Sitting of 24 March 1863

MINUTES.
SUPPLY—Resolutions (March 23) reported.
PUBLIC BILLS—Ordered—Militia Pay.
Second Reading—Partnership Law Amendment [Bill 26]; Vaccination (Ireland), Debate (March. 23) further adjourned.
Committee—Inclosure [Bill 58].
Report—Inclosure [Bill 58].
Considered as amended—Corrupt Practices at Elections [Bill 68].
Third Reading—Tobacco Duties [Bill 66], and passed; Marine Mutiny, and passed.

ABOLITION OF TURNPIKES.

  QUESTION.
  MR. WESTERNsaid, he would beg to ask the Secretary of State for the Home

  1807
  Department, Whether it is his intention this Session to introduce any measure for abolishing Turnpikes; and, if not, whether he will be disposed to leave out of the Continuation Act those trusts which are free from debt?
  MR. H. A. BRUCEsaid, in reply, that it was not the intention of the Government to introduce any general measure for the abolition of turnpikes. It was undoubtedly the custom to extinguish trusts whenever the debt had been paid off, but there were some exceptions, however, to that rule. With regard to the case which the hon. Member had doubtless in his mind, that of the Essex roads, the trustees, and a majority of the parishes through which the highways passed, were of opinion that the trust should be continued. Under these circumstances, it would not be extinguished.

ALIENATION OF BRITISH TERRITORY.

  QUESTION.
  MR. DARBY GRIFFITHsaid, he wished to ask Mr. Solicitor General, Whether it is within the competence of the Prerogative of the Crown, upon the advice of the Minister of the day, to alienate any undoubted territorial possession of the Crown or the country without the knowledge or consent of Parliament; and, if so, whether such exercise of the Prerogative is not, in fact, equivalent to the possession by the Government of an arbitrary power of such alienation of territory?
  THE SOLICITOR GENERAL: Sir, the hon. Member put the same Question to the noble Lord at the head of the Government not long ago. If the noble Lord had not answered the hon. Gentleman, I do not know that it would have been quite consistent with my duty to do so. Since the noble Lord did answer the Question, I may repeat the substance of his reply, without going into the argument involved in the question. There is neither law nor constitutional usage to make the assent of Parliament necessary to the cession of territories of the Crown unless the laws of this country have been introduced into those territories, or unless Parliament has legislated concerning them.
  MR. DARBY GRIFFITHsaid, he wished to ask the hon. and learned Gentleman to explain the exact qualification he had introduced into his answer. The hon. and learned Gentleman said it was competent to alienate territory of the Crown without the as-
  1808
  sent of Parliament unless English laws had been introduced into the territory, or that it had been legislated for in Parliament. He wished, for example, to know whether the Crown possessed the Prerogative of ceding Colonies like Canada, Malta, or Gibraltar without the assent of Parliament?
  THE SOLICITOR GENERAL: I really cannot argue the question with the hon. Member. When British subjects have settled in newly-discovered territories —not countries acquired by conquest or cession—they carry with them the laws of this country. In that case cession could not take place without the consent of Parliament. In the case of conquered or ceded countries, if Parliament had legislated concerning those countries, then I apprehend the concurrence of Parliament might be necessary.

GOVERNMENT OF THE NORTH WESTERN PROVINCES OF INDIA.

  QUESTION.
  MR. VANSITTARTsaid, he would beg to ask the Secretary of State for India, Whether it is true that he has issued instructions to remove the Seat of Government of the North Western Provinces from Agra to Allahabad; if so, whether he has any objection to the production of the Correspondence relating to the same?
  SIR CHARLES WOOD,in reply, said, he had issued no such instructions as those referred to, and no correspondence, that he was aware of, had taken place on the subject.

CASE OF LIEUTENANT COLONEL CHARTERIS.—QUESTION.
MR. CONINGHAMsaid, he rose to ask the Secretary of State for War, What are the terms of the Regulation under which Lieutenant Colonel Charteris, who entered the Army in 1840, and who has not therefore completed his term of twenty-five years' service, is allowed the special indulgence of exchanging on half-pay with an Officer whose first Commission is dated 1830?
SIR GEORGE LEWISsaid, in reply, that a Royal Warrant was issued in January last, which embodied what was understood to be the Regulations formerly in force. That Warrant permitted one Officer to exchange with another Officer on half-pay. But it was not understood

1809
that the Warrant was to introduce any new conditions, and the constant practice of the War Department and the Horse Guards was in accordance with the Regulations before they were put into the shape of a Warrant.

ARTERIAL DRAINAGE IN IRELAND.

  QUESTION.
  MR. BAGWELLsaid, he wished to ask the Secretary to the Treasury. If it is the intention of Her Majesty's Government to authorize the Board of Works to proceed as formerly with works of Arterial Drainage in Ireland, and to place at the disposal of the said Board fur that purpose sufficient funds, repayable by instalments by the owners of the land improved by such works of Drainage?
  MR. PEELsaid, in reply, that it was not the intention of the Government to authorize the Board of Works to proceed with works of Arterial Drainage in Ireland.

CONSTABULARY HORSES.

  QUESTION.
  MR. HUNTsaid, he would beg to ask the Secretary to the Treasury, Whether, in consequence of the small number of horses kept for hire in some parts of the country, and the difficulty experienced by the County Constabulary in obtaining horses on hire from licensed persons, the Government will consider the propriety of recommending to Parliament to exempt from duty horses hired for Police Service, on the same principle on which an exemption is now allowed by law in the case of horses hired to convey prisoners to Gaol?
  MR. PEEL,in reply, said, it was objectionable to multiply exemptions from general laws. Except in a few places the Police had no difficulty in procuring horses from licensed persons, and as those persons paid a heavy duty, it was not desirable to interfere with their trade. The Government, therefore, did not intend to extend the exemption referred to by the hon. Member.

COOLIE IMMIGRATION INTO THE ISLAND OF REUNION.

  PAPERS MOVED FOR.
  MR. CAVE,on rising to move an Address on this subject, said, that as he had more than once called the attention of the House to this subject, he would state very
  1810
  briefly his reasons for again introducing it; and would beg permission before doing so to recapitulate, by way of preface, the transactions to which his Motion referred. It was well known that the French emancipated their slaves after the Revolution of 1818, and that the result in their colonies, as in ours, had been great difficulty in carrying on cultivation, in consequence of the dislike of the negroes to regular work. There were published annually in France expositions of the state of the empire, called Livres Jaunes, which, by a pardonable Hibernicism, had been termed French blue-books. Certain hon. Members, in perusing that portion of those books which related to the Colonial Department, might perhaps wonder that so profound a politician, as the French Emperor should set a high value on his colonies; but so it was. The Emperor anxiously desired the prosperity of his colonies; and seeing that the only way to make them to compete with slave countries was to give them abundance of labour, unlike our Government, which for years threw every obstacle in the way of our colonies obtaining labour, he made it an object of Imperial solicitude. The earliest results of his exertions were not happy; they were the so-called free emigration from Africa, the consequent difficulty with Portugal about the Charles et Georges, and the very natural desire of the Government of this country to put an end to so questionable and troublesome a system. The price paid to the French for giving up recruiting on the coast of Africa consisted of two treaties, one concluded in 1860, the other in 1861, by which France was permitted to draw-labourers from British India. He could not wonder that this concession appeared at first sight expedient, or at any rate the least of two evils. But it must be borne in mind that the Government of this country had wisely declared that the Indian emigrants were not capable of taking care of themselves. They had therefore laid down rules for the protection of these emigrants, and appointed officers to see that those rules were observed. With regard to our own colonies, trickery and concealment were impossible, and he had himself this Session induced the hon. Member for Honiton (Mr. Moffatt) to add to his annual Returns on the subject of immigration the number who returned each year to their own country and the amount of earnings they carried with them, so that the House might see at a glance the work-

  1811
  ing of the system. Could this be done in a foreign colony? The earliest and, he believed, the only French colony which had as yet taken advantage of the treaties was the island of Réunion or Bourbon, near Mauritius, which, having got so bad a name at Madras that no more emigrants could be obtained thence, gladly availed itself of the more distant labour-market of Calcutta. A British Consul had been stationed in Réunion to protect the immigrants and see that the stipulations of the treaty were duly observed. In consequence of certain rumours which had reached him, he asked the Under Secretary for Foreign Affairs last Session, on the Vote for this Consul's salary, what reports had been made by him of the condition of the coolies. The reply which he received was very unsatisfactory; he elicited no information about the state of the Indians in the island, but an admission that there had been great mortality at sea. This induced him to apply to a gentleman of high standing in Mauritius, wholly unconnected with sugar estates or planters, who had since paid a visit to Réunion and made inquiries for himself, and who entirely confirmed the reports of ill-treatment which had reached him. Without going into individual cases, he would merely mention two facts as indicative of the system pursued. The first was that coolies found in the road or elsewhere without a pass from their masters, and those against whom their masters had made a complaint of idleness, were carried off to the atéliers, in reality travaux forcés, where they were compelled to work as convicts; and the operation many of them were engaged in, while his informant was in the island, was standing up to their shoulders in the sea, passing along stones for the harbour now in course of construction at Réunion. The other fact was that many, who had been introduced by a company called the "Sociéte é Agricole," at so much a head, were pronounced not good agricultural labourers, and were induced on that account to accept a lower rate of wages than that promised in India. Now, he was not advocating the claim of our colonists to monopoly in the labour market of India, but he could not help asking what fair competition there could be between employers who fulfilled their contract to the letter and those who repudiated it. His informant concluded his letter in these words—
  "The result to which I have come is that
  1812
  Coolie immigration to Réunion is a modified form of slavery, and ought to be given up, unless placed upon a better footing."
  Such were his reasons for placing this notice upon the paper early in the Session. Since then, in fact only last week, the mail from India brought an important corroboration of these statements. A debate had taken place in the Viceregal Council at Calcutta on this very question. It was on the 5th of last month. In the course of the discussion reference was made to the deceptions practised on the coolies by the recruiting agents, to the great mortality during the voyage, and the great mortality in the island. Mr. Ellis, one of the speakers, quoted from a newspaper published in Reunion, which complained "of the physical inability of the Indians to work in the sugar plantations," but added that "the demand for labour was so great that even such was eagerly taken up." Upon which Mr. Ellis remarked, "that he much feared the old slavery opinion, that it paid to use a man up with labour for which he was unfit, prevailed at Réunion." It was also stated that no less than 9,000 coolies had left India for this diminutive island of Réunion—a mere speck in the Indian Ocean—in little more than two years, and that a treaty had been entered into permitting the Danes to take coolies to Santa Cruz, in the West Indies. It was asked whether we intended to depopulate India. The hon. Member for Maidstone had recently expressed just indignation at the permission given to the French Emperor by the Viceroy of Egypt to take a black regiment to Mexico; but we had given the Emperor permission to deport whole tribes, if he pleased, to the notoriously deadly climate of Cayenne. The Treaty of 1861 could not be terminated before eighteen months after July, 1864, but the Governor General of India, by Article 26, had the power "to suspend emigration to any one or more of the French, colonies, in the event of his having reason to believe that proper measures have not been taken for the protection of emigrants." It might be objected that should such power be exercised the French could, under the same article, terminate the whole convention, and would probably resume the objectionable emigration from Africa. To this he replied, that if the French chose to disgrace themselves by reopening the slave trade, we should not be responsible for it; but we were re-

  1813
  sponsible for giving our deliberate sanction to what, if his information were correct, was the slavery of our own fellow subjects in India. He was brought therefore to this conclusion—either the information which he had received concurrently from various sources was wholly inaccurate, which he could scarcely believe; or the Consul, whose salary now appeared for the third time in the Estimates, and who was appointed specially to protect the immigrants, and report upon their condition, had utterly neglected his duty, which he could not believe, either; or there were documents in possession of Her Majesty's Government which ought to be communicated to the House, and upon which, in all probability, action ought to be taken. It was for these reasons that he ventured to move, pursuant to notice, an Address for Copy of any Communications from Her Majesty's Consul at Réunion, respecting the condition of natives of British India held to labour in that Island.
  Motion made, and Question proposed,
  "That an humble Address be presented to Her Majesty, that She will be graciously pleased to give directions that there be laid before this House, a Copy of any Communications from Her Majesty's Consul at Reunion, respecting the condition of natives of British India held to labour in that island."
  MR. ARTHUR MILLSseconded the Motion.
  MR. LAYARDsaid, he was willing to admit that the information which he communicated to the House last year on the subject of the condition of Indian Coolies in the Island of Réunion was not satisfactory, but the fault did not lie with him nor with the British Consul at Réunion, upon whose reports it was founded. The fact was, that upon the arrival of the ships from India the Consul had means of ascertaining what mortality had taken place on board; and when the Coolies were removed to the quarantine station appointed for their reception, he could keep his eye upon them and observe how they were treated. Once, however, they were distributed over the island, it was extremely difficult for him to keep them under his notice. Perhaps the hon. Gentleman was not aware that no fewer than 47,000 Indians had been taken to Réunion, a large number of them before the convention was concluded between the English and French Governments. These poor persons were so ignorant as very often to be imperfectly aware of how they
  1814
  got there, who were their masters, and what the remuneration for their labour was to be. It had been suggested that they should each have a livret, or little book provided for them, stating in whose employment they were, and other particulars, which might enable the Consul to interfere in their behalf when the necessity arose; but some difficulty had occurred through these books being liable to pass into the hands of persons who had no right to them. In his last report, however, the Consul, Mr. Hill, spoke much more favourably than before of the treatment of the Coolies, both on board ship and after they landed. He stated that he had been over the various places appointed by the French Government for their reception, and that everything which could be desired was done there to promote their comfort. On their arrival they were examined, and if they were found incapable of doing the kind of work they were supposed to be bound under their contract to do, they were placed in a rejected class, called rebutés, and then, as it were, thrown upon the public, their contracts being annulled, and no wages secured to them other than they could obtain by competition in the market. That was the vice of the system, but the fault did not lie at Réunion, but with the agents at Madras and Calcutta, who were so anxious to obtain labourers and to fill the ship, that they engaged those people without taking proper care to see that they were in suitable health and condition for their work. Thus, some of them were reduced to great misery. Each of the rejected immigrants, however, had the option of returning home, but the Consul stated the singular fact that only three had availed themselves of that privilege, and that they were all blind men. As far as the Consul and Her Majesty's Government were concerned, everything had been done that could be done to insure that these persons should be properly cared for. What the hon. Gentleman said was true as regarded those who refused to work being removed to atéliers for a certain time as a kind of punishment. This appeared to be the only means of punishment, and in many cases, no doubt, proved a great hardship. Of course, our Consul was bound to protect these British subjects if they applied to him for protection; but he could not, under the terms of the Convention, interfere unnecessarily. It would not, for many reasons, be advisable to lay the whole of the papers on the table; but he

  1815
  was ready to show them to his hon. Friend, and if there were any among them which his hon. Friend thought it important or expedient to submit to the House, he would have great pleasure in doing what he could to meet his wishes. Upon that understanding, he trusted the Motion would be withdrawn.
  SIR MINTO FARQUHARsaid, he had supported his hon. Friend (Mr. Cave) on a former occasion, when he brought the question of the Treaty with France for the immigration of Coolies into Réunion before the House, and he was really surprised to find how truly prophetic the words spoken by his hon. Friend at the time had proved. He was glad to have the opportunity of now supporting him again. They all abominated everything approaching to the name of slavery, and after what had been stated there was every reason why they should specially consider the case of the Coolies sent to this French Colony, who were British subjects, and as such had every claim to their protection. They had all heard of a marriage de convenance, but this was the case of a traité de convenance, enabling the French Government to introduce a system which really amounted to slavery under another name. The Emperor had, it was true, given up the slave trade, but he was determined, that whatever the English might do, his colonies should not go out of cultivation for want of labourers; and when urged by the British not to procure them from Africa, he consented, on condition that England supplied him with coolies. It was upon this consideration that the British Government entered into the treaty with France; and there was established what was in reality, though not in name, slavery. Earl Russell, in the House of Commons at the time, himself expressed great doubts as to the policy of entering into this treaty; but, he added, the circumstances were so peculiar, that we might try the experiment, the object being, moreover, to prevent a renewal of the slave trade. He felt convinced that the greatest possible vigilance on the part of our Foreign Office was indispensable in this matter. Since the treaty 9,000 coolies had, as he had heard, been taken to Réunion. Having entered into such a treaty with France, the Danes now pressed us for coolies to be sent to Santa Cruz. A competition was thus springing up on the part of other countries for these labourers; and so anxious were the French to get them to Bourbon that they were not particular as
  1816
  to what class of coolies they belonged, but took the weak and infirm and obliged them to work beyond their strength. We never allowed a single coolie to be sent to a British colony without carefully looking after him, from the day he started till the day he arrived, and also during the whole period of his stay there, and indeed up to the time when he was again landed in India. It was only proper and honourable to us that the same protection should be extended over these persons sent to a foreign Colony, who, as the hon. Under Secretary said, were often ignorant and unable to take care of themselves. He earnestly trusted, that unless they were as well treated in the French as they were in the English colonies, Her Majesty's Government would refuse to renew the treaty.
  SIR JAMES ELPHINSTONEsaid, he thought there was a screw loose somewhere in that matter of the Bourbon immigration. The coolies, he must observe, who emigrated to Ceylon and the Mauritius were a perfectly intelligent people, and quite capable of understanding the nature of the bargain they were entering into. It was quite true that our own coolies were well taken care of, and well looked after, both on board ship and in the colonies. They were also, generally speaking, able-bodied men. But that was not the case with the coolies who were taken to Réunion, and if the cripples were cast adrift, as had been represented, our Government ought to take care that none but healthy immigrants were taken to Réunion, and that the same guarantees for their proper treatment while there should be obtained as existed in regard to the coolies in our own colonies. It was not usual for the French, as colonists, to oppress their labourers; but it would seem that a scandalous state of things prevailed at Réunion, though he was sure that a fair representation of any injurious treatment would insure a speedy remedy.
  MR. HENRY SEYMOURsaid, he thought that if anything was done to check the immigration of Indians into the French colonies, it would be attended with great injury to the coolies themselves. He had always looked upon emigration from the over-peopled regions of the East as the real way of putting an end to the slavery and the slave trade; and he saw no difficulty in their ascertaining the actual condition of these labourers while living in French colonies. When the treaty was negotiated with France, the Government

  1817
  of that country proposed that the immigrants should be placed under the same regulations as those who were sent to English Colonies. Had that arrangement not been carried out? If it had, it was probable that the sufferings of the coolies had not been very great. The term of service in our own Colonies was five years, and the sum of money which each man brought home with him was a sufficient proof that the treaty worked well. Of these sums a Return was regularly made to our Government; and why should not similar Returns be made to our Foreign Office of the savings of the labourers in the French colonies? In that way it might be easily ascertained whether they were less prosperous than our own.
  MR. CAVEsaid, in reply, that he was quite aware that a large number of Madras coolies had been smuggled into Réunion, and had called attention to the fact in 1860; but his present Motion referred only to those who had been imported under 'treaty, he considered what had been stated by his hon. Friend (Mr. Layard) as the strongest condemnation that could be pronounced against the system. In acceding to his proposition, therefore, he must say, if they could not agree as to the papers to be produced, he should feel at perfect liberty on some future day to make another Motion on the subject.
  Motion, by leave, withdrawn.

INCOME TAX— RESOLUTION.
MR. HUBBARDsaid, he rose to move the Resolution of which he had given notice relative to the Income Tax. The provision of funds in a country like England, to meet the large unproductive expenditure, even curtailed as far as the safety of the country would permit, must always be a matter of very serious consideration; and it became still more serious when they considered that their indirect taxation was now narrowed to a very few articles, tea and sugar, the two most important, being subject to heavy duties imposed to assist in meeting a war expenditure. Nothing could be more natural than that there should be a loud and urgent cry for the reduction of these war duties. But a cry, at least, as loud and urgent, was raised for a reduction or removal of the income tax. It was not only unpopular in itself in the highest degree, but its existence was a memorial of broken faith and of the fallaciousness of all prophetic finance. But why
1818
should the income tax be thus unpopular? The annual expenditure of this country required an annual provision which must be raised out of the incomes of the people; and at first sight it would seem that an income tax was the most natural source for providing an important portion of revenue. But it was an undoubted fact that the income tax was detested. The only reason for that detestation was that the income tax was founded upon no principle whatever. It was not a creation of their own days, but came from the darkest ages of finance, and had never been proposed but for a temporary purpose— never introduced or accepted but under the solemn assurance that its days were numbered. What was now the prospect of its days being numbered it was not for him to decide; but, whether or not it were retained as a means of raising a permanent revenue or consigned to the armoury of fiscal legislation for future exigencies, he thought it equally the duty of the House not to part with it till they had placed it on a definite and acknowledged principle. Circumstances many years ago had attracted his attention to the working of the income tax, and gave him a peculiar insight into many of its more important provisions. Two years ago he moved for a Committee on the subject, and his right hon. Friend would forgive him for saying that neither the conclusions at which that Committee arrived, nor the rejection by the House of his propositions last year, had left on his mind the slightest feeling of discouragement. Those who like him had been fated to contend with the ablest men of a powerful Government, both in the Committee and the House, would sympathize with him when he said that he never felt more confident in the soundness of his principle and the ultimate triumph of his cause, and he could not acknowledge a defeat in numbers to be a defeat in principle. He was far from undervaluing the force of the opposition which had been brought against him; nor did he believe that either the House or the country thought lightly of that opposition. But if an opposition came with evidence of its being founded on an entire misconception of the principle and misconstruction of the objects at which he aimed, he felt that such an opposition he was bound not to succumb to, but to surmount; and having searched carefully through the whole series of debates he was prepared to give to the articles

