Sitting of 7 May 1875

MINUTES.
WAYS AND MEANS—considered in Committee—LICENCES AND DUTIES.
PUBLIC BILL—Committee—Report—Public Health * [55–157].

LAW AND JUSTICE—THE WORTHING MAGISTRATES.—QUESTION.
MR. P. A. TAYLORasked the Secretary of State for the Home Department, Whether his attention has been called to a statement in the newspapers, that a child of seven years old had been sentenced by the Worthing magistrates to three months' imprisonment for stealing some sugar plums and fourpence in money; and, if he will cause inquiry to be made in regard to the case?
MR. ASSHETON CROSS, in reply, said, his attention had been called to the case in question, and from the result of his inquiries it appeared that the facts were rather peculiar and he should wish to offer an explanation. It seemed that the father of the boy resided in High Street, Worthing, in a corner shop, but he carried on no business. He was an habitual drunkard, and since the death of his wife, four or five years ago, his five children had been grossly neglected. In January, 1874, he was convicted and sentenced to 21 days' hard labour for neglecting to maintain them. On the hearing of the charge now in question he did not appear, but his housekeeper did, and instead of protecting the little boy she tried to make him out as bad as she could. On the same day a younger child of the man died, and at an inquest held upon it on Friday last, it appeared that though it had not been starved to death, yet death was accelerated by want of food. The Coroner severely censured the father. There was no mode of removing the child from the evil influences of home other than that adopted, for the boy, being under 10 years of age, could not be sent to a reformatory school. The report of the magistrates was that what had been done by them in sentencing the boy was an act of kindness to remove him from the evil influences which had surrounded him. His gaoler wrote that he concluded that the sentence upon the boy was intended as an act of kindness; and that he had requested the attention of the schoolmaster and the chaplain to his ease. He added that he did not think that it would have been any use sentencing such a boy to a reformatory school, as there was none such that would receive him for some time to come. He also said that the boy should

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receive all proper kindness, and every effort should be used to reclaim him.

COAL MINES—COLLIERY EXPLOSION AT BUNKER'S HILL.—QUESTION.
MR. MACDONALDasked the Secretary of State for the Home Department, Whether he will instruct counsel to attend the coroner's inquest about to be held to ascertain the cause of death of the forty-two persons who lost their lives in the Bunker's Hill Colliery, North Stafford, on the 30th ultimo; whether he is aware that up till a recent period the coal was all worked without the use of blasting powder, and if it was only so got by the miners or colliers; and, whether he will state if a change in the mode of working has been made, it is done with the consent and full concurrence of the District Inspector?
MR. ASSHETON CROSS, in reply, said, he had already stated that the fullest inquiry should be made as to the causes of this lamentable catastrophe. He had nothing to add to that, except that precisely the same course would be taken in this case as was adopted in the case of the Dukinfield explosion, and other similar cases, and which had proved entirely satisfactory to everybody concerned. With regard to the two latter parts of the Question, he had caused inquiries to be made, but had not yet received the answers.

THE PREROGATIVE OF PARDON.

  QUESTION.
  MR. HANBURYasked the Under Secretary of State for the Colonies, Whether it is intended to take any steps to assimilate in the various Colonies the procedure in reference to the exercise of the prerogative of pardon?
  MR. J. LOWTHER: Sir, respecting the exercise of the prerogative of pardon, further Papers will shortly be presented to Parliament, by means of which the views of Her Majesty's Government upon this subject will be fully explained.

PARLIAMENT—ARRANGEMENT OF PUBLIC BUSINESS—WHITSUNTIDE HOLIDAYS.—QUESTION.
COLONEL BARTTELOTasked the First Lord of the Treasury, Whether he is able to state to the House the course of Business during next week; and also
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whether he will state on what day the Whitsuntide holidays will commence, and how long they will be allowed to remain away?
MR. DISRAELI, in reply, said, he should probably be able to announce on Monday the course of Business for the week. He proposed that the House should rise for the Whitsuntide holidays on Thursday, the 13th instant, and meet again on Thursday, the 20th.

WAYS AND MEANS—FINANCIAL STATEMENT.—COMMITTEE.
WAYS AND MEANS considered in Committee.
(In the Committee.)
1. Brewers Licences.
Motion made, and Question proposed,
"That in lieu of the Duties payable on Licences to Brewers of Beer for Sale (other than Brewers of Spruce or Black Beer) there shall be charged, collected, and paid on such Licences to be taken out on and after the first day of October, one thousand eight hundred and seventy-five, the following Duties (that is to say):

£

s.

d.

For and upon every Licence to be taken out yearly by any Brewer of Beer for Sale,—

If the quantity of Beer brewed within the year ending the thirtieth day of September next preceding shall not exceed fifty barrels, the Duty of

0

12

6

If the same shall exceed fifty barrels, then for every fifty barrels and for any fractional part or number of an entire quantity of fifty barrels, the Duty of

0

12

6

And for and upon every Licence to be taken out by any person who shall first become a Brewer of Beer for Sale, the Duty of

0

12

6

And there shall also be charged upon and paid by the last mentioned person in respect of his Licence, such further sum as with the said Duty of Twelve Shillings and Sixpence shall amount to the Duty which would be chargeable on a Licence for a quantity of Beer equal to the quantity brewed by him during the existence of his Licence, and such further sum shall be paid within ten days next after the expiration of the Licence."—(Mr. Chancellor of the Exchequer.)

MR. GLADSTONE: Sir, I believe that I am correct in supposing that I shall be perfectly in Order in offering, on the present occasion, such general observations

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upon the Financial Statement of the Chancellor of the Exchequer for the year as may appear to me to he required, although the immediate question before the Committee only refers to the proposal with regard to Brewers' Licences, and I shall accordingly proceed to make these observations. Sir, I was very glad last year, when my right hon. Friend the Chancellor of the Exchequer approached the consideration of his annual arrangements under circumstances of great disadvantage, to allow that, from his point of view, there was very little to complain of in his Budget. The plan of finance which we had meditated and proposed to the country had been rejected by a majority of the constituencies, and a different plan of finance with a different scale of expenditure were adopted by the incoming Government. It has been frequently stated—and it was even supposed by some—that the Estimates of the present Government last year were the Estimates that had received the sanction of the preceding Government, but that is an entire mistake. They were Estimates, no doubt, which were in preparation in the Departments for the judgment of the preceding Government, but they were not Estimates which had received the sanction of that Government, for no decision had been taken upon their proposed amount when Parliament was dissolved. However, I very much wish that I could have repeated or that I could have indulged in the use of similar language on the present occasion, or, better still, have refrained from troubling the House with any observations of mine as to the finances of the year. I must own I was under the expectation when my right hon. Friend was about to make his Statement, that he must necessarily present a Budget of extremely small dimensions and of exceedingly small interest, because when it was found that his expenditure was large and that his means were narrow, there was very little that could possibly be expected from him, and under those circumstances the House could hardly claim credit for over-indulgence in submitting to the necessity of the case, and allowing the Chancellor of the Exchequer to travel quietly forward without attempting plans which would afford relief or challenge criticism. But I am bound to say that there are a number of points in the Budget, small as is its scale, which call for remark—in
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some cases, for approval; in some, for inquiry; and in others for criticism or disapproval. I wish, in the first place, to say a word on the subject of the income tax. It is one of such great importance that it is exceedingly desirable the House of Commons and the country should understand with precision the ground taken by the Executive Government in regard to this most important impost. Now the impression has gone abroad that my right hon. Friend intended to convey in his speech that the Government had considered the matter, and did not now propose a merely annual renewal of the tax at 2d. in the pound, but that it was a matter which ought to culminate in that form, not necessarily permanently, but only as an impost of which that ought to be considered the normal condition in time of peace. Well, it is desirable that that should be understood, because that was certainly not the impression that would have been formed by any Gentleman who conceived that the present Government drew its inspiration in this matter from the right hon. Gentleman the Member for Buckinghamshire, because at the time when he issued his address to the electors of Buckinghamshire, and when the then responsible Advisers of the Crown had pledged their responsibility for the removal of the income tax, the right hon. Gentleman gave it to be understood that not less was to be expected from him in that respect than from the then Government, for, says he—
"The principal measures of relief will be the diminution of local taxation and the abolition of the income tax, measures which the Conservatives have always favoured and which the Prime Minister has always opposed."
I must admit that was a piece of history, like many pieces of history which have proceeded from the same quarter, which was entirely new to me and had not been embraced in my narrow studies. But apart from history I look to opinion, and I should like to know whether it is the opinion of the Government—for which my right hon. Friend on that assumption has already received great credit from the one really great financial authority—The Economist—and there is nothing invidious towards other journals in speaking of that as the leading organ in financial matters—he has, I say, received great credit for having thrown over the false and erroneous doctrine held by former

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Administrations, and laid down the doc-trine that the income tax is now to be regarded as a permanent part of the finances of the country. Well, if so, I wish to know what was the meaning of the words of the right hon. Gentleman the Member for Buckinghamshire, and whether we may now dispense with further consideration of them, they having served the purpose they were intended to promote? I have no fault to find with the Government if that be their decision. My own opinion of the income tax is, that it ought to be abolished when by economy, and without economy it never can be done—by a policy of economy, instead of a policy of very free and large expenditure, and by the vigorous vitality of the resources of the country, its abolition can be effected. There never were but two occasions when that step could be taken. One was in 1845; but at that time Parliament determined, and I think wisely, to retain the income tax, and made it the instrument of most important and vital reforms in our finance: the other was last year, when it was offered to the country, and when either the country—or, what is called the country, the majority of the constituencies—advisedly rejected the offer, or else were charmed by the incantations of the right hon. Gentleman the Member for Buckinghamshire into the belief that the same result would occur, but that other hands would bring it about. And I must say I cannot help looking with a degree of compassionate interest on a great variety of communications which now reach me from what are called Income Tax Repeal Associations. Those associations are under the chairmanship of Conservative Members of Parliament, and were so at the time of the General Election last year. I am sorry that these communications—some of which reached me so lately as yesterday—are about 15 months' too late; for, unfortunately, it is not in my power, whatever my disposition may be, to give effect to the views they express—not that I blame any man for that, or that his opinions differ from mine. Well, Sir, with respect to the Brewers' Licences, which is the immediate subject of the Resolution, I think the proposal of my right hon. Friend the Chancellor of the Exchequer is a decided improvement on the existing law. Whether it is a greater improve-
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ment than that proposed by my hon. Friend the Member for Hackney (Mr. J. Holms) is another matter, and one to which the House will give its very serious consideration before deciding between them. There is another proposal, however, which will not affect the balance of income and expenditure, as to which I hope the Government will give full consideration—namely, the proposal to abolish the present charge on the undergraduate scale upon salaries, or to reduce it very largely and make it uniform by the extension to it of all appointments in the Civil Service. We are told that there is to be neither gain nor loss by this proceeding. To some persons, no doubt, there will be very great gain; and I having cast over the matter in my mind, and having paid £1,200 or £1,400 in my time for stamp duties on appointments, find that, as I understand the proposal of my right hon. Friend, I would have only had under it to contribute to the necessities of the country 1,200 or 1,400 shillings. [The CHANCELLOR of the EXCHEQUER dissented.] Yes; 5s. instead of £5. And, whatever may be the patriotism that warms my breast, I would not have viewed with dissatisfaction that state of things. But it would be interesting to know who is to pay the other 19 s.; because when 19 s. disappear some one must pay them. I hope some information will be given upon that subject before the Committee comes to a final decision with respect to it. Sir, the Chancellor of the Exchequer has made two proposals in his Bill—one relating to the Post Office Savings Bank, including what are called the old Savings Banks, the other to the Friendly Societies accounts. There is one proceeding connected with these proposals which I own appears exceedingly objectionable. I will not now discuss it, but it is the throwing of the Savings Banks account into hotch-pot with the Friendly Societies account. The Post Office Savings Bank account, besides being a benefit to the country, is, I am glad to say, a solvent and paying concern, and to take the profits we make from the deposits of those savings and throw them into the account with the old Savings Banks with an immense deficiency, and to continue to pay the old Savings Banks depositors a higher interest than the country can afford, and higher than the Post Office Savings Bank depositors ever received,

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is a proposal in which I hope the Government will not persevere. Having watched the Post Office Savings Bank with considerable interest from its infancy, I shall be bound to oppose the proposition if it is submitted to the Committee. But there is another proposal contained in the Bill which, I think, is an excellent one, and it is that instead of going on with this real charge upon the country—a liability of the country concealed from our eyes which is kept in a separate account of which Parliament hears nothing, except when special occasions arise—the deficiency—for deficiency it must be for some time—shall be made a regular charge, and shall be made a regular charge to be disclosed to the House of Commons each year, and to be provided for as part of the financial measure of that year. I also understand that it is the intention of the Government that in future years there shall be submitted to the House of Commons what is called in the Financial Statement "Local Budgets," and that likewise appears to me to be in itself a very wise and useful proceeding. I have no objection to make to such an arrangement, and I know of but one difficulty in the way of carrying it out—namely, that it will entail a very serious addition to the labours of an already overburdened Parliament. I confess, however, that, although I think that Parliament is over-burdened, such is not the general opinion, because we see deputation after deputation, headed by Members of Parliament, waiting upon various Departments of the Government, imploring the latter to assume functions other than they now exercise, and we see that those deputations meet with the most courteous and flattering receptions, and with such replies as encourage them to repeat their visits and multiply their proposals. But be that as it may, I think that in view of the enormous extension of the system of local loans, the proposal of the Government on this point may be a sound one in principle and one to which I do not object. That is all that I need say at present upon the financial and administrative propositions contained in the Financial Statement of the year; but I come now to consider that which I regard as a more important matter—namely, the mode of stating the accounts of the country, and of presenting to the House of Commons the balance
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of the income and the charges of the country. This is a subject that appears to have attracted no attention at all from critics out-of-doors; for, as far as I am able to judge, there has scarcely been a word of discussion on this point during the present year, and I should say, speaking impartially, that the reception of the Budget by the Press is uniformly favourable, and it is therefore possible that I may be in a very small minority in my old-fashioned views and notions with regard to the form in which the accounts of the nation should be stated. Such as my views on the question are, however, I hope that the House of Commons will permit me to state them, because it rests with this House to determine what those forms shall be, and upon it rests the responsibility of resisting dangerous innovations which to my mind do not deserve its sanction. There can be no doubt as to the elementary rules that ought to govern the conduct of the Financial Minister with regard to this subject. They are three in number. Let it be remembered at starting that lam not condemning the action of the Treasury as being wanting in judicious economy, because I frankly admit that such economy prevails there, and that to those who control the Treasury every credit should be given. The first duty of the Chancellor of the Exchequer is to reduce the expenditure of the country; the second is to keep the income of the country above the charges; and the third is to present nothing to the country and to the House of Commons, except figures that will bear careful and searching examination; for we must not forget that the House of Commons deals with the Government in matters of finance upon terms of great disadvantage. On most questions that are discussed in this House numbers of hon. Members are able to follow the subject and to give opinions of weight with regard to it, but on questions of finance that is not the case. Our system of finance is often complained of as being so complicated, and people ask why we do not have a more simple system of finance; but I believe that the primary condition of our financial system should be not so much to secure simplicity in our accounts, as a system that is certain, safe, and well calculated to maintain the control of Parliament. And I venture to say, after a long experience, that, however desirable simplicity may be, I

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doubt the possibility of combining the attainment of the greater ends to which I have referred with the simplicity in our accounts which some persons desire. It is, therefore, of the utmost consequence that every figure given by the Government should be such as to bear a searching examination, and that the course hitherto adopted for giving solidity to our finances is rigorously and strictly maintained. But the necessary result of this complication in our present financial system is, that there only exists a small number of persons in this House who can follow the financial accounts of the country. I do not mean as to the expediency of laying on or of taking off particular taxes, but as to the mode of bringing to a proper account those enormous sums which pass through the hands of the Chancellor of the Exchequer, who is possibly the greatest banker in the world, and has, in that character, to deal with affairs which are scattered all over the face of the earth. Under these circumstances, I think that the rules of finance that are the result of the experience of former times should be rigorously and strictly maintained, and the question is, have those rules been followed by the Government in the present instance? I will state in terms, I hope, not of exaggeration, what appears to me to be the state of the case, and I shall be all the better pleased if the Government are able to answer my objections to their accounts satisfactorily. I am not about to hold my right hon. Friend responsible for the recent growth of the national expenditure; I am sorry to say that the growth of the expenditure seems to be one of the normal incidents of the accession to power of the Party to which he belongs. ["No, no!"] I should like to see some proof to the contrary. What I have always required and desired—what was once the established rule of the country, but which has been entirely forgotten for the last 20 years of my Parliamentary life—was a generous rivalry between the two great political Parties of the State on matters of economy; but that is no longer so, and the figures and accounts of the last 20 years will determine the question more satisfactorily than any arguments or ingenuity of mine can do. I wish, however, to keep to facts, and not to enter on arguments, having no desire to give a political character to
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what ought to be strictly a matter of business. On looking at the Supply Services for 1874–5 and comparing them with those of 1873–4, after deducting the two great items of the Alabama accounts and the Ashantee War charges, there appears to be, according to my calculation, an increase under the head of public expenditure of £1,360,000, which appears to be a pretty good sample for a first year's performance. But I am bound to say, at the same time, that the Government by increasing the expenditure of the country are acting in a manner not generally disapproved, although I disapprove their action in the matter. My ideas on the subject, as I said before, may be antiquated and belong to a period of some 20, 30, or 40 years ago; but the Government may some day awaken to the fact which they do not seem to understand now—that these continual additions in detail to the expenditure of the country do act upon the totals. Many people think that a gross paradox; but it is, on the contrary, one of the most common-place matters of fact that these totals do determine the sound state of our finances, and put it out of the power of the British Parliament to diminish the burdens of the people by reducing the taxation. I am right in saying that the Estimates of the present year show a considerable increase over those of the previous year, notwithstanding the strenuous efforts of the Treasury to keep down the total of the expenditure. That, however, is not the fault of the right hon. Gentleman the Chancellor of the Exchequer, and in common Christian charity I ought to say that the responsibility for that increase rests upon the Government, and that responsibility is shared by Parliament, which must be prepared to let the country understand that it requires and sanctions a constantly growing national expenditure. But although it may not be the fault of my right hon. Friend that the expenditure of the country is growing, if the Chancellor of the Exchequer makes proposals to the country which do not present a clear surplus of income over expenditure in estimating the circumstances of the country for the coming year, he is guilty of a default of duty which, besides affecting the Government generally, affects himself specially. The Chancellor of the Exchequer is also specially responsible for all that relates

