, has been levied from the people, who have, it must be remembered, likewise been sustaining establishments of unusual magnitude, in the shape of taxes. That, Sir, is the state of the case, and when I think of those extensive changes in taxation that have taken place, perhaps I may be permitted, by way of relieving a monotonous discussion, for the purpose of illustrating a more important subject, to quote an author whose very name gives life and animation to every subject on which he wrote—I mean Mr. Sydney Smith, one who, in a rare, perhaps in an almost unequalled degree, mingled wisdom with his wit. He placed on record forty-two years ago a passage that enables us in some degree to judge of the immense transition we have effected with regard to our fiscal system. In 1820 Mr. Sydney Smith wrote an article in the Edinburgh Review, since published in his works, in which he warned the Americans of what would happen to them if, for the sake of glory, they were induced to rush into war; and certainly, when compared with the very letter of what was now passing— looking to the particular items and clauses of that Tax Bill, which in some of its stages, I do not exactly know what, is or is supposed now to be under the consideration of Congress—a more remarkable prediction I cannot conceive. I cannot quote the whole passage, it is too long; but the general spirit and purport of it is this— he warns America by pointing to the then state of England. He says—
"We can inform Jonathan what are the inevitable consequences of being too fond of glory,— taxes upon every article which enters into the

489
mouth, or covers the back, or is placed under the foot;…taxes on everything on the earth and the waters under the earth—on everything that comes from abroad or is grown at home—taxes on the raw material—taxes on every fresh value that is added to it by the industry of man— taxes on the sauce which pampers man's appetite, and the drug that restores him to health—-on the ermine which decorates the judge and the rope that hangs the criminal—on the poor man's salt and the rich man's spice—on the brass nails of the coffin, and the ribands of the bride."
I believe that that passage, which was literally true m England at that moment, is, if what we read be true, about to be verified in a country hitherto almost exempt from internal taxes for the purposes of its general government. Let us see how that passage, so just, so vivid, and so accurate, I applies to our present state. There were then written on our statute-book taxes on the raw material; now there are no taxes on raw material. There were taxes on every fresh value added to it by the industry of man; now there are no taxes on the fresh value added to it, in any branch of industry, by the industry of man. There were taxes on the sauce which pampers man's appetite; now there is no tax on sauce, and man may pamper his appetite as he pleases. There were taxes on the drug that restored him to health; now there is no tax on drugs, and he may get well its quickly as he can. There were taxes on the ermine which decorates the judge; now ermine is free. There were taxes on the rope which bangs the criminal; now that rope is free. There were taxes on the poor man's salt; now that spice is free. There were taxes on the rich man's spice; now that spice is free. There were taxes on the brass nails of the coffin; now those brass nails are free. There were taxes on the ribands of the bride—and let her wind up the procession—and her ribands also are free. Such have been the changes effected in our indirect and protective taxation; changes which, in setting free our industry, have left our revenue from Customs and Excise larger than it was when we began the process of abolition and reduction.
Let us see, then, what has been the condition of the revenue during the last three years, and how far it illustrates the policy which has aimed at giving it elasticity and reproductive power. As respects Customs revenue, we parted in 1860 with £2,420,000 more than the amount which was laid on, but the deficit of Customs revenue in consequence of these reductions is only £743,000, so that out of £2,420,000 we have in two years recovered
490
£1,677,000, and that, I think, is satisfactory, taking the very trying circumstances of the country into account; but if we make our comparison with the revenue as a whole, it stands as follows; and these are the last figures with which I shall trouble the Committee:—The revenue of 1858–9 was £63,920,000. The estimated revenue for 1862 3 (after deducting £1,125,000. with a view to a just comparison, for items that did not appear at all on the other side of the account in 1858 9) is £69,065,000. Of that there is certainly I think not more than £1,050,000 due to new taxes. I therefore deduct that amount; and I find that from the sources of revenue in operation in 1858–9 we have derived £68,015,000. That is, the revenue of the country, fairly and accurately compared, in a, great degree under the effect of remissions of duty, as I think judiciously made, has risen, without extension of the sources, from £68,920,000 to £68,015,000, or by a sum of £4,095,000 in four years: that is, it represents an annual average improvement in the revenue, apart front the change of taxation, of upwards of £1,000,000. I do not pretend to say such results will continue. I do not believe it is in our power to repent these operations. I am convinced it would be a gross and most dangerous mistake to generalize the principle, that whatever taxes you choose to reduce, you will have equal benefits. The reduction of any tax is without doubt more or less beneficial to those who pay it; but the fact that the revenue has not decreased, notwithstanding the large remissions that have been made in some taxes, is attributable to the fact that the particular taxes which have been selected for abolition or reduction were peculiarly impolitic taxes.
Now, Sir, I have endeavoured to bring to the mind of the Committee clearly these facts, we have been passing through exceptional years—we have got through them in a manner which has provided for the public demands, besides maintaining a high rate of general charge, and we have avoided going into the market for loans. This is the bright side of the case. But in order to provide for all this charge we have exhausted what I may cull our casual resources. They remain no longer. If you look into the future, and ask yourself how provision is to be made for it, you must make your reckoning without them. It is most material that you should keep this truth in view. Bad harvests, distress in the country, great complications abroad,

491
may bring upon us the evil of fresh taxation, or the far worse evil of loans. On the other hand, good harvests, favourable circumstances at home and abroad, may carry us level with our expenditure. With favourable circumstances, our revenue will maintain itself, and will do more than maintain itself. One word more, and it is the last I will speak to the Committee. What I have to say, in concluding my general review of our finance, is this; if we really hope to effect remissions of taxation, those remissions are not to be had, compatibly with maintaining the financial credit of the country, except by the cautious, the judicious and gradual, but yet resolute, application to all the departments of our public service of the principles of a true and strict economy.
The course, Sir, which I propose to take to-night, is this—to move at once the Resolutions on the wine duties, without meaning to pledge hon. Gentlemen in any way to a final judgment; but, inasmuch, as the new duties ought to be levied tomorrow morning, I think it necessary to submit those Resolutions without delay. I propose also on the part of the Government to go on, as early as possible, with those other measures upon which—if I am right in presuming so—no great amount of difference of opinion is likely to exist. It will be necessary to have a Resolution for the renewal of Exchequer bonds—£1,000.000 of which will fall due in May. That Resolution I propose to take on Monday, and on Monday, likewise, the Resolutions on the income tax. My hon. Friend the Member for Buckingham (Mr. Hubbard) has given notice of some Motion relating to the reconstruction of the income tax; but I am sure he will perceive that it would be impossible to mix up the general reconstruction of the tax with the re enactment of a law which has reference simply to making provision for the public service during a single year. At all events, if he should consider it his duty to fasten his plan for the reconstruction of the schedules of the income tax upon the present proposal of the Government, then, however much as a salaried officer I might be obliged to him for the handsome present he would make me if his scheme were adopted, it would be my duty to resist it. But I think I can trust my hon. Friend's judgment and good sense to permit the necessary provision for the year to go forward without interruption. There will, of course, Sir, be a Resolution for the renewal of the tea and
492
sugar duties during the year; and there will be three Resolutions relating to occasional licences, to playing cards, and to foreign loans. All these Resolutions, if time permits, I propose to move on Monday. With regard to the three Resolutions relating to brewers' licences, as they will require a little longer time, I propose to take them on Thursday, and when the Resolutions have passed, to bring in a Bill to give effect to the whole of them. With these observations, which have been greatly protracted, but have been protracted with the sincere desire to give the best information and make the clearest exposition in my power to the Committee, 1 beg to place, Sir, the Resolutions in your hand.
MR. HUBBARDsaid, nothing could be further from his wishes than to propose the Resolutions, to which the right hon. Gentleman had referred, with a view to embarrass Her Majesty's Government, or to delay the necessary work of the country; but the question was one of immense importance. The tax which would expire within forty-eight hours had taken from the taxpayers of the country £11,000,000 sterling in the course of the last year, and, as it stood on the estimate of the right hon. Gentleman, it was to be productive of £10,000,000 for the year ensuing. It was of importance that such a tax should be levied upon something like equitable principles, and therefore he felt he should be wanting in his duty if he did not take the earliest opportunity of enabling the House to pronounce its opinion on the inequality of the existing tax. Up to the last moment he had waited with some hope that the right hon. Gentleman would have intimated that he intended to give some relief from the inequalities of the tax; but as he had not done so, it must be assumed that the right hon. Gentleman proposed to renew it in all its deformity. He had, therefore, no alternative but to bring his Resolutions before the House at the earliest opportunity.
MR. BUXTONsaid, that as a brewer he thought that nothing could be fairer than the proposal of the right hon. Gentleman with respect to the hop duty. It left the brewers pretty much where they were before. As the representative, however, of a Kentish borough (Maidstone), he thanked the right hon. Gentleman for the compromise, which he believed would conduce to the prosperity of the country. He was very glad that private gentlemen were about to be brought into the confraternity of licensed brewers.
MR. CRAWFORDsaid, he regarded the statement they had just heard as a fair and honourable statement on the part of the right hon. Gentleman the Chancellor of the Exchequer, and he thought it was not the less fair and honourable that an hon. Gentleman who would be largely affected by it should get up and express his assent to the scheme. He had never heard a financial statement in which the principles upon which it was founded were more clearly or more eloquently expressed, and in a manner to carry conviction to the minds of all, than that which the right hon. Gentleman had that night presented, On the part of his constituents he begged to say that the proposed arrangements with respect to the wine duties would be received with great satisfaction, as they would have the effect of doing away with the necessity of the alcoholic test in almost all cases. That sort of wine to which the alcoholic test would be applied was imported in so limited a quantity that practically the test would be abolished. With regard to the sugar duties, representing, as he did, the Mauritius, the East and West India interest, and the interest of the refiners, he thought nothing could be more fair than the proposal of the right hon. Gentleman that they should have an opportunity, if any hon. Member should move for a Select Committee, of stating their case before them. He begged to offer his congratulations to the right hon. Gentleman and the hon. Member for Rochdale (Mr. Cobden) on the effects of the French Treaty. On the whole, the Budget would, the believed, be received with satisfaction by the country, although, perhaps, it might be considered in some respects rather an immoral budget, when it was seen what facilities it offered to card-playing and tippling at fairs. Exceptions might, perhaps, be taken to those propositions; but the thought any objections to them on the ground of immorality would be purely imaginary, and that, upon the whole, the budget would, he believed, give great satisfaction and content throughout the country.
SIR STAFFORD NORTHCOTEsaid, the best wish which he could offer to the Budget was that it might be the only one; that year, for his right hon. Friend had dropped some expressions which seemed to show that he himself felt uneasy as to possible contingencies. His right hon. Friend began with a very small surplus, and they could not but feel that the re-
494
venue was in jeopardy in consequence of circumstances which all must lament, not only in a fiscal point of view, but on account of the suffering in this country which they would create. There were two questions which he wished to put. In the first place, he did not understand with regard to the Vote of Credit. Something like £5,200,000 had been voted; £4,608,000 had been spent, leaving about £600,000; and yet they were told they were to have another Vote of £500,000, and that thus the whole expenditure of the China war would be brought to a close. He wanted some explanation upon that point. Another matter with respect to which he desired some explanation, was as to the grounds on which the right hon. Gentleman had made his calculations of the Excise. With regard to the Customs, the right hon. Gentleman had taken a very sober and moderate estimate, setting them down at £100,000 less than was produced last year; but as for the Excise his estimate was something more than that for the previous year, and he made no allowance for the amount which he would lose by the paper duty. Last year the Excise was estimated at £18,788,000, and they were then told it would be probably less this year by £525,000, owing to the repeal of the paper duty. That would give £18,203,000 as the estimated Excise revenue of this year. But the Excise last year actually produced only some £18,330,000, so that, if they deducted £525,000 from it, the Excise revenue this year ought to be £17,800,000. He wished to know on what grounds the right hon. Gentleman expected a larger Excise revenue than during the past year. He had proposed nothing to increase it, and the repeal of the hop duty, even with its equivalents, would rather diminish it than otherwise. Perhaps, the right hon. Gentleman the Chancellor of the Exchequer would be able to give the House a revised estimate when allowance had been made for all the changes that were proposed. It was needless at present to refer to the other points of the right hon. Gentleman's financial statement, and he could only express a hope that the Committee would find the same surplus at the end of the year that they began the year with.
MR. BALLsaid, he could have wished that the right hon. Gentleman the Chancellor of the Exchequer had taken into his consideration the claims of the very numerous and important class of the community