1819
of indictment against him a distinct and deliberate negative. It had been imputed to him that in the conduct of the question he had propounded an impracticable scheme—that the scheme would create inequalities more numerous and grave than it removed, that he was attempting class legislation, that he proposed to violate a solemn compact with the fund holders, to give undue advantages to the capitalist and the great merchant, and lastly, and the heaviest blow of all, that his scheme was especially hostile to the agricultural interest and would seriously aggavate the damage that interest already suffered through the infliction of the income tax. He met that indictment frankly and fearlessly, and to every one of its allegations he gave an open distinct denial. He asked for nothing but a fair hearing. If the allegations were borne out, let the House reject the plan he proposed. If they were disproved, he thought he might fairly ask the House to bear with him while he endeavoured to supply the deficiency of principle in the income tax, and that he might ask his opponents to reconsider a scheme which they had misunderstood. It had been objected that his was not an original proposition; but so far from aiming at originality, that was the very thing he wished to avoid. The strength of his scheme was not that it was new, but that he could allege in its support the most undoubted and invaluable authorities. Confining himself for the present to the first part of his Motion, he would recall the attention of the House to the principle laid down when the Parochial Assessment Act was passed in 1836. That Act, after reciting that it was desirable that a uniform mode of rating for the relief of the poor should be established, enacted that no rate should thenceforth be allowed unless it were made on an estimate of the net annual value of the several hereditaments, such net annual value to be obtained by deducting the average annual cost of maintenance from the rents of the hereditaments themselves. That was a principle which he thought was most sound. It was a principle which was reaffirmed only last Session by that House, where, in the Union Assessment Act, it not only confirmed previous legislation, but confirmed in distinct terms the very definition to which he was drawing attention—namely, the necessity of arriving at a net annual value before assessment was made. Why, if that were a principle ac-
1820
knowledged to be desirable for local taxation, should it be said to be undesirable or inexpedient for imperial taxation? That was a question to which, if a negative answer could be given, he would be glad to hear it. He had to contend that the same principle was applicable in both cases, but he contended, moreover, that any inequality, any inconvenience, arising in local taxation from the absence of an accurate basis, was trivial as compared with the inconvenience arising from taxation of the gross rental instead of the net, in cases of income tax. At that point he would not trust to his own arguments, but would refer to the highest authority—authority most undeniable on the particular point— namely, that of the Chancellor of the Exchequer himself in 1853. That right hon. Gentleman, in proposing his Budget, said—
"I estimate that one fourth part of the gross income derived from land and houses goes into the pockets not of persons beneficially interested in them, properly speaking, but into those of mortgagees, annuitants, and others who receive under settlements. If that be so, then it appears that the owners of land and houses do not receive £67,200,000, but from that sum you must deduct the fourth part of £80,000,000, which reduces their income to £47,200,000. This sum of £47,200,000 is then the net receipt of those beneficially interested in land and houses. But you will justly say that the encumbrancers, who receive the £20,000,000 pay the income tax. Well, let us see what their quota amounts to:— 7d. in the pound on £20,000,000 gives £583,000; deduct this sum from the £2,333,000 paid by the owners of land and houses, and the sum of £1,750,000 will be left, and this is the amount actually paid on an income of £47,200,000. Now, if hon. Members will take the trouble to apply the figures I have stated they will find the result to be this:—That the sum of 9d. in the pound on a net income of £47,200,000 would amount to £1,732,500, and that, consequently, under the law as it now stands, the income derived from land and houses is taxed at the rate, not of 7d., but 9d. in the pound."
That statement was most important, and he believed most accurate; but he would ask why had the landed interest been left in that most desolate condition for the last ten years? The measure of distress described in those remarks was only the average measure, and gave no idea of some extreme cases that might occur. The total annual value of houses and land was £80,000,000, from which must be deducted £12,800,000 for cost of maintenance, leaving £67,200,000 as the available income. But that income did not belong exclusively to the landowner, the claimants for life interests and mortgagees receiving

1821
their shares, upon the net amounts of which they paid income tax. The landed proprietors paid income tax not only upon what they received, but on their outgoings of £12,800,000 besides. Of all the grievances arising out of the mode of levying the income tax none was more oppressive than that which fell upon incumbered land. But these average results did not show the extreme limits of the grievance. He would put a case illustrating facts of which he was personally cognizant. A property was leased at £800 a year. The outgoings might be averaged at 10 per cent, leaving £720; but there was a mortgage upon the property for £16,000 at 4 per cent interest, which swallowed up £640, leaving only £80 net income to the proprietor. The mortgagee paid income tax upon the £640 he received; but the tax being levied upon the whole value of the property, the landowner had to pay, not upon the £80 he received, but upon £160, or at the rate of 1s. 6d. in the pound, instead of 9d. Supposing the rate of interest upon the mortgage debt had been raised to 4½ per cent it would have absorbed £720, thus leaving nothing for the landowner, who, nevertheless, would have had to pay the tax upon £80 a year. When he was told that his plan would create greater grievances than any already existing, he invited hon. Gentlemen to suggest a worse instance than the one he had given. He thanked his right, hon. Friend, and he was sure the House would thank him, for having forced this grievance upon their notice; for he confessed he should not himself have thought of searching in Schedule A for the graver defects of the law, being satisfied, that as his principle was sound, it must in application correct any grievance arising from comparative poverty or riches. The grievance was now clearly exposed, and he thought it required great confidence to tell the landed interest that they were benefited by the present arrangement of paying upon sixty-seven millions, when in fact they only received forty-seven millions. Although he did not pretend to be the friend of any particular interest, but was simply acting in the cause of justice, he declared that no charge could be more unfounded than that the plan he advocated would aggravate the injury suffered by the landed interest. In making such a charge the right hon. Gentleman had, without intending it, misled the House, especially when
1822
he stated the effect of the proposed change would be to raise the tax upon the unencumbered residue of landed property from 11 ½d., as at present, to 13½d. in the pound. The question to be considered was how were the grievances which he had pointed out to be removed. There was one effectual but simple method of dealing with them, and that was to apply to the case of income tax upon the rent of land and houses precisely the same principle as the House had affirmed to be proper in the case of local taxation—namely, to place the tax on the net ratable value of the land. Let that be done, and all inequalities would vanish, for whatever might be the amount of income the tax would be divided ratably among all parties interested. And he would remind the House that the mortgagee, whom he wished to see fairly sharing the burden of taxation with the landed proprietor, was the rich capitalist, whom it was alleged his scheme would chiefly benefit. If the House would refer to a Parliamentary paper published last year, and numbered 397, and would reduce the results to a 9d. tax, they would see that he had ground for affirming that the assessment on land and houses, combined under the wider operation by the scheme he proposed, would be 9d. and 64–100ths. That was the point to which the assessment of real property would descend from 11½d., at which his right hon. Friend fixed it under the present system. It was not merely land or houses that would receive benefit from that rational mode of taxation, but mines, quarries, and every kind of property would share in it equally; nay, it would carry relief even to that most helpless individual, the owner of a terminable annuity, who would find comfort and relief in the application of that simple principle of taxing nothing but net income. To show how that relief could be given, he had only to refer again to what had been done by legislation under the guidance of the right hon. Gentleman opposite. In 1846 the Government lent £3,000,000 to landowners, to be repaid by annual instalments extending over twenty-two years. Under the ordinary operation of the law those landowners, in making their instalments, would be entitled to deduct the income tax on the whole amount, as in 1853 a measure was introduced, or rather a provision was introduced in the general measure of the budget to the following effect:—
"That whereas advances of public money have been made, and the repayment has been secured

1823
by a rent charge, by which the principal sums advanced will be eventually repaid with interest, it is just that provision should be made for deducting the duty charged by this Act in proportion to such interest."
With regard to that, Mr. Timms, the law adviser to the Board of Inland Revenue, said that the circumstances were peculiar; and the peculiarity seemed to be, that whereas in the case of every other terminable annuity the State was the debtor, in these peculiar Acts the State was the creditor; so that it deliberately made a law carrying out with regard to its debtors a principle which it utterly denied as a matter of justice to its creditors. He wished to know whether in England such an utter subversion of justice should be tolerated as thus to make one law for the debtor and another for the creditor of the State. For his own part he thought, that if they wished to make the income tax regarded with constant hatred and contempt the Government could do no better than perpetuate such a law.
He next passed to the second clause of his Resolution, relating to the relief of industrial incomes. That question had already been argued most largely, and he would therefore simply state the principle he adopted: —"Industrial profits are partially applied as income to purposes of expenditure, the residue passes into investment, and as capital yields new products for taxation. If therefore the portion saved is taxed, it is taxed twice— first as profits and again in its subsequent products." The question had been looked at in every possible light, but there was a general agreement in demanding very nearly the same remedy—namely, a concession in the amount of assessment. Here, again, he would refer to legislative precedent. In 1853 a clause was introduced into the Bill for the renewal of the income tax, awarding to the extent of one-sixth of his income a remission of the tax to every individual who spent the portion so saved in the purchase of life policies. He asked Mr. Pressly, chairman of the Inland Revenue, upon what he conceived the policy of that concession to be founded, and his answer was distinct. He said that that portion was exempt from taxation "because it was considered no part of a man's income." The principle was excellent; the mode in which it was carried out was open to grave reprehension. He would state this objection in the words of
1824
a most able and critical writer of the present day, who remarked—
"It is no part of the duty of the State to give bounties to saving, or to lay penalties on expenditure. The State cannot put itself in the position of individuals, and judge for them; and as it cannot judge whether it is better for a man to save or to spend, it ought not to interfere. A father, for instance, may do more wisely if he expend £200 a year in giving his son a good education than by laying by the money, and the State ought not to punish him for doing so."
At the present moment the following case might arise:—A and B, two men in the same profession, each received £1,200 a year. Of that income A spent £200 a year in the education of his son, and B £200 in the purchase of a life annuity. The law remitted the tax upon B's life policy and it taxed A for his expenditure upon his son's education; so that, as now administered, it contravened the excellent policy laid down by the right hon. Member for Calne (Mr. Lowe). Now, his proposal was that upon professional incomes a concession should be made of one-third, and A and B would therefore both be taxed upon £800, and would be left perfectly free to apply their respective incomes as they chose. While, therefore, he adhered to the principle affirmed by the Act of 1853, he entirely condemned the mode in which it was endeavoured to be carried out, believing that nothing could be more tyrannical and impertinent than for the law to interfere and dictate in what shape a man should make his investment in order to be entitled to exemption. His proposition was conceived in the very words of his right hon. Friend in 1853, and that, he thought, must commend it strongly to the acceptance of the House. His right hon. Friend might, indeed, say, "It is one thing to admit that a certain remedy is desirable, and another thing to say that it is practicable." Now, upon the practicability of his scheme he could not wish to find more trustworthy evidence than that of the late Chairman of the Inland Revenue Office. An admirable servant of bis country, Mr. Pressly, was a most rigid adherent to things as they are, and under the influence of this strong Conservative tendency, with a strong perception of what was the feeling of the Government, he was not likely to concede any point which he did not feel bound as a man of honour to concede. Mr. Pressly was asked what were the points as to which he would find a difficulty in carrying out this measure. He mentioned two points. That was in the very earliest stage

1825
of the inquiry; but towards its close Mr. Pressly, having had laid before him papers relating to these two subjects, distinctly admitted that upon both points his difficulties were removed, adding that he had no objection no offer upon any other portion of the scheme. He appealed, therefore, to this as conclusive evidence in favour of the practicability of his proposal; and he might mention—not out of mere display, but to show that he had tried to set his mind to the solution of this question—that he had in his possession, drawn up by an eminent draughtsman, every provision which would be required to carry out his scheme.
Another and very serious charge was that his scheme would create inequalities more numerous and more grave than those which it removed. Now, the only grievance of that kind which had come to his knowledge was this—that he proposed to treat upon a different footing the profits arising from public companies and from private partnerships. With respect to public companies, they consisted of managers and clerks, who supplied the skill, labour, and intelligence, and of proprietors, who supplied the capital, had nothing whatever to do with the management, and received their dividends at the appointed time, just as they would the interest of money in the funds or in any other investment. At present the law taxed both those classes equally, but, according to the principle he submitted to the consideration of the House, the dividends of public companies would be fully taxed, while the intelligent managers and clerks who carried on the business would receive a proportionate abatement on the amount of their stipends or salaries. In private companies the partners among themselves provided both capital and management, and the result was one and inseparable. It might be said, that in perfect analogy with the case of public companies the capital and profits of partnerships should be separately assessed. There might be some large establishments which would make the requisite return; but nine-tenths of the whole number would be unable to do so, for they could not dissever the value of the capital from the value of the services which made that capital productive. In like manner, though there might be some instances in which professions were carried on with nothing but skill and intelligence, yet, generally speaking, capital, in one way or another, crept
1826
in, and contributed to professional profits, so that a distinction could not be made between professions and trades, and a principle could not be laid down on which separate assessments could be made.
It was also stated, that the rich capitalists and bankers were his clients, and that he was endeavouring to obtain for them a very unfair and improper advantage. Now, bankers' securities consisted in part—far the largest portion of them— of Government securities, railway securities, and private and public bonds, on the interest of which they paid income tax, and it never reached them without the deduction of that tax. As regarded the whole of that source of revenue, the effect of his proposition would be, that, instead of diminishing, it would aggravate the burden of their contribution to the Exchequer. With regard to the great brewers, great merchants, and others, they had a special advantage under the 133rd clause of the Act, which declared that whatever might be the amount of the average profits upon which they had been assessed, they should in a subsequent year be assessed wholly on the amount they had made; and that if that amount fell ever so far short of the average they returned, they should be entitled to the full abatement. Mr. Pressly said, that under the operation of that clause, great merchants, great brewers, and great manufacturers, whose profits were subjected to vicissitudes, had the means of escaping paying half or little more of the income tax, in the most legal manner. He asked why those individuals should be entitled to this prerogative, which was not shared in by professional men, by salaried officers of the State, or by employés in private life? He asked those persons to surrender that peculiar privilege, and take their share of a more fair and equitable taxation. There was another point on which he desired to offer an observation. Whenever it was desired to make a hard hit in debate, something was said about keeping faith with the fundholder. The English mind was peculiarly sensitive, and very rightly, on that point; but by his proposition the funds would not be taxed in any special manner, but would be treated only like other analogous income. As to the charge of class legislation, he wished to say, that no charge, in his opinion, could be considered more odious; but he challenged any one to point to a single word in anything he had said or written on the subject which could

1827
bear such a construction. He had felt it his duty to explain his scheme for the purpose of showing its consistency and safety, but he would, on that occasion, simply submit to the House the proposition, "that with regard to invested property, net income should only be assessed, and that some abatement ought to be made, for the purpose of taxation, from the net amount of industrial incomes," No result was more to be dreaded than that those who were aggrieved by the existing system should be driven by a continued refusal of relief into a stolid indifference, and should say to the Government, "Do your worst; we will take care of ourselves." He wished to press on the House the necessity of laying down some definite course of policy, and of directing the Government to reconstruct the tax, if it was to be renewed, in such a manner as to carry out what Adam Smith had declared to be the essential principle of all taxation, "That the subjects of every State ought to contribute to its support in proportion to the revenue which they may respectively enjoy." He therefore begged to move, as affirming the principle of an income tax—
"That, in the opinion of this House, the incidents of an Income Tax touching the products of invested property should fall upon net Income, and that the net amounts of industrial earnings should, previous to assessment, be subject to such an abatement as may equitably adjust the burden thrown upon intelligence and skill as compared with property."
MR. LEATHAMrose to second the Resolution, and said: Mr. Speaker, Sir, I think that any one who proposes to reconstruct the incom tax upon some simple principle which shall remove all its inequalities and render it a tax justly levied upon the revenue of every one, must be either strangely unfamiliar with the difficulties which beset this question, or singularly confident in his own omnipotence. But although I fear that we must despair of doing justice to everybody, that is no reason why we should despair of redressing some of the more prominent inequalities, and so doing to large classes of persons a justice which, if it be not absolute, is at least comparative and approximate. If it be contended that with all our Amendments there must still remain much injustice unredressed, it is at least worth while to see whether we cannot reduce the sum of our necessary injustice to a minimum; and if it be objected that the tax is in its operation so full of inequalities that we are bewildered where to begin redressing them, instead of sitting
1828
down patiently under shuch a confession on our part, I fear that taxpayers will rather incline to use the language of a great statesman, once a very eminent Member of this House, and to ask whether "they are to despair of justice because they have need of so great justice." And, Sir, a special reason for moving in this matter now seems to me to be afforded by the change which has taken place in the policy of those who are for maintaining the tax as it is. The plea which used to be put forward was that the tax was lying under sentence of death, that it had but a little time to live, and that it was not worth while elaborately to reconstruct an impost which was trembling upon the verge of dissolution. But all this is changed now. The right hon. Gentleman the Chancellor of the Exchequer, who told us, in 1853, that "it was on all hands agreed that this tax was not adapted for a permanent part of your fiscal system, unless by reconstruction you could remove it inequalities," is now the strenuous advocate of an unadjusted income tax, and tells us, for our comfort, in the same breath, that "he thinks some better Chancellor of the Exchequer may, in some happier times, achieve the great accomplishment of abolishing this tax." Why, the right hon. Gentleman has even discontinued the performance of the annual pantomime, in which he carried the tax with great pomp to its burial, and then with equal pomp restored it again to life. The tax has not even the decency to die once a year, but has taken its place among the permanent sources of the revenue. And if any one were in doubt as to the policy of the Government with reference to it, he has only to refer to the evidence taken before the Committee appointed the year before last, and to watch the part played in that Committee by Members of the Administration. Besides the Chancellor of the Exchequer, then sat upon the Committee another right hon. Gentleman, the Vice President of the Committee of Council on Education, who lavished his ingenuity upon the answers of illogical physicians and other well-meaning persons who had only English common sense to help them, and who were therefore babes and sucklings in the hands of a right hon. Gentleman armed with all the logic of the schools. And since I have referred to the Report, permit me to express the disappointment which I believe the whole commercial community experienced at the abortive result of the labours of the Committee. Besides the

1829
illogical physicians, they examined some of the first statisticians and some of the most eminent political economists in the country. The most elaborate argumentation took place; every point was examined with the utmost nicety; no effort seemed to be spared in order to mystify and complicate the question; and then, when they had led us step by step into the very heart of the labyrinth, and we were looking to them for the clue which was to lead us safely out again, your Committee blew out the light and laughed in our faces. Yes, Sir, after this prodigious labour of the mountain, this ridiculous mouse of a Report was born. Nor can it be contended that the Committee had no leisure to prepare a Report. By a reference to the blue-book, I find that they took a whole month to frame it. They had an abundance of digested materials. The hon. Chairman prepared a Report. That Report they discarded—they do not vouchsafe to tell us why. For anything we can gather, for no better reason than that which made Dr. Fell so unpopular. The right hon Gentleman the Member for North Wilts—whom I regret not to see in his place—whom we all regret not to see in his place—who has devoted much attention to this question—prepared a Report. That was discarded. The right hon. Gentleman the Vice President prepared a Report, which was at least a high intellectual treat. That was discarded. The hon. Baronet the Member for Stamford prepared a Report. That Report was embodied in the Report of the Committee. But before embodying the Report of the hon. Baronet, the Committee took an unusual precaution—they disembowelled it. Having emptied out the Report of the hon. Baronet, they proceeded to fit it up with an interior of their own manufacture, the substance of which was that the objections to this tax were objections to its essence and nature, and not to its incidence (although how the Committee extracted that from the evidence I am at a loss to conceive); and secondly, that you must not reconstruct the income tax without taking into consideration the pressure of other taxation upon the various interests of the country, and especially of the succession duty. Why, Sir (although I know that another opinion has been expressed in this House), unsophisticated persons in the country imagined that the succession duty was imposed in order to remedy a great and startling injustice under which per-
1830
sonalty laboured when passing from father to son—although how completely it has failed to do so, through a system of evasion, there is no one in the House so well qualified as the right hon. Gentleman himself to tell. And as regards the pressure of other taxation upon the various classes in the country, I commend the discretion of the Committee in that they did not carry their investigations into this branch of the question; for had they done so, I am convinced that such an investigation would have disclosed anomalies in quite an opposite direction, which perhaps it would be safer to conceal. And this is the Report which is to extinguish the most wide-spread discontent which was probably ever excited by any unjust direct tax, and which is to eradicate the profound and universal instinct by which, from one end of the country to the other, the injustice of this tax has been condemned. When such was the Report, and such the men who framed it, we naturally enough supposed that they were reserving the reasons upon which it was founded for purposes of debate. It was therefore with considerable anxiety that we awaited the debate which took place when my hon. Friend brought his Motion before the House. We saw the name of the hon. Baronet upon the paper. I think we saw the right hon. Gentleman the Vice President in his place. We expected much from both the right hon. Gentleman and the hon. baronet. My hon. Friend made his statement with his usual clearness. He was ably seconded by my hon. Friend the Member for the City. We looked towards the hon. Baronet and the right hon. Gentleman. The hon. Baronet withdrew from the paper, the right hon. Gentleman retired from his place, and the Chancellor of the Exchequer was left single handed to vindicate the Report of the Committee, and to dispose of the case of my hon. Friend. Now, I am not going to deny that the right hon. Gentleman made on that occasion a most masterly speech. I have seldom listened to a speech of the right hon. Gentleman which was otherwise than masterly. We all know that the right hon. Gentleman possesses, in an eminent degree, the faculty of clothing the dry bones of a financial question like this with comeliness and life. We all know that he often illustrates and embellishes the whole with his eloquence, and now and then that he condescends to throw over it the brilliant halo of his imagination. If ever the right hon. Gentleman dazzled the House,

1831
it was upon the occasion to which I refer. He positively extinguished the debate. I watched hon. Members who had intended to take part in it, quietly return their papers to their pockets. I must confess that this was exactly my own predicament. But when we had had time to get from under the fascination of the right hon. Gentleman—when his speech appeared on the prosaic page of Hansard, we began to wonder how it was that it had made so profound an impression upon the House. And now, if I do not weary the House, I should like to state why (although I generally follow the right hon. Gentleman into the lobby) his line of argument upon that occasion does not appear to me to have been perfectly conclusive. The right hon. Gentleman, after having congratulated my hon. Friend upon his inflexible will in persevering with his Motion in the face of the adverse Report of his own Committee, proceeded to develop the argument upon which he evidently relied for the discomfiture of my hon. Friend. He said that the plan of my hon. Friend, if carried into execution, would create a gap of two and a half millions in the revenue, and he asked my hon. Friend how he proposed to fill up that gap. Now, if my hon. Friend had possessed the gift of prescience—if he could have foretold that the Government could by a scratch of the pen, without in the least impairing the efficiency of the services reduce the Estimates by a couple of millions, he would have possessed the key to a ready reply. But, of course my hon. Friend was ignorant of this fact. No doubt the right hon. Gentleman then was equally blind to it; because, if I remember rightly, it was at a subsequent period of the Session that those events occurred which brought sudden conviction to the minds of Ministers. And, Sir, I may say, in passing, that I shall be much surprised if the present Session should close without the pressure of events which will have the effect of carrying those convictions to a point which they have hitherto failed to reach. At that time, however, the right hon. Gentleman was unable to devise any means by which the gap could be filled up, except the imposition of an extra income tax of threepence in the pound. Now, it is wonderful how the fertility of resource of the right hon. Gentleman varies with circumstances. It reminds one of the fertility of the soil in some of the neighbouring counties. One moment the soil is deep and rich, unfathomable and inexhaustible.
1832
You mount a gentle eminence, and the fertility ceases. You are told that you have come upon the chalk. I have observed that when the right hon. Gentleman is preparing a budget his resources are inexhaustible, but when any one else proposes changes in our system of taxation which would result in a loss to the Exchequer, there is an end of the right hon. Gentleman's fertility of resource. We come at once upon the chalk. But on the supposition that all the other sources of revenue are already exhausted, and that a corresponding reduction in the Estimates is impossible; is it certain that we have so large a sum as two and a half millions to provide for by an extra income tax? My hon. Friend expects that the attempt to do justice to Schedule D will have a salutary effect upon the conscience of Schedule D, and that a large sum will he recouped through this resurrection of conscience. The right hon. Gentleman tells him that such an idea is altogether visionary. Now, so far as I am competent to form an opinion, I have formed one half way between that of the right hon. Gentleman and that of my hon. Friend. No doubt, when you have for years and years schooled men in duplicity and then proceed to set them a righteous example, you will find them better adepts in your first lesson than in your second; but I would beg the right hon. Gentleman to remember that a number of persons come every year for the first time under the operation of this tax, and that they, at all events, will not be tempted to commit fraud upon the specious plea that they do so in order to resist the fraudulent pressure of an unjust tax. Then there is the omission of Clause 133, as suggested by my hon. Friend. I believe that a large amount would be recovered from the omission of this clause, and that this additional advantage would accrue from its omission, namely, that it would hit large bankers and brewers—persons whom the right hon. Gentleman pursues with relentless hostility. But, Sir, I must protest against the manner in which the right hon. Gentleman draws a sharp line between the classes taxed under the different schedules. He tells us one moment that it is impossible to tax different classes differently in this country, as you might in India, because they all blend imperceptibly into one another, and the next he draws a sharp line between them, as though they were hopelessly distinct. It seems never to have occurred to the right hon. Gentleman that rich bankers and browers may