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to the accounts of the country. These are the points upon which I wish now to make some reference—that is, to the figures in the Financial Statement. Firstly, with regard to the manner in which the account of Revenue and charge was made out. The House will have observed that last year there was a surplus on the Revenue, as compared with the Expenditure, of £594,000; but they will also have observed that the account which has been presented to Parliament this year since the Financial Statement, shows not a surplus of £594,000, but a deficiency of £6,000. This is a matter I think it right to touch upon, without at the same time, dwelling upon it as one of capital importance. I do not think that there has been any uniformity of practice with regard to the mode of stating the accounts. Sometimes the whole of the Expenditure, including loans—and it is the question of loans which makes the difference—has been given in the Financial Statement of the year; and I think it is better that it should be so. For the most part, when there is a large surplus, it is almost immaterial whether it is stated or not, and fortunately, on many occasions of late years, there have been large surpluses to announce to the House. When, however, it so happens that that loan expenditure makes the difference between a respectable surplus and a small deficiency, I think it is most desirable that it should be distinctly stated, and it seems to me it would have been better to have included it in the Financial Statement of the present year. Whether we are wise in including the known loan expenditure in that expenditure which is ascertained before the balance is struck to determine the surplus applicable for the reduction of debt is another matter upon which I might have something to say, and upon which I can easily conceive that argument might be made. My object in referring to this subject is not to cast blame, for I think it is a small matter whether the thing was stated or not. My wish is to point out the usefulness of the rule which has on this occasion been neglected. It is useful and important to bring before Parliament on the only regular occasion when the attention of Parliament is effectually given to the finance of the country, the whole expenditure of the country. It does not sig-
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nify whether it is from Revenue or from loan, the House of Commons ought at one conspicuous period of the year to understand fully what is the entire expenditure which has been made under its sanction, or under the sanction of the Executive Government. It is an old and valuable practice of finance, and if the thing be not done at the period of the Financial Statement, it may as well not be done at all. No notice is taken of these things if they are severed from that one great central occasion, and I should be very glad if, without censuring anyone, my drawing attention to the matter should have the effect of causing this useful practice to be observed in future years. But, Sir, there is another operation connected with the Revenue of last year which I confess appears to me to be much more difficult to defend. The Chancellor of the Exchequer said to us, in the fairest and most ingenuous manner, in the course of his Financial Statement, that the apparent deficiency in the Miscellaneous Revenue of the country was owing to a special cause. The words ascribed to him in the report are these—
"It was owing to my having given instructions that there should he no haste in calling in certain receipts which might have been paid in before the 31st of March, but which it did not appear necessary to call in, and which it would he better to leave for this year."—[3 Hansard, ccxxiii. 1026.]
Here, Sir, I must frankly state that I think my right hon. Friend, in assuming to himself the liberty of checking the inflow of any portion of the Revenue in order to enlarge the resources of the coming year, committed a serious error—an error so serious that, though all I desire on the present occasion is to make it understood, I should, in default of anyone else, feel it my duty, if it were defended, to challenge the judgment of the House in regard to it in ease it should become a practice. I am not aware of such a thing having been done before. This, however, I do remember, that during the existence of the late Government, a very vigilant Member of Parliament who did us some good service in matters of finance—namely, Mr. White, then Member for Brighton—inquired of my right hon. Friend the Member for the University of London (Mr. Lowe) then Chancellor of the Exchequer, what was the cause of the

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great and evidently exceptional augmentation of receipts in the first week of the financial year, and whether it was owing to the keeping back of the Indian receipts at the suggestion of the Treasury, and my right hon. Friend is reported to have replied as follows:—
"There was no doubt that the excess for that week was due to the causes assigned in the Question; but it was equally certain that that result had not been obtained in consequence of any suggestion from the Treasury."—[3 Hansard, ccx. 1263.]
Now, if I understand the Chancellor of the Exchequer rightly on the present occasion it was by a suggestion from the Treasury that a sum of £300,000—which I may observe would have been a real and legal surplus, though a small one, in last year's transactions—was kept back and taken out of the account of last year, and brought into the account of this year, because "it would be better to leave it for this year." This, I believe, is not acting in accordance with the spirit of those regulations which govern the collection of our Revenue and the methods of bringing out the accounts. Under the Orders of the Treasury, the receivers general of Revenue are bound to pay it in daily to the Exchequer. No delay whatever is permitted in respect to any branch of the Revenue. It is perfectly true that, in a certain sense, there is no receiver general of Miscellaneous Revenue, but at the same time it is quite evident that the regulation of the Treasury requires daily payment from every Revenue Department: this rule merely expressing the principle that what becomes due to the public should at once be placed to the credit of the public and not be delayed in its passage to suit the convenience of any Government, be that Government what it may. Obviously this principle is one of the greatest consequence, for there are no bounds to the extent to which a contrary practice might be carried. It is a Treasury Order, and a Treasury Order alone, and not the law of the land, that secures the proper payment of the Revenue. These delay payments are made by the Revenue Departments under the Order of the Treasury. Were the Treasury to send Orders to the Revenue Departments to suspend them for the week, any Chancellor of the Exchequer, who had to meet a large expenditure, and did not like the responsibility of imposing new taxes, might,
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by stopping the inflow of Revenue of the last week of the year, throw into the coming year such a surplus as entirely to dispense with the necessity of increased taxation. That will show the House that the question here at issue is really one of principle and a measure of the deepest possible importance. No doubt the designs of the Chancellor of the Exchequer were most innocent, as we may clearly see from the ingenuousness with which he stated them to the House. He gave us an opportunity, manfully and honourably, of raising the question. For my part I must say that I believe the practice to be unprecedented and decidedly dangerous, and I earnestly hope that it will not be repeated. So much, Sir, for the account of the last year and the mode of handling the Revenue for that year. I now come to the Estimate for the present year, and to a rather minute examination of what is supposed to be the surplus upon the figures of the Financial Statement. That surplus is stated at £417,000. My doctrine is, that there is no surplus at all, and not only so, but that there is a considerable amount of probable charge quite unprovided for, independently of any scheme for the reduction of the Debt. Let us see how it stands. We start with £417,000 the reality of which I do not dispute; but I find the Chancellor of the Exchequer is reported to have said in reply to my right hon. Friend near me (Mr. Childers), who found fault with the surplus as being overcharged with weight of expenditure, that his Estimates were taken at a very reasonable and moderate figure. Now I must make a comment on the practice of taking Estimates at a very reasonable and moderate figure, and I affirm with the utmost confidence that no Chancellor of the Exchequer has the smallest right at the commencement of the financial year to take credit for the probable incoming of any Revenue beyond that which he has anticipated in his Estimates. It is his duty to include in his Estimates whatever Revenue seems to him probable—neither more nor less—and that is a duty to the performance of which the House of Commons ought tightly and stringently to bind him. In that way they would maintain what their Predecessors valued so much—namely, the financial control of Parliament over the expenditure of the country. I must take the Estimates as they are presented. If

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we show that the figures will not bear the expenditure of which we already know, and that the Chancellor of the Exchequer and the Government are disposing of money they do not possess, it is not a sufficient answer to say that the Estimates are taken moderately. There is one course open, and it is this—the Chancellor of the Exchequer should reconsider the Estimates and make such additions to them as, in his judgment, may be necessary and justifiable. But you cannot have it both ways, and say, in presenting Estimates at a given figure—"I have other sums in reserve which you know nothing about, but on which I can rely, and as to which I ask you to charge some portion of the expenditure." I shall, therefore, take the Estimates as real Estimates, and assume that they show a surplus of £417,000. The reduction of £60,000 in respect of Brewers' Licences brings that sum down to £357,000. We have lately adopted a principle which it is necessary to explain for a moment to the House with regard to the large business which we transact in loans and advances for public works and otherwise which enters into the statement of the Revenue and charge of the country. We have begun to take credit for the interest which we receive on those loans and advances; and if we take credit for the interest we receive on them, it is quite plain that when we borrow money in order to make them, we must charge ourselves with the interest which we have to pay on that money. I am not certain whether I am quite correct in what I am going to say; but as I understand that the Chancellor of the Exchequer—if I am wrong he will correct me—has this year borrowed money for the purpose of making these loans, and that he expects to have to pay £70,000 as interest on it. That is part of the actual charge for the year, and it must be taken as against the surplus of £417,000, because when the interest on the loans so made comes in, it goes to the credit of Revenue, in which case it must go to the debit of Revenue when the loans are contracted. Therefore, we must reduce £357,000 to £297,000. But then, Sir, it is part of the plans of the Government, and I own a most excellent part, that they should charge upon the finance of the country from year to year the deficiency into which we have allowed the Friendly Societies and Savings Banks
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Funds to fall. If you like to take credit in the surplus for the Post Office funds you may do so; but I find that the aggregate deficiency, as shown by the Bill submitted to the House by the Government, is at present £3,700,000 in round numbers, and the interest on that deficiency is £120,000 a-year, which has not been mentioned in the Financial Statement, but which must evidently be part of the charge of the year. That £120,000, taken from £297,000 brings it down to £177,000. Then there is a charge for which, as a public charge, I am sorry my right hon. Friend made no provision in the Estimate of Income and Expenditure which he presented to the House, and that is a charge on account of Irish Education. The amount of the charge last year was £118,000. It has not yet been stated to Parliament in an Estimate. Why? Was it withheld in order to be reduced? No, Sir, it is withheld in order to be augmented. Therefore, using the best information at my command, the £177,000 to which I have already referred has to be still further reduced by £118,000, which leaves you £59,000 as all that remains of your surplus of £417,000, and that surplus of £59,000, must be charged with the augmentation, whatever it may be, in the Irish Education Vote, which has been actually announced. I do not know what it will be; it may be £30,000, or it may be £40,000, or more. There was also mentioned in the discussion that it was the intention of the Government to make a proposal for paying a portion of the expenses of the Registration Act. Has that been provided for in the Estimates? [The CHANCELLOR of the EXCHEQUER: Yes, it has.] Then nothing need be said further respecting that. Well, we have got the surplus reduced to £59,000, against which, as I have said, there is the increase on the Irish Education Vote, and the result, I say, is that there is no surplus at all; for in a question of this kind, you cannot dispute about a mere £10,000 or £20,000. Now, Sir, I submit that the charges which I have stated to the House are positive charges, every one of which ought to be provided for in the plans of the Government; and the effect of them is that they eat the whole of the surplus—substantially, the whole of the surplus which has been announced to us by the Chancellor of the Exchequer;

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and yet that surplus had a great deal else to do, for, first of all, is there to be a surplus of Revenue or not? Now, it is the established principle of finance that the whole of the charge for the year, so far as it can be foreseen, is to be submitted to the country, as a charge, when the Financial Statement is made; and if any of the elements of that charge are uncertain, they are not to be kept out of view. The established rule is that the Chancellor of the Exchequer has to state them as well as he can, and take a sum which he thinks ample to cover them, charging himself with the whole of the sum before he presents anything that he is justified, in the face of Parliament, in calling a surplus. Of course, I do not speak of a time when a great war is impending, when £5,000,000 or £10,000,000 might have to be added to the expenditure of the year: it is impossible to say what the charges may be then; but I speak of the regular state of things in time of peace, which may be roughly called the normal state of things; and I say it is the duty of the Chancellor of the Exchequer in such cases to present to Parliament, before taking credit for any surplus at all, what he thinks will be the probable amount of those charges. I wish very much to know whether that principle is challenged, because I hold it to be essential to sound finance, and even, in the long run, to what would be called by Parliament, honest finance. My right hon. Friend has said there will be Supplementary Estimates, but that he does not know what they will be; and because he does not know what they will be, he does not provide a farthing to meet them. I say it is his absolute duty to make the best computation he can of those Supplementary Estimates, and to charge himself with the whole of them before he so much as pronounces the word "surplus" to the House. And so, Sir, the £417,000 presented to us as a surplus has vanished from our view; it is nowhere; it has gone to supply purposes valuable and important, no doubt, but still it is gone; and what remains? It has three or four duties which it ought to do. It ought to perform the function of meeting Supplementary Estimates, as well as the right hon. Gentleman can calculate them. After that it ought still to leave Parliament in a position to say—"We have provided for unseen
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contingencies a surplus of income over charge for the coming year; "instead of that, however, it has to bear all the charges I have stated, and besides it has to supply the sum of £185,000 which is to be voted for the reduction of the National Debt, and of which the Government does not possess a single shilling. I do not refer to the details of the Supplementary Estimates. An hon. Friend of mine put a Question the other day as to the charge for the proposed Royal Progress through India, and the Question was answered by the right hon. Gentleman opposite with much tact and skill. I say nothing of that charge, because I know nothing; but I hold that it is in the power of the Treasury, by communication with the Departments, to know what the Supplementary Estimates are likely to be, and that their probable amount is part of the information that ought to be submitted to us before we proceed to strike a balance between the Revenue and Expenditure of the year. I now propose to make some remarks on the plans of my right hon. Friend in respect to the National Debt, in the light of the observations I have already offered in regard to the condition of his most shadowy and ghostly surplus, which it appears is fully and more than fully charged—nay, charged three or four times over—for different public purposes, a course of proceeding which I contend it is impossible for him or any other person to carry out in practice. My right hon. Friend has proposed a scheme with regard to the National Debt which has received the marked approbation of what are believed to be the most sagacious of all things inanimate—namely, the Three per Cents. He is very much pleased—and I do not wonder at it—because half a per cent, forsooth, has been added to that part of the National Debt in consequence of the promulgation of the scheme of the Government for its reduction; but there are sceptical persons who may say this fact proves that the Three per Cents are not of that high order of intellect which they have been considered to be. Let us look at this matter a little. There are three modes by which the National Debt may be reduced—one is by a surplus of Revenue over Expenditure; one is by Terminable Annuities; and the third is by fixed appropriations beforehand. I tell the Government fairly that,

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so far as I am concerned, my own deep conviction is that, although we have done a good deal, we have never done as much as we ought to have done in the reduction of the Debt. That has always been my opinion, and I am thankful to say my right hon. Friend near me (Mr. Lowe) was enabled during five years of his administration to surpass every proceeding Chancellor of the Exchequer in this matter; but even the standard of reduction established by him did not, I think, at all answer the powers and capacities of a country so great as this, if they were accompanied by an equal forethought and a desire to guard against the probable contingencies of the future. Having those views, it may be said, and truly so, that I ought not to be fastidious as to my preference as between one mode and another of reducing the Debt. Well, I ought not, and I will take any mode that you show to be real; but my objection to this proposal is that it is totally unreal, totally opposed to authority and to the test of experience. You will see if I make good this objection. First, we may reduce the Debt by Terminable Annuities; and here the Chancellor of the Exchequer gave the House the figures, which I have no doubt are perfectly correct; and they are of the most instructive character. Down to a certain date, he showed us what had been done by two modes that have been adopted for the reduction of the Debt, and he likewise showed us what had been done by the contraction of new loans. [The CHANCELLOR of the EXCHEQUER: They were up to the present time.] At any rate, however far they may extend, as far as the principle is concerned, the effect will be the same. The figures, which are extremely simple, are these. The surpluses of Revenue over Expenditure amounted, when put together, to £40,000,000. But these surpluses of Revenue over Expenditure are, unfortunately, outweighed by the surpluses of Expenditure over Revenue, because, although we may divide these surpluses of Expenditure into two classes, according as they are unforeseen deficiencies, or according as they are loans, yet a loan means nothing in the world but the expression of a deficiency in the year's income over the Expenditure. And while the whole of those surpluses amounted to £40,000,000, the deficiencies, together with the loans that it was found
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necessary to raise to meet the Expenditure were £73,000,000. Therefore, so far as the surpluses of Revenue are concerned, although there has been a great effort made by Parliament and the Governments for the reduction of the Debt—great efforts made by prudent and vigilant men—yet, so far as the annual balance of Revenue and Expenditure are concerned, taking loans into view, as you must do, there is an actual deficiency of £33,000,000, so that you have £33,000,000 added to the Debt. The whole of the reduction has been effected by means of Terminable Annuities. They have, according to the figures of the Chancellor of the Exchequer, effected a reduction of £120,000,000, which balances that deficiency of £33,000,000, and leaves an entire reduction of £87,000,000. I am not going to enter into a discussion of what, in my view, is the real argument in favour of Terminable Annuities as compared with visionary schemes. The fact is that the visionary schemes did not reduce the Debt; that Terminable Annuities did reduce it; and the merits of any scheme for the reduction of the Debt are that the Debt shall be reduced. My right hon. Friend the Chancellor of the Exchequer, in face of the figures which show that there has been on the whole no surplus of Revenue over Expenditure, and that we have required £33,000,000 to meet deficiencies, has printed a Re-turn, in which his imagination flies into the empyrean, and ranges over a period of 30 years down to 1905, in which he takes credit for a surplus of £500,000 every year. I ask, is that a practical proceeding? Why, the history of the last 30 or 40 years proves that what we have borrowed has, upon the whole, done more to increase the Debt than our surpluses have done to reduce it; and is it not a most extraordinary thing to submit to Parliament as a calculation and assumption that, upon the whole, in the 30 years to come, there will be a surplus of £15,000,000 over all deficiencies; that is to say, that a state of things which experience has shown us to exist heretofore will be entirely reversed? Under what circumstances is this done? If my right hon. Friend had a surplus of £500,000 to begin with, there would have been some little element or spark of encouragement to believe his calculation; but here is a Chancellor of the