495
which he more especially represented. They had made many applications to the right hon. Gentleman for relief, but he had always found when the right hon. Gentleman had a Budget to frame that he had to thank him for nothing. He could not comprehend why the right hon. Gentleman could never be induced to consider the great difficulties and hardships of the agricultural interest, especially as regards the malt duty. When the right hon. Gentleman diminished the period during which the duty was payable he gained for present use £1,000,000 sterling, and there would be no positive diminution of taxation if he assented to the requests made to him to postpone the payment of the duty. He felt too high a respect for the right hon. Gentleman to charge him with obstinacy, folly, and prejudice, and he could only, therefore, conclude that the fault was in his own advocacy of the claims of the agriculturists. He could not but differ from the right hon. Gentleman in his opinion that our increased trade with France had a tendency to insure peace and good feeling between the two countries. He thought, on the contrary, that it was more likely to generate ill-feeling than otherwise. ["Oh!"] His language must not he mistaken: he meant, that if this country increased its exports of manufactured articles, to the prejudice of the manufacturers of France, it would create ill-feeling. The right hon. Gentleman the Chancellor of the Exchequer said, he could not understand the buzz which prevailed in the Committee when he proposed to levy a licence duty of 12 s. 6d. a year upon persons who brewed their own beer. It was not an expression of surprise at the smallness of the sum; but, if his own feelings were shared by others, it was a manifestation of astonishment that, in addition to the burden laid upon the producer of malt, an additional impost should be levied upon those who brewed it for their own use; and, further, that the right hon. Gentleman should propose anything so inquisitorial as a tax on what was done in a man's own house and for his own family. He could not sit down without again expressing his regret at the right hon. Gentleman's immovability and impenetrability.
MR. DODSONsaid, that on behalf of the hopgrowers, he begged to tender their sincere thanks to the right hon. Gentleman for proposing the abolition of the hop duty. He congratulated him on taking this step, for seldom had any tax been repealed
496
which would give so much relief to the producer and confer so much benefit upon the consumer at so slight a sacrifice to the revenue. He was sorry the necessities of the Exchequer had compelled the right hon. Gentleman to couple with the repeal of the hop duty an alternative proposition. According to the old saying, he perhaps ought not to "look a gift horse in the mouth;" but the commutation proposed was so fair and reasonable that it would commend itself to public approbation. He was glad the present scale of brewers' licences was to be adjusted, because the existing system operated in favour of the large and against the small brewers. The right hon. Gentleman expected to raise £300,000 by his licences on brewing. [The CHANCELLOR of the EXCHEQUER: That includes licences for private brewing.] He believed that the new duties, taken in connection with the repeal of the hop duty, would be no detriment, but rather a benefit to the manufacturer and consumer of beer. The expense and vexation of collecting the hop duty would be done away; and if the Exchequer derived less from the licences than the hop duty, the receipts would be more uniform and regular. The right hon. Gentleman calculated that there were annually brewed in this country 5,000,000 quarters of malt, which should give 20,000,000 barrels of beer. Adopting the calculation of 2 lbs. of hops to each barrel of beer, the consumption of hops to those 5,000,000 quarters of malt would be 40,000,0001b. During the last two years there were brewed in this country 40,000,000 barrels of beer, and there ought, therefore, to have been at the rate of 21b. of hops per barrel a consumption of 80,000,000 lb. of hops. Now, the produce of hops in 1860 was 11,000,0001b., and in 1861 23,000,000 lb. and there were further imported into this country during those two years 12,000,000 lb., making a total amount of 46,000,0001b. of hops grown or imported into this country, whereas upon the moderate estimate of 2lb. per barrel, there ought to have been consumed 80,000,000 lb. He might be told that the unsold produce of former years had been brought into use, and this was true; but after two years hops became colourless and flavourless, and, according to the Reports of the Board of Inland Revenue, were then sometimes tickled up with grains of Paradise and other compounds.

497
The old stocks had no doubt helped us us out hitherto. But there was the prospect of another short crop of hops this year, and the crops abroad were as precarious as those grown at home. It was most desirable that the difficulties of procuring supplies of hops, whether at home, or from abroad, should not be aggravated by taxation. The Reports of the Board of Inland Revenue, and other authorities, stated that in the brewing of beer various deleterious ingredients were used in place of hops; and it was a remarkable fact, that while all those noxious substitutes were untaxed, a heavy duty was imposed on the legitimate article. During the last forty years the hop duty had been forty times reduced, increased, suspended, postponed, or altered in some way or other, in a vain endeavour to make it work beneficially to the Exchequer, and fairly towards the cultivator. The only change that would prove satisfactory would be its total abolition; and to that change he trusted the House would give its unhesitating assent.
SIR WILLIAM JOLLIFFEsaid, he entirely concurred in what had fallen from the hon. Gentleman opposite in respect to the commutation of the hop duty. That measure, he believed, would prove very beneficial, and be received as a boon in the country, because farmers would have the satisfaction at least of knowing that the crop which they were growing would not be taxed as it used to be even when grown at a loss. He wished he could approve equally of all the other propositions of the right hon. Gentleman; but he was one who took great exception to the proposal to grant a three-days' spirit licence, permitting publicans to sell spirits on the ground at fairs. He had seen with regret the number of fairs gradually diminishing throughout the country, and the recreation of the people in that respect restricted; but the invariable argument for their suppression was, that they were scenes of drunkenness. If that was the case formerly, it would be much more so in future, when these ambulatory gin-shops were established, and fairs would be rendered unbearable in those neighbourhoods where it was desirable that the people should be enabled to enjoy rational recreation. He was not sanguine enough, in times like these, to expect a very flourishing financial statement from the Chancellor of the Exchequer, and certainly in the present year we should start without
498
any surplus worthy of the name. The right hon. Gentleman had spoken of the various exceptional aids which the revenue had received during the last three years, but he had forgotten one which constituted the greatest blot on his administration, and which he would one day, perhaps, see occasion deeply to regret—namely, the exaction from the taxpayer two years ago of a fifth quarter's income tax within the twelvemonth. The mode in which the income tax was now levied from tenant farmers, and proprietors farming their own land, operated most inconveniently and even oppressively. They were called upon to make their contribution just at the precise period of the year when they were least able to meet it. The Chancellor of the Exchequer came down upon the agriculturist when his rent and other heavy payments pressed upon him. The Chancellor of the Exchequer told them that in the last quarter, of the last year he received an extra ordinary revenue from the income tax; but its operation was not only most oppressive to the farmer, but also to the tithe-owner. The farmer was called upon to pay property tax, for instance, which was to be deducted from the landlord, in some cases six months, and in all three months, before he could come to a settlement with his landlord and get back the money. In like manner the owner of a tithe rent-charge had to pay the income and property tax four times within the year, but did not get his income a day sooner than at Lady-day or Michaelmas. The system, therefore, pressed with undue severity upon country clergymen and others, because the Chancellor of the Exchequer required the tax before the income was actually received by the person who paid it. Again, under Schedule A, those who had small tenements had to pay half a year before they could get their rent. He considered that it was a most dangerous principle to sever the payment of that impost from the actual receipt of the income by the person who was called upon to pay it. Such a system of collection pressed heavily upon many other classes besides those of landlords, tenant farmers, and tithe rent-charge owners; but if it did not, he should like to know why it was that tenant farmers should pay on a different principle to the fundholder, or the owner of railway stock or debentures. Last year the Chancellor of the Exchequer told him that those under Schedule D

499
always paid quarterly; but there was no injustice in that, because they paid the tax out of money which they had already received, whereas in the case of tenant farmers the case was quite different, and the effect of demanding the year's income tax from them within the year was to force them to bring their produce into the market and sell, whether at a loss or not. He did not make these observations from any unfriendly feeling to the Chancellor of the Exchequer, for he could not think that the right hon. Gentleman would wish the continuance; of such an anomaly in the collection of the tax to be coupled with his name. He believed the matter to be one of serious importance, and one which would cause much dissatisfaction throughout the country if this system was allowed to continue.
MR. HORSFALL, said, that he did not rise to make any comment on the general statement of the right hon. Gentleman the Chancellor of the Exchequer, which he believed, on the whole, would be considered satisfactory; but, as representing a large commercial constituency, he must express his regret, which he had reason to think would be participated in by the merchants and shippers of the various ports, that the right hon. Gentleman had not done anything to remove those minor, but vexatious, charges to which they were at present subjected. He was well aware of the right hon. Gentleman's statement that in the present state of the Exchequer he could not afford to remove them, but he hoped that their continuance would not be of long duration. The charge of one penny on what were called "units of entry" was most objectionable. The right hon. Gentleman took credit for the Government having years ago removed a large number of charges from the Customs; indeed, there was but a small number of articles now charged with Customs duty, but about 120 articles had been added to the list by the "units of entry." It was not so much the charge itself as the way in which it was collected that made the penny tax on those units vexatious to the persons who had to pay it. For instance, 1d. was charged on 30 bundles of basket rods, 1d. on 5,000 bladders, 1d. on 500 canes, 1d. on 6cwt. of bones, 1d. on 1,000 bricks, 1d. on 1 cwt. of cheese, 1d. on 400 cocoanuts, 1d. on 1 cwt. of cork, 1d. on one ton of "fish, shell, including shrimps and crabs." From these samples of the "units" the Committee might judge
500
that the charge was a very inconvenient one as regarded its collection. He supposed there could be no doubt, after the admission of the right hon. Gentleman as to the obnoxious character of the tax, that it would be removed. Under these circumstances those who paid it must submit for another year, but he trusted that it would be one of the first charges which the right hon. Gentleman would abolish next Session. Then, with respect to the 1s. 6d. on shipping bills and bills of lading, the system adopted by the Customs in respect of these dues involved an immensity of trouble on the part of owners of ships. He had been shown a manifest which the owner of a steamship had been obliged to hand in every week before his vessel went to sea. It was from fifteen to twenty feet long. He had another in his possession which was from twenty to thirty feet long. The amount of trouble caused by such taxes was utterly beyond any advantage produced by them in the shape of an addition to the revenue. He had only to express a hope that another financial statement would not be made without an announcement that those charges were to be removed.
COLONEL SYKESobserved, that it would be satisfactory to the right hon. Gentleman to know that information had been that day received from India of a new cotton supply. He was in a position to inform the House that fifty tons of cotton of a very superior staple had reached Calcutta from Burmah. He believed, that if the war continued in America another twelvemonth, the cultivation of cotton in India would be so extended that we should be independent of America for the supply of that article. Last year the supply from India was 258,000,000 lbs., but this year from Bombay alone it was 279,000,000 lbs., while in 1858–9 it was only 157,000,000 lbs. He would remind the Committee that the House had pledged itself to an expenditure of £12,000,000 in brick and mortar for fortifications, by the aid of a loan. If they went on spending money in that way and for such purposes, resulting from a groundless panic about invasion, there was an end of the favourable prospects held out by the Chancellor of the Exchequer. There was an outlay of three-quarters of a million for the troops in China; and it could not have entered into the mind of the hon. Gentleman that there was a probability of our being obliged to maintain our trade there by an

501
increased armament; nevertheless such was the case. Under all the circumstances, he supposed the House must only hope that the right hon. Gentleman's anticipations would be realized.
SIR HENRY WILLOUGHBYobserved, that the Chancellor of the Exchequer estimated the income of the year at about £70,190,000, and the expenditure at £70,040,000. He had some doubt as to, whether there would be such a surplus as the right hon. Gentleman estimated. He had some doubt as to whether they were in posssesion of the entire of that class of accounts which came into the Miscellaneous Estimates. For instance, he would remind the Committee that the accounts from Kaffraria extended over a period of ten years; and on investigating them in the Committee of Accounts, it had been: found that no less a sum that £70,000 had been expended not only without the authority of Parliament, but, as far as they could find, without authority from any department in this country. In fact, he believed that expenditure had been incurred by parties in command in that distant country without any other authority whatever. He wished to know whether there was any other account of that kind outstanding, and he asked the question because it appeared, that when they came to examine the Treasury chest, it was found that a considerable sum had been advanced on account for the troops in China, he believed some £250,000 or £260,000. Now, was that account discharged, or was it still in existence? It was quite clear, that if there were accounts of this kind outstanding, the surplus of the right hon. Gentleman, such as it was, could not be; depended upon. He viewed the state of the finances opened by the right hon. Gentleman as rather a dangerous one. He did not think that with an expenditure of £70,000,000 a revenue of about the same amount could be considered satisfactory. The fire insurance duty was an objectionable tax; but he could not understand how the House could go on voting £70,000,000 expenditure with regard to the ways and means of providing the money. If the House was determined to spend £70,000,000 he was sure, that although the Chancellor of the Exchequer might tide over the year, it must end in increased taxation. He hoped the people would resist any further taxation in time of peace; but he feared that next March the right hon. Gentleman would be able
502
to give only a Flemish account of his resources.
MR. POLLARD-URQUHARTobserved, that a material point in the right hon. Gentleman's comparison of the revenue with that of 1859 appeared to have escaped notice. The year 1859 was the last of three successive years of good harvests and prosperous trade, whereas the present was the second year of an indifferent harvest and of a failing commerce. If they would only contrast the present year with 1839 or with 1848, the circumstances of which were somewhat similar, they could not help being struck with the remarkably hopeful prospects of the revenue. He was himself sanguine enough to hope that a great deal more would be clone to reduce taxes which interfered with the comforts of the people, and at the same time tended to cripple commerce; but he thought the right hon. Gentleman was acting with great prudence in declining to make the attempt for the present.
MR. PACKEsaid, that he thought it would be unfair to small consumers of beer who brewed at home to make them pay an equal licence duty to others who had a large consumption. The operation of the brewing licence in that respect would cause very great dissatisfaction, especially in the rural parts of the country. He hoped, therefore, that the Chancellor of the Exchequer would take that question in to consideration, and at any rate so remodel that part of his proposition as to ensure its acting with equality and fairness.
MR. J. C EWARTobserved, that be quite agreed with his hon. Colleague that the petty taxes upon exports and imports operated as continual blisters on commerce. It would be very desirable if some inquiry could be made into the subject, and some better mode of raising the money might be found.
MR. AYRTONsaid, he wished to ask whether the licences to brew in houses above £20 rental applied to cases where beer was brewed not for sale.
MR. ALDERMAN SIDNEYsaid, he was satisfied with the statement of the right hon. Gentleman; but he hoped, that as the income tax might now be considered as a permanent impost, the right hon. Gentleman would be prepared on Monday to state whether he could hold out any hope of introducing an improved mode of assessing and collecting it. He could assure the right hon. Gentleman that great irritation had been caused in the country by