1833
be taxed under more than one schedule. It seems never to have occurred to him that rich bankers and brewers are in all probability great landowners, great fund-holders, and great holders of railway shares. And so universal is the application of this remark, that I believe rich bankers, brewers, merchants, and manufacturers would not gain a shilling by the scheme of my hon. Friend; for they would lose with one hand what they gained with the other. It is not for them, therefore, we demand justice, but for the 400,000 industrial and professional incomes, compared with which the incomes of rich bankers and brewers are but as a drop in the ocean. Well, Sir, from both these sources we should probably gain no inconsiderable sum—but the probability is that we should still have to provide for a deficiency of two millions, should the plan of my hon. Friend come into operation. Now, referring to the statistics, for which my hon. Friend moved at the close of last Session, I find that the distribution of an extra income tax to cover this amount would raise the tax on Schedule A to a fraction above 10 d. in the pound, and lower the tax on Schedule E (the farmer's) to rather more than 7¼d.—and blending these two rates together, as we have a right to do on the supposition that this tax will be perpetual, we shall find that the tax upon land will be raised from 9d. to 9½d. Now, I do not think that the imposition of this odd halfpenny is likely to breed—
"Red ruin and the breaking up of laws,"
as the right hon. Gentleman appears to anticipate—and mark how the right hon. Gentleman piles up agony for the territorial interest. He tells them that, owing to the fact that most estates are more or less encumbered, and that the tax is levied upon the gross income, they pay already 2d. in the pound on the average more than they ought to pay. Well, I admit that this is a grievance. But what is its cure? Has the right hon. Gentleman proposed any? No, but my hon. Friend has. His proposition that net income alone should be taxed is the cure. But the right hon. Gentleman tells hon. Members opposite, that if they pass the measure of my hon. Friend, they will find that it will be materially improved upon in subsequent years. The right hon. Gentleman tortures the confiding imaginations of hon. Members with vague spectres of spoliation and confiscation to come. Now, why does the
1834
right hon. Gentleman do this? Because the right hon. Gentleman wishes to convince hon. Members that this scheme of my hon. Friend's, if it be not a deep-laid plot to destroy the social fabric, is at least the commencement of a strenuous struggle between the classes. But who is it who is the first to raise the cry of class against class? my hon. Friend or the right hon. Gentleman? Why I remember that two years ago the right hon. Gentleman, two or three times on the eve of a division, informed hon. Gentlemen opposite with a reiteration and an emphasis from which there could be no escape, that the struggle was not between himself and my hon. Friend, but between Schedule A and Schedule D. Nothing can be more adroit, nothing can be more admirable from a rhetorical point of view than the way in which the right hon. Gentleman deprecates the spirit of discord while steadily infusing it. But I think that the right hon. Gentleman pushed his happy intrepidity to the extreme when, after having proved to hon. Gentlemen opposite that it was their interest to reject the scheme of my hon. Friend, after having appealed to every selfish and sordid feeling, he wound up his speech by a peroration in which he besought them to have the manliness and virtue to vote against my hon. Friend—the manliness and virtue to vote in strict accordance with their personal interests! But it is not only the landed interest which will be unfairly taxed under the plan of my hon. Friend. There is the public creditor. The right hon. Gentleman tells us that Sir Robert Peel and Mr. Pitt were of opinion that to tax Schedule C in full, and the other Schedules not in full, would be equivalent to laying a special tax upon the funds. But Mr. Wilson, a high authority upon matters of finance, and a more recent authority than either Sir Robert Peel or Mr. Pitt, arrived at an opposite conclusion. In his memorandum—part of which I hold in my hand—he proposes to tax the fund-holders' income at 7d. while he taxes traders' profits at 4d. Now, there is another argument which is a great favourite with the right hon. Gentleman, and it is this: —That because there is a great disparity in the relative value of incomes in Scedule D, make what abatements we may, we shall still leave an immense amount of relative injustice unredressed. The right hon. Gentleman, in proof of this assertion, compares an income worth a few years' purchase, with that derived

1835
from a bank—a business which he estimates to be worth twenty-five years' purchase. Now, I feel infinitely obliged to the right hon. Gentleman for the high opinion which he has expressed as to the solidity of the kind of business in which I happen to be engaged. But will the right hon. Gentleman think me very ungracious and ungrateful if I say that his estimate appears to me to be so wild, so rash, so remote from the truth, that I am perfectly at a loss to conceive upon what grounds the right hon. Gentleman has arrived at so incredible an assumption. Does the right hon. Gentleman ask the House to believe that a capitalist would invest his capital in a business involving no inconsiderable risk, and, as we flatter ourselves, requiring no inconsiderable skill, upon such wretched terms as only to return him 4 per cent? It so happens that I was asked only the other day by a friend of mine (one of the most eminent private bankers in the North of England) at how many years' purchase I should put a banker's business? I at once replied that there was no banker's business in the country worth more than ten years' purchase. My friend demurred at my estimate, "Say rather five or six," said he. Now, if there be any truth in this estimate, what becomes of the argument of the right hon. Gentleman which is based upon the immense disparity in value of incomes in Schedule D? But I wonder that the use of such an argument did not suggest to the right hon. Gentleman a test by which to measure the iniquity of this tax. If it be so unjust to tax at the same rate incomes from professions worth five years' and incomes from professions supposed to be worth twenty-five years' purchase respectively, how much more unjust must it be to tax at the same rate incomes like that of a lawyer, which the right hon. Gentleman tells us is not worth a single shilling in case of his death, and incomes like those derived from land worth thirty or forty years', and in many parts of the county in which I reside fifty years' purchase? Now, there is only one more argument employed by the right hon. Gentleman to which I wish to reply before I sit down—namely, that which is based upon the proposition that Schedule D has no claim to an abatement because many persons in Schedule D take care to do themselves justice in the process of self-assessment, that is, by falsifying the returns. And first, I would recall the admission of the right hon. Gentle-
1836
man made two years ago, when he stated his—
"Conviction that a large portion of those who pay under Schedule D pay every farthing that they ought, and in many cases of doubt rule the doubt against themselves."
And I would ask the right hon. Gentleman what kind of justice he is doing to these meritorious persons who, rather than evade the unjust impositions of the State, conspire with the right hon. Gentlemen in defrauding themselves, and who, in return for the exercise of a lofty morality, are told by the right hon. Gentleman, "It is all very well for you to talk about the morality of your class, but we know that in the folds of your schedule lurks all the roguery in the country?" But what is the right hon. Gentleman in effect saying to those who do themselves justice at the expense of truth and of the State? Is he not saying this?—" We are aware that you falsify the returns, and upon this fact we base our defence. We incorporate your falsehood into our system. Your falsehood and our injustice stand there face to face, confronting and neutralizing one another. What matter, so long as practical injustice is the result?" Let me tell the right hon. Gentleman that by persisting in the use of this argument, and persisting in a system of unjust taxation, admitting of the safe and ready remedy which he indicates, he is undermining the morality of a class upon whose high sense of honour, more perhaps than upon that of any other, the credit and reputation of this country in the eyes of foreign nations depend. And let me venture to remind him that the House of Commons is no mere vestry of tax-makers, but that we are supposed to be the guardians of the public morality, and the source of public justice, and that in this high character it becomes us to exhibit to the nation at all times no equivocal—I had almost said no disreputable —example, but especially when, as now, we were seeking to impose an obligation —abnormal, odious in itself, altogether removed from that public observation which is the safeguard of public morality— ought we to assume an attitude, the justice of which does not depend for its vindication upon the refinements of reasoning, but appeals at once to the public conscience —to the profound and intuitive instincts of our countrymen.
Motion made, and Question proposed.
THE CHANCELLOR OF THE EXCHEQUER: Sir, there are certain acts, the repetition of which enables a man to cast aside whatever degree of bashfulness or shyness he may have previously exhibited in performing them. I am sorry to say that the repetition of the same annual speech on the same annual Motion is not one of those acts; and I most sincerely state to the House that it is with some degree of bashfulness that I feel myself compelled, by the Motion of my hon. Friend, to revert to the discussion of a subject which, as far as it can be opened out in a debate of this kind—and I am one of those who think it is not likely thus to be very fully opened out—is, to a certain extent, of a threadbare character as regards the principal topics and arguments it embraces. My hon. Friend appears here as a reformer of the income tax, and not only as a reformer of the income tax, but likewise as the advocate and champion of a particular plan. He does not appear as a reformer of the income tax in general, for no man has more mercilessly than my hon. Friend the Member for Buckingham cast aside, rejected, and repudiated the plans of every previous reformer. He enjoys, indeed, an absolute certainty that the plan which he himself proposes is, in all its essential parts, perfect and invulnerable; and if he could but convey to the minds of others that undoubting sentiment with which he himself regards it, certainly he would lead us at once to the adoption of his scheme. But I must be permitted to say this, that while I resist the project of my hon. Friend as being, in regard to its impracticable and visionary character, on a footing with the other schemes which he joins me in repudiating—nay, as being a scheme much more vulnerable in argument than those which he rejected because he found them so defective—I do not stand on the proposition that the structure of the income tax is to be defended as being, in all its parts, entirely agreeable to justice. It is not possible, I believe, to devise a tax of this kind which shall not be full of inequalities and anomalies. Still, the inequalities and anomalies of the income tax, as they now exist, have at any rate this advantage—an advantage which even the faults of every established tax possesses—namely, that they are in some degree understood, and that the back has, in some degree, adapted itself to the burden. But the faults, the anomalies, and as, I think, in most cases the injustices,
1838
which my hon. Friend proposes to introduce, have the additional disadvantge of novelty—a novelty which, to the speculative mind, may constitute an attraction, but which, if it even were the fate of my hon. Friend to have to propose his plan as a practical measure for the adoption of the House, he would find, when once he had to consider it as a question of legislation with a view to the supply of the public necessities, that to shift anomalies and injustice from one side to another is not merely not to remedy an evil, but to exchange an existing evil for another still worse and more difficult to bear.
Sir, my hon. Friend has submitted to us two Resolutions, and he proposes them, with the same confidence as he projected them last year. But I must again point out to him that upon which I have dwelt, when formerly engaged in argument against him—namely, the predicament in which he stands with reference to recorded authorities on this question. He spoke himself of an entire misconstruction of principles and misconception of objects on the part of those with whom he has to contend. But, at any rate, this must be admitted, that on a matter of such a character authority is of great importance, because the authority of men in such a case is not a naked and bare claim to domineer over the minds of others, but is the expressed result of the experience of those who have come nearest to this question, who have most closely and systematically examined it, and who have been obliged to adapt their conduct in this House to the principles which they found practically applicable to the subject with the least amount of objection. In that sense my hon. Friend does not doubt that the two greatest Finance Ministers of this country—if I may presume to form or pass an opinion upon our Finance Ministers—Mr. Pitt and Sir Robert Peel— have both considered this question, and have both left the tax as a uniform income tax, not, indeed, as the image of perfection in our fiscal system, but as that form on which, as wise, prudent, and practical men, they found it necessary to take their stand. But the question has also a more recent history, and that history is somewhat remarkable. A Committee was appointed in 1850 to consider, not the plan of my hon. Friend, but a plan which so far agreed with it that it aimed at a reconstruction of the tax in favour of those classes whom, at the expense of other classes, he now proposes to relieve. Now, what was the history of that Committee?

1839
The inquiry was voted by the House, if not unanimously, by at least a large majority. Every one was desirous of inquiry, and those who projected the investigation made the most sanguine and confident announcement that they would prove their case before it. The Committee sat; it examined the matter patiently; it ended by making no Report. That plan entirely broke down. Nor was that all. There were Gentlemen of eminence in this House who went into that Committee completely wedded to the plan of reconstruction, and who came out of it either entire converts to the principle of the present tax, or, at all events, greatly shaken in their adhesion to the scheme for reforming it. I have been told—and I may be contradicted if I am wrong — that my hon. Friend the Member for Rochdale (Mr. Cobden), who entered that Committee with the utmost confidence in the practicability of the re adjustment scheme, was entirely shaken in his belief as to its feasibility by hearing the evidence adduced. And it is perfectly well known that another Gentleman, then a Member of this House, and not second to anybody in his knowledge of, and fitness for dealing with, politico-economical questions—Mr. Ricardo—went into the Committee of 1850 prepossessed in favour of that scheme, and came out of it convinced that its agitation was mischievous and its adoption impracticable. Well, we had another Committee, on the urgent application of my hon. Friend, in 1861. How was it composed? My hon. Friend himself will not deny that which I am now about to assert. He did not lose his Report. His scheme was not rejected by that Committee, because it was a Committee which went to its inquiry with foregone conclusions adverse to his proposals. Some of the Members were opposed to the present mode of levying the tax; others were favourable to it; but the majority depended upon minds which were entirely impartial. Yet how did that inquiry end? By the adoption of a Report wholly hostile, to and condemnatory of, the scheme of my hon. Friend. And the reason why that Report was carried was because the majority who agreed to it consisted of men who were brought to their conclusions in consequence of their labours and inquiries on that Committee. Sir, these are facts of great importance. It is very easy to discuss a matter of this kind in the House of Commons, but something is due, in point of authority, to the conclusions of those who
1840
have been selected by the House for the purpose of examining in great detail a particular question of great intricacy and complexity. And when it is found that Committee after Committee closes its investigations with a mind more adverse to such schemes as my hon. Friend's than that with which they began them, that is a fact of great significance, which not all the ingenuity of my hon. Friend can shake. And although I do not pretend for one moment to say that the House is to be governed by the authority either of Ministers or of Committees, in opposition to its own conviction, yet it is an element of great weight in the case, which it would be highly for the interest of my hon. Friend's argument if he could eliminate from it, but the force of which I think we must all feel it difficult reasonably to disregard.
My hon. Friend the Member for Huddersfield (Mr. Leatham) made a very ingenious speech, but how does he know what may happen to himself? Other Gentlemen, ingenious like him, and with the same leanings, looking at the question from a distance, have thought to reform the income tax; but when they came to look at it more narrowly, have found, not that the present tax stood free from fault and blame of almost every kind, but that it was unwise to encourage the agitation of schemes which in themselves are impracticable, and tended to excite hopes and expectations that cannot be realized. Now, my hon. Friend, rejected by his own Committee, and having himself rejected the favourite schemes of reformers in the preceding Committee, after having had his Motion likewise rejected by a large majority in the House, comes forward with unabated confidence, and again submits his propositions; and I must say my hon. Friend, as he adds to the numbers of his campaigns, together with his experience— I had almost said together with his misfortunes—exhibits no small increase of hardihood. This evening he has adopted a much bolder tone than on any former occasion. He has undertaken to show us that there cannot be a greater mistake than to suppose that his proposition is favourable to the great capitalists, bankers, merchants, and brewers. That, says my hon. Friend, is all a mistake. Those gentlemen have all property invested, not, as we all thought, in their business, but in the funds and railway shares, where it is subject to the highest rate of

1841
tax. My hon. Friend is so modest with respect to Schedule D that he will not allow himself to assume the smallest credit as a benefactor to that unfortunate interest; and when he deals with Schedule A, he adopts quite an opposite tone. He says there cannot be a greater mistake than to suppose that I am going to augment the burden on Schedule A. He quotes an entirely impossible case of a gentleman with £800 a year, derived from landed estate, and that £720 of it may be put out on the interest of a mortgage. I certainly am not conversant with such a case, but he says, "This is a most cruel case. I have shown that under the present law such a man, instead of paving 9d. in the pound, may really pay 1s. 6d.; whereas under the plan I propose he will only pay 10¼d." Let us, then, try that issue. Does my hon. Friend admit or not that his is a plan to relieve one class at the expense of another? If he says that he does not impose unjust burdens on Schedule A, I fully admit he is not half so unjust to Schedule A as to some others. I don't know on what principle he has been pleased to select some descriptions of income which are generally considered most fluctuating and uncertain, in order to smite them with the weight of his right hand and lay on them the full weight of the tax. In his printed paper railway and canal property is to pay the highest tax. Canal property! Canal property, under railway competition, has undergone severe pressure and reverse, but he selects it for agreeable prominence in taxation, while he makes a deduction of one-third from every flourishing business in the City of London. Then with regard to railway property—I hope there is no railway shareholder in this House — if there be, he will judge what kind of remedial scheme that is which leaves railway property taxed as now at the full rate, and puts an extra tax on it, in order to give relief of 33 per cent to every flourishing business in the City of London. Is the income from railway property such a very flourishing income? I trust there is no person connected with the Great Western Railway present. Its dividend took a great jump upwards; but something of this kind lately happened, that the shareholders, enjoying an income of £3 per cent one half-year, the next it dwindled to 5s. per cent; but my hon. Friend has no mercy for such an income, and he proposes to levy a sur-tax for the benefit of those who are to enjoy
1842
a reduction of 25 per cent. My hon. Friend assumes an over-modesty with respect to Schedule D, and a degree of confidence, of innocence, towards Schedule A, of which he is hardly entitled to claim the benefit. His inference meant, if it meant anything, that he would give an effective reduction on Schedule A. Is that so, or is it not? Let us understand. Is the plan to relieve everybody out of some bottomless purse possessed by my hon. Friend, but of which no one else is cognizant; or is it the old vulgar plan of patting his hand into the pocket of one man to place the contents in that of another? That is my humble translation of my hon. Friend's speech, and it is very considerably supported by the figures and papers he has laid on the table. We have heard his speech to-night; how great a benefactor he is to Schedule A. Well, the amount of tax paid in 1860–1 under Schedule A was £2,048,000, and the amount of the tax which would have been paid under Schedule A, if the scheme of my hon. Friend had been in operation, is £2,308,000, showing an augmentation of £260,000, or about 12½ per cent. That is the plan; but do not be mystified about the amount of expenses and repairs and charges of maintenance. That is the net result presented by my him. Friend. Schedule A actually paid, under the present cruel and grinding tax, £2,048,000; and if his plan had been in operation, it would have paid £2,308,000 —an increase of £260,000—for the relief and benefit of other parties. My hon. Friend worked himself up by his dissertation on the three years' average clause till he appeared to arrive at the conclusion that the present law was by far too much in favour of those who pay the tax under Schedule D. Let us see how he ought thus modestly to disclaim the character of benefactor to Schedule D. I revert to his own simple figures. Schedule D in 1861, when the tax was 10 d., paid £3,613,000; and if his plan had been in operation, Schedule D would have paid £3,049,000, or less by £564,000 than it actually paid. I therefore think I have established in favour of my hon. Friend, first of all, that he has somewhat overstated his claims to the gratitude of the taxpayers in Schedule A, and that he has greatly understated the grounds on which he is fairly entitled to be considered a benefactor to those paying under Schedule D.
Let us now come to the principle on which he founds his proposition; but first

1843
of all let me say, that what I have stated does not, in the least degree, exhibit the full amount of anomalies and cases of injustice my hon. Friend proposes to inflict on the country. Under Schedule, A he says will make an allowance of one-twelfth or 8⅓ per cent; let us see the meaning of that. Some owners of land have properties in which the repairs of agricultural holdings are very heavy and go far beyond one-eighth, but many other holders have properties on which they do not pay a shilling for repairs. The way the hon. Gentleman would remove anomalies is, that whether a man pays 20 per cent for repairs or nothing, a deduction of 8¼ per cent shall be made all round to him who pays nothing as well as to him who pays much. If he could grant that deduction to one without taking it from another, there would be something to say for such a mode of dealing, but that is not and cannot be the case. If you make a deduction all round, the meaning is, that to benefit one man you must tax somebody else. The general upshot of my hon. Friend's plan is, that he adds rather more than one-eighth to the payments of those who pay the tax upon land or houses. Every man upon the average who now pays £8 would then pay £9; but the difference would be, that while as a class those who now pay £8 would then pay £9, many of that class would still only pay £8, because the increase of the tax upon them would be counterbalanced by an arbitrary deduction, while others of the same class, instead of paying £9, would have to pay £10; and this immense inequality my hon. Friend seeks to introduce by a machinery as arbitrary in character as it is unsatisfactory and anomalous in results. But he says, he rests upon one main proposition as the basis of his plan— that is, he aims to relieve what he calls industrial incomes. I will come to the justice of that principle by-and-by; but upon what considerations does he found it? His argument is, "I will relieve industrial incomes, because under the law, as it now stands, the very same property which is taxed in one year as profits of trade is taxed in another year as capital, with reference to the fruits it produces." But, Sir, is that a reason why the income tax should be reconstructed? Because in 1863 you tax as profits in trade what in 1864, so far as unexpended, appears as capital, yielding fruits subject to taxation —I say, that is the principle of our law as
1844
to property in general. The law of this country makes property pass through preliminary taxation at the point when it comes into the possession of the holder, and then subjects it the year after, and every year after, to taxation in respect of its fruits. If a man makes £50,000 in trade in 1863, my hon. Friend says that ought not to be taxed in respect of its fruits as capital in 1864. But supposing a man inherits a property worth £50,000 in the Funds in 1863, he pays Probate Duty, Legacy Duty, or Succession Duty. It is taxed as capital in 1863, it remains in his possession, yielding income, in 1864, which is taxed again. The main reason which my hon. Friend urges for breaking up the income tax and substituting a scheme of his own is because we apply to savings made in trade the same rule which we apply—whenever the law can apply it —to any other property when it comes into possession of the holders. I think, therefore, that my hon. Friend has no ground for substituting his plan for the existing system, and the principle of his plan, I must say, appears to me to be fraught with danger.
The hon. Member for Huddersfield seems to think that the existence of a surplus would solve the question; and that the exception I took to my hon. Friend's proposition is simply that we had not a surplus, and therefore had not the money wherewith to do justice. I did mention the non-existence of a surplus as a difficulty for my hon. Friend to deal with, but not as any part of the difficulty I felt in acceding to his proposition. If there be a surplus—and it does not become me to say now whether there be or not—but if there be a surplus of taxation, we ought to deal with this question upon precisely the same footing as if there were no surplus—that is, we should do justice between the several classes of taxpayers of the country. Now, as to the practicability of the proposed scheme, my hon. Friend has, I think, done an involuntary injustice to the late Chairman of the Board of Inland Revenue. He said that Mr. Pressley, although he made difficulties at first, and although he was a most violent Conservative in all matters relating to revenue, yet such was the force and truth of my hon. Friend's plan, that at the close of the inquiry he withdrew all his objections, and had no more to make. My hon. Friend mistakes the character of Mr. Pressley, perhaps, because he has not been privileged, as