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Exchequer, who has not one farthing of surplus, who presents to you an imaginary surplus of £500,000 for 30 years to come, for every one of which years the surplus is founded upon the assumption that every future Chancellor of the Exchequer will do the exact opposite of what the present one is doing. This is a somewhat extraordinary result, and it is necessary that the House of Commons, in the first instance, the intelligent editors of critical periodicals in the second, and the Three per Cents in the third instance, should take some cognizance of these facts. A word or two now with regard to the third method of reducing the Debt, respecting which I will not enter into any comparison between Dr. Price, Mr. Pitt, Lord Grenville, and Lord Bexley. They had different methods of proceeding; but it is a waste of time to enter into a distinction between one of these plans and another. The essential point of these plans is this—that whereas a surplus of Revenue proceeds upon firm conviction that there shall be a surplus, the whole value of that plan depends upon exacting rigidly from the Chancellor of the Exchequer, that from year to year he shall present to you not a nominal, but a real surplus. While that the Terminable Annuities have proved what they have actually done, that plan has for its essential feature this system of making a fixed appropriation of money by prior Act of Parliament. Of money did I say? No, Sir, not of money. If it were a fixed appropriation of money, there would be a great deal to say for it, and I would be slow to quarrel with it. But it is a fixed appropriation of figures and ciphers written down on a sheet of paper—of figures written down too on such a scale that they have revealed that glorious sum of £230,000,000 which has astounded the Three per Cents and bewildered their imagination. Why, it is not clear from the Estimates of the Chancellor of the Exchequer that this year there will be even a surplus of the most slender description. What I submit to the Committee is this—that these methods of providing for the reduction of the Debt by annual appropriations, arbitrarily fixed by those who do not intend to find the money for them, but who think it laudable and creditable to lay it down that future Parliaments shall find that money, have been tried and tested
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by experience and have failed again and again. If they have been so tried and tested, and if they have so failed, I ask is it wise—and I give my right hon. Friend credit for the best motives, for he has, no doubt, had the idea that a plan of this kind would be an efficient check upon expenditure—again to resort to them? I know my right hon. Friend is the last man who would deliberately produce an exploded fiction; but I ask him to consider in the light of experience, and not in the bewildering light of hazy speculation, whether this plan of proceeding is not a fiction detected by experience? After the Great War, the statesmen of that day were profoundly impressed with the necessity of reducing the National Debt. They began by paying off a large sum which had been borrowed, and which constituted the large balances in the Treasury at the close of the War. They began with the very best intentions. Popular feelings with regard to the oppressive operation of existing taxes were not then so accurately represented in this House as they now are, so that the circumstances of Parliament were in many respects favourable to paying off the Debt. The plan adopted was this: In the year 1819 it was determined that £5,000,000 should be provided every year for paying off the Debt. No doubt, the Chancellor of the Exchequer has studied all these details, and yet, if he has, I think they ought to have impressed his mind more than the mind of other people. £5,000,000 were to be appropriated for paying off the Debt. Were they so appropriated? Not even in that Parliament, the majority of which held seats hardly accessible to the faintest breath of popular opinion—not even in that Parliament was that sum applied for the reduction of the Debt. The whole sum that was applied to the reduction of the Debt between the years 1816 and 1828 was considerably less under the operation of this £5,000,000 system, with certain modifications which I shall mention by-and-by, than the annual amount which was applied to it by my right hon. Friend near me when he was Chancellor of Exchequer. This law, with regard to the appropriation of £5,000,000 remained an absolutely dead letter. You may pass a law that you will pay off the whole National Debt this year, but it will remain an absolutely dead letter.

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It will do nobody any good, and it will do nobody any harm, except those who are weak enough to believe it. So it was in this case, the law with regard to the £5,000,000 remained, but the money was not provided, and at last they began to think that this state of matters was unsatisfactory, and that a demand of £5,000,000 every year was too heavy. So they said—"Let us make it more moderate, and the amount of money will be provided." They reduced the demand to £3,000,000; but it was exactly the same thing over again. They passed a law that £3,000,000 should be provided, and the £3,000,000 were not provided. Then there sat a Committee of great weight on Finance in the year 1828. That Committee was, I may say, then accepted as almost conclusive authority on the subject and has been so from that day to this. That Committee distinctly reported against the whole system of fixed appropriations. They said—
"The Committee are of opinion that, instead of a fixed sinking fund, the surplus of Revenue only should be appropriated annually in the mode hereafter stated to the reduction of the Debt."
That is the principle upon which now for 47 years the successive Governments of this country have acted, and from which we are now requested to depart. So broke down the plan of fixed appropriations; but in the course of time there arose another Chancellor of the Exchequer, a man of great ability—a man immensely respected and, I may say, beloved in this House; a man whose character was eminently that of a circumspect and practical statesman—I mean the late Sir George Cornewall Lewis. That eminent man, when it became his duty to borrow for the purposes of the Crimean War, satisfied himself that it would be worthwhile to try this scheme. In 1855, he made a loan of £15,000,000 or £16,000,000; and he invited the House to insert in the Bill then before it, a clause to the effect that in every financial year—beginning with the first year after the signature of a definitive treaty of peace, £1,000,000 should be applied to the reduction of this Debt. That was the clause which he recommended to the House, and I am sorry to say it was one which he prevailed upon the House to accept. It was no wonder that it should have done so, for
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there was no one whose advice it was more disposed to follow, and no one who more deserved that that should be the case. But the clause excited sharp resistance. I, myself, was one of those who stoutly protested against it; and amongst those who made excellent speeches against it was the right hon. Gentleman now at the head of the Government. This, the House must bear in mind, was one of those measures for the reduction of Debt by means of fixed appropriations; and the right hon. Gentleman said—
"I trust the House will hesitate before it assents to this 22nd clause. What is it? It is neither more nor less than a recurrence to the system of creating an artificial sinking fund; and, to my mind, no principle can be more pernicious."—[3 Hansard, cxxxvii, 1967–8.]
The right hon. Gentleman, with the present Chancellor of the Exchequer, and several other right hon. Gentlemen, Members of the present Government, very loyally and properly went into the same Lobby, all harmoniously uniting on that occasion. I said I objected to the clause exceedingly. I said—"If my right hon. Friend is Chancellor of the Exchequer when the war is over, and if he endeavours to induce the House to provide a millon of money and give a vote for it, I shall be found voting with him." I was in that patriotic state of mind that I would assist him to provide the million. Well, the war did come to an end, and the Chancellor of the Exchequer did come forward to make provision for the year. It was the right hon. Gentleman the Member for Buckinghamshire; but I had no opportunity of assisting the right hon. Gentleman in persuading Parliament to provide this money. The right hon. Gentleman said it was not to be expected that the money was to be provided. He had always been against the clause. A former Chancellor of the Exchequer had carried a majority of the House in voting the clause into the law, and the right hon. Gentleman carried the whole House with him in voting it out of the law, with only a a faint and feeble protest from a single ghost of the old Liberal Treasury Bench that then sat on this side of the House. It appears to me that these are historical matters which really amount to a sufficient teaching of experience upon the whole subject that is before us. My right hon. Friend said

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he thinks if we adopt his plan and pass it into law, a future Chancellor of the Exchequer will not like to come down and repeal the law, unless he had good reasons against imposing a new tax. He thinks a Chancellor of the Exchequer will have difficulty in finding good reasons against a new tax. There, again, I must say I am astonished at his sanguine expectations. Is there ever wanting a good reason against a new tax? Are new taxes ever adopted, except under pressure of necessity? Will any man under a paper necessity impose a new tax? Will any man do so under such a necessity as is now proposed to be constituted?—that is to say, referring to a past Chancellor of the Exchequer, who travelled out of his province and chose to lay an injunction upon the future which he had no right to lay, and which he did not supply his successors with the means of meeting? We live in an age of wonders; we have seen many, and shall see many more; but there is one wonder we have never seen, and that is a Chancellor of the Exchequer, who in his place here will propose a new tax in order to maintain a sinking fund. History certainly has not producd any such creation; no such lusus naturœ has as yet appeared; and I do not think that the Government of a Party which justly prides itself on adherence to the traditions of the past, on learning lessons from antiquity, on avoiding vain theories, and keeping to the lessons of experience, ought not to be the people to delude us by projects such as this into the marshes in which we shall be plunged, instead of remaining upon the safe high road by which we have hitherto travelled. I must say, I think that there is no answer to these objections. There is another ground on which I object to the proposal of the Chancellor of the Exchequer. I must say that attempting to provide what shall be done in the year 1885 with a sum of £5,000,000, which will then become disposable, is invading the province of future Finance Ministers, and of future Parliaments, to a degree entirely unexampled. Is it reasonable to suppose that in 1885, the Chancellor of the Exchequer will be governed in the slightest degree, in his view of the policy which he thinks the time and interests of the country may then require, by a reference to the circumstance that the Chancellor of the Exchequer wished this year to do
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something, and provided no money to do it? He would say—"It is enough for us to manage our own affairs, and to leave them to manage theirs." Apply this to my right hon. Friend himself. I was Chancellor of the Exchequer in 1865, and if, in 1875, there had been £5,000,000 coming in, what sort of respect would my right hon. Friend have had for the Chancellor of the Exchequer in 1865, who had been so good as to do his work for him, in total ignorance of what would be the state of the country, and what its interests would require? These form strong practical considerations against the proposal. It is an attempt to revert to a scheme of proceeding which, however well intended, has been exploded under the combined action of authority and experience. With respect to the criticisms which I have ventured to offer, I have done so on information not so perfect as that possessed by the right hon. Gentleman; and if the explanations which he may hereafter give should be found sufficiently satisfactory, I shall accept them, not only with resignation, but with lively gratitude.
THE CHANCELLOR OF THE EXCHEQUER: Sir, my right hon. Friend has travelled, as he was entitled to do, over a very large field, and if I were to follow him over the whole of his observations I fear I should weary the Committee, for in doing so I must enter upon subjects the discussion of which had better be deferred to more convenient opportunities. I will, therefore, with the permission of the Committee, reserve for the present the discussion of one or two of those subjects. The policy of the Government with regard to the income tax it will perhaps be more opportune to discuss upon the Motion of the right hon. Member for the City of London (Mr. Hubbard); the question of Stamp Duties on Salaries again will be the subject of a special Resolution, and I would rather reserve the discussion respecting the Savings Banks until the House comes to the discussion of the Savings Banks Bill. I understand that my right hon. Friend approves of the principle upon which that Bill is founded, although he objects for special reasons to putting the three funds into one; but I think I shall be able to show him, when the proper time arrives, that it is not open to the objection which he takes

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to it. I pass from these matters in order to reply to that part of the speech of my right hon. Friend which is in the nature of a direct personal attack on myself—I mean officially personal, because no one can be more sensible than I am of the extreme kindness and courtesy with which the right hon. Gentleman treats me individually in discussing these matters, and I shall not be misunderstood when I say he has made severe comments upon the framework and principle of the Budget, which I had the honour to submit a week or two ago. It is really essential I should deal frankly and freely with those criticisms, and satisfy the House that there is no foundation whatever for any imputation cast upon me or the present Government of departing from the old frank, honest, and straightforward system of finance. On the contrary, we are prepared to challenge comparison with any of our Predecessors in this respect on any point of practice. I come then to the three points which my right hon. Friend says the Chancellor of the Exchequer ought to bear in mind in dealing with the finances of the year—namely, to keep down, or, as he said, to reduce the expenditure; to maintain the income above the charge; and to present figures to Parliament which will bear thorough examination. With regard to the question of keeping down the expenditure, I can only say that I thank him most sincerely for supporting me in my position as Chancellor of the Exchequer by keeping a vigilant eye, and making severe comments upon the natural tendencies not of the Government, but of Parliament and the country, continually to raise the expenditure. I am no advocate of unthinking and indiscriminate economy; I am not prepared to say the public service ought to be stinted or impaired, or that the natural desires of the country ought to be thwarted when the expenditure called for is reasonably within the country's means and likely to be beneficial and useful. At the same time I am painfully conscious, from daily experience in my position as Chancellor of the Exchequer, that the demands made upon me from all quarters induce me to welcome support, from whatever quarter it may come, to my anxious desire to check and resist any undue increase of expenditure. But in speaking of the increase this year and last my right hon. Friend must have
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included the sums which have been paid in subvention of local finance. Now I am not sure that a subvention to local finance can be regarded simply in the light of increased expenditure. What you give in subvention of local expenditure is a relief to rates. It is a reduction of one form of taxation at the expense of the Exchequer, but it is still a relief to the nation. Although I am not one of those who think that the Exchequer should give with both hands in subvention of local government, still money given in aid of the rates cannot be regarded as money thrown away in the same way as if it had been expended on the ordinary Supply Services of the year. Passing over that matter, I must next notice the remark of my right hon. Friend—that it is the duty of the Chancellor of the Exchequer to keep the income of the year above the charges, and here my right hon. Friend began by saying he was going to call our attention to those old-fashioned principles which he admires, and he challenged me for not having taken into account—when I presented my balance of Revenue and Expenditure the other day—the item for fortifications and local defences. He says that I presented a Budget putting the surplus of income over expenditure at £417,000; but that if I had deducted the sum expended on account of fortifications and barracks, I should have found myself with a deficiency of £6,000. I quite admit that if you state the account in that way there is a deficiency. But is that the old-fashioned way of stating it? Of all Members in the House I am perhaps as clear on this matter as anybody can be, because it was my lot to be one of a small minority who protested against a system introduced by a Government of which my right hon. Friend was Chancellor of the Exchequer, of raising money for fortifications by the creation of Terminable Annuities, and I argued, as well as I could, that that expenditure ought properly to have been met by the ordinary Supply Vote for the Services. But I was overruled by an enormous majority. The system was introduced against my wishes and counsels. And how has that system been put into operation? Why, in every year but one since its commencement, the practice which I have now adopted has been uniformly followed. It is true that, in the first year for borrowing on

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account of the fortifications, 1860–61, my right hon. Friend, who was then Chancellor of the Exchequer, stated his Income and Expenditure, with an allowance of £50,000 for fortifications, but in no subsequent year did he adopt that plan. [Mr. GLADSTONE: "Oh, oh!"] Well, will my right hon. Friend state any other year in which that plan was adopted? I have here a statement of the surpluses as stated by the Chancellor of the Exchequer, and as returned to the Commissioners for the Reduction of the National Debt. In these Returns on every occasion the sums spent on fortifications form part of the expenditure, and in no one year, except 1860–61, do the figures correspond with the figures stated by the Chancellor of the Exchequer. In 1863–4 the surplus returned to the National Debt Commissioners was £2,352,000, but the sum stated by the Chancellor of the Exchequer was £3,152,000. It is much the same in the subsequent years. If I were to go through every one of these Returns I will venture to say that in no year, except the year I have mentioned, 1860–61, do the figures correspond. Now, has the practice which my right hon. Friend has urged upon us been adopted? I am not saying my right hon. Friend is not right in his criticism, and that we ought not to adopt this plan. But when he asks us not to depart from old-fashioned principles, I have a right to complain that the discovery of novelty in a practice which has been followed by himself and others these 15 years has suddenly flashed upon him when our proposals are laid before the House. I wish he had told us of his views a little sooner. If, last year, when I stated the surplus of the year 1873–4 at £869,000, for which we were not claiming credit ourselves, but were ascribing it to our predecessors, he had said—"Oh, no; you are giving us credit for too much, you ought to have reduced it by the amount borrowed for fortifications," then I might have taken the hint, and would have framed my Estimates this year accordingly. But that did not occur then to my right hon. Friend, and I do not blame him for it: I only wish to point out that when he blames me in this matter he is blaming himself. Then, in bringing the tremendous charge against us of not having called up a certain proportion of Miscellaneous Revenue
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last year, I think he is hardly measuring out to me quite the same measure which has been measured out to himself and to other persons who have been placed in similar circumstances. I have no doubt the answer which we have heard was given by the Member for the University of London (Mr. Lowe) to Mr. White was strictly and literally correct. I am not sure that I might not this year have given a similar answer, and been equally correct, because there were certainly no instructions from the Treasury that the India Office payments should not this year have been called in by the 31st of March. In 1872, when the India Office payments to the Treasury were kept back, the amount was more than £800,000. On the present occasion, all I did was on a very much smaller scale. There were two sums which I certainly did not call up as Miscellaneous Revenue, although I might have brought them in before the close of last year. One of them was the remains of the Credit Vote on account of the Abyssinian Expedition. The payment had not been accurately adjusted—had not then been ascertained; and, although I knew that there was a certain sum which might have been called in, I thought it reasonable that it should stand over to the beginning of the year, by which time the actual amount could be fully ascertained. There was also a small sum of £160,000 due by the Indian Government, which, if we had taken steps to call it in, we could have got before the 31st of March; but I frankly told the Committee I did not call it in because I did not very much desire it. At all events, if I did anything wrong, I frankly stated it to the Committee, and I do think that under the circumstances of the case I was justified in what I did. Now, what were the circumstances of the case? Last year I brought forward a Budget in which along with a large remission of taxation I proposed a subvention to local expenditure. At the moment I made my Statement I was not perfectly aware how much of the local subvention would fall to be paid within the financial year. I did not know at what periods the payments to Scotch and Irish police, &c, would fall due, and, as a matter of precaution, I took a round sum, as being the amount which would have to be provided during the year. As the year drew on and we came