503
the present system. It would be more convenient for the poorer taxpayers to be called on quarterly rather than half-yearly or yearly, as at present; but he must say he did not think that much hardship had been done the tenant farmer whose case had been referred to. In the case of a farmer holding a farm worth £300 a year the whole of his tax would only be £5, and it was not probable that a man whose rent was £300 a year could be seriously inconvenienced by having to pay so small a sum as £5.
SIR JOSEPH PAXTONsaid, the right hon. Gentleman must have been much gratified at the reception which his Budget had that year met with. Last year his financial statement was received with strong forebodings as to the position in which the right hon. Gentleman would be placed on the present occasion. The result had, however, shown that the apprehensions of hon. Gentlemen opposite were groundless. He (Sir J. Paxton) had ventured at the time to dissent from their prediction; for the information he had received from Paris satisfied him that great things might be expected from the commercial treaty. He had not, however, anticipated the calamitous events which had taken place in America. With regard to the present budget, he must say he thought the right hon. Gentleman would probably be disappointed in the yield of some of the taxes, for his connection with railways in the midland district showed him; that a general reduction was taking place in the manufactures of the country.
MR. PHILIPPSsaid, the great advantage resulting from the course pursued by a Chancellor of the Exchequer in bringing forward his financial statement so early in the year was, that it enabled persons to obtain a connected view of the finances of the country. As one of those who voted in the minority on the fire insurance question the other night, he felt that he had been placed in a false position by the manner in which that subject was brought forward. If the income and expenditure for the year did not balance, it was clear that in voting for the reduction of a particular tax, hon. Members were not giving a merely affirmative vote with regard to it, but were, in fact, voting for the imposition of some other tax in its stead. Until he was in possession of a connected view of the finances of the nation, he should have felt equally bound to oppose any merely affirmative Motion for the reduction or
504
abolition of a particular tax. The right hon. Gentleman had favoured the Committee with a quotation from Sydney Smith, in which all the taxes pressing upon the country were enumerated. But at that time there was not an income tax of 9d. in the pound, and perhaps, if the father of the bride had been asked whether he would rather pay duty on the riband or be subjected to income tax, he would have preferred paying a little additional duty on the riband.
MR. PEASEsaid, he believed that when the statement of the Chancellor of the Exchequer was read in moneyed circles on the following morning, the pains which the right hon. Gentleman had taken to bring forward and explain all the items of the Budget, some of which were new, would be highly appreciated by a commercial country, that relied so much on correct statements of figures; and that he would receive credit for ability, fairness, and lucidity of statement. It was quite, manifest that there could be no diminution of taxation except by a careful attention to the expenditure authorized by the House of Commons. Only last year the Chancellor of the Exchequer informed the House, that notwithstanding the enormous increase of the property of the country, he found the expenditure authorized by the House had more than kept pace with it. And if that had been the case in prosperous years, it especially behaved hon. Members, in the interest of their constituents, to endeavour to keep down those expenses, which could only be defrayed by additional taxation, and as far as possible to remove such taxes as those upon tea and sugar, which pressed so heavily upon the toiling millions, who were the source of the strength and wealth of the country.
MR. FRANK CROSSLEYsaid, he quite concurred in the opinion which had been expressed, that the Budget would meet with the general approval of the country; but, at the same time, he must express his regret that the Chancellor of the Exchequer had not been in a position to remit any considerable amount of taxation. The fact was, they had run into the most lavish expenditure, and it was impossible for any Chancellor of the Exchequer to produce a Budget that could be really satisfactory till an extensive retrenchment had been effected. The time was come for the application of the old watchwords, "Peace, retrenchment, and reform." With regard to peace, he would say that of late years,

505
as evinced on the Italian question, the conduct of the Government had been more satisfactory. He also quite approved of the firm tone the Government had taken with regard to the Mason and Slidell affair; but he must say, that if the United States Government had declined the proposal of the British Government, and we had fired a single shot without having first proposed to refer the matter in dispute to arbitration, a tremendous responsibility would have rested on the British Government He rejoiced that this country was beginning to take neutral ground in the disputes of foreign nations. But millions had been thrown away in preparing for an apprehended invasion by the Emperor of the French, which he believed from the first to be purely chimerical. Retrenchment was necessary, for the amount of taxation was too heavy to be long endured. The railway traffic returns were decreasing; the trade of one of the best customers of the country—namely. America—had fallen off, and the people of the north were suffering from the want of the supply of cotton, and enduring privations in such a manner as must win the approval of all. He was of opinion, that if countries borrowed money in time of war, they ought to pay it off in time of peace; and with that view the Chancellor of the Exchequer ought to have an instruction from the House of Commons to lay by £500,000 every year, which was little more than three times the magnificent gift of Mr. Peabody to the poor of London, in order to liquidate the National Debt. Every £500,000 laid out for this purpose would, by the creation of terminable annuities, at the end of 100 years extinguish £10,000,000 of the public debt, and in that way the whole of the National Debt would be paid off by the year 2042. He believed that the suggestion was worthy of the attention of the right hon. Gentleman, and he trusted it would receive his consideration.
MR. NORRISsaid, he could not but take exception to the proposition of the Chancellor of the Exchequer to impose a licence tax of 12 s. 6d. upon domestic brewing, if the house belonging to the party concerned were above the value of £20 a year. He (Mr. Norris) submitted that the incidence of such an impost would prove just as unequal as that of the brewers' licence at that moment. He also contended that such a measure would be unjust and unfair towards the humbler classes of
506
society. Instead of discouraging private brewing, it was the interest of a good Government to encourage it as much as possible, in order to reduce the temptation in men to enter public-houses, particularly in the rural districts, those public-houses being generally the places where the crimes of poaching and thieving were concocted, and many other offences actually committed. He believed that in proportion as they encouraged domestic brewing they would be providing against the immoralities to which he had alluded. If the right hon. Gentleman were determined to remit the hop duty, he hoped that he would not endeavour to reimburse himself by imposing such a licence as that which, he proposed.
MR. HEYGATEsaid, that the retrospective consideration of our policy as regarded finance was by no means agreeable. In the previous year there was a deficit of about £2,500,000, and in the present year the excess of ordinary expenditure over income amounted to no less a sum than £1,442,000, whilst the Exchequer balances were annually diminished, although they were years of European peace, and although, during all that time, the House had voted supplies with no niggardly hand. Such results as those were by no means satisfactory, and could not be defended by the allegation that the Chinese war and the affairs of the Trent were matters of extraordinary occurrence. In point of fact this country was always at war: our interests were so extensive, and their ramifications were so widely spread, that hardly a year passed in which some war in which we were interested did not turn up in some quarter of the globe; and such contingencies ought to enter into the calculations of our Financial Minister. Last year the right hon. Gentleman had well said—
"I admit that the only firm and permanent foundation on which we can stand is that which has for its basis an even balance between income and expenditure,"
and he hoped that in his future calculations he would keep that maxim steadily in view, and make every allowance for what were called unforeseen difficulties. He had listened with pleasure to the closing observations of the right hon. Gentleman, because if this country were to continue in a flourishing condition, we must adhere to a rigid economy. It was for the right hon. Gentleman, and the Government of which he was so distinguished a Member, to guide the House

507
and the country as to how that economy was to be observed. It was of no use for individual Members to endeavour to prune away odd items of £5,000 or £10,000, nor did it become them to dictate to the right hon. Gentleman the measures which he should adopt. It was from that latter consideration, that although he entertained a strong opinion on the subject, he had on Tuesday evening abstained from voting in favour of the Bill for Reducing the Duty on Insurances; but, if that was the case, it was surely all the more necessary that the right hon. Gentleman should direct the House as to the means by which economy might be obtained.
MR. SLANEYobserved, that in his opinion the able statement of the right hon. Gentleman the Chancellor of the Exchequer evinced a clearness as to the subject, and was hopeful as to the future. The increased taxation of the country was owing to a rivalry between nations. There ought to be an endeavour made by the various Governments of Europe to come to an understanding whereby the advantage of all would be consulted in the reduction of those armaments which entailed so much expense on each power. That great and powerful monarch the Emperor of the French, he believed, was peacefully inclined, as he had shown a disposition lately to reduce his armaments. He (Mr. Slaney) thought that this country ought to do the same. He hoped that the Chancellor of the Exchequer would reconsider his proposition respecting private brewing, as he believed that such an impost would prove most unfair and injurious to the moral interests of the industrial classes. In respect to the income tax, he thought it only just that the opulent classes of this country should bear the great burden of that impost, and that the humbler and industrious classes should be relieved of the weight of taxation. In regard to the sufferings of the people in the manufacturing districts from the want of cotton, he might mention that the lower parts of Italy possessed capabilities of growing that article to a great extent, and he thought it would be worth our while to encourage the people there to cultivate the growth of cotton, and to exchange it for the products of this country which they were more in want of. Having recently travelled in Italy, he could bear testimony to the prosperity that was opening in that country now that the Italians were becoming a free and united population.
MR. BAZLEYsaid, that it appeared to him that the converse of what the hon. Member for Leicester (Mr. Heygate) had suggested would be the best course to pursue. Instead of bringing up the income to the expenditure, he (Mr. Bazley) believed that it would be more agreeable that the expenditure should be limited to the amount of the income. He wished to congratulate the Government upon the financial statement of the Chancellor of the Exchequer, and to express the deep obligation which he felt, and which he was sure the people of Lancashire would feel to the right hon. Gentleman for the sympathy which he had expressed with the present sufferings of those who were concerned in the cotton trade. He had truly stated that the price of cotton was then about double what it was a year before; and thus, although only about half the quantity was consumed that was manufactured at that time, the sum paid for the raw material remained the same. Twelve months ago they were paying £35,000,000 for the raw material; and although we now received only half the quantity which we obtained then, the sum expended remained the same. He calculated that the loss of remuneration to the labouring classes amounted to something like £12,000,000 per annum, or £1,000,000 per month. It was easy to see how much so great an abstraction from the funds of the labouring people must limit their comforts, and what a material effect it must have upon the revenue of the country; and unless they could obtain an abundant supply of the raw material, he should look to the coming financial year with dread. A little more than a year ago they were using some 85 per cent of American cotton, of other foreign cotton 8 per cent, and only 7 per cent of East Indian. Efforts had been made to alter that state of things, and already they were using a much larger proportion of East Indian cotton. Unfortunately, however, if our exports of cotton goods continued to diminish at the rate at which they had decreased last year, there would in the ensuing twelve months be a falling-off of some £20,000,000. He thought that the labouring classes employed in the cotton manufacture deserved the greatest credit for their exemplary conduct during this period of extreme distress; and though the House of Commons could do little to mitigate the distress, their sympathy would be grateful to those who were passing through it. The duty of the

509
Government was to continue removing the shackles from industry and capital. In our own colonies we had ample means to produce supplies of the finest raw material, and he hoped the Government would do all in their power to remove all impediments to the employment of capital and labour in the obtaining of it. If we had been independent of the United States for the supply of our cotton, we should have been treated with much more justice by them.
MR. HOWESsaid, he rose to ask whether the 12 s. 6d. licence on private brewers was intended to be a tax on all persons who occupied a £20 house, and every tenant fanner who held a farm of the value of £150? To enable such persons to brew with a profit, each of them must brew fifty barrels a year, which was a greater quantity than such persons brewed.
MR. CRAWFORDsaid, he wished to know whether the simplification of the wine duties would take effect the next day; and whether the reports that had been received from those persons who had been sent to examine the resources of the wine growing countries would be laid on the table?
MR. ALDERMAN SALOMONSsaid, he lived in a hop district, and he thought that unless the duty on brewing were accepted, the hop-growers had no valid claim for relief. On the whole, he approved of the budget; and so, he believed, would the country generally. He wished to know, whether the Ottoman Loan was to be taxed? If the wine duties were to commence on the next day, it was rather invidious that the capitalists should go free. On the whole, he thought it would be rather a surprise to our friends on the other side of the water, that, notwithstanding the loss of their trade, we had got so far into the year without being utterly ruined; and it ought to be a matter of great pride to ourselves to see with what patience the sufferings caused by the disturbance in our trade and manufactures had been borne by our labouring population.
MR. LINDSAYsaid, he was much disappointed by the retention of the penny charge on packages, and other minor charges. Great labour and inconvenience were caused to shipowners by the detailed statement of the cargo required on account of those insignificant imposts. As a specimen of those statements, he had with him a long roll no less than fifty-four feet in length, and which would reach half across the floor of the House. The right hon. Gentleman might be unable to reduce taxes
510
whilst his colleagues called for twelve or fifteen millions annually under dread of invasion from France, but he might levy them in a less inconvenient manner. The amount of the Navy Estimates were far too high, and a diminution might fairly take place in them, as France was expending only one-third of the same amount on her navy. The Vote for fortifications was also highly extravagant, and he hoped the House of Commons would, by their Vote the next evening, declare that the one-and-a-half millions of pounds voted for, but not yet spent, on the fortifications, were no longer to be wasted. He thought the time had come when this country might make an effort to stop the fearful carnage which was going on on the other side of the Atlantic, and to obtain that raw material upon which so many English people depended for their very existence. He could not say that he was dissatisfied with the statement of the Chancellor of the Exchequer, but he should have been better pleased if he had proposed to take one penny in the pound off the income tax, and to repeal the small duties upon shipping.
MR. MARSHsaid, be would congratulate the Chancellor of the Exchequer on his budget generally. Especially he was pleased with the abolition of the hop-duty; next year he hoped to see an end of the malt tax; and if a tax was necessary, he would like to see it placed, not on the raw material of hops and malt, but on the manufactured article, beer.
MR. SEYMOUR FITZGERALDsaid, that last year he ventured to suggest that the right hon. Gentleman's Estimates, in regard to the Chinese indemnity was somewhat too sanguine. He understood that the arrangement come to between the British Government and those interested in the indemnity was, that half was to be paid in cash, and the other half in bills. The right hon. Gentleman had stated that the half which was to be paid in cash amounted to £193,000. But the sum absolutely ascertained to be due by Mr. Parkes, and assented to by the Earl of Elgin, was £650,000. Had another investigation taken place, and were there any outstanding claims beyond those recognised by the right hon. Gentleman? The facts proved that he (Mr. Fitzgerald) was almost literally accurate in the calculations he made last year on that subject. He said that about £450,000 would be received, and the actual receipts were £366,000, after making allowance for the loss on