1845
many of us have, to enjoy the intimate friendship of that gentleman. What is the value of the term "conservative" as applied to politics, is not a question for discussion at present; but as applied to the administration of the revenue laws, never was error more ludicrous than to describe Mr. Pressley as eminently entitled to the epithet, on the ground of his being wedded to existing schemes and existing laws. For six years I have had the closest and most intimate intercourse with Mr. Pressley upon all matters relating to the revenue, and never in my life did I see a man more wholly free from all vestige of prejudice, more eager for improvements, or more desirous to carry them out. He never withdrew his objections to my hon. Friend's plan, because he never made any. Does my hon. Friend think that Mr. Pressley was so young in his duties as to commit himself in a reply to some ingenious question of my hon. Friend put with the hope of obtaining the sanction of Mr. Pressley's authority to his views, or that he was a man to put himself in the place of the Members of this House, and dictate to them the principles upon which the tax should be levied? All he said was "if the House chooses to enact a plan, we can carry it out," and there is no doubt of that; but I venture to say that the plan of my hon. Friend will not soon be submitted to any Chairman of the Board of Inland Revenue to carry into effect.
But what is the principle of my hon. Friend? He claims privilege for what he chooses to call industrial incomes. There is some degree of fallacy in that expression. Industry in this country is at present exempt from the income tax. I do not know that that exemption can be said to rest upon any very broad or clear principle, but, for my own part, I think it may be justified by two considerations:—First, that I believe it to be visionary to dream of levying income tax from the bulk of the labouring-classes; and next, because, as far as I am able to judge, under the system of taxation now existing the labouring man, although exempt from income tax, pays at least a very fair, perhaps a rather full, share of taxation; but, as far as the income tax is concerned, industry, properly so called, except a limited portion of the more highly skilled mechanics, is exempt. My hon. Friend means the profits of educated men in the professions, or some of them, and he likewise means the exercise of industry and intelligence in combination with capi-
1846
tal. I want to know upon what principle my hon. Friend gets to this particular distinction, as different amounts of taxation are to be taken from different people not according to the revenues they possess, which is an intelligible principle, not according to their poverty, which is an intelligible principle, not according to their wealth or poverty, but according to the degree in which industry and capital are mixed up together in making up the income. My hon. Friend propounds this as the foundation of his system. He confidently puts it forward as a self-evident proposition; but, in my opinion, a more dangerous principle it is not possible to conceive. Those whom he desires to relieve are the class whose fortunes are on the most rapid state of progress and increase. Those who are needy in proportion to the station they occupy my hon. Friend leaves untouched, or rather, he subjects them to additional burdens in order to give a great relief from taxation to a class whose fortunes are in the most rapid state of augmentation. But how does he think, when he has established his claim on behalf of what he calls industrial incomes, he will be able to shut out those who are disposd to recommend other principles? He will, no doubt, be shocked when I say that in my opinion more is to be said in favour of graduated taxation than for his plan. A graduated taxation recognises poverty in one class and overgrown wealth in another, and justice demands that one should pay less and the other more. There is something rather plausible in that principle, more so than in my hon. Friend's plan. My hon. Friend is very sensitive when the microscope is applied to the examination of his scheme, but that is really the only way in which to divest it of the plausibilities in which it is wrapped. He takes a widow, with £200 a year from the Funds, with six children to educate, to train, and to start in the world, and he takes the case of a great merchant—I will not say brewer or banker, as there seems to be some objection to specifying those flourishing classes—but to a great merchant, with £20,000 a year, he grants a relief to the extent of one-third, and in order to do that he adds 25 per cent to the burden of the poor widow. I protest against the principle of my hon. Friend. It is one, in my opinion, which, when carefully examined, is much less plausible, and at least as dangerous as the principle of

1847
graduating taxation. The hon. Member for Huddersfield says I appealed last year to the hon. Gentlemen opposite. He is much more fresh in his recollection of that speech than I am, having done me the honour to refer to it; but I am not aware that I appealed to the hon. Gentlemen opposite in particular. I appealed to the whole House, and I trust the whole House will have the justice and the manliness now to repeat the Vote which they gave on that occasion. Some justice and some manliness I think it requires, because I do not deny the faults and flaws of the present income tax. I do not deny that a feeling has existed, does exist, and I believe will always exist among considerable portions of the community, in the direction of the Motion which my hon. Friend has made. Neither do I deny that such a feeling is entirely natural. But I do say, that when the real merits of the case are examined, when investigation is made of broad practical issues, such as I have only endeavoured in one or two cases to exemplify, but which were more fully and sharply brought out before my hon. Friend's Committee, the danger involved in my hon. Friend's principle will be apparent. The danger, moreover, will be obvious of agitating subjects like this, and of substituting vague expectations in the minds of the community—expectations which only end in taking money from one man to give it to another—for those rational hopes of reduction which never can be realized by my hon. Friend's plan, but the realization of which must entirely depend on the adoption of judicious economy, and the consequent application of sound principles to the relief of the public.
MR. HUBBARDasked the House to consider the position in which the subject was now left. He had met with a distinct denial and disproof every count in the indictment which had been urged against his plan of adjustment. His right hon. Friend in his speech had not even attempted to rebut his argument or invalidate his facts; but abandoning the logical contest, he had endeavoured to discredit his (Mr. Hubbard's) scheme by showing that all former schemes had failed. The only other scheme he had heard of was the one called Mr. Hume's—which he agreed with most practical men, with the officials, and with his right hon. Friend, in thinking impracticable; but surely one failure is no proof that amendment is unattainable. His right hon. Friend repelled the proposed adjust-
1848
ment by pleading that neither Pitt nor Peel had attempted one; but is no improvement in fiscal legislation to take place which Pitt or Peel neglected or ignored? Pitt was a great man, but is the policy of the author of the Sinking Fund to be a rule for us? Peel was a great man; but had he died a few years earlier, the Chancellor might have been quoting his authority now in support of a Protective system. The inequalities of the present tax are not denied, but we are told by the Chancellor of the Exchequer that the back must adjust itself to the burden — we must not hope to shake off our chains, but we are to find comfort in the expectation that our limbs will become callous to the pressure of the galling chain. I find, Sir, nothing more to reply to, and I must leave my Resolution to the decision of the House.
Question put,
"That, in the opinion of this House, the incidence of an Income Tax touching the products of invested property should fall upon net Income, and that the net amounts of industrial earnings should, previous to assessment, be subject to such an abatement as may equitably adjust the burthen thrown upon intelligence and skill as compared with property."
The House divided:—Ayes 70; Noes 118: Majority 48.

APPROPRIATION OF SUPPLIES.

  RESOLUTIONS.
  LORD ROBERT MONTAGU,in moving Resolutions with reference to the Appropriation of Supplies, said, that in 1861 he had moved the same as that which was now contained in his first Resolution. In 1862, when moving the appointment of a Committee of Accounts, he had strongly urged the abolition of the system of transfers which took place under the transfer clause in the Appropriation Act. Both these Motions had been unsuccessful. But now, as the blue-book of the Public Accounts Committee had fully borne out all that he had said upon those occasions, he trusted that the House would not deem it presumptuous in, him to press the same Resolutions again upon them. The Appropriation Act was the result of the grand struggle which had ended with the Revolution of 1688. It ought, therefore, to have been maintained unaltered until the present day; no changes at least should have been made in it recklessly and without due consideration,

  1849
  or through carelessness and neglect. Notwithstanding this, many changes had been made in the Bill, including the insertion of the clause which empowered transfers, and the alteration which had been made in the year 1858. With regard to the latter, the Committee of Public Accounts reported as follows: —
  "The subsequent alteration was made (in 1858) without the attention of the House being called to the point. The Bill was not printed, and, as your Committee are informed, the change was made through inadvertence. By the alteration the intended limitation was entirely removed." [Second Report, Public Accounts, 1862. page v.]
  This was explained by Mr. Anderson in his evidence. Until the year 1858 the army grants used to appear in two aggregate sums, between the Votes of which no transfers could take place. In that year they were massed together. It was said that this was done by mistake; but the mistake had not been rectified, and therefore the sphere of transfers had remained extended. The Report of the Committee continued thus—
  "Your Committee recommend that the Appropriation Bill, and the Appropriation Clause, should be printed and distributed in time for consideration, before the Bill passes through Committee of the House."
  Until the year 1854 the insertion of the appropriation clause had been made the subject of an Instruction to the Committee on the Bill, and was therefore necessarily inserted in the Appropriation Bill. In that year, however, this practice was discontinued. The result was, that in the second Session of 1857 the appropriation clause was omitted and the transfer clause was retained. In the first Session of the year 1859, the appropriation clause appeared as the 18th clause, and the transfer clause was omitted. In the second Session of the same year the appropriation clause was omitted, while the transfer clause appeared, as the 23rd clause. Last year the Bill was printed, but was not distributed, while certain alterations were made without the sanction or cognizance of the House. One of those alterations provided that deficiencies should only be "temporarily defrayed" out of surpluses; and another enforced that the representations made to the Treasury for leave to transfer should be "laid before the House within one month after the accounts had been sent to the Audit Board." He trusted that his first Resolution would meet with the approval of the House, seeing that it was in the same terms as
  1850
  the Report of the Committee of Public Accounts, He was not urging a technical matter of detail, but sought to enforce the constitutional principle, that the appropriation of supplies was peculiarly the function of the House; and which, considering that the struggle to establish this principle had lasted half a century, should ever be looked upon as a sacred duty by the Representatives of the People. His second Resolution referred to the power of transferring the surplus of one Vote to provide for a deficiency under another; or, in other words, appropriating balances to meet excesses. The clause which authorized this operation had been first introduced in the Act of 1846. This clause he would speak of as the 29th clause, because this power was contained in the 29th clause of the Act which was laid before the Committee of Public Accounts, and was spoken of, by the witnesses, under that name. With reference to that clause be affirmed these three propositions—that the object with which it had been introduced had never been attained; that it tended to increase the public expenditure, and was otherwise most injurious; and that no inconvenience could result from its omission.
  The object of this clause was the same as that which Sir James Graham sought in 1832, in order to secure a strict appropriation—namely, to secure to the Treasury a control over the Departments, so as to prevent them appropriating money contrary to the wishes of Parliament. Mr. Anderson had stated in his evidence, that the origin of Clause 29 was the Report of Sir W. Herries' Committee; the intention of which was that—
  "Treasury Control might be brought in aid of Parliamentary Control, so as to prevent an excess on any Vote."
  This, moreover, had been recommended by that Committee only on the supposition of there being no Committee of Public Accounts to inquire into any excesses upon the Votes. This object had not been obtained. To this every one of the witnesses had borne testimony. Sir Richard Bromley said (153), "My own opinion is, that it (the check of the Treasury) is a mere matter of form, and that it would be better dispensed with." Mr. Arbuthnot (1104–9) stated that "the authority given to the Treasury has degenerated into a mere matter of form." "The Treasury check has not so worked as to be successful in its object." The Duke of Somerset al-

  1851
  lowed (1327) that "the control of the Treasury to deny the transfer is and must be merely nominal." In fact. Colonel Greene (230) did not know any case in which the Treasury have refused to give their absent. The Duke of Somerset continued (1447)—
  "The Treasury have, for a great many years, been trying (under Clause 29) to control the expenditure, and keep the Naval Estimates in their right position, but have totally and entirely failed."
  Mr. Arbuthnot stated, that the Admiralty "utterly declined to acknowledge the authority of the Treasury," and tried systematically to set the Treasury at defiance. He might mention two examples. The first was the transfer of £250,000, which had been voted for the building of iron ships, to the purchase of stores. The Treasury were never asked for their sanction to this transfer, and never knew of it for upwards of a year afterwards; and at last it was made a matter of mere verbal communication between the present Secretary to the Admiralty and Mr. Laing, who was then Secretary to the Treasury. In the same year the store Vote was exceeded by £424,651; which was also met by a transfer; and here again the sanction of the Treasury was not once asked. Application for leave to transfer was, in fact, never made until five days before the accounts were sent in to the Audit Board, when there remained no longer sufficient time to make any inquiries. Such instances showed that the clause had entirely failed in the object for which it had been framed. He now passed to the second proposition, and would show that this 29th clause, or rather the power of transfer which it gave, had operated most injuriously for the public service. He would show this in six different ways. The clause had a very injurious effect, because, in the first place, the expenditure had thereby been greatly increased. Sir Richard Bromley had, in fact, affixed a stigma to the clause by calling it a mere "cover to expenditure." The power of transfer had been created in 1846, and the Duke of Somerset stated that "the next year (1847) the expenditure exceeded the Estimates by £454,000, thus showing that the balance had been overthrown." Mr. Anderson had referred to the same cause, the well-known fact that the expenditure in 1862 was three times as great as that of 1832. As an example, he might mention that the gun-
  1852
  boat slips at Haslar were constructed and the expenses met by a transfer, and "Parliament was thereby committed to a vast expense without any previous sanction." So also the £12,000 given to the German settlers at the Cape was met by a transfer, having been given without the sanction of Parliament. This had been stated by the Secretary at War on March 9.
  Secondly, the abolition of the power of transfer, or the expunging of Clause 29, would reduce expenditure. This might be deduced as a corollary from the preceding statement; but he preferred to bring forward independent testimony to substantiate it. Mr. Anderson, who was principal clerk at the Treasury, said (1716) that—
  "Whenever you require those great departments to go to Parliament to vote all their deficiencies, you will very much reduce the amount of those deficiencies.
  The Duke of Somerset allowed (1400) that "having to come before Parliament for a Supplementary Estimate," would tend to "check the expenditure." But Mr. Gladstone asserted (1636) that "at present there is a power of final adjustment without coming to Parliament at all." And he continued to state that there were many transactions which the Departments would not enter into at all, if they knew that the case must come before Parliament. The reason why the expunging of the 29th clause would reduce the expenditure was very plain; and this introduced the third head—namely, that the power of transfer prevented the Departments coming to Parliament for money; which was another very injurious effect of that clause. The Secretary for War said, that "if the clause were repealed, the Departments would have to go to Parliament for every excess," and added, that "the real check undoubtedly was the vote by Parliament." Colonel Greene stated, that the different Departments always took care to "have a surplus in order to prevent having to go to Parliament." Fourthly, the 29th clause was very injurious, because the system of making transfers tended to produce a laxity in the Estimates; and this laxity in the Estimates produced surpluses and then transfers. These evils thus acted and reacted on each other in ever increasing ratio; and caused an ever-widening circle of vicious expenditure. This had been plainly stated in the evidence, of Mr. Arbuthnot; and Mr. Anderson, had said that the Departments were tempted to

  1853
  make surpluses, and were then induced, by the possession of a surplus, to incur expenditure which they would never incur otherwise; but if no power of transfer existed, and the Departments had to go to Parliament for deficiencies, they would "estimate every service at its proper amount." Fifthly, the power of transfer not only enabled the Departments to avoid coming before Parliament, but also operated most injuriously in entirely defeating the knowlege of Parliament. The Duke of Somerset (1464) said, that "under the existing system, Parliament may vote a vast sum of money for the conveyance of troops, and may find that a large portion of it is spent in stores." Colonel Greene (358) mentioned an instance in which money voted for barracks at Plymouth was spent on works at Hong Kong, which Parliament had never sanctioned, nor even heard of; "so that" to use his own words, "the knowledge of Parliament was thus defeated." And Mr. Arbuthnot (842) said, that payment for salaries might go on without even the Treasury knowing of it. This they did by applying it out of the Vote for Works. Thus, "the Surveyor of Coast Guard Buildings" was an office which was never known of until discovered by accident; for his salary had never appeared in the accounts, but was paid by a transfer from some of the Votes. The Duke of Somerset (1279–1286) confessed that, while Parliament was sitting, the money voted for iron ships was spent in buying timber. He allowed that he "did this on his own responsibility," he "thought it the right thing to do." This line of conduct he had determined on while Parliament was sitting, and yet he had never mentioned it to Parliament. It must be remembered that he had already "taken a Vote, of £722,000 for timber, which was all he could get" from Parliament. To wind up this statement, he confessed that he had determined not to let Parliament know anything about it, as long as "Parliament could take any action." There was also another head under which the 29th clause had operated most injuriously. The Government were induced, owing to it, to ask for a larger sum than they required for certain Votes which were known to be popular with the House; while they took less than was necessary for others which were unpopular; so that the House was by that means actually deceived in two ways:—First, they were persuaded that some much-desired object would receive the
  1854
  advantage which they so profusely granted; and, secondly, they were induced to believe that no more would be spent on some undesirable object than they chose to give. It was well the House should know that it was the practice of Governments to obtain money under false pretences (for he could designate the practice by no milder term). Mr. Arbuthnot, for instance, in his evidence (670, &c.) had said—
  "There was a popular Vote obtained for a Naval Reserve, amounting to £100,000; and I apprehend that Parliament would not have placed that £100,000 at the disposal of the Admiralty for any other object.… Not above £12,000 was spent for that purpose;. … and the rest of that Vote was applied to purchasing stores. I do not think it was an honest expenditure."
  Again (830)—
  "There is one thing to be always guarded against, and that is, taking what I may call popular Votes, and then applying them to services which have not been voted."
  And Sir George Lewis (2293) said —
  "Occasionally, as one Vote is a little more popular than another, and the House is more likely to agree to some particular Vote than to another, they might make the Estimate a little fuller upon that head, and they might starve it a little upon the unpopular Vote, in the speculation that they would save upon the popular Vote, and turn it over to the unpopular Vote."
  While Mr. Gladstone (1577) gave this remarkable evidence—
  "The Admiralty, as all those Departments, have a great temptation.…. to allow those surpluses to grow upon certain Votes, in order to form a fund for meeting the deficiencies upon other Votes…. It leads them. … to provide surpluses in the main upon the more popular Votes, and to trust to them for supplying the deficiencies upon the more unpopular Votes."
  Indeed, it was quite obvious that the practice of thus taking more than was required under one head, while another Vote was starved, was in itself very reprehensible; yet the evidence of all the leading witnesses who appeared before the Committee went to establish the truth of what he stated. To prove this important matter, still more clearly, he would show it by examples taken from the Estimates and accounts; he would give instances of Governments taking too much on Votes which were popular with the House, and starving those that were unpopular.
  Vote 1, for Wages of Seamen, was a popular Vote. On such a Vote, surpluses were made by asking more than was required. Now, it appeared from the evidence, that since 1848, with one exception, there had always been large surpluses on this Vote; equal to £2,000,000 in thirty

  1855
  years, of which £1,700,000 had occurred in the last ten years alone, while in the year 1860–1 the surplus had amounted to,£441,411. Vote 3, for the Admiralty Office, was an unpopular Vote. Such a Vote was starved, to delude the House of. Commons; that is to say, less was provided than the Government intended to spend. It appeared in the evidence, that since 1832, with one exception, the Admiralty had always exceeded their Vote; they had exceeded it at an average of £5,000 per annum. And Mr. Arbuthnot stated, that "there is no reason why the Admiralty should not estimate correctly, except the desire to starve an unpopular Vote." And the Duke of Somerset (1229) allowed this to be the true state of the case. Vote 4, for the Naval Reserve, was a popular Vote; that was, more was asked than would be wanted. The surplus on this Vote in 1859–60 was £96,000, and in 1860–1 it was £92,652. Vote 10. for Naval Stores, was an unpopular Vote, and less was asked for it than would be spent. It was proved, that during the last ten years, this Vote had been exceeded by £2,500,000; of which the excesses during the last two years alone had amounted to £1,000,000. Of this, none was attributable to the China war. For the last five years there had been an excess of £100,000 per annum for timber alone; and the excess during the last three years had been at the rate of £500,000 per annum for timber alone, although they were now building only iron ships. Now, Mr. Anderson said, that as all contracts were made at home, this expenditure could easily be correctly estimated. Hence this was a wilful starving of an unpopular Vote, designedly to be met out of other Votes. Vote 11, for Works, was of a mixed character, in part popular, and partly unpopular. With regard to this Vote, it was shown that £77,000 had been, in 1860–1, spent differently from the intentions of Parliament, and £10,000 more had been spent which had never been estimated for. Again, £15,000 had been granted for dredging Portsmouth; but £25,000 had been spent; and £12,000 had been spent for new docks, which had never been granted at all. Similarly, £10,500 had been spent for works at Hong-Kong, which had not been voted by Parliament, nor authorized by the Admiralty, nor sanctioned by the Treasury, nor estimated by any Department, nor even explained by the accounts. On the whole, it appeared in
  1856
  the evidence that, from 1856 to 1861, £5,000,000 had been spent on objects other than sanctioned by Parliament; so that Colonel Greene, the Director of Works, exclaimed, "The whole of the Estimates (for Works) are a series of those sorts of cases of excesses and surpluses." He had, he thought, said enough to justify him in maintaining that the 29th clause was injurious, and that its operation had justified the use of the epithet which he had the other evening applied to it, when he observed that it had "infistulated" our whole financial system. He wished he could make this stigma hang round the neck of the 29th clause, as long as it appeared in the Appropriation Acts. Before passing to the next proposition he would therefore mention some more important evidence on this point. In the second Report, page vi., the Committee stated, that "the witnesses, with scarcely an exception, disapprove of the power as at present existing." The Duke of Somerset (1448) said, that "the Treasury check has totally failed;" and (1489) "everything that has happened since 1846 shows that the course taken has not resulted in what was intended." Mr. Macaulay (2150–3–4) "entirely agreed that the 29th clause should be repealed;" and said (2224, &c.) "the repeal of the 29th clause would effect every object." While Mr. Gladstone (1580), in quoting Mr. Anderson, said—
  "Let the 29th clause of the Appropriation Act, first introduced into the Act in 1846, and which unsettles the appropriation of all the grants of the year for the naval and military services, be expunged from the Appropriation Act, which will then be restored to its former state,"
  He should next pass to the third proposition which he sought to establish; which was, that no possible inconvenience would arise if Clause 29 were expunged. If some alternative (such as the plan of another Treasury Chest Fund) were thought necessary, let it be proposed by an additional Resolution. He did not himself think it necessary in a financial point of view; although in another point of view it might be most beneficial. For the different Departments were at daggers drawn with the Treasury, and tried to slip from under Treasury control. This scheme had therefore been devised in order to tie them down, and force them under the restraint of the Treasury. This, the House would remember, had been the object sought in framing the 29th clause, but which that clause had failed to attain.