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to ascertain the dates of the various payments, I found there was less to be made last year and more to be thrown on this year than I had calculated. I, therefore, assumed I should have a larger surplus in the Exchequer than was necessary, and that the calls upon me this year would be proportionately larger. Under these circumstances, I did what was nothing very extraordinary or unprecedented, or of which I am in the least degree ashamed—I allowed £300,000 to stand over from one year to the other and to go towards defraying the expense of the metropolitan police and other objects. I think I was perfectly justified in doing it equally with the other case I mentioned. And if I had not mentioned the fact I do not think anybody would have found it out. In these matters I wish to be perfectly frank, and therefore I let the House and the country know exactly what I was doing. My right hon. Friend, of course, has the right to comment upon this, and to say we ought to be more regular in future. We will endeavour to be so. But now I am coming to an important point. My right hon. Friend challenges my Estimate for the present year, and he says—"In the first place you claim to have a surplus of £417,000. But there is £60,000 on account of Brewers' Licences, then there is the interest of £70,000 upon loans, next a large deficit on the Savings Banks, and finally the Vote for Irish education." Well, with regard to some of these items, I do not admit the correctness of my right hon. Friend's observations. The interest on loans had been considered in the calculation which was originally made, and will cover the amount we are likely to require. If a larger amount should be raised we must remember that the interest will be balanced by the interest we shall derive from the advances we shall make, and that this will be carried to the other side of the account as Miscellaneous Revenue. The Savings Bank deficiency, again, will not arise till next year. But taking the Irish Education Vote and any other Supplementary Estimates, no doubt there will be some of the latter which may even absorb the surplus, or even more than absorb it. There is the deduction on the Brewers' Licences of £60,000, and allowing a further deduction for the increase in the charge or Debt of £255,000, which in-
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cludes £185,000 of the fixed sum, and £70,000 for the local expenditure, the result is a total deduction of £315,000 taken from the surplus of £417,000, which leaves me £102,000 with which to begin the year, with a prospect, undoubtedly, of some further Supplementary Estimates. Well, I have said that my surplus was entirely exhausted, but I did also state that my Estimates were moderate; and although in the Statement I have laid before the House I have only made provision for the Estimates which have been actually laid upon the Table, and not for the sums we shall have to propose in addition, I do anticipate that there will be a further amount of Revenue which will come into the Exchequer in some shape or other, and which will fairly balance any Supplementary Estimates that we may have to propose. Is not that, after all, a common sense view of the case? I was twitted last year with the kind of Budget I then laid before the House. Last year I presented a Budget which was fortunate enough to receive the approval of the right hon. Gentleman himself, in which I set forth in detail the amount I expected to receive from Customs, Excise, and so forth. The result was that, on the whole, the Estimate I then presented was exceeded in the actual returns by something like £500,000. I was justified in the result, and yet I did not satisfy my critics. I was told I was wrong here and wrong there, and that, although I might be right in the totals, I was wrong in the details. Now, I am a student of the newspapers, and I am not above taking advice from any quarter whence it may come, and I am not ashamed to say that I received a valuable hint from the correspondent of one of the leading newspapers, The Times, who writes under the well-known name of "Surplus." In a letter which that gentleman wrote, and which entirely fell in with my views on this subject, he said—
"It is impossible for a Chancellor of the Exchequer, although he may calculate the general outcome, to say what might be advances on particular articles, such as tea, malt, stamps; but let him take courage and make his Estimates as carefully as he can, and then make some allowance for the general spring of the Revenue."
Well, unless circumstances should arise altogether unexpected, I think I am

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taking a safe estimate when I say that I may put the supplementary receipts and savings on expenditure—for these must be taken into account—against any Supplementary Estimates that may be required. I may be wrong, and I may be open to criticism next year; but at the present moment I will ask the House to give me credit for having acted, at least, as one who, above all others, will be the sufferer if he makes any mistake. If there should happen to be a deficiency of £100,000 or 200,000, the country will not be a great loser—["Hear, hear!"]—but it will be a very great loss indeed to the Chancellor of the Exchequer and his credit; and, in spite of the ironical cheer from the right hon. Gentleman opposite, I am staking my own reputation more than any interest of the country upon the sufficiency of the Estimates I have presented. We have heard a great deal about old-fashioned notions, but is it such a very unheard-of thing that a Chancellor of the Exchequer should present a Budget with an anticipation of a very narrow surplus or, possibly, of a deficiency? Why, some 10 or 12 years ago we had cool Estimates presented to us of deficiencies of upwards of £1,000,000, which were to be taken out of the Balances. Is there anything very extraordinary in estimating rather closely on the present occasion, when in former times a Chancellor of the Exchequer got up and said—"I foresee such an amount of expenditure and income, and I leave you with the prospect of a deficiency of £1,200,000," which ultimately turned out to be something like £2,500,000. [Mr. LOWE: There was £6,000,000 for the China War.] I suspect that if we went into the details of those Estimates there would be a good many things to speak of besides the China War. We were at that time giving away right and left in reduction of taxation; we were reducing duties in this quarter and that quarter. ["Hear, hear!" from the Opposition.] You cheer that. Am I to understand that the argument that we have come to is that it is legitimate to speculate for a deficiency, if you are going to give away taxes; but that it is not right to speculate upon a close fit, if you are going to do something towards paying off Debt? The last, and what may be called the most interesting, part of my right hon. Friend's re-
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marks filled me with a most profound astonishment. I did not expect that my proposals would, in all particulars, meet the approbation of my right hon. Friend; but I own I did think that the kind of criticism that we have heard on the propositions for the reduction of the Debt would have proceeded from any other Member of this House rather than from my right hon. Friend. His arguments were perfectly new and surprising. He told us that there were three ways of reducing the Debt. The first was to maintain a surplus of Revenue over Expenditure, the second was by a system of Terminable Annuities, and the third was by fixed appropriations. Three ways! I must say I only know of one. Does my right hon. Friend mean to put the maintenance of the surplus of Revenue over Expenditure in contradistinction to any other plan, as if there could be any plan not founded on this principle? Why, that is the old fallacy brought up again, and stamped with the authority of my right hon. Friend. For my own part, I take my stand, and the Government take their stand, on the principle that was embodied in the Report of the Finance Committee of 1828—upon the principle which has been repeatedly impressed upon this House ever since the fallacy of the old Sinking Fund was discovered; and that is, that the only legitimate way of reducing Debt is by maintaining a surplus of Revenue over Expenditure. And if my right hon. Friend means to tell us that he has found any machinery in the form of a juggle or puzzle, in connection with Terminable Annuities or anything else, which does not involve the maintenance of a surplus of income over expenditure, and if he thinks that he is thereby going to reduce Debt, he is only seducing the House into a false track, which ought to be repudiated at the first possible moment. I will do my right hon. Friend the justice to say that I do not believe he meant what he said. What I suppose he meant was, that we might trust to casual surpluses from year to year of Revenue over Expenditure, as contrasted with any fixed principle or system for the reduction of Debt. That must have been the meaning of my right hon. Friend, because it justified what I said—that casual surpluses from 1829 to the present time had only produced a

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reduction of £40,000,000, against which was to be set an increase of £70,000,000 in loans. On the other hand, I pointed out that the system of the reduction of the Debt by the fixed process of Terminable Annuities had produced the more satisfactory results to which I adverted; and I used the argument to support my proposition that it was not safe, if you wished to do something substantial for the reduction of the Debt, to trust to these casual surpluses from year to year, but that you ought to try some settled plan. That, however, was spoken of my right hon. Friend as unreal and against all experience, and that was a principle to be condemned! But where is the experience that my right hon. Friend spoke of? He gave us the experience of Lord Bexley, and of the period when, at first £5,000,000, and afterwards £2,000,000 or £3,000,000 a-year, was to be set aside for the Debt. That plan was given up in 1828. My right hon. Friend gave us also the experience of Sir George Cornewall Lewis, which likewise ended in failure. But he did not give us one experience which is more recent and more to the point—he did not give us his own experience. He has been proving that, under the circumstances of the years after the Great European War, the system on which Lord Bexley and other Chancellors of the Exchequer had endeavoured to maintain a fixed appropriation of £5,000,000 was impossible to be carried out. He has reminded us that when the country was burdened with taxation, the primary object was to reduce taxation and relieve the industry of the country; but although the pecuniary arrangements of a Sinking Fund were objected to and were given up by my right hon. Friend, yet he forgot to tell us that we have been living for 10 years under the system of what he now calls a fictitious payment of the National Debt. We have been left by him to provide for the Terminable Annuities which, at his suggestion, we have been paying for the express purpose of extinguishing Debt, and it is just as fictitious and as unreal as any other system. Well, my right hon. Friend may prefer his system to mine; I do not care for that, and I do not quarrel with him for doing so. The system I proposed was an exceedingly simple one, and occupied some 10 minutes to explain, while that of my
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right hon. Friend was an extremely complicated one, and took up at least a good half-hour. I daresay many hon. Members here will remember the celebrated speech which gave everyone a headache in 1865, when my right hon. Friend brought forward his elaborate plan of Operation A and Operation B, and distinguished the position of the Chancellor of the Exchequer as Finance Minister from the position of the Chancellor of the Exchequer as banker, and showed how in the one case he might be in a surplus and in the other in a deficiency—that there were cases in which he might be in a special condition to make arrangements which would reduce the Debt. I do not know that he named such very large sums as he did just now, but he named very considerable sums, and the right hon. Gentleman the Member for Pontefract (Mr. Childers) was so enthusiastic on that occasion that he got a Return printed and laid upon the Table, which carried you on to 1888, with a vista of annuities which would be terminable in 1905. I have never been visionary enough myself to go beyond that date; and then my right hon. Friend says with an air, as if he was going to put us all down—"Did you ever hear of a Chancellor of the Exchequer who came forward and proposed taxes in this House for the purpose of keeping up a sinking fund?" Yes, I did. I remember a Chancellor of the Exchequer coming forward and proposing a match tax. I am proposing taxes at this moment to carry out arrangements into which my right hon. Friend himself originally induced us to enter. [Mr. GLADSTONE dissented.] My right hon. Friend shakes his head; but does he mean to tell me that if it were not for these Terminable Annuities which he has set on foot, and which you might be pleased by a very simple operation to put an end to at once—we would be obliged to bear the burden of taxation we are doing? Nothing of the sort. My right hon. Friend and those who sit near him are ready enough to come forward on proper, or, what they think proper, occasions, and say—"See, we have extinguished £3,000,000 or £4,000,000 of Debt every year." Why, Sir, these Terminable Annuities will this year pay £3,700,000 of Debt, and we are proposing taxation to cover that. And, therefore, I say that this system of fixed

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provision is not new, and is not absurd. It is one which my right hon. Friend has himself proved the efficacy of, and one which experience shows that Parliament will maintain and carry out. [Mr. GLADSTONE again dissented.] Well, my right hon. Friend is the most incredulous man I ever met—he keeps on shaking his head whenever I refer to him; but if the House will not think it too familiar a parallel, I will mention one which suggests itself to me. There is one of Walter Scott's novels in which he introduces a Scotch boy, who informs a gentleman that the Nabob of the story had given him half-a-crown, charging him not to play it away at pitch and toss. "And of course you disobeyed him? "he was asked. "No," he said, "I didna disobeyed him, I played it away at neevie-neevie nick-nack." Why, Sir, the difference between the two systems is just about the same as losing the half-crown at neevie-neevie nick-nack instead of at pitch and toss. My right hon. Friend seems to think that my plan is necessarily antagonistic to Terminable Annuities, and that I have a feeling against their operation and principle. I say, not at all, because it is perfectly possible within fixed limits—and I think on certain occasions it will be the right thing to do—to create Terminable Annuities as much as you please, and I believe within those limits it will be a good arrangement to do so. My right hon. Friend has, I think, said—other people certainly have—that I am proposing to reduce Debt with one hand and to contract it with the other. Well, in a very limited sense, that is true; but if you look at the whole of the operations proposed by the Government, in the Bills which we have laid on the Table, you will see that we are putting an end to the various systems which really allow the contracting of Debt. If it is open to assert that we are reducing Debt on the one hand by raising it on the other, I would say that my right hon. Friend and hon. Gentlemen opposite have been for some years going upon the principle of reducing Debt with one hand and raising it on the other with four hands. Now, first, they have been in the habit of borrowing for fortifications, just as we propose within the limits they prescribe to do. They have been paying off Debt by Terminable Annuities on the one hand, and
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have been raising money for fortifications and adding to the Debt with the other. But not only that—when they have raised £1,000,000, they have not only added £1,000,000 to the Debt, but substantially £2,000,000—£1,000,000 they raised, and they stopped another from going into the Exchequer in the form of a sinking fund to reduce Debt. I will not weary the Committee with the figures, but they show that the amounts expended on fortifications have added to the Debt much more than the amounts raised, because taking the sum raised and the amount deducted out of Revenue, and arriving at the amount you are to hand over to the National Debt Commissioners, you have been robbing the National Debt, and of course strengthening your balances in a way which enabled you to fall back upon those balances to make up a deficiency when occasion required. Then the third hand you have used is this Savings Bank deficiency, which you have allowed to go on increasing, and which we propose to extinguish. I apprehend that there is no more sound or simple principle of finance than this—that, instead of allowing those sums to accumulate as Debt against the nation from year to year, we should come to Parliament and say—"Here are these Savings Banks deficiencies; you choose to allow the depositors in them this amount of interest, being more than your funds will bear; they must, however, be provided for, and we must ask you to vote sums for the purpose." But now what is the fourth hand by which you have been contracting Debt? What is this system of Terminable Annuities? When you turn a Perpetual Annuity into a Terminable Annuity, what do you do? You extinguish a Perpetual Annuity of smaller amount, and you substitute for it a Terminable Annuity for a certain number of years of larger amount, and the difference ought to be such that by investing the amount by which the Terminable Annuity exceeds the Perpetual Annuity, you will at the expiration of the term of years have replaced, and exactly replaced, the money which you had to begin with. Well, but what have you done? If you had gone into the market, and had offered to issue Terminable Annuities and extinguish Perpetual Annuities in their place, no doubt the higgling of the market would have

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established fair terms. But, for reasons which I need not go into, you did not do that. The Chancellor of the Exchequer, in his capacity of National Debt Commissioner, or banker, as my right hon. Friend calls it, has made terms with the Chancellor of the Exchequer as Finance Minister, and he has been both buyer and seller of these Annuities, and has fixed the price as he thought fit. But suppose you attempt to operate upon a large scale in that way, what would happen? You extinguish your Perpetual Annuity. You create a Terminable Annuity, and you repay every year a certain amount of capital, which has to be re-invested; but the effect would be to raise the price of the funds, as my unhappy proposal, which has created so much wrath and contempt, has done; so that the money, when it comes back to be re-invested, will not produce the same amount of stock, and consequently there is a loss, and that loss is another way in which I say a false operation has been going on. If you attempt to rest any scheme for the reduction of the National Debt on Terminable Annuities, you will to a certainty produce that effect. You will either make a bargain too favourable and add to the Debt, or you will, on the other hand, make a bargain too unfavourable, and so rob those for whom you are trustees—the Savings Banks depositors; and, therefore, the system is not one on which you ought to rely. I do not, however, say we are not to have Terminable Annuities at all. I am for retaining them to a certain extent, and there are provisions in this Bill to enable you to do so; but to say that that is the only really sound and sensible principle to act upon, and that the other which I propose is unsound and visionary, seems to me to be nothing but gross and sheer prejudice. I am not able to use any other term. Of course, my right hon. Friend regards his own child with different feelings from those with which he regards the child of another; but I must say I was amazed when I heard the propositions laid down by my right hon. Friend. If he has passed over his own peculiarities he has looked into my faults with the sharpness of an Epidaurian serpent. He has done me the honour of looking into the Division List of 1858, and reminding me that I went into the Lobby on the occasion to which he referred with him-
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self and my right hon. Friend at the head of the Government against Sir George Cornewall Lewis. I was then a young Member of the House, and I voted pretty much according to the authority of my two right hon. Friends. But, as the right hon. Gentleman has thought fit to refer to the manner in which I gave my vote on that particular occasion, I should wish to remind him that in a book which I have since written upon the subject I have very freely given my views with regard to that sinking fund of Sir George Cornewall Lewis, and I beg to refer the right hon. Gentleman to my opinions therein expressed. Sir George Cornewall Lewis originated his proposal in a year when a war was raging, and when he was borrowing large sums, and his intention was that his sinking fund should come into operation at the close of that war. The year, however, which he had selected for the sinking fund to come into operation was of a peculiar and very unfortunate character for such an operation. It was not a year of peace, because we were at war in China; the commercial condition of the country was such as to threaten us with a deficiency, and it was also a year when we were bound by an agreement entered into long before to reduce the income tax from 9d. to 7d. in the pound. There were circumstances, therefore, which rendered that year very different from the present, and I refer to it mainly to show that in adopting my proposal we by no means bind future Ministers of Finance. If within two years after Sir George Cornewall Lewis made his proposal for a sinking fund, Parliament was ready to set his scheme aside, is it not perfectly manifest that if times should ever arise when Parliament should think that it is not expedient that my plan should remain in force, the Finance Minister of the day will be bound to come forward and to ask Parliament to set it aside? If you adopt my proposal you will have none of the complications incident to the system of Terminable Annuities—you will have a system of finance which I venture to say will be of a most sound and stable character, because while it establishes a consistent policy of the repayment of Debt, it can be set aside whenever the circumstances of the country require that it should be put an end to. If the country were really in want of money,