511
exchanges. He wished to know how the right hon. Gentleman proposed to meet the further sum which, according to the estimate of Mr. Parkes, must he due on the Score of this indemnity?
SIR MORTON PETOsaid, he desired to express his unqualified satisfaction at the budget which had been presented to them that night. He would remind the Committee, however, that the Chancellor of the Exchequer could not be considered responsible for the enormous expenditure of the country, and could only be expected to do the best he could under the circumstances in which he found himself placed. All his efforts were frustrated by the extravagance of the Government. A glaring instance of their reckless expenditure was shown in the fact that after a neighbouring country had abandoned wooden ships altogether they had spent about £10,000,000 in building and £3,000,000 in repairing wooden ships. He had no hope that any reduction would be effected in the expenditure unless the House was prepared to take a business-like view of things, and, departing from the old line of routine, to take up plain questions of business when propounded to them in a plain, business-like spirit. He hoped the House would support the right hon. Gentleman, for they knew his mind and heart were bent upon rendering the country prosperous.
MR. WHITEsaid, he should not have ventured to offer any observations to the Committee but for the reproachful glance and upbraiding words which the Chancellor of the Exchequer had addressed to those Members who voted the other evening for the Motion for the remission of the fire insurance duty. He begged to assure the right hon. Gentleman that he spoke not alone his own sentiments but those of some of his hon. Friends around him, when he said that many hon. Gentlemen were prepared to vote for the remission, not only of that tax, but of the malt tax and income tax, simply because they saw no other means of obtaining a diminution of expenditure save by a diminution of revenue. He could not join in the congratulations which the right hon. Gentleman had received on his speech, for he thought it was rather a melancholy exhibition. He missed the earnest eloquence with which he usually adorned, and the heart and soul which he threw into his speeches. It was painful to hear the tone of compunction, almost of remorse, with which
512
the right hon. Gentleman, as the organ of the Government, was obliged to describe the deplorable consequences of the profligate and reckless extravagance to which the country had been committed. Looking to the efforts of the right hon. Gentleman, it brought forcibly to his mind the saying that a virtuous man struggling under adversity was a sight worthy of the gods. In that sense he entertained a feeling of commiseration towards the right hon. Gentleman, and he did hope that he might long continue to hold his office, but that he might be spared having ever again to address the Committee under the circumstances under which he had addressed them that night. As to the Chinese indemnity, there need be no apprehension on that account. The revenue from imports and exports amounted to about £500,000 per month; and if the Foreign Office only did its duty, the whole of the indemnity would be quickly paid up. With an income of £70,000,000 a year it seemed a step from the sublime to the ridiculous to levy a duty of 12 s. 6d. per annum upon the private brewing of beer, and he hoped that proposal would be withdrawn.
THE CHANCELLOR OF THE EXCHEQUERsaid, he would how reply to some of the many hon. Gentlemen who had addressed the House; and if others should refer to any isolated subjects, he should be perfectly prepared at a subsequent period of the evening to answer them. The hon. Member for Stamford (Sir S. Northcote) asked two or three questions immediately pertaining to the financial statement. The hon. Gentleman asked whether the Committee were to understand that he proposed to take a Vote of Credit for £500,000 on account of the Chinese expenditure. What he meant was, not that a Vote of Credit was necessary, for his belief was that the Vote of Credit which they already had was perfectly sufficient to enable them to make the payments, but that that was the amount of debt over and above the receipts which would probably stand in the expenditure of the year on account of China. He stated last year that probably £1,750,000 was the amount outstanding of Chinese charges, and he did not suppose that the amount would be much higher. His hon. Friend asked why he ventured to estimate the Excise for the coming year to be as much as the actual produce during the last year, when he was about to lose the remaining fraction of the paper duty.

513
The reason was this:—The remaining fraction of the paper duty was very small, because a considerable inroad was made on the net receipt which last year he estimated for the current year, in consequence of an excess of £200,000 in the drawbacks on stocks in hand over what had been anticipated. The net receipt from the paper duty was only about £350,000; and taking it roughly, he thought he might safely say that it would be fully counterbalanced by the improved estimate from malt. The Committee was aware that, notwithstanding the shortening of credits, they knew at the commencement of the financial year what an important part of the revenue malt would be. Last year the on-coming charge was very bad. This year the on-coming charge was very good, and the better estimate from malt made up the loss from the paper duty. With regard to the minor charges from playing cards and foreign loans, they would stand against the reduction in respect of hops, and the account would be such as he had presented to the Committee.
The hon. Member for Evesham (Sir H. Willoughby) asked whether there were any other accounts outstanding. He could only give the hon. Baronet a general answer, that when they came under his cognizance he was desirous to bring them, at the earliest possible moment, before the notice of the House. But he did not know of them until they were ascertained, and probably the hon. Baronet would obtain more particular information by putting specific questions upon specific points. The hon. Member for Horsham (Mr. S. Fitzgerald) asked a question with regard to the China indemnity. He could only speak from recollection, but his impression was that the hon. Gentleman was in error. The actual payments made to the merchants amounted to 850,000 dollars. That was certainly one-half of the ascertained claims of the merchants; and when he said "ascertained," he meant ascertained on the spot by Mr. Parkes. He thought he could give documentary information to the hon. Gentlemen which would probably be more satisfactory than an explanation given from memory. But of this he had no doubt whatever, that a sum of 850,000 dollars would be as much as would be charged in the accounts for the present year. Other claims might be substantiated, but a total of 2,000,000 taels was the amount limited for the payment of substantiated claims and interest to be paid on a final settlement.
514
The hon. Member for Greenwich (Mr. Alderman Salomons) asked whether they could not make the Resolution as to foreign loans applicable to the Ottoman Loan. The Resolution had no relation to current transactions. It was not like a question of Customs duty, but was intended to be entirely prospective in its character. It might depend upon a construction of law how it would operate, but it was not proposed for the purpose of catching any transaction now in progress.
He had reason to be thankful to the Committee for the general tone in which the proposals of the Government had been received and discussed, and particularly so for the dispassionate view taken by the hon. Member for Maidstone (Mr. Buxton). But several observations had been made upon the licences for private brewing. He would state how that stood. The motive of the Government was not to obtain a considerable sum for the public revenue, and probably the amount which the licences would yield would be insignificant. But it seemed extremely hard that the brewer who brewed for sale should pay 3d. per barrel in lieu of the hop duty, and at the same time any one who chose to brew for himself should be allowed to brew to any extent without paying any equivalent. Out of that consideration of justice the proposal arose. Two courses might have been taken. They might either have attempted to give licences adapted minutely to the quantity of beer which each person brewed, or they might have endeavoured to take it in the rough. If the licences had been adapted to the quantity which each person brewed, an inquisition into every private house must have been the consequence, and that was very undesirable. The only other choice was to take it in the rough, and therefore they took an average exempting those who were poor and imposing a charge of 12 s. 6d. at a certain point. It was objected that it would operate in favour of certain gentlemen with large private establishments, but they might introduce two or three scales which would effect a greater degree of justice, and not entail any inquisition. That was a matter for consideration, but the Committee would now understand the motive upon which the Resolution was founded.
It had also been suggested that, as the income tax would be permanent, some irritation might be got rid of by taking the assessment and collection into the

515
hands of Government. He had stated on more than one occasion that he was of opinion that it would be expedient for the public interests if the assessment (not interfering with the discretion of the local authorities, but the original amount of charge) and the collection were in the hands of Government. At the same time, an Act would be necessary, and the Government hesitated to advise that, unless they could be assured that it was likely to meet with general assent. But on that point opinion was very much divided in different districts of the country.
Allusion had also been made to the occasional licences to sell liquor, and he wished to say a word in explanation of his meaning. There were public assemblies, such as cricket-matches and boat-races, that were not periodical, at which there was great irregularity in the sale of liquor. All he proposed was to bring these less fixed gatherings under the same rule that applied to periodical fairs and markets, and subject them to the same restraints.
With respect to the charge of a penny on packages inwards, and 1s. 6d. on bills of lading outwards, and the document referred to by the hon. Member for Sunderland (Mr. Lindsay), there was no more connection between them than this—that the payment of the 1s.. 6d. would require the production of the document; and it was the opinion of those who prepared the statistics for the Board of Trade that it was most valuable for statistical purposes. But he was very willing that the point should be made the subject of an impartial inquiry; but that inquiry must be made elsewhere than in that House. As to the penny on packages inwards, he was ready to surrender it at the first moment the revenue could dispense with the amount. Reference had been made to a conversion of the National Debt into annuities. That system was actually in operation every day, though only to a small extent. The fact was, it was impossible to convert such an enormous mass of debt into annuities. They might show on paper that it would be advantageous to convert it into annuities terminable in ninety-nine years; but if they went into the market to convert the debt into such annuities, they could not get such terms for the commodity they offered as they might be entitled to expect. All that could be done was to sell as many annuities as possible; and by that sale, even in bad years, like the three last, there
516
had been some operations in the reduction of the debt. These were the principal points that had been raised in the present discussion.
He would conclude by answering the question of the hon. Member for the City of London (Mr. Crawford), whether there would be any objection to produce the reports of the officers of the Customs Department, who had visited various countries to obtain information for it. He did not think there was any objection to producing those reports, and the information they contained was of considerable interest. As to the time at which the new duties imposed by the Resolutions would take effect, the former practice was that they should not take effect till the Resolutions were reported; but the recent practice had been that they should take effect immediately the Resolutions passed the Committee. The new duties, therefore, would be in operation on the following day, subject, of course, to the ultimate decision of Parliament.
SIR FRANCIS BARINGsuggested, that the duty on brewing licences might be regulated in reference to the rent of the premises; some difference ought to be made between small houses and large establishments. The duty would still not be quite equal, but the inequality would not be so great as by the proposition of the right hon. Gentleman.
THE CHANCELLOR OF THE EXCHEQUERsaid, that the point was one of detail. He was glad the principle was agreed to, and he would consider the matter for a day or two, to see whether the part of the Resolution referring to private brewers could be arranged to the satisfaction of the Committee.
MR. HUBBARDsaid, he had understood the right hon. Gentleman as suggesting a postponement of the Resolution he intended to move with regard to the income tax. He wished, therefore, to ask at what period he could submit his Resolution to the House without inconveniencing the right hon. Gentleman?
THE CHANCELLOR OF THE EXCHEQUERsaid, the hon. Gentleman would derive no advantage whatever from moving his Resolution before the discussion of the Bill he was about to propose. It was not a change in the Bill for the present year, but a permanent change in the tax, the hon. Gentleman wished to make. That would require a very long discussion, whilst the income tax was intended to

517
meet fee necessities of the moment. If the House were drawn into a long discussion on the income tax great public inconvenience would be created. But if the hon. Gentleman intended only to take the opinion of the House on a principle of the income tax, he would have no difficulty in proposing his Resolution, either in Committee or on the Question that the Speaker leave the Chair.
MR. HUBBARDsaid, he would accept the suggestion; he would move his Resolution after Easter.
SIR HENRY WILLOUGHBYthought the Committee ought to have the Resolutions before it, in a printed form, before it passed them.
THE CHANCELLOR OF THE EXCHEQUER: The proposition of the hon. Baronet amounts to this—that the financial measures of the Government should be published before the financial statement was made, and that would be attended with

Containing less than the following Rates of Proof Spirit, verified by Sykes' Hydrometer, viz.—

If imported in Bottles, and containing less than 42 degrees.

26 degrees

42 degrees

s.

d.

s.

d.

s.

d.

Wine, Red

the gallon

1

0

2

6

2

6

" White

the gallon

1

0

2

6

2

6

Lees of such wine

the gallon

1

0

2

6

2

6

House resumed.
Resolution to be reported To-morrow.
Committee to sit again To-morrow.

SUPPLY—CIVIL SERVICE ESTIMATES.