  1857
  To apply to the Treasury for an allowance out of a particular fund, in order to meet deficiencies, was far preferable to the mode of transfer under clause 29. For, when the accounts were made square by means of transfers, there was nothing to attract the notice of Parliament; there was no definite issue placed before the House. While, to apply for the use of a fund, and to give the reasons in writing for that application, and then to come to Parliament for a credit in order to repay that fund, brought a distinct question for discussion before the House. It was, nevertheless unnecessary to resort to this alternative; for, as matters stood, the accounts of the navy were got in eight months after the close of the financial year; then it was discovered that there were deficiencies on some of the Votes, caused partly by imprests at home, and partly by repayments to the Treasury chests abroad. It then became necessary to square the accounts fur Parliament. According to the present system that was done by means of transfers. Now, a transfer did not mean a carrying about of money-bags; it was a mere matter of account, a credit transposed; it made no noise; it was done by a clerk taking the pen from behind his ear and writing a few figures. But, if the 29th clause were expunged, if the power of transfer were abolished, then all the balances (or surpluses) would have to be surrendered, and new credits would have to be voted, to meet the deficiencies and square the accounts. To surrender a balance, it must be remembered, meant merely to surrender a credit, to give up an authority to draw. How, then, it might be asked, could the current expenditure be carried on? The accounts at the pay office were mere current accounts, or cash accounts. Now before the navy accounts were squared they would have procured a new credit at the Bank. The expenditure could therefore be met out of these new credits; all payments could be made out of the navy cash. The only difference would be, that the accounts could not be squared without coming to Parliament for "Votes in excess;" that was, for new credits to clear off those deficiencies. To remove any doubt upon this point, he would refer to the evidence: — Colonel Greene (414) was asked "if he sees any objection in taking away that power of transferring surpluses?" and answered, "No, certainly not." Mr. Vine, the Inspector of the Audit Office, said (473), "I am
  1858
  not aware of any inconvenience to the public service that would arise from it." Mr. Arbuthnot (1117–1120) said, "The transfer is merely effected in the Admiralty books, and is a simple matter of account." The Duke of Somerset argued (1320) that the public payments would not be stopped even if every Vote were exceeded; so that, consequently, if the power of transfer were taken away, there would also be no inconvenience resulting. Mr. Whiffin, Deputy Accountant General, said (1979), "they can meet the expenditure out of the current army cash;" while Mr. Macaulay (2151) said, that "paying the surpluses into the Exchequer will not in the least degree embarrass the different Departments for money." He would compare the services in order to make this evident — namely, the army, the navy, and the civil services. In the case of the Civil Service, each Vote had its own special account in the books of the paymaster; each Vote had its own credit, and its balance was struck every week. When an issue was applied for, it was always specified for which Votes the issue was demanded. The consequence was, that a Civil Service Vote could never be exceeded, the balances at the end of the year were surrendered, and there were no transfers. In the case of the army or navy, money was issued on the aggregate credit; the paymaster knew not for what particular Votes it was issued, nor how the money was appropriated. Yet many of the Votes were for charges at home, and the payments were final payments, as in the Civil Service. The paymaster, in short, was, in the case of the Civil Service, a banker for each separate Vote; while in the case of the army and navy, he was a banker for the whole service; he must honour their draughts as long as they had a credit at his bank (so to speak) sufficient to meet their demands ills accounts were a mere banker's account—a current account—not an appropriation account. But when the navy made up their appropriation accounts, then deficiencies were discovered on some Votes, and surpluses on others. It then became a question how the accounts were to be squared. If it were by transfers, then no definite issue was brought before Parliament; but if the transfer clause were done away with, then the Departments could not square their accounts without coming to Parliament for credits to the amount by which they had exceeded, in their expenditure under particular

  1859
  heads; and there was voluminous evidence to show that no inconvenience could result from such a mode of proceeding. He thanked the House for their indulgence in hearing him on so dry a subject, and hoped that they would bear in mind the propositions which he had proved. 1. That the 29th clause had failed in attaining the proposed object. 2. That it was most injurious to the public service, by increasing the expenditure; by preventing the Departments coming before Parliament; by promoting laxity in estimating; by defeating the knowledge of Parliament; and by causing the Government to take too much on the popular Votes, and starve the unpopular. 3. That, in the nature of things, no inconvenience could result from expunging the obnoxious clause altogether. The noble Lord concluded by moving—
  "1. That every Bill hereafter introduced for the appropriation of supplies be printed and distributed in time for consideration before it passes through Committee of the House.
  "2. That it is inexpedient that any Bill for the appropriation of supplies shall contain the power of transfer which was first introduced into the Appropriation Act of 1846, and which unsettles the appropriation of all the grants of the year for the naval and military services."
  Motion made, and Question proposed,
  "That every Bill hereafter introduced for the appropriation of Supplies be printed and distributed in time for consideration before it passes through Committee of the House."
  THE CHANCELLOR OF THE EXCHEQUERsaid, he could not concur in several important points with the opinions expressed by the noble Lord He thought the noble Lord had very much exaggerated the effect produced in the augmentation of expenditure by arrangements—certainly in themselves defective — with regard to the fiscal laws of transfer. No doubt the tendency of lax and defective arrangements was to increased expenditure; but he could not agree, as the noble Lord seemed to assume, that the aggregate amount of expenditure had been very largely increased. He differed, too, from the noble Lord on another point, which though not expressly asserted by him, was assumed and taken for granted all through his speech. He gathered from the noble Lord's speech that he was of opinion that in all cases where the Vote on a particular item was exceeded by the expenditure, whether that deficiency was capable or not of being supplied from the aggregate fund voted for the service of the year, it ought to be made the subject of a supplementary
  1860
  Estimate. [Lord ROBERT MONTAGU: Of a Vote of excess.] That, of course, was a very different matter; but still it was a popular and plausible delusion, that if, on any emergency arising, there was an excess of expenditure on the sum actually voted for a particular service, it ought at once to be brought before Parliament in the shape of a supplementary Estimate. From his experience in the office he had the honour to hold, he was persuaded that there was no practice which would be more destructive of Parliamentary control over the expenditure. It had been a matter of regret to him that on several occasions, from very grave and sufficient reasons, supplementary Estimates had been presented during his term of office, but he was firmly convinced that the whole effectiveness of Parliamentary control depended upon the state of the finances— the balance of income and expenditure— being once a year gathered together and submitted as a whole to Parliament— and in a plan being submitted to Parliament which should substantially, and in the main, govern the whole expenditure and income of the year. But, if from any idea of the supreme control of Parliament, the Government were to be called on every week or every fortnight to bring down supplementary Estimates, the control of Parliament over the expenditure of the year would be entirely nullified under the semblance of consulting its dignity. It was impossible for Parliament to give its whole attention to these points, and he held it to be a canon of all sound finance that supplementary Estimates should be few and as limited in extent as possible. Coming next to matters of fact, he was afraid that the noble Lord had not taken into view what had been recommended by the Committee on Public Accounts, and what had actually been done by the Government. To adopt the noble Lord's second Resolution, which was the most important, would be like taking precautions against dangers which had ceased to exist. When the question was examined before the Committee of the previous year, all that the noble Lord had stated to the House was taken fully into consideration. It was felt that the system was defective. The Act of 1846 sanctioned practices which had previously prevailed without any sanction at all; and though the provisions of that Act might be defective, the noble Lord would find that, substantially, the whole of what he

  1861
  had proposed had been adopted under that Act. The power of transfer, in fact, which he described and denounced, no longer existed. A plan had been submitted in the previous year by which certain separate funds would have been established, out of which these excesses might have been temporarily supplied. That plan was not adopted by the Committee, but in lieu of it another plan was adopted. New securities were taken to insure the submission of these excesses to the Treasury, so that the Treasury had greater certainty than it ever possessed before that these excesses would be submitted to it. The matter being thus brought under the notice of the Treasury, it was likewise provided, that although the Treasury, out of unappropriated surpluses, was Authorized to advance sums to meet the deficiencies on particular Votes, yet that such appropriations should be of a purely provisional character, that they should only hold good until the final closing of the account, and that after that closing of the account the expenditure in excess should be definitively met by a Vote in excess. That Vote would not correspond precisely in its technical character with Votes in excess as we now understood them. They referred to excesses properly so called, which entered into the Exchequer account of the year in which they were passed, and materially disturbed the relative balance of expenditure and income. The essence of the noble Lord's Motion, as he understood it, was to bring each transaction on its merits to the judgment of Parliament; so that by the arrangements of the different Departments they might not be prevented coming under the attention of House. That was precisely the object of the clause which had been incorporated into the Appropriation Act. The 26th clause of that Act provided, that where there was an excess of expenditure, on application being made to the Treasury, the Treasury might thereupon be authorized, temporarily, to defray the excess out of any surplus which might have accrued; and it was then provided, that within a given time after the assembling of Parliament, the proceedings should be laid before it for its sanction, and provision be made to meet the several excesses on the several Votes in such manner as Parliament might determine. The criticism, therefore, of the noble Lord was directed to a state of things which no longer existed, and he was endeavouring to provide a remedy for that which had
  1862
  already been cured by Parliamentary proceedings. Unfortunately, it was impossible, in the varied expenses of a great country like this, for every Department to know exactly the precise amount of its expenditure, and it was necessary that some slight margin should be left. It would be most undesirable to say to each Department, "You must take into account, in framing each particular Vote the extremest amount which you can possibly require, and call on the Chancellor of the Exchequer to provide for it out of the income of the year on a scale which will cover all emergencies." With regard to the noble Lord's first Resolution, of course it was very proper that the Appropriation Bill should be accessible to Members, but he scarcely thought it desirable to go to the expense of from £50 to £100 for printing 658 Bills, of which, perhaps, not a dozen would be used. The principle of the noble Lord's first Resolution was sound; and if he would take it in the following terms, he should have no objection to its being adopted: —
  "That a sufficient number of Copies of every Bill hereafter introduced for the appropriation of Supplies be printed and delivered to Members applying for them in time for consideration before it passes through Committee of the Whole House."
  With regard to the second Resolution, he had endeavoured to point out that the object at which it aimed had already been obtained.
  SIR FRANCIS BARINGsaid, he was Chairman of the Committee on Public Accounts which sat during the last year, and the House ought to be made acquainted with what had taken place. No doubt changes in the Appropriation Acts had been made without the knowledge of the House, and it was proper that hon. Members who paid attention to these subjects should have the opportunity of seeing the Bill in print before it was passed. There had been great looseness in the matter, and it was necessary to put a stop to that looseness. The Committee over which he presided considered several plans, and at length came to a decision to make recommendations, which the Government had adopted, and which he believed carried into effect all that could be reasonably wished. In future the sanction of the House was to be obtained for the appropriation of any excess in any one Vote to another Vote, in whatever Department the excess arose. He could not see the use of passing a Resolution to do that which had been done already, and he warned the House against

  1863
  interfering with the transfer clause. Under the old practice the Admiralty of itself, transferred the excess of one Vote to another Vote, but a change was made by which the sanction of the Treasury was required. If they repealed the transfer clause, the Admiralty would get rid of the check of the Treasury. What the noble Lord wished was to increase the check, and the Committee recommended them to strengthen it by adding the necessity for the sanction of the House. Under these circumstances, he hoped the House would not come to a Resolution which would entirely upset the plan of the Committee, and would abolish a valuable means of keeping the different Departments in order.
  MR. SPEAKERasked whether the noble Lord accepted the Amendment of the Chancellor of the Exchequer?
  LORD ROBERT MONTAGUsaid, that he did.
  Motion, by leave, withdrawn.
  Motion made, and Question proposed,
  "That a sufficient number of Copies of every Bill hereafter introduced for the appropriation of Supplies be printed and delivered to Members applying for them in time for consideration before it passes through Committee of the Whole House."
  MR. HADFIELDsaid, he was friendly to the publication of all the Acts of the House, and therefore he should support the principle of the first Resolution. But it did not go far enough. He wished the Indemnity Bill as well as the Appropriation Bill to be printed. The Indemnity Bill ought not only to be printed in the folio edition of the statutes, but that, as the greatest part of the expense of setting the types must be incurred, copies should be supplied to any Members who required them. It was a reflection on the House to be passing a Bill every year indemnifying persons from penalties for not taking an oath against the Pretender.
  MR. SPEAKERsaid, he must call the hon. Member to order, as he was not addressing himself to the question before the House.
  MR. HADFIELDsaid, he would move as an Amendment that the Indemnity Bill be included in the first Resolution, and then he should be in order in referring to that Bill. He protested against the House being made ridiculous by passing Bills which excused even those who passed them—including the Law Officers of the Crown—from the penalties incurred by a neglect to make unnecessary and ridicu-
  1864
  lous declarations, the ground of such excuse being that they did not know the law.
  Amendment proposed, after the word "Supplies," to insert the words "and every annual Indemnity Bill."
  LORD ROBERT MONTAGUsaid, that the chief argument which had been brought against him was that a change had been made last year in the transfer clause, which clause the Chancellor of the Exchequer had denominated "an evil," and which this change had "cured." The change which had been referred to might be an improvement, but they had no experience flow it would work, and no security even for its continuance. At any time they might return to the old system without the cognizance of the House. But as it was agreed on all sides that the clause had failed in its object, and was an evil, he must express his astonishment at the desire which was evinced to bolster up a bad cause. He would, however, consent to withdraw his second Resolution. The Chancellor of the Exchequer had assumed that he (Lord Robert Montagu) wished him to comedown to the House "every fortnight" to adjust the accounts. He meant that this should be done once for all, when the accounts were closed. The Chancellor of the Exchequer had objected also that "a Vote in excess entered into the account of the year in which it is voted." This was true of a cash account, but it would not be thus in the case of service accounts, such as those of the army and navy. He should withdraw the second Resolution.
  MR. NEWDEGATEsaid, he wished to remind the House of the offer of the Secretary of State for War to furnish the detailed accounts of the army expenditure, if they were moved for. He wished also to appeal to those hon. Members of the Committee who had said that there was no objection to their being presented, to say whether further examination confirmed them in that conclusion, because if they were to check the power of transfer, which had been abused, they must have before them the detailed accounts of the expenditure of the army for the past year when they were dealing with the Estimates.
  Question, "That those words be there inserted," put, and agreed to.
  Main Question, as amended, put, and agreed to.
  Ordered,
  That a sufficient number of Copies of every Bill hereafter introduced for the appropriation of Supplies, and every annual Indemnity Bill, be printed and delivered to Members applying for them in time for consideration before it passes through Committee of the Whole House.

PROCESSION AND ILLUMINATION ACCIDENTS (METROPOLIS).

  RETURNS MOVED FOR.
  MR. HARVEY LEWISsaid, he rose to move an address for Returns of the names of the persons killed or injured during the procession of the 7th of March and on the occasion of the recent illuminations in the City on the 10th of March, and of persons who afterwards died in consequence of injuries received on either of those days; and of the persons injured on either of those days whose cases were reported to the City and metropolitan police, distinguishing the localities in which the deaths and injuries occurred. The difficulties which arose in the City, upon the occasion of the procession of his Royal Highness the Prince of Wales and the Princess Alexandra, were unhappily matters of public notoriety. Under the circumstances the fatal accidents to which his Motion referred, ought not to have occurred; for if ever proper notice was given to authorities, it was given on that occasion. For several days, previously to the 7th instant, the City had been engaged in mailing the most extensive preparations for the Royal reception, which attracted such crowds of spectators that the streets were almost impassable, so that there was ample warning of what was to be expected on the day of the arrival of the Princess. Besides, notice was given from a quarter which ought to have received deferential attention. They had the statement of His Royal Highness the Commander-in-Chief, that he had tendered the Lord Mayor the assistance of the military, which was in the first instance declined; but when the Commander-in-Chief, fortified by the opinion of a council of officers, again pressed the use of the military on the Lord Mayor, his Lordship accepted the aid of a limited number of mounted artillery. If he had not done so, the most fearful consequences would probably have ensued. But as it was, the City authorities could not be held to be tree from blame. They arranged the programme and published an order for the clearing of certain streets at stated times; but long after the fixed
  1866
  hour the streets were encumbered with vehicles of every description in defiance of their own regulations. There was an appalling scene at London Bridge, which was crowded long after the hour that had been, fixed for clearing it, and there was great anxiety as to the possibility of making a passage over the bridge for the Royal procession. So densely were the people massed in front of the Fishmongers' Hall that it was wonderful some were not crushed to death, and it was a grave question where the people on the bridge were to be forced to. A. few policemen, who had been placed on the bridge to perform an impossible task, made an attempt to clear the bridge, but failed hopelessly; and when the duty was undertaken by the mounted artillery, the result was to drive an immense mass of human beings on to the already overcrowded spaces opposite Fishmongers' Hall, along King William Street, and before the Mansion House. The City procession then began to make its appearance, getting through the crowd as it best could; but only part of it crossed the bridge; and when the Royal carriages reached the centre of the bridge, they could get no farther for some time, because the corporation carriages, advancing to meet the Royal carriages, stopped the way. All that showed great want of precaution on the part of the City authorities, and at the same time evidenced in a remarkable degree the good conduct of the people, and they could only be thankful that the number of fatalities was not larger. Had there been evil-disposed persons in the crowd, or had the police displayed anger or irritation, much more serious consequences might have been apprehended. Several lives, however, had been sacrificed and limbs broken, and it was well worth inquiry how these grave accidents had occurred. In King William Street, on the Saturday, a woman had been thrown down from a stand which had been improperly erected there; her arm was broken, and she was removed to an hospital, where she subsequently died; and it was on account of that case he had introduced the 7th of March as well as the 10th into his Motion. The public mind had been painfully excited on the subject, and he thought it must desirable that all the facts that could be ascertained should be laid before the House previous to the discussion on the Motion of the hon. and gallant Member for Westminster (Sir De Lacy Evans) for the amalgamation of the metropolitan and

  1867
  City police; so that the House might have correct data upon which to form an opinion.
  Motion made, and Question proposed,
  "That an humble Address be presented to Her Majesty, that She will be graciously pleased to give directions that there be laid before this House, Returns of the Names of the Persons killed or injured during the Procession on the 7th day of March 1863, and on the occasion of the Illuminations in the City on the 10th day of March 1863, and of Persons who afterwards died in consequence of injuries received on either of those days:
  "And, of the Persons injured on either of those days, whose cases were reported to the City and Metropolitan Police, distinguishing the Localities in which the deaths and injuries occurred."
  MR. NORRISsaid, he rose to move that the Return be supplemented by a Return of the number of persons killed and wounded on the occasion of the lying in state and funeral of the Duke of Wellington; and a copy of any order issued by the metropolitan police authorities with a view to prevent such accidents. He moved that addition because he thought that the information furnished, to be of any value, should be as full as possible, and he hoped that the House would suspend their judgment until they obtained full information. As the hon. Member, however, had given a detailed account of what took place in the City, he might, perhaps, be permitted to say that the great blunder which had been committed was that of confining the full procession to so limited a line of road as that which existed between London Bridge and Temple Bar. Another fact which he would mention was this—that on the morning of the 7th March he attempted to approach the Mansion House from the north of London; but when he got as far as the junction of Newgate Street, and St. Martin's le-Grand, his carriage, those of other people, and a great many respect able persons on foot, were prevented getting into Cheapside by van-load after van-load of metropolitan policemen being driven from the West End through the City of London; and an obstruction of that kind having occurred, it was certainly right to inquire how far the metropolitan and the City police authorities acted in harmony upon such occasions. When one body of police was found fault with, and another was found adding to the obstruction, the House ought to suspend its judgment until the whole of the facts were before them. If it could be proved that the City authorities had neglected their duty, they ought
  1868
  to be called upon to resign the authority which they possessed.
  Amendment proposed,
  At the end of the Question, to add the words "also a Return of the number of Persons killed and wounded on the occasions of the Lying in State and Funeral of the late Duke of Wellington:
  "And, Copy of any Order issued by the Metropolitan Police authorities, with a view to prevent a recurrence of such accidents."
  THE LORD MAYOR (Mr. Alderman ROSE)said, he thought it would be inconvenient upon that occasion to attempt to answer the observations of the hon. Member for Marylebone; but when the Returns had been furnished, the whole circumstances would be in possession of the public, and they would then be able to judge of the merits of the question. He might, however, be allowed to repeat what he had stated before, that troops having been offered to him, he accepted that offer on the very day on which it was made. There was, however, some little irregularity on the part of Sir Richard Mayne in communicating the offer. Such offer was made in an unofficial manner; but the moment the offer was officially made, he at once accepted it verbally, and within two hours a written acceptance of the offer was sent to His Royal Highness the Commander-in-Chief, and that letter also thanked him for the offer so made. Further, when two officers were sent down to him (the Lord Mayor) he not only expressed his gratitude for the 200 troops who were offered, but said that if 100 or 200 more could be sent he should be thankful.
  COLONEL NORTHsaid, he wished to know whether, when his gallant Friend Sir Richard Airey first made an offer of to the Lord Mayor, on behalf of His Royal Highness the Commander-in-Chief, he did not meet with a refusal.
  THE LORD MAYOR (Mr. Alderman ROSE)said, that he most distinctly stated that personally he was very much obliged to His Royal Highness for his kind consideration, but that he being the occupant of his office for one year only could not accept the offer off-hand; that personally he accepted it, but that a written communication would be sent as soon as the proper parties could be consulted, and that written communication was sent, he believed, about an hour after the interview by special messenger.
  SIR GEORGE GREYsaid, he thought that was not the time to discuss the arrangements of the City Police. It was

  1869
  quite obvious, however, that that force was quite insufficient to meet the recent emergency. He had not seen the report referred to by the Lord Mayor, but had no doubt he would find it at the office on the following day. He had no objection either to the Motion or the supplement to it.
  Question, "That those words be there added," put, and agreed to.
  Main Question, as amended, put, and agreed to.
  Resolved,
  "That an humble Address be presented to Her Majesty, that She will be graciously pleased to give directions that there be laid before this House, Returns of the Names of the Persons killed or injured during the Procession on the 7th day of March 1863, and on the occasion of the Illuminations in the City on the 10th day of March 1863, and of Persons who afterwards died in consequence of injuries received on either of those days:
  Of the Persons injured on either of those days, whose cases were reported to the City and Metropolitan Police, distinguishing the Localities in which the deaths and injuries occurred:
  Of the number of Persons killed and wounded on the occasions of the Lying in State and Funeral of the late Duke of Wellington:
  And, Copy of any Order issued by the Metropolitan Police authorities, with a view to prevent a recurrence of such accidents.

PARTNERSHIP LAW AMENDMENT BILL [BILL 26.]