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and taxation could not be increased without injury, the first thing that the Minister of Finance would do would be to put a stop to the system of the repayment of Debt in place of borrowing money. I must apologize to the Committee for having devoted so much of their time and attention to the discussion of this point; but I did so because it was the one which was most pressed upon their attention by the right hon. Gentleman in the last part of his speech. The right hon. Gentleman referred to other matters, which I shall be ready upon the proper occasions to discuss, and I hope that the right hon. Gentleman will not think that I am passing them over because I have thought it right to confine my observations on the present occasion to that part of his speech which refers to my proposal for the reduction of the National Debt.
MR. LOWE: I wish, Sir, in the first place to correct a statement of the Chancellor of the Exchequer with reference to what occurred in 1864. I find on referring to the speech of my right hon. Friend (Mr. Gladstone) in 1864 that he said they must bear in mind that they had incurred certain charges for fortifications, and that both Expenditure and Revenue had included a considerable amount which did not appear in the accounts of previous years. With regard to the charge made by the Chancellor of the Exchequer against the conduct of my right hon. Friend in taking off taxes and yet having a deficit in the same year, I must observe that the right hon. Gentleman (Mr. Gladstone) took off the taxes in question in April, and the China War, necessitating the re-imposition of those taxes, broke out in the following July, and was one of those unforeseen contingencies which no Minister could guard against. It was, therefore, owing to no fault of my right hon. Friend that the deficiency was incurred. I think that that is a complete answer to the charges which the Chancellor of the Exchequer has brought against my right hon. Friend. But we are not here to answer charges. We are here to arraign the policy of the Chancellor of the Exchequer, and to show the House why the financial proposals of the Government do not merit the confidence of the House. The right hon. Gentleman opposite has argued the matter as though he had not a deficit.
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When he made his Financial Statement, he gave the country to understand that he had a surplus of some £417,000; but, in giving us those figures, he entirely left out of sight the large expenditure that will be required for the purposes of Irish Education and other matters of account. But on the faith of those Estimates, he asked the House to sanction the remission of the charge for the Brewers' Licences amounting to £60,000, the payment of £70,000 on account of interest for money borrowed on loan, and his proposal for the repayment of the National Debt, incurring a further expenditure of £185,000. The right hon. Gentleman never ventured to say in so many words that he had not a deficit, and, indeed, I do not know why he should have done so, because he seems to regard a deficit as being just as good as a surplus. The right hon. Gentleman having no money in his pocket, draws upon the negative quantity, and enters upon a far-reaching speculation for the purpose of paying off the National Debt, commencing his operations by borrowing the money to enable him to make a start. Under these circumstances, I really wonder that the right hon. Gentleman took the trouble to deny that he is in debt. Therefore, while the right hon. Gentleman does not venture to say that he has a surplus, I think that we are justified in saying that he has a very serious and considerable deficit, and that it has arisen from the want of serious consideration being given to accounts of income and expenditure. Well, this is after all but a poor affair. But although it is but a poor affair it might have been relieved if he had treated it in a more magnificent manner. We have shown that in a time of profound peace, when no emergency is expected to arise, when we only last year gave the right hon. Gentleman £6,000,000 to play with, and when we are enjoying the result of a splendid harvest, he has been unable to keep us out of a deficit. I really was somewhat ashamed when I saw the manner in which the right hon. Gentleman dealt with and palliated the circumstances of the case. He told us, in the first place, that he had retarded the progress of £300,000 of Indian money which was finding its way into the Exchequer, and he seemed to consider it a matter of no consequence. But surely it is the duty of the Chancel-

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lor of the Exchequer to lay before the House the finances of the country as they actually stand, and not as he has manipulated them. Any Finance Minister who adopts the latter course enters upon what was termed some years ago in relation to railway speculations, "a culinary operation" of the most difficult and dangerous nature. Nothing can be more alarming than for it to be publicly avowed that it is the duty of the Chancellor of the Exchequer to manipulate the public accounts so as to show the revenue to be larger than it really is, and our fears would be greatly increased were we to be told that the object of such manipulation was to prevent the necessity of its being shown that there was a large deficit. It may be said that this is a small matter, and that it does nobody any harm; but the first step in such a direction is everything, however little, and if the House consents that the Minister of Finance shall cook and manage the accounts and present that as a fact which is not a fact, we are entering on a course the end of which no man can foresee. The right hon. Gentleman has not only disposed of the £6,000,000 given him last year, but he has also reduced the balances by £1,000,000, and worse than that, what kind of excuses does the right hon. Gentleman set up to cover his proceedings? Why, he says that the Government remitted a great quantity of taxes last year, and that part only of such remission came into operation during the present year, and therefore that he was entitled to consider that a portion of the deficit was a remission of this year. He also said that the coming year is Leap Year, that it contains an extra day, that there is no Easter in it, and several things of that kind, and hopes that things may be better than his own calculations have led him to believe. The right hon. Gentleman in making his Financial Statement appears to have made all kinds of mental reservations instead of telling us exactly what the state of the Revenue was. That is a matter for serious complaint, for if there is anything in the hopes that the right hon. Gentleman now entertains on the subject of the Revenue, he ought to have taken that into consideration before he presented his Estimates to the House. There is nothing more difficult than to fix upon the
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right hon. Gentleman any specific statement at all. We have had of late years a pretty good time in the way of finance, even without the assistance of the Match Tax. But it seems that whenever the Conservative Party are in power there must be a deficit. After the right hon. Gentleman the First Lord of the Treasury came into office in 1852 he had to deal with a deficit, and, wanting to take off a great portion of the Malt Tax, he laid hold of a Public Works Fund and appropriated it for the purpose. That was his first experiment in finance. Then in 1858 he laid his hand upon the sinking fund, which had been provided by Sir George Cornewall Lewis, and appropriated it as part of the Revenue of the year. Now, the right hon. Gentleman has come in with every conceivable advantage, after a remission of £12,000,000 of taxes and with power to remit £5,000,000 more. We had taken off something like £26,000,000 of Debt; we had paid off £5,000,000 of the Abyssinian legacy that was left us by our Predecessors; we had expended £2,000,000 in the preparations rendered necessary by the War in 1870, and in addition we had paid £3,200,000 of the Alabama Indemnity, all payments of the nature of Debt. In five years, therefore, we had paid off no less than £36,000,000 Debt. If ever a Chancellor of the Exchequer came into office with a good chance of having a surplus and of cutting a respectable figure—if only for the sake of variety—surely it was the right hon. Gentleman. But what has been the result? In the first year the right hon. Gentleman squandered away the whole of the surplus which he found available when he came into office, and the next year he comes before us with a deficit. I think, under those circumstances then, that the right hon. Gentleman would do better if he directed attention to his own defence, instead of endeavouring to carry war into the enemy's country. In a most admirable manner the right hon. Gentleman sought to show that he was still remitting taxes. First, he told us that part of the remissions of last year took effect this year; and, in the second place, he pointed out that relief was given in some respects to local taxation. With regard to the latter circumstance, it is obvious that the money spent in relief of local taxation must be charged upon the Revenue of the

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country; but according to the logic of the right hon. Gentleman this is remission of taxation—and therefore the more you tax a people the more you relieve them. But what I object to most of all in the right hon. Gentleman is the levity with which he speaks of a deficit. I do not know that this is a place for logical definitions; but if I were asked to define a Chancellor of the Exchequer, I would say he is "an animal who ought to have a surplus." If—except under extraordinary conditions—he has not a surplus, he fails to fulfil the very end and object of his being. I hold that the want of a surplus in a time of peace—when there is no pressure, no panic, no great distress anywhere—is nothing less than a national calamity. Our position as Englishmen—and I feel it—is lowered by it in the eyes of the world. The right hon. Gentleman has given us a great many reasons why he has not taken off fresh taxes this year. I think he might have spared himself the trouble. It is like the person who could not fire a salute, for 13 reasons—the first being that he had no gunpowder! The Chancellor of the Exchequer having spent every shilling he had, had a good excuse for not taking off taxes. The right hon. Gentleman attached importance to the fact that next year—Leap Year—there would be an extra day, and that, moreover, the Easter festival would not fall within the financial year. Surely these are little calculations, which are more worthy of a retail trader than of a Chancellor of the Exchequer? People sometimes say that we are descending in the scale of nations—that we are not the country we are, and so on. We can still, however, point to many circumstances which prove the contrary, and notably to the rate at which we can borrow money. But if we hold ourselves out to the world, under the auspices of the right hon. Gentleman and his supporters, as caring so little for the credit of the country and for its antecedents that we do not scruple, without any occasion, to present the miserable spectacle of a Financial Statement which does not balance, how can we expect to retain our high position in the eyes of other nations? And if this is what you do when there is nothing threatening, how will it be when there is real danger and pressure? I hold that we are bound, not only as a matter of pride, but as a
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matter of duty, to give an example to the rest of the world by regularity and propriety in our financial arrangements. With regard to the scheme for the reduction of the National Debt, I maintain that the right hon. Gentleman is introducing into this country a system which, from its own nature, is certain to fail, and which experience has shown to have always failed. Suppose a Chancellor of the Exchequer is asked to take off a tax—the Malt Tax, for instance. He says—"Very well, I will do it; but I must increase another tax." But then the repealers of the other tax—say the income tax—come forward and make a similar demand, and the Chancellor of the Exchequer may stand by until the two parties fight it out. But suppose, instead of being obliged, if you yield to either of the demands, to increase the taxation in some other direction, there is a fund already provided for the purpose of paying off Debt, how long do you think the Chancellor of the Exchequer will be able to resist the pressure for an appropriation of that fund to the remission of taxation? He will say—"I want to pay off Debt." But on all sides there will be a cry—"We do not care at all about that." I should like to read a few lines from Ricardo's Essay on the Funding System in regard to a sinking fund established in 1716—
"This fund was for some time regularly applied to the discharge of Debt. … Soon after, the principle of preserving the sinking fund inviolable was abandoned. In 1733, £500,000 was taken from that fund and applied to the Services of the year. In 1734, £1,200,000 was taken from the sinking fund for current services, and in 1735 it was anticipated and mortgaged. The produce of the sinking fund at its commencement in 1717 was £323,437. In 1776 it was at its highest amount, being then £3,166,517, and in 1780 it had sunk to £2,403,017. … On the whole, this fund did little in time of peace, and nothing in time of war, to the discharge of the National Debt. The purpose of its inviolable application was abandoned, and the hopes entertained of its powerful efficacy entirely disappointed."
That was the experience of the first sinking fund in this country, and it is exactly what would happen now. As long as it is small—and the right hon. Gentleman has not yet contributed anything to it—it will be safe. But let it reach a larger sum, and there are numerous claimants who will try to get hold of it; and the only question will be to whom will the Go-

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vernment of the day make this present that is being provided for them? It is impossible to suppose that it will last. Let us take an instance. The right hon. Gentleman at the head of the Government is now lending his countenance to the project of a sinking fund. Well, in 1855, when Sir George Lewis was Chancellor of the Exchequer, £16,000,000 were lent to the Turks, and £1,000,000 was to be used every year as a sinking fund. Soon after peace was restored, a Conservative Government came into power, and as usual there was a deficit. Then the present Prime Minister was Chancellor of the Exchequer, and the right hon. Baronet was Secretary to the Treasury. [The CHANCELLOR of the EXCHEQUER: I was not then in Parliament.] The result was, that an Act was passed under the auspices of the right hon. Gentleman opposite (Mr. Disraeli) to which I would ask particular attention. By that Act the right hon. Gentleman repealed the sinking fund scheme, and did the very thing which he is now condemning. He resisted in the most solemn manner the bad system of a sinking fund, and yet now he came down to the House to rate those who sat opposite to him because they, in Opposition, ventured to doubt the policy which he had himself so emphatically denounced. The real objection to a sinking fund is that it is a thing made to be robbed. It always has been robbed and always will be robbed, to the end of the chapter, because it is of no interest to the general public to defend it, and in a fight about taxation, with an interested party on the one side and the general public on the other, the general public will always go to the wall. The right hon. Gentleman the Chancellor of the Exchequer said, and with truth, that Terminable Annuities have in them something of the nature of a sinking fund. But, as a matter of practice, there is this difference between them—that the nature of a sinking fund, such as the right hon. Gentleman contemplates, is that it should be plundered, while the nature of Terminable Annuities is that they have not been able to be plundered. They have been efficient; they have never been interfered with by Parliament, and although I may be told that it is not logical to object to one and not to the other, I do not care whether it is logical or not; one thing is certain, that is that the country
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will allow us to do one thing and not the other. By this proceeding the Committee are asked by the right hon. Gentleman to do away with the system, and to destroy the only efficient means that have yet been devised for paying off the Debt. I will not dwell upon the ridiculous position in which the Chancellor of the Exchequer places the House by landing us in a deficit, and then, without a farthing to dispose of, proposing to borrow money in order to initiate a system by which he hopes to pay off £200,000,000 of Debt. The right hon. Gentleman might at least have waited until he had a shilling of his own to commence his operations with. It was urged upon Burke, when arguing the case of America, that we ought to take off the monopoly of trade and the taxation, or neither, because it was not logical to continue to monopolize their trade and not to pay taxes. He said—"I do not care whether it is logical or not. They will submit to the monopoly, and they will not submit to the tax." That is exactly the case in this instance. I do not care for the logical objections which may be urged against Terminable Annuities; the fact is as I have said, the people of England will inevitably apply the money laid up by the right hon. Gentleman for the purpose of taking off taxes while they will not disturb the Terminable Annuities. Further, the right hon. Gentleman might have been content with landing the House in the discredit of a deficit, without striking a fatal blow which, upon the authority of his own Leader, must inevitably lead to the appropriation of the sinking fund to the necessities of the Government. One small matter I may refer to before resuming my seat—namely, the stoppage of £300,000 in its course into the Exchequer, with regard to which the right hon. Gentleman says he has let matters take their course. It is owing to the right hon. Gentleman's instructions and under his own direction that this most irregular and improper step has been taken. In conclusion, this is the outcome of the whole business—that we have got our finances into a state in which we have not seen them for five or six years, and that the only consolation the Chancellor of the Exchequer has to offer is a number of refined definitions as to the incidence of taxation, the effects of moveable feasts, and other matters of

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the same nature, and then, having given us this immense boon, he takes measures, so far as human foresight can ascertain, for destroying the only means we possess for paying off the Debt of the country.
MR. HUNTfelt when the right hon. Gentleman who had just spoken (Mr. Lowe) rose, that he had a very difficult task before him, because the right hon. Gentleman the Member for Greenwich had dealt with every conceivable point of attack in the proposals of the Chancellor of the Exchequer, and his criticism had been so completely answered by his right hon. Friend's speech, that he was sure the right hon. Gentleman had nothing to do but to
"Glean the blunted shafts that had recoiled, And aim them"
again at his right hon. Friend. They were charged with having no surplus, and it was quite possible that the Supplementary Vote for Irish Education might almost absorb the surplus after the sinking fund had been provided for; but when it was objected that a Chancellor of the Exchequer ought not to start without a surplus, he would remind the House that in 1871–2 the Chancellor of the Exchequer of that day was content to start with an estimated surplus of only £7,000, from which it appeared that what was then entirely proper was now entirely vicious. True, the actual surplus realized in 1871–2 was £3,218,000, so that, notwithstanding the dismal prospect with which that year began, it closed with a very prosperous state of the Exchequer. Therefore, before right hon. Gentlemen opposite came to the conclusion that the present year would land them in a deficit they should wait until they saw its actual result. With reference to the sums receivable from India, to which allusion had been made, he understood that both in the case of the last as well as the present Government, the receivable Order was sent to the Bank of England one day later than it might have been. Whether the right hon. Gentleman opposite had given directions to that effect he did not know; but the Order was at the Treasury, and he might have made himself acquainted with the fact if he had made inquiry into the matter. In the one instance, then, according to the right hon. Gentleman, the transaction was a most legitimate one; while in the
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other there was a most flagrant dereliction of duty. The right hon. Gentleman went on to say that the late Government had left their Successors a very considerable surplus and that they had squandered it. Now, the surplus of last year had been dealt with entirely in the way of the remission of taxation; but while right hon. Gentlemen opposite were apt to boast of all that they had done in that way, they characterized the same operation on the part of their political opponents as squandering a surplus. A great deal of criticism, he might add, had been expended on the subject of the relief which was given to the ratepayers, and no doubt that which had ostensibly increased the expenditure of the country was the subvention in aid of local taxation by which very considerable relief had been afforded. In connection with the subject complaints, which had been admitted on all hands, had been made for years past that certain Imperial charges were placed solely upon a certain class of taxpayers—namely, the local ratepayers; but while the late Government found it necessary to pay attention to that grievance, it was left to the present one to deal practically with it, and he believed the relief felt by the remissions of his right hon. Friend the Chancellor of the Exchequer had been gratefully acknowledged by those who had participated in them. But the main question raised that evening was, whether the proposals of his right hon. Friend with respect to the reduction of Debt were such that they ought to receive the sanction of the Committee. The right hon. Gentleman opposite (Mr. Gladstone) contended that the plan was one which must fail, inasmuch as sinking funds had always failed with the exception of Terminable Annuities. Well, circumstances altered cases, and the failure of sinking funds, in his opinion, involved the question whether it was necessary in order to support them to impose heavy burdens on the people in the shape of taxation. It was not surprising that when war taxes were pressing on the community a Chancellor of the Exchequer should rather seek to relieve the taxpayer than to provide for the reduction of Debt. That might be his duty, while at another time when the burden of taxation was light the reduction of Debt ought to occupy more seriously his attention. And when the

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right hon. Gentleman opposite contended that the only form of sinking fund which was of any value was that of Terminable Annuities, he (Mr. Hunt) would ask whether he thought those Annuities would be safe in the event of the pressure of taxation being very great? Nothing could be gathered in answer to that from what had occurred, for it appeared to him that the pressure of taxation had been very much less during the continuance of these Annuities than on former occasions when other forms of sinking fund had been abandoned. He recollected that when he himself was Chancellor of the Exchequer, and had to make provision for the expenses of the Abyssinian War, there were not wanting hon. Members in that House to urge the desirability of breaking in on the system of Terminable Annuities for the purpose of raising the necessary funds. He was, however, enabled, with the support of the House successfully to resist the proposal; but in the event of the breaking out of a war, which should necessitate the imposition of taxes of anything like a grievous nature, he had no doubt that under any system of sinking fund we should be compelled to cease paying off Debt for the period those taxes were required. But, then, the right hon. Gentleman argued that the present was not the time to enter on such a system as that proposed by the Government, because the contribution which it would be possible to make this year in furtherance of it was so exceedingly small—only £185,000. The time was, however, he maintained, an opportune one to make a beginning in the proposed direction, because there was so much less temptation to decide on any other mode of spending the money. The pressure of taxation being by no means grievous, and taxation having of late years been remitted to such an extent in the case of those classes on whom it bore most heavily, it was easier under the circumstances to make a virtuous resolve than it would be in 1885, when the Terminable Annuities would fall in, and when there would probably be a general scramble for the remission of taxes. But the right hon. Gentleman went on to say that the Chancellor of the Exchequer sneered at the system of Terminable Annuities. That, however, was not the impression which he (Mr. Hunt) gathered from the speech of his
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right hon. Friend. Indeed, he rather thought his right hon. Friend had pointed out that there was a scheme of Terminable Annuities which it might be advisable, under certain circumstances, to adopt; and in his Savings Banks Bill he had taken power to cancel Stock, and to substitute for it something similar to Terminable Annuities. Terminable Annuities had, no doubt, been successful as far as they had gone, but it would, in his opinion, be unwise to tie ourselves merely to that mode of operation. He thought that the matters complained of had been so entirely answered that it was really unnecessary for him to trouble the Committee further, and he hoped that the Committee would assent to the proposals of the Chancellor of the Exchequer.
MR. LAINGthought the speeches to which the Committee had listened that evening, able and eloquent as they were, partook rather of the tu quoque line of argument, while he was desirous of addressing himself to the question as it bore on sound principles of finance. Considering himself as a financier first, and a politician next, he proposed to enter upon what appeared to him to be a legitimate criticism of the Budget in three aspects, the first of which would be the Budget of the year. That Budget was divided into two parts; one the Financial Statement, the other the scheme for the reduction of the National Debt. His only weighty objection to the first part of the Budget was summed up in the admission of the Chancellor of the Exchequer, that there was substantially no surplus, and probably none whatever. The circumstances must be exceptional in which it was not the first duty of the Chancellor of the Exchequer to provide against possible contingencies. It was a question, not of money, but of credit and security. The commercial classes felt uneasiness at the prospect of a deficit, and a substantial surplus ought to be regarded as a point of honour. The only argument against it was that it encouraged pressure from the Departments, but Government ought to be strong enough to consider demands on their merits. The reason why we found ourselves in our present position, after two years of peace and prosperity, was that remissions were carried so far last year, although he would, in passing, admit that the large reductions previously