  COMMITTEE.
  Order for Committee (Supply) read.
  SIR JOSEPH PAXTONsaid, he hoped the Government would not think of going into Committee of Supply that night. The House had been sitting six hours discussing the Budget, and hon. Members were exhausted.
  MR. AUGUSTUS SMITHsaid, he also would press upon the Government not to go into Supply that night. They had passed the Army and Navy Estimates, which embraced two-fifths of the expenditure. The National Debt took other two-fifths, and they had now only to deal with the Civil Service Estimates, which were the remaining fifth. It was only by reducing the expenditure under that head that they would be enabled to make ends meet; and as those Estimates required careful con-
  518
  extreme inconvenience. The inconvenience to the Committee is not so great as it seems. It is true the Committee enables us to levy a certain duty to-morrow morning, or to remit a certain duty; but all those proceedings are taken provisionally, and their final adoption is contingent upon the future approval of Parliament. I am only acting in conformity with the uniform precedent.
  Resolved,
  That, towards raising the Supply granted to Her Majesty, in lieu of the Duties of Customs now charged on the articles under mentioned, the following Duties of Customs shall be charged thereon on importation into great Britain and Ireland, on and after the 4th day of April 1862: viz. [See Table.] And for every degree of strength beyond the highest specified, an additional duty of 3d. per gallon.
  No more than 10 per cent of Proof Spirit shall be used in the fortifying of any Wine in Bond; nor shall any Wine be fortified in Bond to a greater degree of strength than 40 per cent of such Proof Spirit.
  sideration, he hoped the Government would not call upon them to go into Committee of Supply to-night.
  VISCOUNT PALMERSTONsaid, he trusted the House would not object to go into Committee of Supply for an hour.
  Motion agreed to.
  House in Committee.
  MR. MASSEY in the Chair.
  1. Motion made, and Question proposed,
  "That a sum, not exceeding £32,647, be granted to Her Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March 1863, for Works and Expenses at the New House of Parliament."
  SIR HENRY WILLOUGHBYsaid, he wished to know whether the account for the expenditure for building in connection with the Houses of Parliament was entirely closed; and whether might be reckoned as the average annual charge for keeping them up.
  MR. COWPERsaid, the Vote was for the ordinary expenses in connection with the Houses of Parliament, and contained no item for building purposes. He could not say that any great reduction of the amount in future years was to be expected.
  MR. KENDALLsaid, he wished to have some explanation of the item for lighting. There were in or about the building some 5,000 gaslights, and about 200 argand lamps. Nevertheless, while the expense of the former (which were equal to 7,000 argand lamps) was only £2,500, the 200 oil lamps actually cost £2,000.
  MR. W. WILLIAMSsaid, he desired to ask who the two Sovereigns were whose statues were to be added to the four which were already in progress?
  MR. AYRTONsaid, that four statues to Sovereigns of this country had already been erected. The four selected had been Charles I., George I., George IV., and William IV. That year two new ones were to be added, and it would be instructive to know which of the kings were considered equal in merit to George IV. and Charles I.
  SIR MATTHEW RIDLEYsaid, if it were right that Parliament should grant money for the encouragement of the arts in this country, he would submit that the Committee had not exercised a proper discretion in endeavouring to promote that object by statues of the sovereigns of this country as part of the accessories of the House. The effect was, not to hold out the patronage of Government and the authority of Parliament to genius, but to give a helping hand to mediocre talent while they obtained works which did not excite the sympathies of those who looked upon them. The production of merely mediaeval statues would have no effect upon fine art in this country. But by inviting our artists to represent great incidents in our history, or noble passages in the poets, the Committee would really lend to genius a fostering hand. He regarded the annual Vote for statues produced by mediocre artists as mere waste of the public money, and he should therefore move the omission of the item of £1,600 for the two statues proposed that year.
  Motion made, and Question proposed,
  "That the Item of £1,600 for two Statues of British Sovereigns to be placed in the Royal Gallery, be omitted from the proposed Vote."
  MR. AUGUSTUS SMITHsaid, he also desired to know the names of the two sovereigns for whose statues the item of £1,600 was proposed. He objected to frescoes being placed in such a position that the only light falling upon them came through painted glass windows.
  MR. WHALLEYsaid, he would beg leave to ask whether the name of Oliver Cromwell had ever suggested itself to the Chief Commissioner. [A laugh. Hon. Members might laugh, but no less a personage than Earl Russell recently stated to a deputation that there was no period in the history of England so much entitled to be remembered as that which was identified with the name of Oliver Cromwell. Why, then, he asked, should that glorious period not be commemorated in some way or other in connection with the Houses of Parliament? About a year before he escorted a party of Frenchmen round the buildings; and when he showed them the highly poetical frescoes, they asked him whether it was because the English people had nothing in their national history worthy to be commemorated that they had recourse to the imagination of their poets. They requested him to explain some of the frescoes, but he was compelled to acknowledge that he could not do so. He wanted to know whether the name of Oliver Cromwell had occurred to the right hon. Gentleman the First Commissioner; and, if not, why not?
  MR. COWPERsaid, the oil used in the Houses of Parliament was supplied under a contract which had been in force for a long period. He had given orders, however, that it should be discontinued at the end of six months, when a new, and he hoped a more economical, arrangement would be made. Reference had been made to the statues in the Royal Gallery. The Estimate of 1860 had been so framed as to commit the House to a long series of statues from the earliest to the last Sovereign. The House was unwilling to be so committed, and the Vote was withdrawn. Last Session the House voted four statues as a portion of a chronological series of twelve, which were required for the decoration of the Royal Gallery; and the Estimate for the present year contained an item for two more statues, also a porportion of the series of twelve. He believed that those two statues, which were to be executed in accordance with the recommendation of the Fine Arts Commission, would represent Sovereigns whom he was

  521
  sure the House would be anxious to commemorate, since they were associated with an illustrious period in our constitutional history. He alluded to William III. and Queen Mary. ["Which Mary?"] It was not the Mary to whom the hon. Member for Peterborough (Mr. Whalley) so much objected, but the Mary who was consort to William. He thought the House would be of opinion that the Royal Gallery would be incomplete without statues, and the object of the Fine Arts Commission in recommending that the Sovereigns should be represented in marble was to gratify the feeling to which the hon. Member for Peterborough had just given expression— namely, that in so magnificent a building as the Houses of Parliament there ought to be historical recollections. The hon. Baronet opposite (Sir M. Ridley) had objected to the proposed statues in the Royal Gallery, not because he was not favourable to art, but because he was a lover of very high art. There was no reason for supposing that the statues would be low in art; and when the hon. Baronet expressed the apprehension that medisaeval statues were going to be put up, he did not properly distinguish between the statues placed in the niches, and forming part of the decoration of the walls, and those marble statues which were to stand out separately on the floor. No fault could be found with the statues in St. Stephen's Hall on the ground of mediaevalism. They were executed by the best sculptors whom England could produce, and were generally considered creditable to English art. They did not show any great fondness for mediaeval costume. Leather breeches formed no part of mediaeval costume, but they were in fashion at the end of last century, and Mr. Fox was faithfully represented in the dress of his period. He hoped the hon. Baronet would not think it necessary to oppose the Vote.
  SIR MORTON PETOsaid, he would beg leave to suggest that there ought, without loss of time, to be placed in one of the most prominent positions the Houses of Parliament contained a statue executed by the first artist of the day of the late Prince Consort. Such a work of art, whatever its cost, would be one of those tributes which the country delighted to see paid to that virtue which so eminently distinguished the present reign, and which they were all so anxious to perpetuate.
  SIR MATTHEW RIDLEYsaid, he altogether dissented from the opinion that
  522
  the statues in St. Stephen's Hall were superior works of art. On the contrary, he affirmed that those, for example, of Fox, Pitt, Burke, and Grattan were as bad statues as were ever perpetrated. They had neither mind, speech, nor thought in them. The perpetration and repetition of such statues could do nothing whatever to promote art. They pointed no moral, and adorned no tale. They did not appeal either to the perceptions, the sensibilities, the sympathies, or the national feelings of those who beheld them. He would not, however, press his Amendment.
  MR. AUGUSTUS SMITHobserved, that while the proposed Vote was for £33,000, there appeared to be on the 20th of February a balance of £54,000 on last year's Vote. For what purpose was that £54,000 required?
  MR. COWPERsaid, he would remind the hon. Gentleman that the Estimates last year only passed in August, and such was the punctiliousness of the Office of Works that they did not give their orders till the Estimates were passsed. The £54,000 would be paid for the orders so given.
  MR. CAIRDsaid, he hoped that in the chronological series of Sovereigns it would not be forgotten that they were dealing with a united kingdom, and Scotland should not be overlooked.
  MR. WHALLEYsaid, he regrettted that the right hon. Gentleman had neither answered his question, nor expressed any opinion respecting Oliver Cromwell. He rose, however, to call attention to the fact, that the most conspicuous place in the House of Lords had been given to a fresco depicting Augustine baptizing some Saxon king, which he understood was intended to represent the introduction of Christianity into this island, but which he could not designate otherwise than as a gross and palpable falsification of all history. It rather represented the authority of the Popes of Rome. ["Oh, oh !"] Christianity had been introduced into this country five hundred years before either Augustine or the Pope existed. He wished to know under whose direction such a perversion of our national history had been perpetrated.
  SIR JOSEPH PAXTONcalled attention to a sum of £3,000 for racks in the Victoria Tower for the reception of original acts, records, and documents.
  MR. MILDMAYsaid, he wished to ask how it was that so large a sum as £1,200 was required for haircloth, &c.
  MR. COWPERsaid, that the records of the House of Lords were encroaching so much upon the disposable space in the passages and offices of that House that the Clerk of Parliaments had made application that they should be lodged in some other situation, and there appeared to be no other place for them than the Victoria Tower. There were at present but two rooms fitted up, and the item in the Vote was intended to fit up another floor. There were altogether sixty-four rooms in the Victoria Tower. He hoped the hon. Member for Peterborough (Mr. Whalley) would not ask him to follow him in his historical discussion. Whatever inferences the hon. Gentleman might draw from the facts, it was not to be denied that St. Augustine had baptized the Saxon King, and that important event was represented on the walls of the House of Lords. It was an historical fact which might very properly be represented. He quite sympathized with the hon. Members in their admiration of Oliver Cromwell, and he should be glad to see a well-executed statue of that great ruler in a suitable place. However, they had so little encouragement in the erection of statues that Members should not be surprised if he did not propose any more. If the House were inclined to have one erected hereafter, such a proposition would meet with no discouragement from him; but on the present occasion they could, only discuss the statues in the Estimates, and they were limited to those of William III. and Queen Mary as part of a series.
  Motion, by leave, withdrawn.
  Original Question put, and agreed to.
  2. Motion made, and Question proposed,
  "That a sum, not exceeding £5,104, be granted to Her Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March 1863, for the Maintenance and Repairs of Embassy Houses, &c. Abroad."
  MR. AYRTONsaid, he wished to call attention to an item of £2,668 for the houses of our ambassador to Turkey at Constantinople and Therapia, and to ask how it was that so large a sum was required?
  MR. COWPERsaid, that the Sultan had made a present of the site to the British mission, and consequently it was natural that they should spend a little sum in keeping up the house and giving the British Ambassador the benefit of the Sultan's liberality.
  MR. FREELANDsaid, this was not "a little sum;" it was a very large item —£2,668. For the year ending March 31, 1861, the embassy-houses at Constantinople and Therapia had cost £2,350, and for 1862 the cost was £2000, so that the total for the three years would be £7,018. The item was perfectly monstrous. If a grand Turk had come over here, and thought of building a new wing to his house for a seraglio, that sum would be sufficient to build it; but, of course, in the case of the British Ambassador, no such appendage to his residence would be required.
  LORD ERNEST BRUCEsaid, he should be glad to have some explanations with respect to the embassy-house at Paris.
  COLONEL DUNNEsaid, the embassy-house at Constantinople had been burnt down some twenty-five years ago, and had been rebuilt at enormous expense. Since he had been in Parliament large demands had been made for maintaining it. Therapia was a very bad place for carrying on diplomatic relations, but during the summer the ambassador went there from the heat. He did not know why the ambassador should not keep up the house at Therapia at his own expense.
  SIR JOSEPH PAXTONsaid, the embassy at Paris comprised a large extent of building, and, considering the manner in which it ought to be kept up, the sum asked (£885) was not large. So also with respect to the Vote for the houses at Therapia and Constantinople, a large expenditure was required to keep them in order as they were built of wood.
  MR. MILDMAYsaid, he thought the salary of £185 for "the clerk of works in charge" at Paris most objectionable. Such a clerk, if kept up, would find work to do.
  MR. COWPERsaid, it was economical that the Office of Works should have an officer of their own residing at the Paris Embassy, otherwise they would have to be constantly sending over some one whenever repairs were wanting. He did not think the item of £500 for "casual and ordinary repairs and painting, furniture, fittings, and contingencies" of the ambassador's house at Therapia was too much. The Committee could not wish that our ambassador should not reside during the summer months at Therapia, where all the other embassies had houses, and where the Turkish Ministers also resided.
  MR. H. A. HERBERTsaid, the payment to a clerk of the Works at Paris of £185 was an enormous charge for superintending the repairs of a house that was nearly new. There was also an item for a surveyor to look after the clerk of the works.
  MR. MONSELLsaid, that the remarks of the hon. Member for Chichester (Mr. Freeland) had not been answered. During the last three years the sum of £2,500 had been spent in repairing the ambassador's house at Constantinople. He thought the Vote for the house at Therapia was nothing less than a piece of unnecessary extravagance. If they kept a clerk of the works there, they must expect he would find something to do. He would move, as an Amendment, that the Constantinople Vote of £2,668 be reduced by the sum of£1,000.
  MR. COWPERsaid, he had thought it better to confine himself to the Vote before the Committee, and he could state that the sum was not more than was necessary for the coming year. He could not agree with the proposition that having a clerk of the works was likely to increase the expense of repairs; for being paid by a fixed salary, if there were any temptation at all, it would be to do little rather than much, If, on the other hand, the repairs were left to local tradesmen, they would have an interest in running up a bill. It would be the most short-sighted economy to remove the clerk of the works at Constantinople, for it was not a place in which contracts to keep the ambassador's house in repair could be entered into. The ambassador's house at Paris was rather an old one, and had required very serious repairs. It was thought desirable to send over a surveyor to Paris from time to time, instead of trusting entirely to French architects, when more serious repairs were required. If the clerks of the works were removed, the Board of Works would lose the only check they now had on the expenditure for repairs in these capitals.
  LORD ROBERT MONTAGUsaid, that the Government ought to give the Committee grounds for supposing that these sums would be required, and that they would be duly appropriated. The right hon. Gentleman ought to explain how the sums voted for previous years had been appropriated. He should vote for the Amendment.
  MR. COWPERsaid, the sum proposed was the amount which, judging from past
  526
  experience, it was thought would be necessary for ordinary repairs. The sums which had been alluded to were, he understood, not for ordinary, but special and particular repairs. The subject of past Votes was immaterial to the present discussion.
  MR. FREELANDsaid, he thought those past Votes had a most important and material bearing on the question. The repairs of one year, if well done, would obviate the necessity of further repairs in a subsequent year. Not only were repairs executed at great expense when Sir Henry Bulwer went to Constantinople, but others had been executed at a later period. The Committee were now invited to vote £2,600 odd for this purpose, the corresponding charge last year being £2,000. L'appétit vient en mangeant; and he supposed that next year a demand would be made for a still larger sum.
  VISCOUNT PALMERSTONsaid, there could not be worse economy than to give a large house to an ambassador and let it go out of repair. Everybody who had a house, great or small, knew by his own experience that in proportion to its size he must incur a certain annual expenditure for ordinary repairs. There was a Dutch proverb that painting and whitewash cost nothing—not, indeed, that these things had not to be paid for, but that the money spent on them prevented the necessity for much heavier outlays. His hon. Friend said there could be no need of a house at Therapia, because when he was at Constantinople years ago the embassy residence was burnt down, and our ambassador was then compelled to live at Therapia, when great inconvenience occurred, as during a great part of the year our ambassador had to be at Pera, in order to have communication with the diplomatists of other countries. But it should be remembered that in summer not only did the diplomatic agents of other Powers, but the Ministers of the Porte itself, all go to Therapia; and it would be inconvenient for the British ambassador alone to be kept at Constantinople at that season through not having a residence at Therapia. He should really hope that the Committee would not refuse the sum estimated for the ordinary repairs of the embassy house at Pera, which was very large, and intended for the accommodation not only of the ambassador, but also of the other members of the embassy. If the money voted should not really be required, it would not be spent.
  MR. SEYMOUR FITZGERALDsaid, that he was fully aware of the fact that the house of our ambassador in Therapia was in an exceedingly bad state of repair, and in such a condition that no gentleman could be expected to reside in it. The money proposed for its repair was then absolutely necessary. As regarded our ambassador's house at Constantinople, understanding that the sum asked for its repair was only calculated upon an average of years, and that the money would not be expended if the repairs were not needed, he would certainly support the Vote.
  LORD ROBERT MONTAGUsaid, that all that had been said only showed that the large sums in former years for this purpose had been wasted. That was hardly a good reason why the Committee should now vote upwards of another £2,000.
  MR. SEYMOUR FITZGERALDsaid, he believed that only a very small portion of the sums voted in past years were spent upon the house at Therapia.
  MR. MONSELLsaid, that only £500 of the present Estimates was for the house at Therapia.
  Motion made, and Question put,
  "That the Item of £2,668, for Repairs of the British Embassy Houses at Constantinople and Therapia, be reduced by the amount of £1,000."
  The Committee divided:—Ayes 61; Noes 88: Majority 27.
  Original Question again proposed.
  MR. AUGUSTUS SMITHsaid, he would move as an Amendment the reduction of the Vote by £1,500 the item for repairs to the British embassy-house at the Hague.
  Motion made, and Question proposed,
  "That the Item of £1,500, for Repairs of the British Embassy House at the Hague, be omitted from the proposed Vote."
  MR. THOMSON HANKEYsaid he would remind the Committee of the report of last year, which recommended as the best economy that the Government should take the houses for the ambassadors upon lease, on an understanding that a certain percentage should be deducted from the salaries of the ministers to meet the expenses attending them. It was well known that it was often very difficult and sometimes impossible for the ambassadors to procure houses for themselves by the year, as they were, of course, precluded from taking them on lease from a consciousness of their own uncertainty of tenure.
  SIR MINTO FARQUHARsaid, he fully concurred in the principle of the Government taking those houses for our ambassadors, and therefore he should deeply regret any such reduction in the Vote as the Amendment contemplated.
  MR. PEELsaid, that the case under consideration was exceptional. A reduction of the Vote would amount to a breach of engagement to which the Government had deliberately bound themselves.
  MR. AUGUSTUS SMITHintimated that he would not press his opposition to the Vote.
  Motion, by leave, withdrawn.
  Original Question put, and agreed to.
  House resumed.
  Resolutions to be reported this day; Committee to sit again this day.