  SECOND READING.
  Order for Second Reading read.
  MR. SCHOLEFIELD,in rising to move the second reading, said, the Bill contained a considerable number of provisions, but the main one was intended to extend the principle of limited liability to private partnerships, and to enable clerks to share in the profits of a concern without incurring the liabilities of partners, or acquiring the rights of partners. There were also clauses introducing the principle of arbitration into partnerships, where arbitration clauses did not already exist; and, finally, there were provisions for registering the names of parties not already mentioned in the titles of the firms to which they belonged. The Bill contained so many different provisions that it had provoked hostility in various quarters; but he might say at once that he regarded as its leading principle that which related to the limited liability of partners. No one would deny that contracts, whether of partnerships or anything else, should be as free and un-
  1870
  restricted as possible, excepting where they were immoral in themselves or adverse to public policy, or where they were so susceptible of fraud that it would be better to refuse than to admit them. Nor was he then called upon to defend the principle of limited liability, for it had already been sanctioned by Parliament, and was, in fact, part of the law of the land. He merely had to advocate the application of the principle to private partnerships. At present, if a capitalist wished to assist a relative, a deserving clerk, or an inventor, there were only two modes by which he could do it. One was, by lending money at a fixed rate of interest; and the other was, by becoming a partner of the person whom he desired to befriend. If he lent money at a fixed rate of interest, he might not be tempted by the amount which he would receive; or if he obtained a satisfactory amount, it might be far too heavy for the business to bear, especially if the business were one of fluctuating profits. On the other hand, by becoming a partner in the concern, he made himself liable to his last acre and his last shilling. Few men were disposed to run so great a risk, and the consequence was, that a great deal of capital which would otherwise be introduced into commercial enterprises, and so brought to the aid of men of intelligence and perseverance, now went into other speculations, many of them in foreign countries, which were thus enriched at the expense of our own. The present Bill was meant to obviate that difficulty. Its object was to enable any capitalist, if he felt so disposed, to advance a fixed sum of money to a private partnership, becoming a limited partner in the concern, liable only for the amount he had placed in it. That facility, however, was accompanied by stringent provisions of registration, and the registration would give the names of all the partners, limited as well as unlimited, showing the amount of money which each limited partner had put into the concern, and stating the conditions upon which, and the time for which, it was advanced. It would afford, in short, all the information which creditors had a right to ask. The name of the limited partner would not be mentioned in the title of the firm, and he would not be liable to bankruptcy; but of course it would be different with the general partners, who would be liable to their last farthing. He need hardly say that the subject of limited private partnerships was not a new one to

  1871
  Parliament. So long ago as 1782 an Act had been passed in Ireland, the object of which was precisely the same as that of the present Bill. In 1836 the right hon. Baronet the Member for Portsmouth (Sir Francis Baring) prepared the heads of a similar measure; and in the following year Mr. Bellenden Ker, in a Report drawn up at the request of the Board of Trade, admitted that the system was in most successful operation throughout the Continent. Two high authorities—Lord Overstone and the first Lord Ashburton—gave evidence on the subject before a Parliamentary Committee in 1844, the first objecting to any change of the law, and the second expressing himself as, upon the whole, favourable to limited liability, on the ground that it would bring out a great deal of capital now lying dormant or sent to other countries. In 1851 another Committee recommended that power should be given to lend money for periods of not less than twelve months, at rates of interest varying with the rates of profits, the lender not being liable beyond the sum advanced, and proper precautions being taken against fraud. The Mercantile Law Commission in 1853 was divided in opinion, the majority deciding against limited liability partnerships, but three of the Commissioners— Mr. Baron Bramwell, Mr. Anderson, and the hon. Member for Bridport—declared themselves in favour of limited liability, and signed a separate Report to that effect. In 1854 the House, upon the Motion of the hon. and learned Member for Plymouth (Mr. Collier), affirmed a Resolution declaring that the law of partnership which rendered every person who, though not ostensibly a partner, shared in the profits, liable for the whole debts of the partnership, was unsatisfactory, and ought to be so modified as to permit persons contributing to the capital to share in the profits without incurring a liability beyond a certain limited amount. Such was the decision of the House in 1854, and the Bill which he then submitted to their consideration was really founded on that Resolution. The present state of the law on the subject did not rest upon any statute, but on a decision of Chief Justice Eyre in 1793, which was impugned by men of great eminence, among whom were Mr. Baron Bramwell, the right hon. Gentleman the Member for Calne (Mr. Lowe), and Mr. Rickards, counsel to the Speaker. Mr. Stuart Mill, Mr. Senior, and other distinguished economists, also advocated this principle; the whole consti-
  1872
  tuting a sufficient weight of authority to justify him in claiming a favourable consideration for his proposal. The system of limited liability was, moreover, in operation on the Continent of Europe as well as in the United States of America, and it was favoured by some of our most eminent legal societies, and supported by a great number of the chambers of commerce, though he was sorry to say not by all, one of the exceptions being that of the city of Glasgow, whose objections would be stated by the hon. Member for that city (Mr. Buchanan). If the House should be pleased to agree to his Motion, he would ask that the measure be referred to a Select Committee. He begged to move that the Bill be now read the second time.
  Motion made, and Question proposed, "That the Bill be now read a second time."
  MR. BUCHANAN: Sir, the Bill before the House should have been divided into two or more Bills, as it contemplates several distinct and separate objects. The most important of these is the extension of limited liability to all partnerships, and the other next in importance, is the registration of partnerships. It would have been desirable to have had an opportunity of discussing these subjects separately, as many who approve of registration of partnerships are opposed to the extension of limited liability. This appears evident from the Petitions which have been presented to the House. It might, therefore, be a desirable course to refer the clauses of the Bill, as to registration, to a Select Committee. It would then be found what are the practical difficulties to be overcome, whether it is possible to define a partnership with sufficient clearness, whether partnerships for special purposes and for short periods should be registered, and whether the trading of the poorer classes should be burdened with the cost and trouble attending registration. All these are matters of detail, and if there is no objection to the principle involved, might with advantage be left to the discussion of a Select Committee. But I object to adopting the same course in regard to the more important part of this Bill, which proposes to extend the principle of limited liability, by making it permissive in all partnerships.
  Objecting strongly to that proposal, I have thought it only fair to those hon. Members who may agree with me, as well

  1873
  as to the numerous mercantile bodies who by petition or otherwise have expressed their hostility to the Bill, to move an Amendment, which will at least produce discussion, and test the opinion of the House. I am sure that the hon. Member for Birmingham, whose judicious and practical course in this House no man more appreciates than myself, will not regard what I have proposed to be discourteous, more particularly as it coincides with the advice and deliberate opinions of various commercial bodies whose sentiments are entitled to great consideration. I have had the honour of presenting a petition from the Chamber of Commerce of Glasgow, objecting to the extension of limited liability; the Chambers of Commerce of Halifax and Hull have followed the same course; and the Associated Chambers of Commerce at their recent annual meeting, held in London in February, have also condemned that principle.
  I shall not notice the various steps which have been taken with a view to alter the law of partnership, by introducing limited liability previous to 1853; and I refer to the Report of the Royal Commission appointed in that year, principally because it contains the most valuable arguments and facts bearing on the subject, and may be regarded as a text book of the theory and practice of limited partnerships. The Commission consisted of eight Members, all of them men of high position, and legal or mercantile experience. After examining much evidence contained in written replies to queries circulated by the Commission among leading statesmen, lawyers, and merchants at home, and having also communicated with merchants in foreign countries, they came to the conclusion, by a majority of six to two, that it was inexpedient to change the law of, partnership. But this decision did not abate the ardour of the supporters of limited liability. In 1855 a Bill was introduced on the Motion of the right hon. Gentleman the Member for Kilmarnock, on behalf of the Government, and became law, enabling joint stock companies to be registered with limited liability. A further step in the same direction was made in 1858, when banking companies were enabled to avail themselves of the same privilege. In regard to that legislation, it is not my intention to say a single word, either in approval or condemnation. The wisdom of Parliament has sanctioned, and in the recent consolidated statute
  1874
  has deliberately re-enacted, the principle of limited liability in regard to joint-stock companies and banks We are now asked to take a much more important and more perilous step. We are asked to permit this limitation of liability in all partnerships, by adopting the French form of commandite companies.
  It is therefore high time to inquire what has been the success of our experiments hitherto. And first of all, have we had sufficient time to judge of these statutes, which have only been perfected by the consolidated Act of last Session, and exist on the statute book only eight and five years respectively? There has not, therefore, been a long experience of this new principle in our mercantile law such as to justify a further advance in the same direction. But it may be said —Has there been any marked success at all? Has public opinion sanctioned the change of the law by any distinct and unanimous expression? If there really had been a general agreement in favour of limited companies, there would be sufficient proofs of it in the general adoption of the system. Three Returns in regard to limited companies, have been presented to the House, the first and last on the Motion of the hon. Member for Argyllshire, and the second on the Motion of the hon. Member for Lancaster. By the first of these Returns it appears that during three years, from the 17th July 1856 to the 29th July 1859 (omitting the first six months after the Act came into operation), 1,010 joint-tstock companies were registered in England, or 336 annually; and during the same period 290 of these companies were abandoned, or nearly one-third of the whole. During the period embraced by the second Return, two years and a half, there were registered 901 companies, and 73 abandoned; to which must be added the abandonments in a supplemental list, coming down to 1862, and amounting to 214 additional, making 287 companies abandoned, of 901 registered, or considerably above a third. The last Return is for the year 1862, during which period 423 companies have been registered, and 61 abandoned, including a supplemental list of companies previously returned. Similar Returns applicable to Ireland and Scotland have been presented, and give nearly the same results. In seven years the whole number of companies registered in England has been 2,334, and of these 638 have been abandoned, or something approaching to

  1875
  one-third of the whole number. Any one who considers the enormous extent of English commerce will admit that these figures are significant, and indicate no great desire on the part of the public to enter into such companies. The great boon of limitation of liability seems so far to have been little appreciated. As regards banks, the Returns are even more suggestive. Since the passing of the Act, in 1858, only nine banks have been registered with limited liability, and of these one has been abandoned. None of the old-established banks have availed themselves of the privilege, so far as the Returns show; but it is understood that two banking companies one at Manchester and one at Liverpool, have recently been reconstituted on that principle. During 1862 thirty-six banks have been registered, many of them quite recently, and as to all we have only a short experience. Again, it may be asked, where is there any proof of public anxiety for limited banking companies? Colonial banks incorporated by charter and with special conditions of liability (generally twice the amount of shares) are not included in these remarks. Of the 2,334 companies registered, 638 have ceased to exist, dissolved, wound up, and many of them bankrupt. It is to be regretted that the Returns before the House contain no records of the winding-up of these companies in the courts of law. It is believed that in many cases they would present examples of reckless mismanagement, and not unfrequently of swindling. In all of them it will be found that debt has been freely incurred, and that the dividends for distribution among creditors have been small. The hon. and learned Member for Guildford, whose great experience in the courts of law entitles his opinion to much weight, said, in the debate on the 13th May, 1858 —
  "In the cases [of limited liability companies] which had come into the courts, it had generally appeared that all the money which had been paid up was spent, and that there was nothing for the creditors."
  No doubt, subsequent experience has been of the same kind, though, so far as I know, not attested by the same high authority. If current rumours are to be trusted, the disclosures made in the winding up of these companies continue to be disgraceful.
  All these facts afford no encouragement to extend this system. The advocates of this Bill are bound not only to show that so far there has been success in the work-
  1876
  ing of their principle, but that such success has been marked and decisive. The burden of proof rests with them; they must establish a success which warrants a farther advance in the same direction, and we ask for facts to justify that course. But it is said, limited liability and commandite companies have worked well in other countries. I confess that I have been unable to find any conclusive proof of that great success; at least, it is not to be found in the evidence laid before the Commission of 1853. France has been mainly relied on, and the forms of the French law have been imported into this Bill But, let any one go over the evidence, and he will find that instead of a history of great success, we have only apologies for non-success from the principal French witnesses. They have told us, not that the commandite principle has succeeded, but that it has been abused. Even the hon. Member for Bridport, who was one of the Commissioners and reported favourably of the French law, does not deny that it has been abused, and that the practice of mixing up the two different principles of sociétés anonimes and en commandite ought to be abolished. I cannot do better than refer to the summary of this part of the argument in the Report of Mr. Slater, one of the Commissioners, which will be found at page 44 of the Report. To the same effect Mr. M'Culloch has written in the late edition of the Encyclopoedia Britannica (article "Partnership").
  It is alleged that in America the success has been great, but the testimony to that effect is not unanimous. Sir William Brown, well known and respected in this House, Messrs. Haven and Curtis, of Boston, Messrs. Biddle of Philadelphia, and Binnie, an eminent American jurist, all agree as to the frequent abuses resulting from sociétés en commandite. To the same effect is the testimony of Mr. M'Culloch, in the article already alluded to. From Holland and Belgium also we have conflicting testimony as to these societies. In all cases there is an admission of abuses, and numerous proposals for remedy. Again, it may be asked, are these evidences of success sufficient to warrant us in following these foreign examples? Do not tell us that the principle is a good one, but has been ill-worked. You ask us to adopt a new law, and on you lies the proof that it has elsewhere succeeded. Your argument requires that you should have not partial, but great, and even bril-

  1877
  liant success. I confess, I do not know where such proof is to be found. From anything that appears in evidence, at home and abroad, we are not warranted in making further changes in our law. It is merely to carry out a theory that we are asked to adopt the Bill. The Legislature has sanctioned the principle of limited liability in recent statutes; and in order that there may be uniformity in our laws, all partnerships are to be brought under the same category. But that is not a practical argument. In many cases it may be right to go a certain length, and quite wrong to go further. It remains for those who demand a further change in the law, to prove that they are recommending a safe course. But further it has been said, why should parties be restrained from forming any contracts which they may deem for their interest? If the conditions are avowed, and contemplate a legal object, there should be no impediment to such contracts. Interference and restraint are contrary to the principles of freedom recognized in recent legislation. No one has put this argument with more clearness and power than the right hon. Gentleman the Vice President of the Board of Education, who says, at page 84 of the Report—
  "The only case in which the State is justified in prohibiting parties from contracting, is where a contract arises out of a breach of law or morality, as gambling, or is made for the purpose of a future breach of law and morality, as smuggling, or is in itself a breach of some other substantive law, as insuring an enemy's ship. I can find nothing against morality, nothing against public policy, in the legal sense of the word, in contracts of limited liability; and as to whether such contracts are advantageous to those who enter into them, afford facilities for fraud, tend to impair the credit of the concern, or encourage unhealthy speculation, I think we may fairly leave individuals to judge, without State interference."
  This argument is carried too far when it assumes that the State, as guardian of the public interest, is under no obligation, in so far as just and equal laws can accomplish it, to prevent fraud. It is much the same as if it were maintained that the State is not bound to prevent larceny. The great principle salus populi, summa lex, requires that the freedom of the subject shall be restrained in various respects. All law is a system of restraint. A man may not scatter firebrands, nor randish deadly weapons, nor sell poisons; neither ought he to be allowed to make contracts manifestly affording facilities to
  1878
  fraud. In the opinion of the most competent authorities, the further extension of limited liability would produce wholesale swindling. If so, the State is not only bound to afford no facilities, but to resist to the utmost whatever may lend to such consequences. Of course, the weight of this argument will depend on the proof that limited liability tends to encourage contracts of a collusive and fraudulent kind, and that will be attempted to be shown. In the mean time, I may say that the great objection to such companies, their inherent and ineradicable defect, is that they open a wide door to fraud. Even the hon. Member for Bridport, in his able and valuable paper in the Appendix to the Report of the Royal Commissioners, has guarded his statement of the general principle that there should be perfect freedom in contracts, by the notable reservation, "guarding against wilful deception." If wilful deception could be guarded against, this Bill would stand in a better position, but the proviso of the hon. Member cannot be made effectual, and his whole argument is consequently undermined.
  As has been already said, the Bill before the House has adopted the principle of the French law of commandite. The third clause shows what is the nature of the proposal. Any company consisting of two or more persons, may be registered as a limited company. Two persons, of whom one shall be the general partner—the gérant of the French law—and the other the special partner, or commanditaire, upon complying with certain conditions of publicity, as narrated in Clause 4, may demand of the Registrar of Joint Stock Companies, to be registered as a limited company. It may seem an extreme case, but it is not improbable, that two persons might form such a partnership; the one possessed of capital, the other of skill. If the capitalist should pay up the capital to be registered (though for the actual payment there is no security), it would be known to the world; but as to the general partner, there is no certainty that he shall have paid up or be possessed of anything at all. These parties might proceed to trade, to contract debts, to divide profits, whether earned or not. and finally become insolvent, leaving nothing for their creditors, though their debts may have exceeded the amount of their registered capital twenty times over, and the nominal profits which have been drawn out be more than

  1879
  the original stock of the company. It must be manifest that such a law would afford the temptation and the opportunity to fraudulent and collusive contracts among partners—to a system of false valuations and dishonest accounting, rendered easy, as every practical merchant knows, by the difficulty of appreciating mercantile assets, scattered over the world. The first marked distinction beween the existing law of limited joint-stock companies and the commandite companies to be formed under the present Bill, consists in the different objects which they respectively contemplate. Hitherto, limited joint-stock companies have been usually registered for purposes of public advantage, as the supply of water, gas, public parks, canals, or undertakings of risk and magnitude, beyond the reach of private enterprise. If the Returns on the table are consulted, it will be found that such has generally been the character and objects of these companies. The present Bill holds out no such pretence; private gain is the only object. Whatever indulgence or relaxation of the law it may have been considered expedient to make in the public interest, no similar favour should be shown to private speculations.
  Farther, seven partners are required by the law to be associated in a limited joint- stock company. Two partners, one of whom may be a man of straw, may constitute a partnership under this Bill. The difference is important, for seven men cannot combine to defraud their creditors with the same facility as two. The joint-stock companies were required to make their proceedings public. The amounts of capital subscribed, and the amounts paid, were specified and registered. There was a periodical audit provided to be made by neutral auditors, and skilled accountants scrutinized the balance-sheet before profits could be declared. All these precautions in the public interest are to be abandoned. There is to be no published statement of the whole capital account, much less of the items of which it is composed, whether of cash or goods. There is to be no means of knowing whether the limited capital, which is registered, has been actually paid up. There is no provision for a scrutiny of accounts before profits are declared; even an ordinary balance by the partners is not enjoined. For anything that appears to the contrary in the clauses of the Bill, alleged profits may be divided without being earned. If
  1880
  subsequent losses occur, there is no provision for making up the capital to the amount registered by the special partners, so that the register itself may become a snare, instead of a guide to the creditors of the company. On all these points, I cannot do better than quote from the Report of the Commissioners; and I shall briefly refer to the opinions of Lord Overstone, than whom there can be no higher authority; of that acute and learned Judge Lord Curriehill, one of the Commissioners, besides several Members of this House, whose opinions I quote, both as having an opportunity to correct me, if I shall mis-state them, and as being generally opposed to my views. Lord Overstone's opinions will be found at page 96 of the Report. The quotation from Lord Curriehill's Report is at page 17; the hon. Member for Calne, page 84; the hon. Member for Manchester, page 100; and the hon. Member for Peterborough, at page 102. With these high authorities, we are entitled to say that any Bill should be rejected by this House which neither requires the publication of the whole capital of a company nor provides machinery for audit of accounts or the replacement of lost capital. One point may be noticed, though in itself of little consequence. The French law prevents the special partner from interfering in the management of the commandite company. The provision is of little value, in so far as it is impossible to prevent the co-partners from holding unofficial consultations which might equally control the gérant as direct interference. But the principle of the French law is good, in so far as it is meant to prevent a partner with a limited risk from sporting with the funds of the company. But even this safeguard, imperfect as it is, has been omitted in this Bill. Nay, what is still worse, the special partner is not prohibited from signing the firm of the company. For anything that appears to the contrary, he may commit his co-partners by word or writing to any extent, while he himself incurs a limited risk only. The only safeguard proposed by the Bill against acts of management by the special partner is that his name shall not appear in the firm. Farther, the trading of individuals for their own account, frequently the most prudent and efficient trading, is placed at an unfair disadvantage by being exposed to the reckless competition of limited companies. But it will no doubt occur to many, why should this be so? If two

  1881
  partners, one of whom may be a man of straw, may trade limited, why may not an individual also announce that he has registered a limited amount of his capital, which alone will be available for his trade debts. True, this is an argumentum ad absurdmn, but consistency requires that the advocates of this Bill should draw a clear line of distinction, by showing wherefore one man should be debarred from a privilege which is claimed for two men, though in both cases there may be but one capital.
  Before quitting the specific proposals of this Bill, it may be noticed, that its framers have disregarded the recommendations of the Law Amendment Society. That society has recommended that the capital, no doubt the whole capital, should be paid up, though how that is to be ascertained is not very obvious. No portion of the capital may be withdrawn, though profits may be paid out, and the special partner may not sign the firm, make contracts, or engage or dismiss servants. None of these securities against abuse are to be found in this Bill. It may be said that those who object to this Bill should do so on special grounds, but that no general argument against limited liability is admissible, seeing that principle has been already adopted by the Legislature. It should be borne in mind that the present proposal is of a very comprehensive character, embracing all partnerships of whatever kind, and seeking to introduce a principle hitherto untried save in special and exceptional cases. It is therefore not only quite fair, but necessary to argue the question in all its bearings. In taking that course we cannot pass over those arguments which are relied upon in support of the principle. In the first place, it is said that limited partnerships would tend to utilize capital and bring forward those dormant stores which timid men will not employ in trade exposed to the risks of the present law. But that argument is of little weight in a country like this, where capital is not only abundant, but in excess. In various foreign countries there may have been a necessity for stimulating the application of capital to trade. Commerce was a sickly plant, and there was no confidence in her operations. It requited some limitation of possible loss to induce timid men to expose their property to what were held to be most formidable hazards. But among ourselves such a necessity has never been recognised. Capital has always been abundant for the legitimate objects of trade,
  1882
  and is now more abundant than ever. Let it not be supposed that it is necessary to develop the trade of the country; so far from that being required, a less rapid expansion and development might be-desirable in many departments. In all branches of trade the tendency not casual and variable, but normal and uniform is to overtrading. Take, as an instance, the great cotton industry of the north. If all the wheels of Lancashire were again revolving, the consuming power of the world, so far as it has been tested, would not suffice to take off the produce. Capital flows into the channels of trade with no feeble stream, and our policy at the moment seems to be to restrain rather than stimulate the supply.
  Another argument for this Bill is addressed to our compassion and generosity. It is said that young men of character and ability, as well as inventors in the arts, would find patrons willing to assist them with limited capital who do not find such supporters under the existing law. The argument is more specious than real. At no time since Britain was a trading country has there been a greater demand for the talents and energies of qualified young men, nor was there ever a greater certainty that such qualities would meet a due reward. No doubt, ardent youths, unwilling to achieve success in the old paths of industry and patience, might at an earlier period enter on the responsibilities of business. But it is most questionable whether the public benefit would be promoted by such a change. The weak point in limited partnerships is, that they encourage rash and speculative trading, and for such enterprises young men, of all others, are the least qualified. The great and most important objection to this Bill is, that it proceeds upon a principle utterly subversive of the law of the country, recognised in innumerable decisions and enforced for many centuries, that every man shall be liable to pay his debts in full. It is said, indeed, by speculative writers, that unlimited liability for debt is not founded on any principle of law, but has been based on the dicta of the Judges. It is needless to inquire into a matter so little practical, as there cannot be any doubt that the English law for centuries has made a debtor liable for his whole debts both in purse and person. But especially is it just that there should be full liability for partnership debts. These are contracted for the benefit of all the co-partners, and