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made by the former Government in the amount of the Sugar Duties had made their total abolition a case of inevitable necessity; yet the reduction of the income tax, notwithstanding the difficulty created for the present Government by the late Prime Minister's promised abolition of it, was much less justifiable; and had it been maintained at 3d. instead of 2d., we might now have looked forward to a surplus without reckoning upon the odd day in Leap Tear. But for these large reductions of taxation the country would be in a safer position with regard to meeting any emergencies which might arise, and, at the same time, in a position to do more towards reducing the National Debt. The facts showed how injurious it was to import political considerations into our finance. The objections to the proposals for dealing with the Debt were the time and mode of doing it. The difference between a sinking fund and Terminable Annuities was this—a sinking fund was entirely optional, and there was no third party to the contract; but in the case of Terminable Annuities, there was a third party, whose claims could not be got rid of by a stroke of the pen. The old orthodox system of making an impression on the National Debt was to estimate the expenditure well on the safe side, and to apply the surplus to reducing the Debt. If we had resolution to levy £5,000,000 a-year, for that purpose that would be the most straightforward and economical course. Terminable Annuities were only a device for catching the surplus Revenue. The only objection to the sinking fund was we were under no obligation to maintain it. The great danger was, that it looked seductive on paper, and when the amount became large, it was idle to think of pledging any successor as to what he could do with such prodigious sums as would have to be levied by taxation beyond what was actually required for the services of the year. Was it not more desirable that the Chancellor of the Exchequer, 10 years hence, should be as free as the right hon. Gentleman who now held the office to deal with the circumstances that might arise according to what was best for the time? Many of the small assessed taxes were troublesome in comparison with the revenue they produced; and he would not assert that the whole of our system of taxation was so perfect that no question could arise
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hereafter as to whether it would not be better to reduce taxation rather than pay off Debt. He would say nothing about the Railway Passenger duty; but why should a tradesman's cart be liable to taxation, and did not some of the licence duties require revision? As regarded tea, he supposed that all the arguments which were brought forward for getting rid of or greatly reducing the Sugar Duties would tell equally for the reduction of the duty on tea. Indeed, he thought that no greater boon could be given to one-half of the population—the female half—than the reduction, or, if it could be afforded, the total repeal of the tea duties. There were many causes of increased expenditure looming in the distance, and that was an element in the question. The debates on Army Recruiting showed that the labour market had risen against the Government, and if the security of the country required that the raw material of the Army should be improved, it might be necessary to increase the pay of the soldiers. The debate on horses, too, proved that the cost of mounting our Cavalry and Artillery was increasing. Then, again, it might be possible that in four or five years our military authorities would follow the example of Germany, and substitute breech-loaders for muzzle-loaders, at a cost of, say, £4,000,000. The charge for Education was constantly growing. The Votes for National buildings had been properly postponed for the present year; but if we were to have new Law Courts, a new National Gallery, and a Musuem of Natural History, it might, he thought, be true national economy to get them finished without too much delay, so that we might enter upon the use and enjoyment of them at once. All these questions should be left to be considered unfettered by what had been determined upon five or six years before in regard to a sinking fund, and it would be neither wise nor prudent to commit a future Parliament upon the question whether the surplus revenue should go in one direction rather than another. He trusted the House would stand upon the old paths of Conservative finance which had been acted upon for so many years by politicians on both sides—namely, to maintain the old sources of Revenue, to go on with the plan of Terminable Annuities, and if we should chance to have a large surplus

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two, three, or four years hence to defer the consideration of what should be done with it until that time arrived.
MR. J. G. HUBBARDsaid, he merely rose to call the attention of the right hon. Gentleman opposite (Mr. Lowe) to the fallacy underlying his argument as to the relative importance of a deficit and a surplus. It was obvious that a Chancellor of the Exchequer would take a sanguine view of the advantages to be derived from a considerable surplus, and he was certain, under ordinary circumstances, to keep his Estimates of Revenue at a moderate amount. The modern position of a Chancellor of the Exchequer under the system of Terminable Annuities was one in which the reduction of Debt ceased to be a source of solicitude to him, as he would only have to provide for the payment of these Annuities, and upon their expiration there would be wiped off the Debt an amount equal to the capital sum they represented. Consequently, he would have no other duty than to give the House a fair view of his revenue and expenditure. The latter was the view taken by his right hon. Friend, and he thought he had shown that it had been not only with perfect frankness, but with thorough honesty of purpose, he had made his Estimates as closely as he possibly could. On the other hand, he entirely understood the view which attached extreme importance to a considerable surplus. The right hon. Gentleman the Member for the University of London seemed to consider a large surplus a special evidence of a Chancellor of the Exchequer's fitness for his position. But if that were so, nothing in the world would be easier than to become a most accomplished Chancellor of the Exchequer. The holder of the office would only have to take counsel with those excellent gentlemen the heads of the Revenue Departments, and say to one—What may be your estimate? and if the answer was £21,000,000, he need only say, Write down £20,000,000; to another, write down £5,000,000 instead of £5,500,000, and so on. No Chancellor of the Exchequer could have it absolutely in his power to foresee the prospective Revenue; everything must depend upon the circumstances under which the Budget was made, and the objects which were aimed at. A Chancellor of the Exchequer might go a little
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above or a little below the mark, and he ventured to think that his right hon. Friend had made an exceedingly good shot. He ventured, therefore, to think that there was no room for the severe censures which had been indulged in on the apparent discrepancies in the financial arrangements of the Government. When those financial arrangements had been made, and the reduction of Debt provided for to such an extent as the House might determine, it was the duty of the Chancellor of the Exchequer to lay before the House as close and accurate Estimates of income and expenditure, and in that respect he was confident the House had now no cause to be dissatisfied.
SIR JOHN LUBBOCKsaid, that his right hon. Friend who had just spoken (Mr. J. G. Hubbard) seemed to overlook the fact that it would not be sufficient on the part of the Chancellor of the Exchequer to under-estimate his revenue in order to ensure a surplus. He would also have to keep down his expenditure; and, therefore, the matter would not be so easy as his right hon. Friend supposed. He thought the House, in conjunction with himself, had listened with great interest to the very able statement of the Chancellor of the Exchequer, but he feared they came back to this fact—that they had only a nominal surplus at a period of great prosperity—namely, about £102,000—which would be all swept away by the Supplementary Estimates. While he heartily congratulated the Chancellor of the Exchequer on the results of last year, which were owing to an excellent harvest, he was glad that the Estimates of this year were founded on a different basis. The right hon. Gentleman said he was glad the money was in the pockets of the people and not in his cash-boxes. He had listened to that part of his speech with some regret, and it was quite inconsistent with the latter part of his speech, in which he forcibly pointed out the importance of reducing our Debt. The right hon. Gentleman thought that £28,000,000 should be devoted to the principal and interest of the Debt; but he was obliged to carry out this policy by three yearly increments. Why could he not at once carry out his policy? He was prevented from doing so by his Budget of last year. It seemed, therefore, inconsistent that the right hon.

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Gentleman should congratulate himself on that Budget. The right hon. Gentleman the Member for Greenwich and the right hon. Gentleman the Member for the University of London had referred to past precedents which appeared to satisfy them that the Debt was not likely to be reduced by a fixed annual sum. But the circumstances of the present period were different from those of the previous periods, and he was, therefore, on this point, more disposed to take the view of the Chancellor of the Exchequer. The pressure of taxation was now much less than formerly, and the public opinion of the country had been educated on the subject. There was, however, this objection to both plans—that they did not bring prominently before the minds of the public the great advantage of reducing Debt. He believed that if not only the interest of the Debt was paid, but also an appreciable portion of the principal each year, the public would see by the annual burdens becoming less and less each year, the real advantage and importance of extinguishing the Debt.
SIR JOHN KENNAWAYsaid, the Chancellor of the Exchequer had deliberately come forward and proposed a definite plan by which they might make some practical inroad upon the National Debt, and he thought the right hon. Gentleman must have been greatly encouraged by the support he had received from all parts of the House. During the last 47 years, notwithstanding the public income had increased 65 per cent, at the same time that the amount of taxation had been diminished, we had only paid off £ 160,000,000 of our Debt, while we had added to it £73,000,000. The plan brought forward by the Chancellor of the Exchequer would avoid an annual Vote and annual discussion of the sum to be set aside; it was a most practical one, and one which the country always received favourably in times of peace. The right hon. Gentleman the Member for Greenwich found fault with it; but why had he not proposed a better plan when he controlled the finances of the country at periods of unexampled prosperity? When the right hon. Gentleman the Member for Greenwich promised the nation the magnificent surplus of £6,000,000 on the eve of the last General Election, he made no allusion to the repayment of any portion of the National Debt. Parliament had been
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legislating with the view of educating the people and of teaching them to be provident and self-denying; but if they wished their recommendations to have any effect, they must begin by setting the people a good example by providing for the repayment of the National Debt while the country was prosperous and we had the power of doing so. He was not sorry the income tax had been retained, as it was a most reliable source of Revenue, and it did not press hardly on any one at the present time. The country saw that there must be a certain amount of direct taxation, and they preferred the income tax to an enormous increase in the legacy and succession duties, which it was generally understood was the way in which the right hon. Gentleman the Member for Greenwich intended to recoup the Exchequer for the loss of the income tax. He entirely approved the proposals of the Government with reference to the relief of local taxation; while by their scheme in connection with the local loans, much benefit would be conferred upon the country. The financial measures of the Government would be of great practical benefit, and he trusted that the House would confirm the favourable verdict given by the country on the Budget.
GENERAL SIR GEORGE BALFOURsaid, he felt bound to protest against the unjust and unfair attack which had been made upon the Chancellor of the Exchequer in reference to the Exchequer balances left out of income after meeting all charges. It was in every way advantageous to the country to have a Chancellor of the Exchequer working on close estimates, whether of income or expenditure. There was no measure more conducive to exactness and regularity than that of enforcing accurate Estimates. The mere fact of showing that there was no surplus income available for the wants of Departments, effectually prevented the sending in of Supplementary Estimates for additional expenditure. No doubt this bad practice was not only stated by the Chancellor of the Exchequer of the late Liberal Government to be unavoidable; but no one acquainted with departmental arrangements could have heard this avowal with any other feeling than that of regret, and might well lead to the report that, on hearing it, the late Prime Minister left the House. No doubt, the present Chancellor of the

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Exchequer had appropriated the income derived from the whole nation in aid of local taxes for local purposes, and in a way which he could not approve of; but he must admit that, in affording some relief to local taxation, the right hon. Gentleman had only acted in conformity with the desire of the Conservative Party. Had the right hon. Gentleman, however, instead of affording that direct relief out of the Consolidated Fund, merely handed over to the local authorities certain taxes, such as the tax on male servants, on carriages, on armorial bearings, also the gun and dog tax and even the publicans' and other local licences, he would not have laid himself open to the reproach of having increased the expenditure of the country, and would have been spared the reproach of adding to the dangerous practice, previously in force, of powerful parties putting their hands into the Treasury chest of the nation to use public funds for local purposes. The principle which the right hon. Gentleman had adopted of only retaining a small surplus was a very wise and prudent measure, because it would prevent premature attacks being made on the Revenue of the future, and would make all the Departments of Government very cautious in their expenditure. He saw no great objection to the plan of the right hon. Gentleman for the reduction of the National Debt, and he thought that the right hon. Gentleman was not open to the censure and blame which had been cast upon him by right hon. Gentlemen who had attacked his proposals. No doubt the old practice of 150 years of meeting debts by Terminable Annuities was a wise mode of concealing payments for debt; but if the nation would bear a direct charge, as proposed, then it might be tried until the people called for a return to the annuity system.
MR. W. S. STANHOPEsaid, he also wished to express his warm approval of the financial scheme of the right hon. Gentleman, which would preclude any scramble for the large sum that would fall in during 1885. In 1853 the right hon. Gentleman the Member for Greenwich had commenced to speculate upon the falling in of the Long Annuities in 1860; but when the latter year arrived, instead of the income tax being repealed, it had reached the high figure of 10 d. in the pound. He took credit to the Conservative Party for hav-
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ing originated the system which for a considerable time had been gradually reducing the Debt; but, at the same time, he acknowledged that that system had been supplemented and honestly carried out by the late Government. It seemed to him, however, that a yearly appropriation of a fixed sum of money out of which to reduce the Debt was the simplest and most straightforward way of proceeding. This policy might be of vital importance in future generations. We owed much of our commercial superiority among nations to the abundance of our coal supplies, and when coal became scarce—as there was reason to fear it some day might—it would be well if the country had not to bear the burden of a heavy National Debt. With regard to taxation, he would suggest to his right hon. Friend the Chancellor of the Exchequer whether the dog tax might not, with great advantage to the public safety, be increased, so that by limiting the number of those animals, it might have its due effect in repressing the fearful malady of hydrophobia.
SIR JOSEPH M'KENNAsaid, it was his intention, in the few remarks he had to offer to the Committee, to address himself to the scheme contained in the Resolutions of the Chancellor of the Exchequer. As regarded the general character of that scheme, he thought the Committee had little else to do than to accept or to reject it in toto. There were in it, no doubt, things to affirm or applaud, and others that might not be so satisfactory to some hon. Members; but, as he had said, the scheme was one which should be accepted or rejected in toto. What he wished mostly to urge, however, was this—That if this scheme of the Chancellor of the Exchequer was intended to bind future Parliaments and future Chancellors of the Exchequer to the allocation of any particular surplus for future years, it was amenable to many objections, some of which had been very ably stated by the right hon. Member for Greenwich; but if it went no further than to propose a plan which might be acceptable to the present views of Parliament, and which might be approximated to or departed from, as they thought fit, hereafter, it appeared to him to be about as good as any scheme which had been launched in previous years. With regard to the efforts made for the reduction of the National Debt, he would

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only observe that if the whole of the reductions by Terminable Annuities were to be capitalized that they would not amount to more than the additional taxation raised in Ireland since 1841. He said that as an Irish Member, and he would strongly object to having any stereotyped scheme recognized by Parliament, that should bind them in their future contributions to the Imperial Exchequer. On the other hand, he admitted it was desirable that Parliament should place the country on short allowance with respect to the use of its surplus revenue in prosperous years. To that extent, perhaps, Terminable Annuities were preferable to other modes of reducing the Debt. He did not know that there was so much difference between the two schemes, the more so as, in principle, they were what every prudent householder practised—namely, the laying by of a small sum periodically that a larger one might return afterwards. With regard to the amalgamation of the old Savings Banks with the Post Office Savings Banks, he looked on that as a highly critical and dangerous operation. Some of the old Savings Banks were among the best managed institutions in this country or in Ireland. It had been a principle with Conservative Governments to treat existing institutions as tenderly as possible; and he believed that a great feeling of insecurity would arise in many places where the old Savings Banks had a great hold, if the proposal of the Chancellor of the Exchequer were adopted with any view to merge them in the Post Office system, but he did not understand the right hon. Baronet to propose taking that step.
MR. BIRLEYsaid, he approved of the scheme of the Chancellor of the Exchequer, because it appeared to him to be plain and simple in its character, moderate in its compass, and that it would come into operation at an early period. The right hon. Gentleman, he thought, had satisfactorily disposed of the question of Terminable Annuities in one of the best financial expositions which he had ever heard. That able speech by which, as he might say, the right hon. Gentleman had enraptured the House, had to his mind completely disposed of the charges which had been brought against his financial administration by the right hon. Gentleman opposite. The charge, especially that ex-
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travagance was the normal fault of Conservative Ministers, came with a very bad grace from the right hon. Gentleman the Member for Greenwich, seeing that he had in his hand a paper while he was making that charge which showed that the last year of his own administration of the finances of the country was one in which the expenditure had been the largest known for several years. It was possible, of course, as had been contended, that the scheme of the Government for the reduction of Debt might before the lapse of 30 years have to undergo considerable modifications; but even were it to continue in operation for only nine or ten years, it would do much good by enabling us to borrow money on much more favourable terms than would otherwise be the case, besides committing us to a course of continued economy. Among many topics which had been adverted to in the debate was the probable duration of our coal fields There had been several estimates of that duration, none of which had been very satisfactory; but he wished to observe that he had once read in an old book that England was doomed to commercial extinction with the extinction of her forests, when she would no longer be able to build ships to compete with foreign countries on the ocean. That apprehension had been so completely falsified, that it might very well be that the apprehension founded on the limited duration of the coal supply might be just as ill-founded. As to the amalgamation of the Savings and Post Office banks, he understood it was the intention of the Chancellor of the Exchequer not to take entire possession of the money in those banks, but simply to consolidate the accounts, and the security would remain as good as ever.
MR. PEASEadmitted that the Estimates of the Chancellor of the Exchequer for the last year were practically correct; but when he now, without any surplus, talked of Supplemental Estimates, and looked to something to "turn up" in order to meet them, he was reminded of the language of Mr. Micawber, a policy which he thought was one that would not be highly approved by the country. If, too, the right hon. Gentleman wished to reduce the National Debt, he ought, he contended, instead of tying the hands of future Chancellors of the Exchequer by the