PUBLIC ACCOUNTS.—RESOLUTION.
THE CHANCELLOR OF THE EXCHEQUERmoved that the Resolution of the 31 st of March be a Standing Order of the House.
Resolution [31st March], relative to Public Accounts, read, as followeth:—
"That there shall be a Standing Committee, to be designated 'The Committee of Public Accounts,' for the examination of the Accounts showing the appropriation of the sums granted by Parliament to meet the Public Expenditure, to consist of nine Members, who Stall be nominated at the commencement of every Session, and of whom five shall be a quorum."
COLONEL FRENCHsaid, he should not oppose the Motion, although he thought the Committee would remove responsibility from the Government. On that ground he very strongly objected to the constitution of the Committee.
MR. SPEAKERsaid, the question before the House was not the constitution of the Committee, but whether its appointment should be made a Standing Order.
MR. HENNESSYsaid, he wished to ask whether it was intended that the Committee should deal with English accounts only, or that its operation should be extended to the United Kingdom? If to the latter, he objected to the constitution of the Committee as it was to be proposed by the Chancellor of the Exchequer. He thought that there ought to be upon it some representative of Ireland.
COLONEL DUNNEsaid, he had to complain that the statement of the revenue from Ireland was perfectly delusive. The taxes raised in that country were only returned as £7,000,000; whereas in reality

529
they amounted to nearly £11,000,000. The right, hon. Gentleman the Chancellor of the Exchequer, with that contempt which he usually bestowed on Irish subjects, had not only excluded Irish Members from the Committee, but refused to put a single military man upon it, though it was known that, in Ireland especially, military accounts were sadly neglected.
LORD ROBERT MONTAGUobserved, that if Irish accounts were mismanaged, the fault was to some extent that of the Irish Members, who paid little attention to them.
Ordered, That the said Resolution be a Standing Order of this House.
THE CHANCELLOR OF THE EXCHEQUERsaid, that he would then propose that the Committee on Public Accounts in the present Session should consist of Sir Francis Baring, Mr. E. P. Bouverie, Sir Stafford Northcote, Mr. Peel, Mr. Glyn, Mr. Cobden, Sir Henry Willoughby, Mr. Howes, and Mr. Walpole. He wished to state at the same time that it had never entered into the heads of those by whom those hon. Members were selected that there could be the slightest reason for inquiring to what part of the United Kingdom any one of the Members belonged. Of the two vacancies which had arisen in the Committee, one had been filled by the nomination of Mr. Walpole and the other by that of Mr. Bouverie. Especial care was necessary in choosing a successor to Sir James Graham, who hardly ever had a rival, and never a superior, in his acquaintance with the forms and business of the House, in his intuitive perception of all administrative questions, his immense knowledge of public affairs, the comprehensive and accurate judgment which he applied in dealing with matters like this, or in his unbounded readiness to give the benefit of his acquirements, his talents, and experience both to this House and to all who were anxious to profit by them. The hon. Member for Kilmarnock (Mr. E. P. Bouverie) was chosen to fill the place of Sir James Graham, not because he was a Scotch Member, but on account of his competence and ability. Personal fitness ought to be the only guide in the choice of the Members of the Committee, and it was on that ground that he ventured to submit the names which he had put on the notice paper.
On Question, "That Sir FRANCIS BARING'S name be retained on the List of Members,"
COLONEL FRENCHsaid, that notwithstanding what had fallen from the right hon. Gentleman, he must assert the necessity of having two Irish and two Scotch. Members upon the Committee. He must also deny the assumption of the right hon. Gentleman that because a man had served for one Session he was therefore, as a matter of course, to serve on the Committee again.
MR. HENNESSYsaid, that it was plain from the evidence taken before the Committee last year that the English Members did not understand Irish Accounts.
MR. O'BRIENsaid, it would be considered a slight to Ireland if no Irishman was on the Committee. He thought the Government ought to defer to the wishes expressed by so large a section of the House.
MR. NEWDEGATEsaid, there was not one of the Gentlemen that had been proposed to whom he could object, but he protested against the idea that the House was bound by any arrangement made out of it. He should vote for all the names, but he would support a Motion for the addition of another Member.
COLONEL DUNNEsaid, he found great difficulty in voting against any of the names proposed by the Chancellor of the Exchequer, but he thought that the right hon. Gentleman had not dealt fairly with Ireland.
MR. WHITESIDEsaid, he thought that it would be well to add a Scotch and an Irish Member to the Committee.
MAJOR HAMILTONobserved, that he should not be doing his duty if he did not join the Irish brigade in their request on this occasion.
LORD ROBERT MONTAGUsaid, he wished to ask if it was competent for the Chancellor of the Exchequer to add another name after the House had agreed that the appointment of the Committee should be a Standing Order, and that the Committee should consist of nine Members.
MR. SPEAKERsaid it was not.
SIR FRANCIS BARING, Mr. EDWARD PLEYDELL BOUVERIE, and Sir STAFFORD NORTHCOTE nominated Members of the said Committee:—
Motion made and Question proposed, "That Mr. PEEL be one other Member of the said Committee."
COLONEL FRENCHsaid, that he should object to the appointment of that right hon. Gentleman.
SIR STAFFORD NORTHCOTEremarked, that the proceedings of the Committee would be very much crippled if the Secretary of the Treasury were not a member of it.
MR. O'BRIENsaid, he should vote against the name of the Secretary of the Treasury, because his name was not on the list which had been agreed on by the Irish Members.
Question put, "That Mr. PEEL be one other Member of the said Committee."
The House divided:—Ayes 72; Noes 15: Majority 57.
Motion made and Question proposed, "That Mr. GLYN be one other Member of the said Committee."
MR. HENNESSYsaid, he would then move that the debate be adjourned, in order to give the Chancellor of the Exchequer the opportunity of considering whether he would not consent to the enlargement of the Committee.
THE CHANCELLOR OF THE EXCHEQUERsaid, the House had decided, both in this and the previous Session, to retain the number of the Committee as it at present stood, and he must therefore decline to entertain any suggestion for its enlargement.
Motion made, and Question put, "That the Debate be now adjourned."
The House divided:—Ayes 12; Noes 72: Majority 60.
Question, "That Mr. GLYN be one other Member of the said Committee," put, and agreed to.
MR. HENNESSYsaid, that out of respect for the leader of the House, and not wishing to keep him there longer at so late an hour, the opposition would no longer be persisted in.
MR. COBDEN, Sir HENRY WILLOUGHBY, Mr. HOWES, and Mr. WALPOLE nominated other Members of the said Committee.

THAMES EMBANKMENT BILL.

  RETURN MOVED FOR.
  SIR JOHN SHELLEYsaid, he thought that the inhabitants of the metropolis ought to have fuller details than they now possessed with regard to a scheme which was estimated to cost a million and a half of money. He would therefore move for a Return of the estimated expenditure to carry into effect the provisions of the Thames Embankment Bill.
  Motion made, and Question proposed,
  "That there be laid before this House, a Return of the estimated Expenditure to carry into effect the provisions of the Thames Embankment Bill; distinguishing the cost of the filling-in and the masonry of the Embankment, the gross amount of the compensation for wharfage and river frontage, the cost of each approach to the Embankment, and of each of the other streets and improvements mentioned in the Bill, including compensation and all other expenses; also the cost of the Low Level Sewer, the length of the Embankment and of each Street, together with a Plan of the Embankment, Streets, and Improvements."
  MR. CRAWFORDseconded the Motion.
  MR. COWPERsaid, that his objection to giving the Returns was, that all these details would be thoroughly sifted by the Committee to which the Bill would be referred.
  Notice taken, that 40 Members were not present; House counted; and 40 Members not being present,
  The House was adjourned at a quarter after Two o'clock.

MINUTES.
PUBLIC BILLS.—2a Protection of Inventions and Designs (1862).
3a Australian Colonies Government Act Amendment.