  1883
  thence there arises an equitable obligation that they should be discharged by the joint means and property of all. But while equity clearly points to all the participants or expectants of gain as bound to meet loss, the same principle of equity refuses to sanction any right to devolve such loss on creditors, or, what is the same thing, on the general public. Limited liability is most inequitable in this respect. Lord Overstone, in his paper on limited liability, anno 1837, most justly says—
  "In the case of the insolvency of a concern, it removes a portion of the loss, which must be borne by some party, from those who have voluntarily engaged in the concern, and who have had the means of watching and controlling its progress, and who would have been the sole participators in the benefits of its success; for the purpose of throwing it upon those who have had no means of insight into the state of the concern, nor power over its management, and no share in its advantages."
  If commerce could be carried on without loss, there would be no harm in limited liability, but occasional loss being as certain a condition of trade as average gain, why should those who derive the profit not bear the loss? And seeing losses must occur, there can be no advantage in shifting them from the shoulders of the rich to those of the poor; for it may be assumed that poor and struggling tradesmen, compelled by the necessities of their position to give credit and run imprudent risks, will generally be the creditors of limited companies. But I would ask further, where is the equity to merchants as a class in thus sanctioning an invasion of their proper domain by an array of outside competitors? The lawyer or the physician would not like his gains to be shared by any other. His long training, his intellectual acquirements, are all his own. But in the case of the merchant or trader, will it be said that there is no peculiar training, no special aptitudes— the result of labour and effort, requiring powers as distinctive as any other profession, and which only those trained in that school usually possess? Where, then, is the equity of opening up the counting-house or the factory to non-mercantile adventurers? By all means let those become traders, but let them run the risk of trade. The law is not bound to place them in a position for which they are not fitted, and secured by protection which involves injustice to others.
  The worst result of limited partnerships will be found to consist in the wholesale
  1884
  immunity which they afford from the legal consequences of debt. It has been said, these companies will tend to the establishment of a system of cash payments, and the abandonment of credit. There can be no greater delusion. Whether we argue on theory or facts, we shall find the very opposite result to be established. Such companies, in their very nature, imply a system of credit. Where there is no debt there is no liability, and no need for legal protection. And, in point of fact, we know that such companies ask and obtain credit with the utmost facility. If the Returns before the House are consulted, there will be found ample proof of the extent to which they have obtained credit, as well as how they have abused it. Doubtless, prudent dealers should refuse to give credit to those who avow that they will be influenced by no honourable considerations and no principles of justice, but that under the shelter of the law they will defraud their creditors. Unfortunately, such is the struggle for business among competing tradesmen, and such are the necessities of dealers to obtain orders, that the greatest risks are eagerly run. Nor need it be wondered at that these companies are favourably regarded. It is part of the system to present an array of respectable names—men known to be rich, and deemed to be prudent, even from the very circumstance that they are trading with limited liability. But, let us look to the facts. On the face of the Returns it is made clear that one-third of these companies have become bankrupt, and left their creditors unpaid. If such was the case under the restricted application of the principle as it has existed since 1855, it may well be anticipated that there will be a fearful increase of insolvency, mismanagement, and swindling, under the proposed extension of the system. Again, the tendency of limited partnerships is to foster excessive and illegitimate competition in trade. No traders are so utterly reckless as those who have nothing to lose. And it would be found that in proportion as risk was limited, there would be a proportionate disregard of prudence and calculation. Wild and rash speculations would be encouraged by the knowledge that failure involved no irretrievable, perhaps no serious result. Under this new law we should see arise innumerable co-partnerships competing with each other in total disregard of consequences, actuated by trade jealousies and rivalships, and rushing on in a career

  1885
  hurtful to themselves, ruinous to others, and destructive of all honest and legitimate trade. Surely, the advocates of this Bill do not wish to see British commerce degraded by this desperate gambling. But we have abundant evidence scattered through the whole of the blue-book, and especially contained in the answers to the queries of the Commissioners, that limited companies, from their very nature, tend to these results. If an example on a large scale were wanted of their needless expenditure and mismanagement, none better can be found than the history of British railways. If the directors of railways had been spending their own money, or even that of their shareholders, unprotected by Acts of Parliament, they never would have gone to such excess in extensions, competing schemes, Parliamentary contests, and legal costs. The hon. Member for Buckingham has borne testimony to the competition of limited companies, and has also instanced railways in confirmation of his views (page 104). It thus appears that we are asked, under pretence of promoting commerce, to adopt a system which will drive prudent merchants from the field. Lastly, this Bill would give a fatal blow to mercantile character and morality. It has been held the glory of a merchant to meet all his engagements with scrupulous honour. I have heard in this House, on more than one occasion, when some exceptional instance of an opposite kind had startled the public mind, language used which seemed to imply that there had been an abandonment of those old principles and traditions which in by-gone times have raised so high the character of the British merchant. Such statements are rash and groundless. No one can know the interior working of that great system of mutual confidence and honour which constitutes British trade, the tens of thousands in value which change hands by a word or a sign, and the security with which, based on well-known forms and customs, the daily routine of affairs proceeds, but must admit that even the lawyer's parchments do not bind faster than the merchant's word. But this state of things may change; and should this Bill become law, it probably will change. It is proposed to make bankruptcy no longer disgraceful. Under this proposed law a capitalist will not content himself with one adventure. We cannot doubt, from what we know of the energy and enter-
  1886
  prise of our national character, that we shall find merchants engaged as limited partners in various companies. But no one can expect to be equally successful in all his undertakings. He may be bankrupt in one concern and solvent in another. In what position will that man stand, not legally, for that unfortunately is defined by this Bill, but morally? Will he have incurred the greatest stain which can soil the name of a merchant, or under the demoralizing influence of this new law will he be a bankrupt and not be ashamed? It is only the other day that we have abolished imprisonment for debt. If we go farther back, we shall find the bankrupt treated as a Pariah, and (at least in the. North) clothed in a debtor's garment, of which he could not divest himself until he had purged the stain of debt, and become entitled to take his place among honourable men. I have not a word to say in favour of such obsolete barbarisms, but there is no reason why we should go to the opposite extreme, by enacting that bankruptcy shall be no longer a stain, and bankrupts incur no social disqualification. There is a law in the statute book, 52 Geo. III., c. 144, which requires a new writ to be issued in lieu of any bankrupt who may have a seat in this House, and that law has not been repealed by any subsequent amending or consolidating Acts. The position of an insolvent who has failed to meet his engagements in one or many limited companies, will be peculiar and anomalous in regard to this law. What course yon, Sir, might think it necessary to follow in fulfilment of your duty, I will not pretend to say; but this I think I may say, that there should be no limited liability resting on the Members of this House to maintain its honour and its dignity, and these will be best defended by rejecting this Bill. I hope to learn from Her Majesty's Government that they are prepared to adopt that course.
  Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."
  Question proposed, "That the word 'now' stand part of the Question."
  MR. GREGSONsaid, he rose to second the Amendment. He was opposed to the principle of limited liability, and went upon the old English principle, that if a man contracted a debt, he ought to be made to pay, unless he became insolvent. The

  1887
  Act of last Session only passed in August, and came into operation in November, and they ought to have experience of the working of that Act before they legislated further in the same direction. He did not see why the same principles should not be applied to joint-stock companies that were applied to railway companies, in respect to which there was a standing order of the House, that they should not borrow any money till 50 per cent of the capital was paid up, and then not move than one-third of the capital.
  MR. MILNER GIBSONsaid, the hon. Gentleman who had moved the rejection of the Bill, and the hon. Gentleman who had seconded that Motion, had both argued against the general principle of limited liability. Now, he thought he was entitled to assume that the general principle of limited liability had been adopted by the House, and it was not necessary, in dealing with the question before them, to argue that general principle. What they had to consider was how the hon. Gentleman who had charge of the Bill proposed to apply that general principle to this particular measure, and what were the sale guards and provisions he had introduced. With regard to the various provisions contained in the Bill, as the hon. Member proposed to refer it to a Select Committee it was hardly necessary to go into the details. He agreed in the general proposition, that a man ought to be able, with proper safeguards, to advance money on the condition that his interest should depend upon the profits, without being liable to be considered a partner. And workmen, he thought, ought to be allowed to be paid by sharing in the profits of their employer, without being considered partners. But he agreed with the hon. Member (Mr. Buchanan), that if a person were to be allowed to share in the profits of a concern without being subject to unlimited liability, he ought to take no share in the management, and in that respect be thought the Bill was defective. He believed that was the principle of the French law as to partnerships en commandite. There were some provisions in the Bill which he wished to guard himself from being supposed to sanction. The hon. Member wished to have all disputes between partners terminated by compulsory arbitration. He (Mr. Milner Gibson) thought they should be allowed to decide matters for themselves. He strongly objected to that part of the Bill which provided for the registration of
  1888
  all firms in the United Kingdom carrying on business under any other designation that the full Christian and surname of every one of the partners. The registration of all those firms would be a very formidable affair. The present joint-stock companies office in connection with the Board of Trade would be totally inadequate; and if to carry out that provision it was necessary to have a central office in London, with local officers all over the country, it would require an office in London as large as the Bank of England. At the same time, he thought there were provisions in the Bill well worthy of consideration, and consistent with the general principle of limited liability already adopted by the Legislature. Therefore, he would vote for the second reading, the more especially as the hon. Gentleman proposed to refer the Bill to a Select Committee.
  MR. MALINSsaid, that he could not see any principle on which, if they allowed limited liability to seven or eight, they could deny it to two or three. [An hon. MEMBER: Or one.] He denied that the principle of limited liability had signally failed. On the contrary, he contended, as a practical man, that it had been a signal success. The proof was the almost invariable practice of starting new companies on that principle. It was a great benefit that people could put a certain sum in a concern; and even if that was lost, that they need not necessarily be ruined. But it was said that the creditors were defrauded. That, however, was a great mistake; all that the new law had done was to teach people prudence and foresight. He denied, also, that the limited liability companies had all failed. Many of them had achieved a brilliant success, and some of them would never have been started at all on any other principle. Would any one, for example, have ever thought of projecting the splendid hotels which had lately been set on foot if the law had not been altered? It was not necessary to discuss the details of the Bill, because it was to be sent before a Select Committee, but he greatly approved of the proposal to enable servants to be paid by a percentage without being thereby made partners, or to allow persons lending money to be paid by a fluctuating interest without leading to the same result. He should cordially support the second reading.
  MR. T. BARINGsaid, that the old principle upon which English commerce had been

  1889
  carried on was, that every man who shared the profits should also be answerable for the losses of the trading; and if there were concerns which required an accumulation of capital beyond the means of individuals, a Royal Charter would confer limited liability. So far was the principle of limited liability from leading to the exercise of greater caution, that it would diminish care and must lead to inflated speculation. Under the old system the trader was required to look to his liabilities; under the Bill that responsibility was to be thrown upon the creditor. It was under the old system that the reputation, honour, and credit of the English merchant had grown up, and good reason ought to be shown before it was altered. Unlimited liability had hitherto been done away with only with regard to large companies; and its abolition with regard to every transaction and every concern, however small, must introduce great distrust into commercial transactions, and would probably lead to great losses, calamities, and disasters. If he had wanted reasons for opposing the Bill, he should have found them in the speech of the right hon. Gentleman the President of the Board of Trade, whose remarks were sufficient to show that this was a most crude, undigested, and unsatisfactory measure. He objected to almost every clause of the Bill, and only justified his vote for the second reading on the ground that something might be made of it in Committee. That, however, was not the way to treat a subject of such grave importance. The last Limited Liability Bill which was presented to the House was introduced by the Government, and yet it was altered at least five or six times; and if the Bill before them ought to have been brought in at all, it ought to have appeared under similar auspices. The House ought not to alter the whole foundation of commercial security on the Motion of a private Member, without the consideration and without the sanction of the Government. Without such sanction the Bill ought not even to go to a Select Committee. Select Committees might very well deal with the details of measures upon the principle of which the House was agreed, but in this case the details involved the whole principle of the Bill. The reason why the system of commandite was adopted in France was, that it was impossible to raise sufficient capital to carry on the trade of the country without securing men against complete liability. In this country, however, no
  1890
  such necessity existed. The House ough to hesitate before it moved one straw which would shake the commercial credit of England; and although he did not question the good intention with which this Bill had been introduced, he doubted whether it would facilitate sound and honest trade, and he should vote against the second reading.
  MR. MILNER GIBSONexplained that he had expressed his concurrence in two of the main principles of the Bill—that persons might advance money to a trading concern, receiving by way of interest a share of the profits, without being constituted partners, and that servants might under similar conditions be paid by a share of such profits. He thought that these provisions might be accompanied by sufficient safeguards, and therefore felt himself at liberty to vote for the second reading of the Bill.
  MR. BAZLEYsaid, he looked upon limited liability as a great evil. It was true that the principle was recognised in the case of joint-stock companies, but for individuals and small associations of half-a-dozen persons the principle was untried, and would, in his opinion, be most injurious to sound trade in this country. He should therefore give his hearty support to the Amendment.
  SIR HUGH CAIRNSsaid, that as the law stood there was not the least practical difficulty in remunerating clerks by a salary proportioned to profits without incurring the risk of partnership, so that no amendment of the law was necessary in that respect. As to the proposal that persons should be allowed to lend money and receive a share of profits without thereby becoming partners, he recollected that in 1855–6 an attempt was made to provide for loans such as the Bill contemplated; but, after full discussion, everybody who considered the subject came to the conclusion that the principle of limited liability might be safely introduced in respect of companies, but not of persons advancing loans. The company was required to announce itself as formed on the principle of limited liability, and those who dealt with it were thus put on their guard, and were enabled to ascertain from the registry, if they thought fit, what was the capital of the concern and who were liable. With regard to private partnerships, however, it was impossible to introduce any system of that kind. Suppose a firm established in Manchester or Glasgow, or in places more

  1891
  remote, how were the persons dealing with it to know that the firm was kept afloat by loans from persons who were not partners? How could persons, before entering into transactions with such a firm, send up to London and search the register for information? Then, again, it was not possible that, the Joint-Stock Company's Office could register every petty loan made to firms throughout the kingdom. That office could not perform the work. The Bill contained no provisions by which the public would be put on their guard and informed who were lending money upon the principle of limited liability. He regretted that the Board of Trade, to whom the mercantile public naturally looked for protection, were willing to allow a measure of such grave importance to be scrambled for in a Select Committee, instead of introducing it, if they really approved its principle, upon their own responsibility.
  THE SOLICITOR GENERALsaid, that the opponents of this measure seemed to have addressed themselves to the defects of details much more than to the question whether the principle involved was a sound one. That, as he understood, was the point to be determined at that moment; for the mere fact that a Bill contained clauses requiring amendment, or that additional safeguards were necessary, afforded no reason why the Bill should not be read a second time. He agreed that private partnerships on the principle of limited liability should be ear-marked as such, and that that fact should appear in all their notices; but the want of such a provision was a matter of detail which might easily be supplied when the Bill was in Committee. The question before the House was whether an amendment of the law of private partnerships, as regarded that point, was not needed. The House had been told of a distinction so fine that even the framer of the Bill had failed to grasp it. The language of the clause assumed the law to be what it was not—assumed that a clerk would be liable as a partner when he would not; while the marginal note put the matter on its true footing. If a clerk were paid in proportion to profits, and received a salary in the ratio of profits, he was not a partner; but if he received a share of profits, he was liable as a partner. Again, a man might furnish the whole capital of a trading partnership, and take securities for repayment; and if he stipulated for 15 or 20 per cent of interest, instead of a moderate share of profits, he
  1892
  was not a partner. Did the hon. Member for Huntingdon (Mr. T. Baring) really think that the mercantile morality of the country depended upon the maintenance of such a state of the law? He thought that a Bill which got rid of those absurd and irrational distinctions would be of real service to the commercial community, and the requisite safeguards which were omitted might easily be supplied. It was requisite that persons dealing with these companies should know upon what principle they were based, and it was also necessary that those who furnished the capital should not be at liberty suddenly to withdraw it. But to get rid of the anomalies he had mentioned was not a task unworthy of this House, nor did the Government think it right to discourage private Members in the duty which they had taken upon themselves. It seemed to the Government, therefore, right to assent to the second reading of the Bill, while they hoped that it would be greatly improved in Committee, and while they by no means bound themselves to support its passing into law in its present shape.
  MR. WHITESIDEthought his hon. and learned Friend who had just sat down, had rather offered an apology for the Bill than adduced sound arguments in favour of its principle. He should, he might add, like to know whether it was beneath the dignity of the Board of Trade to take so important a question as that with which the Bill proposed to deal under its consideration, and signalize the present humdrum Session by introducing with respect to it a measure worthy the serious attention of Parliament. As for the measure under discussion, he would appeal to his hon. and learned Friend the Solicitor General, to say whether he would put his name to it without having the slightest doubt as to the answer which he should receive. If, he should like to know, John Smith commenced trade, having borrowed £100,000 from the hon. Member for Birmingham, while he was to be paid by a share in the profits, how were the general public to become aware that John Smith had no capital? His hon. and learned Friend seemed to think everything in the Bill was a matter of detail, but he appeared to forget that the value of such a measure consisted in the way in which its details were worked out. If each Gentleman who had spoken had pointed out a radical defect in the Bill, it was in vain for the right hon. President of the Board of Trade to say

  1893
  that something could be made of it in Committee. That was not a rational and scientific mode of law-making. He hoped the good sense of the House would remit the matter to the Board of Trade, and that that Board would signalize itself for the Session by doing something useful.
  MR. JACKSONsaid, he should oppose the Bill, as it was in favour of the capitalist, and not in favour of the trader and man of industry. The tendency of the Bill was to uproot that principle which gave England its greatness—the credit which one man gave to another. He believed that credit would cease if the Bill were to pass info a law. Had it not been for the assistance given to him when a young man, he would never in all probability have become a Member of that House. It had, he might add, been his practice to bestow upon those in his employ a portion of his profits as an inducement to exertion, but he at the same time never supposed that he was thereby making them his partners.
  MR. SEELYsaid, he admitted that great capitalists might be injured by the operations of the Bill, but he thought it would tend to benefit the public at large. It would not injure the prospects of young men, as the hon. Gentleman who spoke last seemed to suppose. He should support the Bill.
  MR. ALDERMAN SIDNEYsaid, he was at a loss to understand why the Bill had been introduced, as he believed it to be fraught with considerable danger and inconvenience; while the existing law did not in his opinion, stand in need of amendment in the direction which it proposed.
  Question put.
  The House divided:—Ayes 56; Noes 39: Majority 17.
  Main Question put, and agreed to.
  Bill read 2o, and committed for Tomorrow.

CORRUPT PRACTICES AT ELECTIONS BILL— [BILL 68.]—CONSIDERATION.
Bill, as amended, considered.
MR. VANCEsaid, he objected to the clause which enacted that a person found guilty of bribery in a court of law should be declared incapable of being elected or sitting in Parliament for five years. He thought that the punishment would be ample if the person so convicted should be incapable of being elected during the then existing
1894
Parliament. He would therefore move to leave out Clause 11, and to insert the following;
Clause (Any person who shall be convicted of bribery at any Election shall be incapable of being elected or sitting in Parliament at any time during the then, existing Parliament).
Clause brought up, and read 1o.
Motion made, and Question proposed, "That the said Clause be now read a second time."
MR. WHITESIDEsaid, he objected to the clause as it stood, inasmuch as if a Committee of the House had decided in favour of a Member, yet, if a jury thought fit to give a verdict for a £10 penalty against him, his seat would be vacated, and be would be incapacitated from being elected for five years.
SIR GEORGE GREYsaid, the 17 & 18 Vict., c. 102, already perpetually disqualified from voting all electors who might be proved guilty of bribery or undue influence, and the question was whether the same measure should not be meted out to candidates. Undoubtedly, under the clause, though a Member might be declared duly seated by an Election Committee, yet if subsequently he were proved guilty of bribery and treating, or Undue influence, before a court of law, and a penalty were recovered against him, he would be obliged to vacate his seat.
MR. AYRTONsaid, that the true nature of the clause was a complete abandonment of the privileges of the House of Commons to reserve to itself the power of declaring the right to a seat in the House, and not to permit a court of justice to interfere in the matter. Would the House reverse all past legislation, and submit to the absolute judgment of any court which might happen to have jurisdiction, to determine whether a Member should continue to sit in the House. The higher court was to have its judgment reversed by the lower court, without knowing the ground upon which the reversal proceeded. Upon a judgment of bribery being placed upon the table of the House, a new writ was to issue without the House having power to ask a question, although the judgment might be the result of the most scandalous and most collusive action, and the proceedings in it most offensive to the honour and character of the House. Upon the part of his constituents he must protest against such legislation in an absurd fit of indigna-

1895
tion, and would call on the House to maintain its own dignity.
MR. WYKEHAM MARTINsaid, that it was monstrous that the decision of a Committee of the House might be reversed by the most partisan and corrupt petty jury which could be collected for the purpose.
MR. DARBY GRIFFITHsaid, that Although there might be a bias in a jury, there was no great superiority in that respect in a Committee of the House of Commons. It was often said, that if they knew who was to constitute a Committee, they could tell what its decision would be. He should support the clause.
THE SOLICITOR GENERALsaid, that whatever course the House might think fit to take, the subject was one which required more consideration than it had received. It was important, in a constitutional point of view, that the House should retain in its own hands the power to decide on the validity of the qualification of its Members; and although the verdict of a jury in a case of felony disqualified the person against whom it was found, no one could imagine that there would be any tendency in the minds of the jury to be influenced by the contemplation of that event, But it was impossible to say, that if the verdict of a jury on a question of bribery would unseat a Member, it might not have influence on the jury so as to affect their judgment. Under these circumstances, he would suggest to his hon. Friend the Member for Hertfordshire to withdraw the clause.
MR. PULLERsaid, he felt that after what had been said by the hon. and learned Solicitor General he ought to withdraw the clause, and therefore he should adopt that course.
Motion and Clause, by leave, withdrawn.
Amendments made.
Bill to be read 3o on Thursday.

CORRUPT PRACTICES AT ELECTIONS BILL— [BILL 68.]—CONSIDERATION.

  MILITIA PAY BILL.
  Bill to defray the Charge of the Pay, Clothing, and contingent and other Expenses of the Disembodied Militia in Great Britain and Ireland; to grant Allowances in certain cases to Subaltern Officers, Adjutants, Paymasters, Quartermasters, Surgeons, Assistant Surgeons, and Surgeons Mates of the Militia; and to authorize the Employment of the Non-commissioned Officers, ordered to be brought in by Mr. MASSEY, Sir GEORGE LEWIS, and The JUDGE ADVOCATE.
  House adjourned at one o'clock.