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scheme which he proposed, to have set down the amount required in his Estimates. That was the proper way to deal with the matter, for then the House would have the real state of the case from time to time before it, and would be in a position to decide whether, under the circumstances, it would back up the Finance Minister in his proposals or not. That, in his opinion, would be a more business-like mode of dealing with the question than the plan suggested by the Government.
MR. SCOURFIELDsaid, however desirable it might be to reduce the Debt, the backbone of the whole business would be the imposition of new taxes to meet the exigency. He quoted a letter he had received deprecating the annual scramble of interests for any surplus, and advocating the bold appropriation of surplus to reduction of Debt as a policy which would be approved by all intelligent classes. At present our danger lay in giving up taxes and in deceiving ourselves by fine words. The right hon. Gentleman the Member for Greenwich would not deceive others, nor be deceived by them; but did he not sometimes impose upon himself? We were led away by metaphors. Under the cry of "The last rag of Protection" we gave up a registration duty on corn, which was not felt, and the duty on timber; other taxes were yielded up as being "taxes on knowledge," or to meet demands for a "free breakfast table," and the income tax had been very nearly shipwrecked by talk about "lightening the springs of industry." He would suggest a new tax to be imposed on phrases and metaphors; it would produce a considerable income, and a large part of it would be paid by Members of the House. The proposal of the Government as to the Debt was objected to as binding future Parliaments. There was no danger of doing that; we could not do it. The duty of all who desired the welfare of the country was not to lose sight of the importance of reducing the Debt; and, although each reduction might be small, the effect on the credit of the country would be great, particularly at a time of emergency. So long as the credit of the country was good there would be no difficulty in raising money at a low rate of interest.
MR. W. SHAWsaid, he had heard nothing to change his first impression
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that the Budget was a business-like Financial Statement, and, although exception might be taken to the scheme for reducing the Debt, he defied any Chancellor of the Exchequer to produce a scheme that would not be open to objection. He would suggest for consideration an income tax on a graduated scale, believing that persons with £1,000 a-year or more would not object to an extra penny in the pound if the proceeds were to be applied to the reduction of that Debt, in the creation of which the working classes had no voice. He would further suggest that the local loan system should be expanded and also extended to Ireland. An Imperial guarantee assisted a metropolitan loan materially. Why Should not local loans be partially guaranteed by the Government?—say, to the extent of £60,000,000 of the total of £80,000,000. Then, instead of local authorities borrowing at 5 per cent, the Government would be able to borrow the money at 3¼ per cent and to lend at 4 or 5 per cent for local improvements offering a substantial security, and thus, while promoting the reclamation of waste lands and sanitary reforms, secure at the same time a profit to the Exchequer. In that way alone very considerable local relief would be afforded; and if the loan system, so improved, were extended to Ireland, that country might obtain some of the spoil, of which at present its share would be very small indeed. The cost of the Army might be materially reduced, with benefit to the soldiers, by finding them useful employment. He had observed the temptations to which the men were exposed by idleness, when within a short distance of the barracks there was reclaimable land which would have paid for any labour they might have bestowed upon it.
MR. BUTLER-JOHNSTONEwished the Chancellor of the Exchequer had operated on the National Debt last year when he had a substantial surplus in hand. He begged to thank the right hon. Gentleman for his statesmanlike speech on the National Debt, and he also congratulated him upon having no surplus. He could not help thinking that there was some danger in the modern plan, not simply of reducing taxes, but year after year of abolishing them altogether. It seemed to him therefore that a check upon prosperity

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such as we had had in the last few years would be most salutary. Chancellors of the Exchequer, drunk with success, had year by year remitted taxation until we had almost come to this—that all taxes would be abolished owing to the coffers of the Chancellor of the Exchequer being so full. There was, however, this remarkable feature in the finances of late years—that not only had taxes been lessened, but entirely remitted, the effect being to make the sources of our supplies become annually smaller and smaller. Not a single new tax had been imposed of late years, and nothing less than the unbounded prosperity we had recently enjoyed would suffice to maintain our present expenditure. A large proportion of our Revenue was raised from beer and spirits, and it was taken for granted that the people's taste for those liquors would continue. But revolutions in taste were not very rare, and it was possible that while the taste for beer might remain, the consumption of ardent spirits might undergo a great change and diminution. At all events, there was some danger in allowing so large a portion of our Revenue to rest upon a basis of national vice—upon what might be called a tax upon vice and drunkenness. Under these circumstances, it would be prudent to lessen the national liabilities as much as possible. No parallel could be found either in ancient or modern times to the prosperity which this country had enjoyed during the last few years; but what ground was there for supposing that it would always last? Our prosperity and wealth depended, for example, in the first degree upon our getting a cheaper supply of coal than other nations, and without this the whole fabric of our prosperity might crumble away. The relations between masters and workmen in this country were in anything but a satisfactory position, yet the whole of our material prosperity depended upon the continued exercise of temper and tact between two great rival organizations. He rejoiced that the National Debt was to be systematically reduced, as he believed that its reduction would promote the prosperity of the people, and he thanked the Chancellor of the Exchequer for the resolution he had arrived at in reference to the income tax, one of the least injurious and unjust of our imposts, and which had done
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such great things for the country in the past, and would materially assist in lightening our load of debt in the future.
MR. DODSONsaid, that reference had been made by the hon. Member for Bandon (Mr. W. Shaw) to the subject of local loans for the accommodation and benefit of Ireland. He (Mr. Dodson) had no objection to the granting of such loans with proper security, but would remind the House that anyone who had looked into the Report of the Committee on Public Accounts would see that the country had many bad debts arising from local loans. He, however, would not say in what part of the United Kingdom the greater part of these bad debts were to be found. The hon. Gentleman who had just spoken (Mr. Butler-Johnstone) was happy that there was no surplus. He ought to be extremely happy, because, according to the figures of the Chancellor of the Exchequer, it was likely that, instead of a surplus, there would be a deficit. The hon. Gentleman had spoken of revenue derived from vice and drunkenness, and he (Mr. Dodson) himself hoped to see the day when the revenue from spirits would be diminished by increased habits of sobriety on the part of the people; but when the hon. Gentleman spoke of a tax upon vice, he feared he was about to bring the House back to the days of Dean Swift, when it was suggested that there should be a tax upon people's vices and virtues, and that people were to estimate their own virtues and their neighbour's vices. With reference to the past Budget of the Chancellor of the Exchequer, there was one part of the criticism to which it had been subjected in which he never had joined—namely, that his estimate of Revenue would not be realized. Nor did he now join in the cry of those who found fault with the right hon. Gentleman because his estimate of the different branches of the Revenue did not come out in the manner he anticipated. The right hon. Gentleman, or any other person filling the same position, had to estimate as well as he could the amount to be obtained from the different sources of Revenue; but it was an absolute certainty that when he had made the best Estimates he could, some of those sources would produce less, and others more than the expected amount. If the results in the main came out right, there was no use in complain-

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ing. More especially was that the case with regard to the Customs and Excise. The Excise had disappointed the right hon. Gentleman's anticipations, but the Customs had exceeded them; and he could not be found great fault with for that, because, after all, the Excise and Customs were cognate branches of the Revenue. But there was another branch which stood separately and on a different basis—namely, the Stamp Duties, which depended upon the prosperity of the country, and not upon the consuming power of the masses. It was in this branch that the greatest failure had arisen. The right hon. Gentleman reckoned upon an income from Stamps of £330,000 above that of the preceding year, and actually realized £10,000 less; and he (Mr. Dodson) should be glad to know to what cause that unexpected shortcoming was attributed? The right hon. Gentleman anticipated that the coming year would be a good financial year because it would have fewer holidays than the past year; but were fewer holidays favourable to the consumption of articles from which a large revenue was derived? The right hon. Gentleman seeemed to look forward with a light heart to the Supplementary Estimates to be presented; but he (Mr. Dodson) thought their effect would be to sweep away the surplus of £102,000 to which the Chancellor of the Exchequer had reduced himself. Last year, the Supplementary Estimates amounted to £1,654,000, and the excess of expenditure over the normal estimate of the Budget was £1,426,000. Out of that amount £512,000 was given in aid of local rates, instead of £1,010,000 as promised, and yet on the year there proved to be an expenditure of £914,000 in excess of the Estimate. If the right hon. Gentleman had only the ordinary Supplementary Estimates of £300,000 or £400,000 to provide for this year, the balance would be on the wrong side. To what was he trusting to meet the Votes for Irish Education and the Supplementary Estimates? Was he trusting to the increment of Re-venue above that of last year? He had discounted that in the total Estimates of Revenue he had given, for he had taken increments amounting in the aggregate to £986,000. No doubt this was much less than the increment of Revenue he reckoned upon last year which, after
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deducting the Sugar Duties and taking 1d. off the income tax, amounted to £1,533,000. The right hon. Gentleman had, however, deliberately stated his estimated increments from the different branches of his Revenue for the coming year; could it be that to meet the Supplementary Estimates and other expenses he was secretly trusting to increment upon increment? If he was doing that, he (Mr. Dodson) did not think it was a prudent or a fair course to pursue towards Parliament. The Chancellor of the Exchequer being, however, according to the figures he had laid before the House, in an impecunious state, in the face of his difficulties, proposed a gigantic scheme for the reduction of the National Debt. This, if carried out, might produce the greatest amount of reduction of Debt ever yet attempted; but before he did that, he ought to be in a position to give the House some earnest of his sincerity by flinging into the gulf some surplus of his own, and not merely cut off the prospective surpluses of his successors. He (Mr. Dodson) did not, however, think the right hon. Gentleman would be successful in inducing future Chancellors of the Exchequer, and especially the Chancellor of the Exchequer of 1885, to follow his lead, any more than the fox who lost his brush in the trap induced his comrades to part with theirs. The right hon. Gentleman sneered at the system of Terminable Annuities, but he had last year created a batch of them, and now proposed a scheme which was equally expensive and far less permanent. Terminable Annuities, like a fixed apportionment of capital for payment of debt, involved a present burden for the value of future relief. Terminable Annuities were looked upon, however, as a contract with someone or other, and experience showed that they were respected. A fixed apportionment never had long proved tenable, and in this case the result would be that some future Chancellor of the Exchequer, if not the right hon. Gentleman himself, would ask the House to set his plans aside. The Government, in fact, was only adding one more good intention to those with which the floor of this House and of another place was popularly said to be paved. Last year, the right hon. Gentleman had a magnificent surplus; but instead of throwing that into the gulf for the pur-

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pose of reducing the National Debt, he applied it to making things pleasant all round. Now he proposed to be virtuous at the expense of his successors. "The system of paying off Debt by fixed appropriations was false in principle, injurious in practice, and one to which the wisest men were adverse." Those, however, were not his (Mr. Dodson's) words but the words of the right hon. Gentleman the Member for Buckinghamshire in 1858.
MR. SAMUDAsaid, he approached the subject as an ordinary man of business, and as such thought that, notwithstanding the intricate and elaborate web which had been woven round it by his right hon. Friend the Member for Greenwich, the subject of the reduction of the Debt was really a very simple one. To set aside a fixed sum to discharge Debt which had been incurred was the course which naturally commended itself to any prudent man who had the misfortune to get into debt or difficulty. This was what the Chancellor of the Exchequer now recommended, and he could not see that there was any substantial difference between that plan and the system which had been adopted by the late Government. He (Mr. Samuda) had turned the matter over in his own mind no end of ways, and had even brought a proposal on the subject before the House, in which he had suggested that the Debt should be cleared off by means of annuities for 99 or 100 years. Such a scheme had some recommendations, and for an immediate expenditure of £500,000, in 100 years the country would be able to extinguish £100,000,000 of debt. But all these proposals came to the same thing in the end—and he was disposed to be contented with the scheme of the Chancellor of the Exchequer, which was to his mind a very proper and wise one. In regard to the Income Tax, he suggested that, on account of the difficulties connected with it, and the evil effect it had in inducing deceit, it might be well to rely upon a Property Tax in its stead. He believed the fear that this would give an undue advantage to persons engaged in trade was quite unfounded.
MR. CHILDERSsaid, the debate had ranged over three principal subjects—namely, the state of the account for last year, the Budget Estimates of Income and Expenditure for the present year, and the scheme proposed by the Chan-
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cellor of the Exchequer for permanently reducing the Debt. As to the first, it was a point of importance to notice, that whereas for many years past there had been a surplus of Revenue over Expenditure applied to the reduction of the National Debt, during the last year there had been no such surplus whatever so applied. A Return for which he had moved showed that although during the last five years no less than £3,200,000 a-year had been applied to the reduction of the Debt, or nearly £16,000,000 altogether, irrespective of the reduction through Terminable Annuities, during 1874–5 the sum applicable to the reduction of the Debt was nothing whatever. It was said that something would have been so applied, but that the Chancellor of the Exchequer at the end of the year had authorized a certain sum that would naturally have come into last year's account to come into the account for the present year; and thus nothing was left available for the reduction of the Debt last year. But the explanation given that night by the right hon. Gentleman as to the grounds on which he authorized that transfer to be made was inconsistent with his statements to the House last year. In his Budget Speech last year, the right hon. Gentleman said he anticipated a very large payment on account of the reduction of local taxation; before the end of the Session he discovered that a considerable part of that sum would not come in course of payment during the financial year; and in connection with that discovery he placed an amended Budget before the House, including considerable Supplementary Estimates for ordinary services, and less aid to local taxation. But on that occasion he gave no hint that he proposed, in consequence of this diminished aid to local taxation, to hold back any part of the Miscellaneous Revenue. Anyhow, not one farthing last year went directly to the reduction of Debt—a striking satire on the Chancellor of the Exchequer's profession. With regard to the payments in respect of fortifications, he had referred to the debates of 1864, 1865, and 1866, and he found that in the Financial Statements of each of those years, his right hon. Friend the Member for Greenwich expressly named the amounts, and stated the surplus both ways, both including and excluding these payments.

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The non-statement of those sums last year concealed—he did not use the word offensively—from the House the fact that, so far as the surplus applicable to the reduction of Debt was concerned, instead of a surplus there was a deficit, and that the first deficit for six years. The consideration of that fact afforded the strongest reason why the estimated surplus for this year should be carefully scrutinized. Now, the nominal surplus was £417,000. Against that there came the following charges:—There was £60,000 on the Brewers' Licences; then £70,000 on account of the interest on the Debt contracted for local purposes; then £120,000 on account of the deficient interest in regard to the old Savings Banks; and £118,000 on account of the Irish Education Vote, which was not a Supplementary Estimate but an omitted Estimate, and a further sum would have to be added to that £118,000. Those items swallowed up the whole of the surplus before they came at all to the sum which the Chancellor of the Exchequer proposed to apply to the reduction of the Debt. It had been suggested that the deficient interest on the Savings Bank account might fall on 1876–7, but he maintained that it could not, under the Bill brought in by the Chancellor of the Exchequer, be fairly excluded from the account for the present year, 1875–6. If that were so, it was perfectly plain that the balance, according to the estimate of his right hon. Friend, at the end of the financial year would not amount to more than £50,000. Was it possible, he would ask, that in a year of profound peace the House could accept, as satisfactory, Estimates which started with either a deficit or a surplus of £50,000? But the Chancellor of the Exchequer suggested that there might be some further increase of the Revenue to the extent of £500,000, out of which he would be enabled to meet the Supplementary Estimates for which he would have to make provision. Now, he for one, protested against the doctrine, which had been this Session, he believed, broached in the House for the first time, that a Chancellor of the Exchequer might, after the lapse of a few weeks from the day when he had stated what the Estimates of Revenue and Expenditure were, come down and say that he expected to get £500,000
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more money. It was perfectly impossible to have a true system of finance if a Chancellor of the Exchequer might in the course of a few days vary his Estimates in that way. But, in a Return for which he (Mr. Childers) had moved as to the probable amount of the reduction in the amount of the National Debt for the next few years, he found that the right hon. Gentleman had taken credit for the very £500,000 which he was now proposing to appropriate as an unappropriated surplus. In the account which had been laid on the Table on the 20th of April were two columns—the one showing the amount of stock which it was proposed to purchase out of the fixed charge of £28,000,000, while in the other the surplus of Revenue over Expenditure, including this charge, was given at £500,000. If such loose Estimates were accepted by the House, he could only say that it would be doing that which it had never done in past times. Having made those remarks with reference to the accounts for the present year, he wished to say a few words with respect to the main proposal of the Government for the reduction of the National Debt. The right hon. Gentleman proposed to reduce within a period of 30 years the Public Debt by over £200,000,000. Well, that was the statement which had so impressed the public mind, who believed that a third of the Debt would be redeemed in the course of a short time, that in a few days after the announcement was made there was an extraordinary rise in the Funds. Now, he had moved for a Return which contained the figures showing how the scheme was to be carried into effect. The proposal of the Chancellor of the Exchequer was that, by the process practically of compound interest there would be applied stated sums rising from £275,000 to £960,000 during the next 10 years annually to the reduction of the National Debt—sums amounting altogether to £6,795,000, or something over £600,000 a-year. The right hon. Gentleman at the same time anticipated that the normal surplus of income over expenditure would yield £500,000 a-year, or £5,000,000 for the 10 years. Putting those two sums together, he expected to reduce the Debt during the next 10 years by the sum of £11,000,000, or rather more than £1,000,000 a-year. That was the first