CHURCH DISCIPLINE ACTS.

  QUESTION.
  THE MARQUESS OF SALISBURYasked, Whether it was the intention of her Majesty's Government to bring in any Bill for the Consolidation of the Church Discipline Acts.
  THE LORD CHANCELLORsaid, that a question similar to that of the noble Marquess, respecting the intention of the Government to introduce a measure for consolidating the Church Discipline Acts had already been put in another place. He had therefore already under his consideration the propriety of introducing such a measure, and Her Majesty's Government had taken steps for that purpose. He had communicated with a person most competent to undertake that duty, and had arranged with him to enter upon the task, He had also been in communication with the right rev. Bench upon the subject of an Act for the better enforcement of Church Discipline; and if he saw any probability of being able to deal satisfactorily with the question, it was probable that he should lay a Bill upon the table in the course of the present Session. Any more definite answer he was not prepared to give.

IRON-PLATED SHIPS.—QUESTION.
THE EARL OF HARDWICKErose, pursuant to notice, to ask the First Lord of the Admiralty, What Number of Iron-plated Ships are afloat and building; and what is intended to be done with the Ships of the Fleet that are built of Timber? The noble Earl said, that is was important to ascertain from the Government what were their views with regard to the future construction of the ships of the Royal Navy. Their Lordships were fortunate in having in that House the head of the Admiralty, and it was desirable that the noble Duke should have an opportunity of stating the views and opinions of the Board on a subject which assumed, at the present moment, a great and vital importance. It was consolatory to reflect that this country was in as good a position in regard to its naval strength as any other nation in the world. There need, therefore, be no very great: haste, fear, or alarm on this question,

431
because it had been before Parliament for a great length of time, and a large amount of public money had been expended in experiments upon iron-plated ships. His own mind had long been made up that iron must be substituted for timber in the construction of any efficient naval force; and although he had not an opportunity of stating his opinion in that House, he had long ago, at public meetings and dinners, declared the necessity of abandoning wooden vessels and building only iron vessels. The late events on the American coast and in the James River, had brought about a sort of crisis in the state of public opinion, since it had evinced to the world that in a contest between iron and wooden vessels the latter were utterly valueless. It was, therefore, for the Government to consider whether they would any longer nibble at this matter, but whether they should not rather open their jaws wide and swallow the whole, let the cost be what it might, and persevere in the construction of an iron-plated navy. As the question now stood before the country, it was as much one of common sense as of science. The duty of a navy was to secure the coasts of the country inviolate, to protect the coasts and harbours of our colonies, to blockade an enemy in his own ports, and to supply an adequate number of cruising ships for service at home and abroad. For these purposes two descriptions of vessels were required. Whatever might be thought of the new method of naval warfare, it had very much changed in this respect—that the vessels which carried the greatest extent of masts, yards, and sails were now liable to the greatest embarrassment in fighting; for the whole fire of a ship would be elevated against the rigging of an enemy thus fitted out, in order that her masts might fall over her side and cripple her movements. He therefore looked forward to the employment of ships more and more in the nature of steam batteries, in which the crew would be protected, which carried the least possible superstructure of masts and yards, and which, like the Monitor, were impervious to shot and shell. This description of vessel, however, besides being enormously expensive, could not keep the sea long for want of coal, and it was necessary for cruising purposes and long voyages to have another class of vessels propelled by sails as well as steam. A merchantman was built for speed and cargo. If fifteen or twenty knots an hour could be got out of her, that was a gain of time
432
and money to the owner. But in fighting ships it was necessary to combine the qualities of sea-going vessels with those of a man-of-war, and to abandon a portion of each for the sake of the whole. It was desirable they should have the power of turning rapidly and manoeuvring, and for this purpose a considerable amount of speed was necessary. He believed that a rate of speed of twelve or thirteen knots an hour might be attained with iron-plated ships of great strength. In the construction of our future men-of-war his opinion was— and he spoke it very humbly—that we should take care to have them of such a size and length that they would be able to perform the duties of men-of-war in an efficient manner. Another consideration in the construction of iron ships was the draught of water. He implored the Admiralty not to be induced by ironmasters and iron-ship constructors, who were not seamen, to build ships drawing twenty-six, twenty-eight, or thirty feet of water—ships which raised the question whether our great harbours were deep enough to admit them. He saw such a number of new contrivances—he saw the Government pressed with so many inventions of iron manufacturers—he saw so many novelties of every description brought under their notice by these constructors—that he could not help reminding the Admiralty that these gentlemen were not seamen, and did not know our requirements. Without commenting on any particular vessel, he must express his opinion that the difficulty of steering and managing some of our new ships would be so great, that if we did not fall back on practical men, we were very likely to have some very bad vessels. It was quite true that low vessels which had no masts might have more propulsion by steam than could be applied to a sea-going ship; but the Admiralty must take care to have them of such a length as that they might be handy and be easily turned. He believed that the principles applicable to floating bodies were in the main the same, whether these bodies were built of iron or of wood, or were propelled by steam or by sails. We must be careful not to run into extremes. There was much to be said for the old principle of constructing a ship for all the purposes for which she was required, without sacrificing anything. Some gentlemen were found to recommend that ships should be built without the ordinary keel. Why, how was a ship without a keel to be steered? The keel

433
of a ship had an essential part to perform in respect to the steering; and if side keels were attached instead of the ordinary keel, they had the effect of turning the ship round when she heeled on one side. He would advise the Admiralty never to build a. ship without first taking advice of men-of-war's men. Another very serious question arose — namely, what were we to do with our fine stock of wooden ships? He had seen it stated in a letter that the Merrimac, of which their Lordships had heard so much, was not iron-plated when brought into action. She had been cut down and covered over with a pent-house roof, that had been described as something like a house-top. As he understood, this floating house was not iron-plated. Bars of railway iron-rails such as those used on railways—were bent across the roof, and lashed with rope or wire to the scantlings inside, the ends of the rails coming down towards the water. He had not only seen it stated in a letter, but had heard from several officers that that was the mode of her temporary construction, and that so constructed she went into action, and yet, so roughly protected, the vessel was able to resist the Monitor. Now, there were none of our wooden ships that were not capable of being cut down and plated with iron at a moderate expense as compared with the cost of our new iron ships. If we were going to try the cupola plan, he thought that, instead of building a new vessel, we could do nothing better than take one of our sound wooden ships, cut her down, and plate her. In that way our stock of wooden ships might be worked up. As an old officer, he paid great attention to these things, and he must say that he saw a total change about to take place in the nature and character of sea life. He felt convinced, that though the movement might be gradual, it would not. be slow, which would change the whole character of maritime life. We should not be able to keep great fleets at sea in time of war. It would be far too expensive. Our fleets of iron ships would be kept in dock or cruising off the coasts, till at last we should come to iron-plated batteries, kept at home. The time would arrive when a ship would be fought by an engineer, a stoker, and an artillerist. The modern character of a sailor would become like that of a soldier. He would live on the coast or in towns; and it was to be feared, that when he lost the excitement
434
of active service, there would not be the same inducement to the youths of this country to enter the naval service. He saw that this change was inevitable, though personally he might regret it. With regard to the question of arming our ships, a number of inventors were very sanguine on the subject; but beyond a certain amount of artillery we should not be able to go. Independently of the danger from bursting of such large guns, it was doubtful whether it would be possible to arm ships in that manner. What was to be the size of the magazines on board those ships? How was space to be provided for the supply of shot requisite on going into action? He had merely risen for the purpose of directing the attention of the Government to a question of momentous importance and involving the very gravest considerations; and he had but glanced at the outline of the subject, abstaining from any comments on particular ships or individuals. As they had the advantage of the presence in that House of the First Lord of the Admiralty, it was desirable that the noble Duke should have an opportunity of expressing the opinions to which, no doubt, he had given grave thought. The noble Earl concluded by asking the First Lord of the Admiralty what number of iron-plated ships were afloat and building, and what was intended to be done with the ships of the fleet that were built of timber.
THE DUKE OF SOMERSET: I am much obliged to the noble Earl for bringing this question before the House, and for the tone and manner in which he has done so, not mixing up with it anything beyond the real interests of the country. I will endeavour to answer as clearly as I can the questions arising from the observations which the noble Earl has made. I must remind your Lordships that when I first came into office three years ago, in the summer of 1859, the pressure put upon the Admiralty by this House, by the House of Commons, and by the public, was—not to put aside wooden ships and to build iron ships only—but to add to the strength of the navy; the questions with regard to which anxiety was more immediately felt were that we should possess a powerful fleet of line-of-battle ships, and that we should add to the strength of our naval reserve. We found when we came into office a programme left by the previous Government, in which was included a proposal for building a large number of

435
wooden ships, and it was also contemplated to take money for two iron-cased ships. We did not think it right to set aside the scheme of the late Government in reference to wooden ships, and the building of the two iron-cased ships was also proceeded with. But before many months passed I was compelled to make an addition to their programme. Information was brought to me which made me press upon the Government the necessity of having four iron-cased vessels, instead of two. Of these vessels, the first, as your Lordships are well aware, was the Warrior; it had been ordered and commenced before the Government came in. The next, the Black Prince, had been also ordered within a couple of months of my coming into office. I considered without loss of time, whether it was possible to make any improvements in her; but I found it would be necessary to have the whole details calculated over again and the lines re-drawn, which would have taken three or four months; and as there was a feeling throughout the country that it was desirable to proceed, I ordered her to be completed on the same lines as the Warrior. But I was not quite satisfied with those vessels. I admit, with the noble Earl, that great length and great draught of water, although characteristic of powerful vessels, and enabling them to make rapid passages, are also attended with inconveniences. I therefore caused the Department to reconsider the question, and to suggest plans for two vessels of a smaller class, which were accordingly prepared at the close of the autumn. Those two were the Defence and Resistance. The Warrior and Black Prince, as your Lordships are aware, are vessels of 6,000 tons, carrying 26 guns, partially protected by thick iron plates. They may also carry guns at their stern and bow, which are not strongly plated; but I do not call these fighting guns, like the others. The Defence and Resistance are vessels of a smaller construction. They are each of 3,700 tons, and carry 12 guns, protected by iron casings. These four vessels are now ready. I was not satisfied with these. Your Lordships must observe that this is so new a question that difficulties arise at every step. We saw that these vessels were not sufficiently protected, and, after consulting practical men, another class was proposed, which I shall call the Valiant class. These ships are of 4,100 tons, carrying 32 guns, all protected by strong iron plates: one of
436
them will be launched in August; the other, through failure on the part of the contractor, not till early next year. We agree to build these vessels by contract; but when the contractors undertake the work, they find more difficulties than they had calculated upon; so much time is required in forging the enormous pieces of iron, and the quality of the iron is so carefully examined by us that contractors complain of the heavy obligations under which they labour in meeting our requirements, and we have had a great deal of trouble in some cases to get them to continue the work. In the case of one of these vessels the contractor entirely gave up the undertaking—a step which has necessarily been productive of delay.
With the considerations affecting these vessels of course arises the question of armament. In the course of the last few years great progress has been made in gunnery. Formerly it was thought that a 68-pounder was the heaviest gun that could be carried on board ship; now we have the 100-pounder Armstrong gun mounted on board. We consulted the Controller of the Navy, and we found, that if both the armaments and the iron plates which vessels carried were greatly increased in weight, the vessels would be very ill adapted for service at sea. Officers abroad report that even at present the weight of the guns in the bow of a ship press her down so that the vessel is actually torn to pieces by her own armament. We accordingly ordered three other vessels in the summer of last year, which were to be no longer than the Warrior, but were to have more displacement, in place of 6,000 tons having 6,700; they will carry 40 guns, protected all round—not partially but entirely—and they will have steam power in proportion to their size, namely, 1,300 horse power. Here, then, we have got 10 vessels of iron, four of which are already launched, and another will be launched in August. In addition, however, to the progress thus made, your Lordships will remember that last year I proposed to take the frames of some wooden ships which had been prepared for line-of-battle ships, and to lengthen them; so that they might bear the weight of plating, which they would not otherwise do. These vessels will be each of about 4,000 tons, and will carry 40 guns, all protected. With these vessels we can advance much more rapidly in our own dockyards than with those which are built by contract;