MINUTES.
PUBLIC BILLS—First Reading—Mutiny; Tobacco Duties (No. 56).
Second Reading—Post Office Savings Banks (No. 47).
Committee—Births and Deaths (Ireland) Registration (No. 30).
Report—Illegitimate Children (Ireland) (No. 57).
Third Reading—Salmon Exportation (No. 51); Consolidated Fund (£10,000,000) (No. 46).

POLISH REFUGEES IN PRUSSIA.

  QUESTION.
  THE EARL OF SHAFTESBURYsaid,
  1794
  that seeing the noble Lord the Secretary of State for Foreign Affairs in his place, tie wished to ask him, Whether Her Majesty's Government had received information as to certain Poles having been seized in Prussia and handed over by the Prussian Government to the Russian authorities. He had himself heard that a report to that effect was quite true; and he had also heard, in another instance, that some Poles, arrested in the Prussian territory, had been handed over to the Russian police, and subsequently shot. He wished to know whether Her Majesty's Government had received any information upon the subject?
  EARL RUSSELLreplied, that the only information received by him was a despatch from Sir Andrew Buchanan, to the effect that two Polish students had been arrested in Prussia, and that a demand had been made by the Russian authorities that they should be handed over to them. The French Ambassador, however, had claimed those two young men on the ground that they were naturalized subjects of France, and Sir Andrew Buchanan expressed a hope that they would not be given up to the Russians. That was the only account he had received with reference to the arrest of Poles in Prussia.
  THE EARL OF SHAFTESBURY: Then the noble Earl has not heard of any case in which Poles arrested in Prussia and handed over to Russian authorities, have been shot?
  EARL RUSSELL: I have received no account to that effect.

BIRTHS AND DEATHS REGISTRATION (IRELAND) BILL—(No. 30.)

  COMMITTEE.
  Order for Committee read.
  THE MARQUESS OF CLANRICARDE presented Petitions from Boards of Guardians in Ireland, praying that the expenses of carrying out the provisions of the measure be defrayed out of the Imperial funds; and from the President and Fellows of the King and Queen's College of Physicians (Ireland), objecting to certain provisions of the Bill, and complaining that the Returns required to be made would not show the sanatory condition of the population in the various towns. The learned body from whom this Petition emanated did not think it was right that the medical men whose duty it would be, as registrars, to

  1795
  make the Returns should be placed in a position inferior to clerks of unions. After reading the petitions and examining the various clauses of the Bill, he must say, that if it were intended to take effect as a sanatory measure, its provisions were utterly inadequate. If it were designed with such an object, it would be necessary that the Returns should be made by gentlemen of professional attainments; while, on the other hand, if they merely contained a bald statement of the number of deaths in each town, they would be of little use for sanatory purposes. When he first read the Bill, he did not think it had any sanatory object, and if it was looked to to give the Government of Ireland sanatory information it would entirely fail. He thought it would be better to expunge those clauses relating to sanatory regulations, and postpone the consideration of the Bill in Committee till after Easter.
  THE EARL OF ST. GERMANSsaid, he should be prepared to discuss the different points the noble Marquess had referred to in Committee on the Bill.
  THE EARL OF BANDONsaid, he entirely agreed with the noble Marquess that a delay of a few weeks was desirable, with a view to the further consideration of this measure; and he thought that delay the more desirable seeing that there were scarcely any Irish Peers then in the House. In the Bill of last year, the expense of registration was to be charged upon the Grand Jury cess and not upon the poor rate; in this Bill it was made to fall upon the poor rate. It was a known fact that so long as the poor rate was confined to the relief of the poor they gave a stimulus to the ratepayers to keep it down; but that if they added other charges, that stimulus was removed. His opinion certainly was that the charge for the registrars should be on the Consolidated Fund. He entertained a very strong opinion that it would have been a far wiser course for the Government to introduce a Bill to settle the whole question of births, deaths, and marriages in Ireland. A Committee was appointed in the House of Commons to which all the Bills on the subject were referred, and they reported as to the registration of marriages; but the Government had not legislated on that point, and had done so on those on which the Committee did not report. He thought there was nothing so easy to deal with as this question of the registration of marriages; and since this Bill had passed through the other House
  1796
  two or three measures had been proposed on the subject, and all parties seemed to agree that legislation should take place with reference to it. He therefore suggested that this measure should be postponed for the present, with a view to their dealing with the registration of births, deaths, and marriages altogether.
  THE EARL OF LEITRIMwas under-stood to dissent from some of the provisions of the Bill, and to urge that its consideration in Committee should be postponed for a short time.
  House in Committee.
  Clauses 1 to 21, inclusive, agreed to.
  Clause 22 (Appointment of Superintendent Registrar).
  THE MARQUESS OF CLANRICARDEtrusted the Government would have no objection to alter the title of the clerks of unions, who in this clause were called "superintendent registrars," to "clerks of registrars."
  THE EARL OF ST. GERMANSopposed the Amendment. He thought it as well to have the same machinery in Ireland as in England.
  THE MARQUESS OF CLANRICARDEwould be contented with the omission of the word "registrar," and the insertion of the words "of registries" in lieu thereof.
  On Question, Whether the words proposed to be omitted shall stand Part of the Clause? their Lordships divided:—Contents 32; Not-Contents 5: Majority 27.
  Amendment negatived.
  Clause agreed to.

  CONTENTS.

  Newcastle, D.

  Sydney, V.

  Somerset, D.

  Cranworth, L.

  Camden, M.

  Crewe, L.

  Dartrey, L. (L. Cremorne.)

  Airlie, E.

  Albemarle, E.

  Foley, L. [Teller.]

  Caithness, E.

  Harris, L.

  Camperdown, E.

  Hunsdon, L. (V. Falkland.)

  Cathcart, E.

  De Grey, E.

  Llanover, L.

  Devon, E.

  Lyveden, L.

  Ducie, E.

  Overstone, L.

  Ellenborough, E.

  Ponsonby, L. (E. Bessborough.) [Teller.]

  Granville, E.

  Grey, E.

  Redesdale, L.

  Russell, E.

  Stanley of Alderley, L.

  St. Germans, E,

  Sundridge, L. (D. Argyll.)

  Eversley, V.

  Wodehouse, L.

  NOT-CONTENTS.

  Bandon, E.

  Clements, L. (E. Leitrim.)

  Belmore, E. [Teller.]

  Somerhill, L. (M. Clanricarde.) [Teller.]

  Hawarden, V.

  Another Amendment moved, and negatived.
  Amendments made: The Report thereof to be received on Thursday next; and Bill to be printed as amended. (No. 57.)

POST OFFICE SAVINGS BANK BILL.

  (No. 47.) SECOND READING.
  LORD STANLEY OF ALDERLEY moved, That the Bill be now read 2a.
  LORD REDESDALEsaid, he thought that the interests of the infant depositors were not sufficiently protected by the Act. As it stood at present, the deposits of children over seven years of age could be transferred from the old savings banks to the Post Office savings banks, and afterwards withdrawn by their parents and guardians. He thought, that considering the class of persons who would make use of these banks, there would often be a disposition on the part of the parent or guardian to withdraw the money of the child, rather than allow it to accumulate.
  LORD STANLEY OF ALDERLEYsaid, that the transfer of such monies must be made with the consent of the Postmaster General and two trustees of the old savings banks. He did not therefore think that the objection of the noble Lord was of any force; but the subject could be considered in Committee.
  Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the Whole House on Thursday next.

THE INDIAN COUNCIL.

  QUESTION.
  LORD LYVEDENrose to ask Her Majesty's Government, Whether they intend in this Session to reconsider so much of the Act 21 & 22 Vict., c. 106, as relates to the Nomination, Election. Numbers, Duration of Service, Salaries, and Retired Allowances of the Councillors of India? In the Bills which were introduced by the Government of the Earl of Derby and Lord Palmerston, at the time the Government of India was transferred from the East India Company to the Crown, the numbers of the proposed Council differed in each Bill. Six was the number at first proposed by himself to the Cabinet to which he had the honour to belong, who altered it to eight, and it was raised by the noble Earl opposite (the Earl of Ellenborough) to fifteen, its present number. Many objections were raised to the duration of
  1798
  the office; and Motions were made in both Houses to limit the duration to five years; and, altogether, there were great doubts and differences of opinion as to the details of the Bill. Lord Stanley then stated that it was unnecessary to introduce clauses of that nature into the Bill; because the Legislature might, at any moment they pleased, alter the constitution of the Council. After they had had a few years' practical experience of the working of the Council, it was generally felt it would be necessary to revise its constitution altogether. From the time, however, of the passing of the Act, Parliament had been kept perfectly in the dark as to what the Council was doing. One paper, certainly, had been laid on the table, and a very remarkable one it was. It related to the amalgamation of the Indian with the Queen's army—a question on which every one would have supposed that the Indian Council would have been able to give excellent advice. But the Secretary of State (Sir Charles Wood) would not allow them to express an opinion upon it until the matter had been finally decided by the Cabinet. Some of them wished to protest; but the right hon. Baronet pointed out to them that the Act only allowed them to protest in matters which had been decided at one of their meetings, whereas this matter had been decided by the Cabinet before the Council met. However, as a matter of good nature, he allowed those who desired it to enter a useless dissent. The Council, too, would have been very well qualified to arrange the details of the manner in which this measure should be carried out; but the Secretary of State, instead of employing them, had recourse to that last expedient of a Minister at his wits' end—a Royal Commission. As to the amount of work in the Council, he knew from his own official experience, that under the old Board of Directors despatches were read and answered by clerks. Abstracts were made for the Directors; but the principal part of the writing was mere clerical labour. In reply to his demand to have the number of Councillors reduced, the names of distinguished men would no doubt be mentioned. It would be said that Sir John Lawrence was one of the Councillors. That was true; but they did not want fifteen Sir John Lawrences, even if they could find them. Six or eight Councillors, the number proposed by Lord Palmerston's Government in the first instance,

  1799
  would be quite sufficient. He said this with the greatest respect for the gentlemen who at present composed the Council. With some of these he was personally acquainted, and he knew that they were all men of business habits and high character; but if even £10,000 a year could be saved by reducing the number, it would be worth while to study economy in the matter. He therefore begged to ask whether Her Majesty's Government intended to submit the question of the number of Councillors to a Committee—which might be a useful course—or whether they intended to bring in such a Bill as might be introduced under the proviso in the Act 22 & 23 Vict., c. 106, which stated that the arrangement made by that Act should stand till "Parliament shall otherwise provide."
  THE DUKE OF ARGYLLsaid, he could not help thinking that his noble Friend had addressed this question to Her Majesty's Government rather for the purpose of expressing to the House his own opinion on a very important subject than for that of obtaining from the Government an answer, the substance of which he must be able to anticipate; because his noble Friend must feel, that if it was the intention of the Government to revise and alter the decision which had been deliberately come to by Parliament respecting the nature, tenure, and composition of the Indian Council, it would have been their duty to come down and make an announcement to that effect, and not withhold the information till such time as it might incidentally be elicited in answer to a question from a noble Lord. His noble Friend must be aware that the answer he had to give him on the part of Her Majesty's Government was, that there was no intention at that moment, or at any future time, as far as they could at present speak for the future, to revise and alter the decision come to after much deliberation and by large majorities, when the India Bill was under discussion in 1858. During the debates on that measure the question was raised by a distinguished Member of the House of Commons (Mr. Roebuck) whether it was necessary for the Secretary of State for India to have any Council at all—whether India might not be governed by a Secretary, assisted by an Under Secretary, and some officials acquainted with India. Mr. Roebuck raised that question; but it was not pushed to a division. He (the Duke of Argyll) was not prepared to state that India might not be governed in that way
  1800
  if men acquainted with the country, and of ability and experience, could be got to serve under the Secretary of State in the subordinate position of ordinary officials. But this objection was taken by Parliament, and he thought it was a fatal one— that we should not be able to induce men who had distinguished themselves in India to assist the Secretary under such circumstances. He very much doubted that we could have got such men as Sir John Lawrence, Sir Frederick Carrie, and Mr. Willoughby under that arrangement. The next question was, as to the number of Councillors. He confessed he did not believe the weight of the Indian Council de pended on its number. He believed it depended on the character of the Councillors, more than on their number. Although there were some expressions of opinion in favour of a Council of twelve, it was ultimately decided by a large majority, with the assent of Lord Stanley, that the number should be fifteen. Another question which was discussed was, whether any portion of the Council should be elective, or whether they should all be nominated by the Crown. A new constituency was devised for the purpose of carrying out the elective principle; but the proposal was rejected. He would not pronounce any opinion upon the wisdom of that scheme; but this, at all events, might be said in favour of it, that it provided that in the new constituency the interests of the commercial classes should be represented. The only principle of importance in election was the principle of representation, and that was entirely abandoned; because, although the proposal was adopted that seven out of fifteen Councillors should be nominated by the Council itself, Lord Stanley very fairly admitted at the time that it had nothing to do with the principle of election, and was merely a means of introducing some few persons who would not be selected by the Secretary of State. These successive decisions by Parliament, in divisions which were not influenced by party feeling, ought to be accepted by the Government as settling the question of the constitution of the Council, unless and until some evil was discovered which it was their duty to remedy. He entirely disputed the proposition that any pledge was given by which they were bound, within a certain number of years, to consider the question again of an organic change in the Indian Council, and he maintained that no change ought be suggested which might

  1801
  lessen the reputation and authority of the Council. In his opinion, nothing had occurred since the passing of the measure to cast a doubt upon the practical working of the system. The Council had, upon the whole, worked smoothly and satisfactorily; and the absence of papers, of which the noble Lord complained, was a proof that occasions did not arise for the Council to record protests and dissents in reference to decisions of the Secretary of State. Some papers, showing what was doing in the Council, had been produced. The amalgamation of the two armies was not an Indian but an Imperial question, and the opinions of some of the most eminent Members were laid before Parliament previous to Parliament being asked to come to a decision upon it. He could not conceive a more important question than the redemption of the land tax and the permanent settlement of the land revenue of India. That question had been discussed and decided in the Indian Council, and valuable papers had been presented to Parliament in which the opinions of the most distinguished Members with regard to it might be read. Another important question, as to the relations between the European planters and the ryots of India, had also been decided, and the opinions of members of Council, eminent for their knowledge of the country, and of Indian affairs, had been made known. In both those instances, the Secretary of State had overruled the decision of the Governor General and his Council, and it was most important to the Secretary of State that he should be able to point to those papers, to show that he had not acted without full consultation and the full support of those eminent and distinguished men. The local Government must sometimes be influenced by local opinion, and local opinion in India, was mainly the opinion of the English settlers and the English commercial classes. He had no doubt that upon the question of the relations between the planters and ryots the local Government had committed a material error; and he was equally sure that the power of the Secretary of State to correct that error was greatly strengthened by his being able to appeal to the opinions of men of equal eminence with the Councillors of the Governor General and free from the vices under which the Legislature of Calcutta more or less conducted its proceedings. In both these cases, of the relations between the planters and the ryots and the settlement of the land re-
  1802
  venue, it was satisfactory to see the opinion of competent men sustaining the opinion of the Secretary of State, and he sincerely believed that the present Council was composed of a body of gentlemen, whose opinions might fairly be trusted in all questions of a similar kind.
  THE EARL OF ELLENBOROUGHsaid, he entirely approved of the course which the noble Duke had announced on the part of the Government, namely, that of deprecating any disturbance in the constitution of the Council. He thought it extremely fortunate that the noble Duke had had the opportunity to make that declaration, which would strengthen the Council and give stability to its judgments. He (the Earl of Ellenborough) had always been in favour of a Council, and the stronger the better, as he thought it was always an advantage for the Secretary of State, when he introduced a measure, to be able to tell Parliament that he was supported by the concurrence of his Council. He believed there would always be occasions when the opinions of the Members of the Council would clash, because there were always questions which required to be treated in a cautious and deliberate manner. He confessed that he should never be afraid of a strong Council; but he should have the greatest apprehension of a weak one; for the Indian Minister might be able to manage able men, but might not be able to manage weak men.
  THE MARQUESS OF CLANRICARDEsaid, it was the unanimous opinion of the country that the Council did, on the whole, work well; but it might, nevertheless, be a legitimate subject of inquiry whether, even if they should not proceed to an immediate reduction, there might not be a possibility of future reduction, not only without a diminution, but even with an increase of efficiency. His own idea was, that the Council would work better if it were not quite so numerous. The noble Lord, however, had given no indication of the kind of change he contemplated in the Council. But what he complained of, and what his noble Friend complained of, was that Parliament did not know how the Council worked. He thought that great advantage would result from the publication of the Minutes of the Proceedings of the Council, because at present they were utterly in the dark as to when the Secretary of State was opposed or supported, and by whom. It was all very well for the Secretary of State for India

  1803
  to say, "I am supported by Sir John Lawrence and such and such other distinguished men;" but their Lordships did not know whether, or on what points, and how far, he was supported by them. On one most important question the opinion of the Council was not known until the decision of the Government had been taken. If the Secretary of State could appeal to the authority of his Council in support of his views, it was right that Parliament should know when he did so, whether the Council were unanimous, and what were the opinions of individual Members. Without such knowledge, Parliament came to the discussion of questions relating to the Government of India at great disadvantage.
  EARL GREYsaid, that the fact of their knowing very little about the Council was to his mind the best possible proof that it was working tolerably smoothly and well. If difficulties arose, and the Council were unable to conduct the affairs of India in concert with the Secretary of State, he had no doubt Parliament would hear of it soon enough. When they found things working well, he certainly did not wish to see changes introduced.
  THE MARQUESS OF CLANRICARDEsaid, what he objected to was that the authority of the Council should be quoted without giving Parliament an opportunity of seeing how far the Members of Council were unanimous,

NEW SOUTH WALES, VICTORIA, AND SOUTH AUSTRALIA.—PETITIONS.
EARL GREY presented Petitions of Inhabitants of the District of Clarence and Richmond Rivers for the Separation of the District of the Clarence and Richmond Rivers from the Colony of New South Wales, and for including the same in the Colony of Queensland; and of Inhabitants of Bridgewater, Portland, and Heywood, in the Western District of the Colony of Victoria, for Separation of Western Portion of Victoria from Victoria, and of the South Eastern District of South Australia from South Australia, and for the Union of these into One separate Colony. The noble Earl said, that in the Act of 1850, for the better Government of the Australian Colonies, power was reserved to the Crown to detach portions of the colony of New South Wales in order to form other colonies if necessary, and to alter the boundaries
1804
of the several Colonies from time to time. In the year 1859 that power was acted upon, and the colony of Queensland founded; but, instead of following the course contemplated when the Act was passed, different boundaries were chosen. The Petitioners in the first Petition, which was from the district of the Clarence and Richmond Rivers, complained that, in consequence of the boundary of the Colony of New South Wales being fixed at the 28th instead of the 30th parallel of south latitude, they had been separated from Queensland, the colony with which they were naturally connected, and remained attached to the colony of New South Wales, from which they were divided by a range of mountainous country. They were 500 miles from Sydney, the capital of New South Wales, from which they were also separated by this natural boundary, and only 100 miles from Brisbane, the capital of Queensland, and they stated that they had no material interests in common with New South Wales. They therefore contended that they ought to be separated from the former and attached to the latter colony. They complained, moreover, that they were unfairly dealt with in the matter of taxation, having been made liable in part for a public debt with which practically they had no concern; that they were not fairly dealt with in the appropriation of the revenue, not having a fair proportion of the advantage in proportion to the revenue they paid; besides which, they had no hope of good government until they were attached to Queensland, with which they were connected geographically and by inclination. Upon those grounds they prayed that such steps might be taken as might seem proper to annex them to Queensland. It appeared to him that the complaint of these petitioners was just, and that the district in question ought to belong to Queensland rather than to New South Wales. There were three other Petitions—from Portland, Bridgewater, and a third district in the western portion of the colony of Victoria. They complained of their distance from the seat of Government, and alleged that they were subjected to legislation unsuited to their circumstances. The same prayer proceeded from the districts forming the eastern portion of the colony of South Australia, who were circumstanced in regard to South Australia as were the other petitioners in regard to Victoria, and who therefore prayed that they might be formed into a distinct

1805
colony. They stated that they were together quite large enough for this purpose, and that they were larger than the colony of Port Phillip when it was separated from New South Wales. He was not so well acquainted with the merits of this Petition as of the other, but all these representations were well deserving of the attention of the Government and of Parliament.
THE DUKE OF NEWCASTLEsaid, that the letters patent constituting the colony of Queensland were issued by his predecessor in the early part of 1859, and he could not explain the reasons which influenced him in adopting the line of division he had made. Some time after his acceptance of office he received an application, not from the colonists, but from their representative in this country, urging that the particular district referred to in the Petition should be added to Queensland; and another series of applications asking that it should be retained by New South Wales. To those applications he replied, that as the boundary lines had been laid down by letters patent, it was beyond his power to interfere; he said, however, that if they could come to any agreement between themselves as to any other line of boundary, he should be willing to adjust their differences. Since then he had had no communication on the subject, and he had hoped that they had acquiesced in the arrangement which had been made. With reference to the formation of a new colony from fragments of Victoria and South Australia, he could assure his noble Friend that applications for the formation of new colonies out of the existing Australian colonies came so frequently, that if it were possible to accomplish the wishes of all the people of New South Wales, Sydney and a very limited district around it would be the only surviving portion of the colony of New South Wales. The settlers in many districts averred that they would be better off if separated from the mother colony; and he considered that it would be exceedingly bad policy to multiply colonies in Australia to an indefinite extent, especially until certain districts were thoroughly populated. Of course, the expenses of new Governments would be large, and all the difficulties which existed, with reference to customs duties, between the different colonies would be greatly magnified. In short, his opinion was, that generally speaking, until a portion of a colony was completely populated, it would be very unadvisable to in-
1806
terfere. There were applications, no doubt, that must shortly be attended to. He had been recently appealed to, for instance, to form a new colony south of the Gulf of Carpentaria. The time had not yet arrived for such a step; but the progress of exploration and the vast influx of people into that pastoral district would justify, before long, the establishment of one, if not two, additional colonies—one at Victoria River, and perhaps another at Albert River. For the present, however, deprecating these constant applications for separation, he had decided on this provisional arrangement:—that the large district extending between the Gulf of Carpentaria and Port Essington, and including an area of 730,000 square miles, should be temporarily annexed, one portion to Queensland and another to South Australia. He thought it would be undesirable to sever the other districts alluded to by his noble Friend unless more valid reasons than any he had yet heard could be assigned.
Petitions to lie on the table.

NEW SOUTH WALES, VICTORIA, AND SOUTH AUSTRALIA.—PETITIONS.
  MUTINY BILL.
  Read 1a; and to be read 2a on Thursday next: (The Earl De Grey.)

  TOBACCO DUTIES BILL.
  Read 1a; to be printed; and to be read 2a on Thursday next; and Standing Orders No. 37 and 38 to be considered in order to their being dispensed with; and the LORDS SUMMONED: (The Lord President.) (No. 56).
  House adjourned at a half past Seven o'clock, to Thursday next, half past Ten o'clock.