437
and when completed the whole number will be sea-going ships. Three of these will be ready this autumn and two more early next year.
But, last summer I felt that we still had not got the proper vessels for the de-fence of our harbours and ports; and as soon as the plans for lengthening these wooden ships had been completed, we considered the question of building a vessel specially for this purpose, and I arrived at the conclusion that to this end the cupola ship recommended by Captain Coles would be very well adapted. But the plan, though it had been considered, had never been experimentally tried; and I therefore caused a cupola upon this pattern, which had been commenced a year or two before, to be finished and put on board a ship. I sent it out to sea with some naval officers, in order that they might try whether they could in a heavy sea use the cupola so as to point the guns. The officers reported very favourably. They could fire so rapidly that some men taken from the Excellent gave up the contest, saying that they had no chance against the cupola. So far as firing went, that was very successful. I then desired to try how far the cupola would be proof against damage from an enemy's fire, or how far the machinery on which it rested would be injured so as to interfere with its revolving. To ascertain this, we had a vessel brought within 200 yards of the cupola ship, and from that distance the latter vessel was subjected to such a fire as a vessel would hardly ever meet with, even in action. In the first instance she was fired at from some eight or ten 40 pounders, next from some fifteen or twenty 68-pounders, and finally more than forty 100-pounders were fired at her. That severe fire did her no injury. One plate was injured, but we found that it was not of good quality. Having tried these experiments, I thought that we had got a vessel that would be most useful for harbour defence. But it was suggested that these cupolas were very heavy, each weighing, with its machinery, about 70 tons, and that it would be a great advantage if instead of one gun they could each contain two, which should both be pointed in the same direction. To ascertain whether that could be done, we had made a wooden shield of the diameter required, and had it tried at Portsmouth last autumn, when it succeeded perfectly. I was at once satisfied that we had got a vessel which would be most useful for the protection of our harbours.
438
But as there was no pressure for defence, and no alarm about the safety of our harbours, I did not think it necessary to apply to the Treasury For authority to commence that vessel at once. I thought I might leave the matter to be discussed by Parliament. A Vote for this purpose was placed on the Estimates this year; and as soon as it was passed, I obtained tenders for the construction of the vessel, and I believe that she will be commenced in the course of a few days, or at most of a few weeks, She will be wholly iron, fitted with cupolas on Captain Coles's plan. Her length will be almost 250 ft., her tonnage little above 2,000, and she will only draw 20 ft. of water. That, I think, will be a very effective and powerful vessel. The noble Earl asked why we did not try the cupola in some wooden ships cut down. I did think of that; but then it was objected that I was about to adopt an entirely new principle, and that if I tried the experiment with an old ship, and it did not perfectly answer, discredit would be thrown upon the whole scheme. I therefore preferred, in the first instance at least, to try it with a vessel built expressly for the purpose. At the same time, my own belief is, that we may also succeed in arming some of our wooden ships, when cut down, with these cupolas; in fact, I propose to do so: but in order that I might be certain of success, I thought it best to order the construction of an iron ship, which should be built in consultation with Captain Coles, who has given up a great deal of his time, and has rendered the Admiralty much assistance in designing and arranging this vessel. The method of construction will not be precisely similar to that recommended by Captain Coles in the pamphlet which he published last year—namely, an external thin coat and an internal thick coat. There are structural objections to that form, and we have not adopted it. She will be a strong iron-plated vessel, carrying her guns in the cupolas about 9 ft. 6 in. out of the water. She will be able to go all round the coast, but she is not intended for a seagoing vessel. Masts and yards would interfere with the training of her guns, therefore she will have none. That I believe will be the best form of vessel that we can have for the protection of our coasts; and I have no doubt that we may with advantage construct some rather smaller upon the same principle. I thought, however, that if I at first built a

439
ship with only one or two cupolas, and that it was seen how heavy would be the cost of carrying two guns in that way, it would re-fleet less credit upon the invention of Captain Coles than if we built a vessel to carry twelve guns. Twelve guns in these cupolas will have the effect of twenty-four as they are ordinarily carried, because the cupolas can be turned round, and the guns fired towards either side.
I have, therefore, shown your Lordships that we are now building plated vessels according to six different plans, but with all this I am not quite satisfied. We have not yet constructed a vessel in which the iron-plating adds to or assists in constituting the strength of the vessel. Many experiments have been made with a view to solve this difficulty, but they have not been entirely successful. I do, however, hope that before long we shall be able to construct a vessel upon such a plan that her thick iron plating will not only protect her against shots, but will greatly contribute to the strength of the vessel. At present the fault of iron plating, especially where wooden vessels are concerned, is that it hangs upon the side, but does not, as it ought, contribute to the strength of the vessel. This defect, I have no doubt, will eventually be remedied.
The noble Earl asked me what we are going to do with our wooden ships. That is a question to which, of course, I have turned my attention. The question is not easy to answer. At present we have prepared the frames of several vessels, and these frames can be easily adapted to the reception of plates. We have five frames of line-of-battle ships and seven frames of frigates which can be easily adapted; and we have also the frames of eight large corvettes which can be adapted to carry at least some guns protected by iron plates. With regard to our vessels generally, we could cut down twenty line-of-battle ships and adapt them to coast service; and as they have their machinery on board, it would be at a comparatively small cost that vessels of this class would be produced. While doing that we should still have a powerful fleet of more than forty ships to oppose any wooden fleet that we might have to engage. Therefore, if the nations of the world wish to have iron ships and to fight with iron, we are as well prepared as any other country.
I wish to say a word with reference to this conflict which has taken place in
440
America. It is said that it alters all our previous notions of maritime warfare. Now. I should like to state what I think it alters, and what I think it leaves unchanged. It leaves unaltered the relation between iron ships and wooden ships. It was already the undivided opinion of all experienced men that where wooden ships met iron ships the former could not live. But it makes this great difference—before this, we thought that we should have to keep iron ships only for home service, for the purposes of coast defence; but if other nations follow the example of the Americans, and have iron fleets, we must be prepared to meet iron ships in all quarters of the globe. Whereas before, we thought that we could keep our iron fleet to protect our coast, and perform our service abroad by means of wooden frigates and corvettes, we must now send iron vessels to every place where we may be liable to meet iron ships. That makes a great change. As to the probable financial effect of this change, I do not think that it will be so expensive to this country as some persons seem to anticipate. When we have these powerful vessels, it will be our object not to send them out to buffet the winds and waves, but to have them in harbour, or at a station where they can be used for the real purposes of war; and to use for the purpose of showing the flag, protecting merchant ships, repressing piracy, or other minor purposes, smaller vessels which will be quite adequate to the performance of such services. I therefore do not think that the change will be attended with such great expense as some people fear. People in this country seem at once to have jumped to the conclusion that iron ships are invulnerable. They may be so when opposed to wooden ships, but not when they meet vessels similar to themselves. It is also said that they can run down every hostile vessel. Let us see what happened in the recent American engagement. Much has been made of the Merrimac running down the Federal frigate. But it must be remembered that the frigate was at anchor and that the Merrimac was a moving mass of 3,000 tons; that she came on at the top of her speed, which, however, is not very great, not more than five or six knots an hour. I believe that a wooden vessel might have done as much under similar circumstances. I do not, therefore, think the result very conclusive. Moreover, it would not be so easy to run down a steamer in motion, which would be able to

441
avoid a collision. There is also an important fact which we have yet to learn, and that is how much the Merrimac was injured by the encounter. Some time back Sir Howard Douglas suggested that it would be a very interesting experiment to put a ship in the river and let it be run into by another of iron. But as a two-decker was required for the purpose, it seemed to me that the experiment would be rather costly, and that it was doubtful whether the House of Commons would sanction such expenditure in the Estimates. It is quite true, I believe, that railway bar iron was used in the Merrimac. It is also a very long frigate. [The Earl of HARDWICKE: Not very long] The Monitor is a vessel of a very curious form. In a letter attributed to Mr. Ericsson it is asserted that this is an entirely new invention, and that it is intended as a "monitor" to the British Government. I, on the part of the Admiralty, am much obliged to him for his admonition, and still more to the Americans for their experiments. If they will only perform a few more experiments of the same kind, it will save the Department a great deal of trouble. This Monitor is something between a raft and a diving bell. Her deck is just two feet above the water in a perfect calm. When the water is at all disturbed, the deck will, no doubt, be immersed. There is no sort of protection for the deck, and nobody can stand or walk on it. The crew, must therefore, live below hatches, under the level of the water, breathing through a pipe that passes through the deck into the air. This strange vessel is furnished with a cupola. One can almost fancy that in constructing this cupola the Americans had heard of Captain Coles's invention. The cupola of the Monitor is plated with inch-iron on inch-iron, until the thickness of eight inches is attained. That is certainly a very ingenious makeshift; but if our experiments are worth anything, they prove beyond a doubt that four solid inches of iron in one plate are worth far more than the same quantity of iron in a couple of plates of two inches each. The American vessel is therefore defective in that respect. Besides, for our purposes such a vessel would not answer, because it could not go from port to port. The voyage from New York to Fort Monroe, was very dangerous to the Monitor. The following account is given in a Montreal newspaper: —
"The Federal Congress has voted 15,000,000 dollars for iron war vessels, and from the success of the Monitor it is probable that a considerable
442
number of vessels of her description will be constructed. There is, we think, little in this success to warrant the assumption that the problem of the beat construction of such vessels has been solved. On her voyage to Fortress Monroe the Monitor was all but lost; the waves broke over her and extinguished her fires, and, but for the assistance of a steamer that took her in tow, she would have sunk. Her success in the contest with the Merrimac, or Virginia, as she is now called, was negative. Her crew narrowly escaped suffocation, their situation being thus described:— 'The inside life in these iron-clad vessels is a sort of Calcutta Black-hole existence, at best. The ventilation is close, and the fire and smoke, with the bad confined air, are almost intolerable. The Merrimac had to endure this with 400 men. The Monitor's men suffered even more, the vessel being so much smaller. The eyes and nose of almost every man at the guns literally shed blood.' The concussion of shot upon the tower containing the armament is so severe as to disable the men inside, and several were rendered senseless by it."
That reminds me that in regard to concussions we experienced the same difficulty when we first tried the cupola; but the top was afterwards altered in such a way as to obviate this inconvenience. It is a remarkable fact that these two American vessels fought for five hours, and no one wag hurt. It becomes, therefore, important to ask what armament they bore. All the American vessels have Dahlgren guns, which, if they are shell guns, are nearly useless against iron plates. This is sufficient to account for the absence of results in that long cannonade. Then, again, these guns are rifled shell ordnance. The force of a projectile depends partly, of course, on its weight, but more on its velocity. The velocity of these American guns, on the showing of one of their officers, who has published a book on the subject, is only 900 feet per second, while our 68 pounders have a velocity of 1,500 feet in a second. In making some experiments lately on a target, representing the side of the Warrior, we found that shells produced little or no effect upon the plates. I used to think that no plates could resist the rifled guns; but I have changed that opinion. We have found that they are not so effective as we supposed, and that we must arm our ships with heavy smoothbore guns, the velocity of which at 200 yards is much greater. With a powerful wrought-iron gun of smooth bore we can easily have a velocity of 1,700 feet per second. I shall be curious to see how far the plates will stand the discharge of such a gun. I doubt whether they will be able to resist it; but if they do, I am sure we shall have much larger and more powerful guns in a few years than any that have

443
yet been brought into use. The results of the experiments, however, hitherto have been to show that while rifled guns maintain a higher velocity for a greater distance, yet for the purpose of penetrating plates near at hand recourse must be had to wrought-iron smooth-bore guns. Of course, it is essential that this ordnance should be made, not of cast-iron, which will not bear the strain, but of wrought-iron, manufactured, or built up, like the Armstrong gun.
The noble Earl says we must have two classes of ships. I am of opinion that we shall require at least three classes. We must have a number of speedy iron-cased-wooden or iron-plated ships to serve as convoys to merchant vessels, and to accompany the fleet. The other day, when sending troop-ships to America, it was asked, why not convoy them? But we cannot convoy them. Convoying these fast steamers is like putting a pony to follow a racer. It is, therefore, desirable to have some vessels for the protection of commerce. We must, secondly, have another class of ships to cruise at sea; and we must have a third class of iron ships for the defence of our coasts and harbours. In the present state of our knowledge it would be unwise to proceed further than we are doing in the construction of wooden vessels. It is desirable that we should limit the building of wooden ships to despatch vessels, always a useful class, and some other small class of vessels. And this is the plan we hare followed for two or three years. Since I have been in office no new wooden line-of-battle ship has been commenced and completed. Some frames have been prepared, but they are now converted into the iron ships of which I have spoken; and we mean to proceed in the same course. As to the question whether iron ships constructed upon Captain Coles's plan are capable of being entirely substituted for forts, I believe that in conjunction with forts they will render any approach to a harbour almost impossible; and should a ship come in crippled after an action, it would be glad to get under the protection of the guns of a fort. It must also be remembered that there is no limit to the size of guns that can be placed on forts; while there is a limit to the weight of guns that can be worked on ships. No doubt we, of the Admiralty, are apt to think that vessels can do all the work; but I think we ought not hastily to give up the construc-
444
tion of forts. It is a subject that requires to be gravely considered; and it would be a great mistake to jump hastily to a conclusion from one result, and that result so imperfectly known. We hear that the Merrimac silenced some forts; but it did not silence Fort Monroe. There is also one reason why the Monitor escaped so easily. The training of the guns of the Merrimac was lateral, not vertical. She therefore could not bring her guns to bear on a vessel so low in the water. When Lord Dundonald took a large Spanish ship of war, he ran his small vessel so close under the enemy's ship that the Spaniard fired over the heads of the attacking crew; and Lord Dundonald boarded and took her. I think the Merrimac, in trying to fight the Monitor, was much in the same position. It is impossible to wish for the repetition of such experiments at the cost of so much sorrow and waste of life as the war is inflicting on America; but these conflicts, viewed solely as matters of scientific experiment, are highly interesting. I believe I have now explained to your Lordships the course the Government intends to adopt, and I trust they will be considered satisfactory to your Lordships and the country.
THE EARL OF MALMESBURYwas exceedingly glad the subject had been brought forward. He believed the very practical speech of the noble Duke would give great satisfaction to the country. It was evident his attention was fixed on this important question, and that he had considered it in all its bearings. His speech would reassure the public, which was certainly not the case with some speeches that had been made in another place.
House adjourned at a quarter before Seven o'clock, till To-morrow, half-past Ten o'clock.