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part of the right hon. Gentleman's scheme. Let the Committee bear in mind, then, that all that was proposed was, that by the ordinary operation of the sinking fund of 1829 and the new sinking fund, there should be applied about £1,100,000 a-year during the next 10 years with the same object; the fact being that the sum which had actually been thus applied to the reduction of Debt during the five preceding years was no less than nearly £16,000,000, or more than £3,000,000 a-year, so that the grand scheme of the right hon. Gentleman, even upon his own showing, was to apply £1,100,000 to the reduction of the Debt by two methods, through the employment of one of which only by the late Government, no less than £3,000,000 a-year had been so applied during the previous five years. In 1885 and 1886 Terminable Annuities would fall in to the amount of between £5,000,000 and £6,000,000 and the Chancellor of the Exchequer proposed that the whole sum should be applied to the reduction of the Debt, and that we should this year pass an Act under which, in about 20 years afterwards, or in 1904, there should be appropriated to the reduction of Debt, from the ordinary excess of income over expenditure, a sum of £14,300,000. Therefore, the scheme came to this—that for 10 years the appropriation towards the Debt was to be one-third of what it had been in the past, and then it was suddenly to be enormously increased. Was it possible the Legislature would venture to lay down that in 1904, £14,000,000 of the National Debt should be paid off by taxes? No Parliament was ever asked before to bind itself and its successors to take £14,000,000 out of the taxes to reduce the Debt. This part of the scheme was impossible. The Chancellor of the Exchequer seemed to think that, in comparing the reduction in the next 10 years with that of the past five, he had included in the latter the operation of the Terminable Annuities. Not at all. During the last five years the Debt had been reduced by Terminable Annuities to the amount of £16,000,000; and, by the two processes together, by the sum of £6,420,000 a-year—a very respectable amount indeed, and as much as the country could be fairly expected to contribute. Therefore, he repeated, what the Government
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were proposing to do, under cover of a magnificent scheme, was to apply at first a much smaller sum than had been applied during the last five years, and to apply enormously increased sums afterwards. Was it reasonable to start such a scheme, at a time when we had no surplus? Why should this plan be preferred, when it was known to be vicious in itself, to have broken down in the past, and to be more likely to promote extravagance than economy? The demerit of the scheme was, that it purported to apply sums of money to the reduction of the Debt before it could be known whether they were applicable; it involved operations in the dark. The only way in which we could satisfactorily attack the Debt was by keeping expenditure well within income, and applying the difference, when it was ascertained, to either temporary or permanent reduction. There were two plans of operating upon the National Debt—one by the Sinking Fund under the Act of 1829, and the other by the process of Terminable Annuities. It appeared, from a Return for which he had moved, that the amount of permanent stock in the hands of the Government was £98,000,000, and that sum might be operated upon so as to produce Terminable Annuities to almost any extent required. Depend upon it, the only way of permanently maintaining fixed charges for the reduction of the Debt was by means of Terminable Annuities; and when the Chancellor of the Exchequer had a reasonable, well-ascertained, actual, and available balance, he should use it for such conversions. What he complained of at present was, that the Chancellor of the Exchequer was building up another Sinking Fund on a surplus which he had not got; while the real way to reduce the Debt was, when there was a real surplus, to use it to connect the funds in the hands of the public Departments. He regretted that the plan of Terminable Annuities should have been prejudiced by the speech and plan of the right hon. Gentleman; and he still hoped that the Chancellor of the Exchequer would lay before the House some proposal for dealing effectively with the Debt by Terminable Annuities, and not ineffectively by this shadowy return to an exploded system.
MR. W. H. SMITHsaid, he thought he might congratulate his right hon. Friend the Chancellor of the Exchequer upon the fact that although there had been no lack of effort to place his financial proposals in no very favourable light before the Committee, they had as a whole met with very general acceptance. The objections raised by the right hon. Gentleman the Member for Ponte-fract (Mr. Childers) divided themselves into two heads; first, that his right hon. Friend had attempted to deal with the Debt by means of a sinking fund when there was no balance available for that purpose, and further, that he was dealing with the Debt by a method which was foreign to the experience of late years. He (Mr. W. H. Smith) could not but be surprised at objections being made to proposals now, when no new taxes were being imposed, which were made practically to establish an equilibrium in the finances of the country, when only three years ago proposals were made to, and sanctioned by, the House, which left the Chancellor of the Exchequer with a surplus of £7,000 only. Great stress had been laid upon the fact that the Chancellor of the Exchequer estimated only for a surplus of £500,000, but did the Chancellor of the Exchequer five years ago estimate for a surplus to be applied in the reduction of Debt? For his own part, he thought his right hon. Friend had taken a moderate estimate, and one that was correct, in assuming that the taxation of the country would bear the charges upon it, and leave that amount of surplus. Was there any probability, so far as the statements made in that House were concerned, that in one year there would be a surplus of £6,000,000, in another of £2,000,000, in another of £5,500,000. If there had been, he believed those sums would have been, not applied towards the reduction of Debt, but in the reduction of taxation. His right hon. Friend opposite had spoken in strong terms about the contracts made as to Terminable Annuities. But what did those so-called contracts consist in? In this, that the Chancellor of the Exchequer in Downing Street wrote to the Chancellor of the Exchequer in the Old Jewry representing the National Debt Commissioners requesting that a certain sum of money should be converted into Terminable Annuities. The result was,
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that at the present time a sum amounting to £3,707,000 had been paid off the National Debt; but objection had been taken that that arrangement was a very good one as far as it was a contract between the Chancellor of the Exchequer in Downing Street and the Chancellor of the Exchequer in the Old Jewry; but that if an Act were passed it would be a much more easy process to get rid of the Act, than when pressure arose to get rid of a charge which by a similar Act of Parliament, might be re-converted into Perpetual Annuities again. For his part, he had no doubt that if a time of pressure came, the one Act would be quite as secure as the other. But there was this vice with respect to Terminable Annuities, that it was impossible to tell at what price they could buy back the Stock, or whether the funds of the Savings Banks would, at the end of the operation, result in a sum of money which would fairly represent the sum at which they were converted in the first instance. It had been said, as an objection to the policy of Her Majesty's Government, that there had been no reduction of Debt last year. But one of the provisions of the Budget was, that £500,000 should be applied to raise £7,000,000 of Terminable Annuities, and that amount of Debt would be extinguished in 1885. [Mr. DODSON: That was derived from interest on local loans, which was not Revenue.] It was the first time he had ever heard that interest did not become Revenue. The interest in question was appropriated in former years to the Balances; but from this time forward it would go in reduction of the National Debt, and he claimed that it was a distinct advance in the principle of sound finance, that income should be applied to definite purposes previously assigned by the Chancellor of the Exchequer in the House of Commons. What his right hon. Friend proposed was, that a fixed sum of £28,000,000 a-year should be applied to pay the interest and a portion of the principal of the Debt. The balance applicable towards the extinction of the National Debt under the scheme of the Chancellor of the Exchequer would increase from £200,000 per annum next year to £960,000 in 1884–5, and that would be supplemented by such surpluses as might remain in the hands of the Chancellor of the Exchequer from

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time to time. That the present taxation was borne without effort and without difficulty by the country was evidenced by the continued prosperity of the Revenue, which almost every year exceeded the calculations of the different Chancellors of the Exchequer, and therefore he trusted that the country would continue to bear without murmur the small charge which it was proposed to appropriate to the sinking fund for the extinction of the National Debt. He was not quite sure that the Committee thoroughly understood the propositions of his right hon. Friend with regard to any future loans for fortifications or local barracks. It was proposed that for the future, if it were necessary to borrow money for such purposes, no sums which remained in the hands of the Chancellor of the Exchequer should be taken, but that they should go in reduction of the National Debt, while a fresh loan should be opened for the fortification and barrack account. The accounts for the Savings Banks were to be made up to the 31st of December, instead of the 20th of November, the date at which the old Savings Banks accounts were made up; but such accounts were to be laid before Parliament within four months. Under these circumstances, the deficiency of the year would be included in the Estimate of the following year; and he did not think that was an unsatisfactory or an improper arrangement under all the circumstances of the case. Objection had been taken to the Government proposal with regard to the old Savings Banks; but it must be recollected that the acceptance of that proposal would not involve any change whatever in the liabilities of the country towards the trustees of such Savings Banks. On the whole, he would claim for the Bill the virtues of simplicity and security, and for the statement of the Chancellor of the Exchequer the advantages of simplicity and clearness; and he believed that those virtues and advantages would recommend both the Bill and the statement to the good sense of the House and of the country.
MR. WHALLEYthanked the right hon. Gentleman the Chancellor of the Exchequer for his Budget, and for the declaration that the National Debt was to be reduced, although they might differ as to the mode in which that object was to be accomplished. He agreed
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with the hon. Member for Wick (Mr. Laing) that it would have been good policy to have retained the income tax at 3d. in the pound; but he would entirely do away with Schedule D, and compensate the Revenue for the loss by an addition to the property tax. There was a special grievance under the operation of the income tax in the case of hardworking men whose income was brought, by dint of extra earnings and over work, just a little over £100, and who thereby came outside the line of exemption. He entirely objected against any portion of the Imperial Revenue being applied in aid of local taxation.
MR. NEVILLE-GRENVILLEsaid, he was sorry to find there had been a petty and a Party attempt made to trip up the Chancellor of the Exchequer in many of the subjects he had brought before the attention of the House. He could not help feeling amused when he heard the right hon. Gentleman opposite (Mr. Lowe), the concoctor of the Bryant and May Budget say that now there was a deficit because they had got a Conservative Chancellor of the Exchequer; but he would remind the right hon. Gentleman that the Whigs never had a surplus from 1832 until they succeeded in stealing from the Conservatives the services of the right hon. Gentleman the Member for Greenwich.
MR. GLADSTONEreminded the Chancellor of the Exchequer that he had not stated what amount he was likely to require for the purpose of loans, and how much was represented for that purpose by the £70,000? He would also ask his hon. Friend the Member for Hackney (Mr. Holms) to state what course he proposed to take with his Resolution with regard to Brewers' Licences?
MR. J. HOLMSsaid, it would be impossible at that late hour—past 12 o'clock—to go on with his Motion, and therefore he would propose that the Chairman now report Progress.
Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Holms.)
THE CHANCELLOR OF THE EXCHEQUERsaid, he could not expect the hon. Gentleman to proceed with his Resolution at that hour if he did not desire to do so. He would therefore suggest that

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the hon. Gentleman should bring forward his Motion, either on the Report of that Resolution or in Committee on the Bill. It was undesirable that the Government should lose a stage in their proceedings, as their measures had already been somewhat kept back, and they were now approaching the Whitsuntide holidays. Some time had elapsed since the close of the financial year and the legal expiration of the income tax. The income tax Resolution had, indeed, been reported to the House, and the Board of Inland Revenue collected the tax under it; but it was not convenient that it should continue to be collected for an indefinite time without the sanction of an Act of Parliament. As to the Question put by the right hon. Gentleman opposite, he was not at present in a position to say how much they were likely to raise this year for local loans, because it depended on the amount of the demands made by the Bodies which had the right to borrow, and especially on the amount that might be required under the Education Act for school-houses. But he expected it would not be more than £2,000,000, and therefore he took about £70,000, the sum which would probably cover the interest on that amount.
MR. GLADSTONEsuggested to the hon. Member for Hackney that his Resolution should be postponed until after the Whitsuntide holidays, in order that the preliminary stages of the financial measure might be advanced.
THE MARQUESS OF HARTINGTONsaid, that the distinct understanding was, that his hon. Friend the Member for Hackney should not be prejudiced by the passing of the Resolution that evening.
THE CHANCELLOR OF THE EXCHEQUERsaid, that was the distinct understanding, and in order to comply with it he would suggest that the best time to bring forward the Motion would be on the Motion to go into Committee on the Customs and Inland Revenue Bill.
Motion, by leave, withdrawn.
Original Question put, and agreed to.
2. Stamp Duty on Appointments.
Resolved, That in lieu of the Stamp Duty now payable on any admission, and on any appointment or grant by any writing, to or of any office or employment, and on any Commission or Deputation granted by the Commissioners of
368
Inland Revenue or the Commissioners of Customs, there shall be charged and paid Stamp Duty as follows (that is to say):

£

s.

d.

Where the annual salary, fees, or emoluments appertaining to the office or employment, or payable by virtue of the Commission or Deputation do not exceed one hundred pounds, the Duty of

0

5

0

And where such annual salary, fees, or emoluments exceed one hundred pounds—

For every one hundred pounds, and also for any fractional part of one hundred pounds of such an nual salary, fees, or emoluments, the Duty of

0

5

0

Medicine Vendors Licence Duty.
Motion made, and Question proposed,

"That, in lieu of the Duties of Excise now payable by Law upon or in respect of the Licences to be taken out yearly in any part of Great Britain by the Owners, Pro prietors, Makers, and Com pounders of, and Persons uttering, vending, or exposing to sale, or keeping ready for sale any Medicine liable to Stamp Duty, there shall be paid for each such Licence, the Duty of

0

5

0"

Motion, by leave, withdrawn.
3. Inland Revenue.,
Resolved That it is expedient to amend the Laws relating to the Inland Revenue.
MR. J. W. BARCLAY, in rising to move a Resolution on the subject of Gun Licences, said, that, when last Session he submitted a Motion for the total abolition of the Gun Tax, the Chancellor of the Exchequer said that he was not aware there was any feeling in the country in favour of its abolition. He had had many deputations craving abolition of various taxes, but none on the Gun Tax. This Session, however, a deputation of Scotch Members, sufficient to show a strong feeling in Scotland on the subject—and he believed the feeling was as strong in England—waited on the Chancellor of the Exchequer, and explained their views regarding the taxes on guns and dogs. It was accordingly expected that the just interests of the farmers would be considered in the right hon. Gentleman's Budget, both as regarded dogs and guns. As, however, the

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right hon. Gentleman had failed to make any concession, he (Mr. Barclay) felt it his duty to take the sense of the House on the exemption from duty of guns exclusively used for protecting crops by farmers, market-gardeners, or nurserymen. No one would deny the justice of the Motion he had to submit—namely—
"That it is expedient that guns used by farmers or persons employed by them exclusively for the protection of their crops, he exempted from Licence Duty."
But it was contended that exemptions were inconvenient and very detrimental to the productiveness of a tax. Had the tax been imposed for fiscal purposes, he would admit the force of the objection; but the right hon. Gentleman the Member for the University of London (Mr. Lowe)—at whose instance the tax was imposed, at a time when there was a large surplus Budget—described it as a tax to restrain lawless habits. The right hon. Gentleman expatiated on the enormity of boys shooting birds, because that led up to poaching, and poaching to crime and Botany Bay; but, whatever might be thought of that kind of argument, the protection of crops by farmers or farmers' servants, could not be described as lawless habits, and was no argument in favour of charging them for gun licences. It would be quite competent, after the proposed exemption was made, for the Excise to prosecute persons of lawless habits using guns without a licence. If they took a licence, the object of the Bill would be defeated which exposed its absurdity. At present, the tax was chiefly paid by farmers for their servants. If the House refused the exemption, it showed that landlords had no confidence in farmers or their servants, and that the Gun Tax was, as it had often been alleged to be, a game law. The hon. Member concluded by moving the Resolution.
Gun Licences.
Motion made, and Question proposed,
"That it is expedient that guns used by farmers or persons employed by them exclusively for the protection of crops be exempted from Licence Duty."—(Mr. James Barclay.)
THE CHANCELLOR OF THE EXCHEQUERsaid, this was a matter on which there was no substantial grievance. It was scarcely to be supposed that any farmer did not take out a gun licence; and the regulations of the Board of
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Inland Revenue were such as to permit the gun which belonged to the master to be used by any person in his employ on his land for the purpose of scaring birds.
Question put.
The Committee divided:—Ayes 44; Noes 173: Majority 129.
Resolutions to be reported upon Monday next;
Committee to sit again upon Monday next.

NATIONAL DEBT (SCHEME FOB REDUCTION).
Returns ordered, "showing the action of a scheme for the reduction of the National Debt by the annual conversion of Permanent Annuities into a 10 years' annuity of £500,000; the rate of interest being assumed at 3 per cent. and the purchase of 3 per cent. Funded Debt at par:"
"And, showing the increased annual charge, and consequent reduction of Debt, resulting from the operation of the scheme."—(Mr. Hubbard.)
House adjourned at a quarter before One o'clock, till Monday next.

MINUTES.
Sat First in Parliament—The Earl of Romney, after the death of his Father.
PUBLIC BILLS—First Reading—Falsification of Accounts * (93).
Second Reading—Regimental Exchanges (44); Bankruptcy (Scotland) Law Amendment * (62).
Committee—Explosive Substances * (75–95).
Committee—Report—Pier and Harbour Orders Confirmation * (64); Bishops Resignation Act (1869) Perpetuation * (74); Bank Holidays Act (1871) Extension and Amendment * (76); International Copyright * (73).
Report—Saint Paul's Cathedral (Minor Canonries) * (60); Pacific Islanders Protection * (88).
Third Reading—Supreme Court of Judicature Act (1873) Amendment (No. 2) * (66); Local Government Board's Provisional Orders Confirmation * (53); Public Health (Scotland) Provisional Order Confirmation * (54); Public Entertainments (Hour of Opening) now Public Entertainments * (77); Consolidated Fund (£15,000,000).

BOSTON ELECTION.
The Queen's Answer to the Address of Monday the 26th ultimo reported by the Lord Steward.
CHAIRMAN OF COMMITTEES.
Moved that the Lord Hampton be appointed to take the Chair in the Committees of the Whole House in the absence of the Lord Redes-dale: Agreed to.
PEACE PRESERVATION ACT—CASE OF PATRICK CASEY.

  PERSONAL EXPLANATION.
  EARL SPENCER: My Lords, I must ask the indulgence of the House for a few minutes before the commencement of the Business of the evening. I do so with confidence, because I know your Lordships are in the habit of allowing any Member of the House to correct any statement made in public and which affects his honour in the conduct of public affairs. I noticed in the usual channels of information of last Tuesday a statement which purported to have been made in "another place" by Mr. Mitchell Henry, the hon. Member for the county of Galway, and which, I think, does reflect on me in the manner to which I have just referred. In a discussion on the Peace Preservation Act that hon. Member alluded to the case of a person named Patrick Casey, who, when I was Lord Lieutenant of Ireland, was arrested and detained under an Act

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  known as the Westmeath Act. Mr. Mitchell Henry is reported to have said that Casey was kept in solitary confinement for several years, that he was cut off from all communication with the outer world, and that it was his belief that Casey had been forgotten by the Government until his case was brought under the notice of the House of Commons. I have thought it right to communicate with the hon. Member, and it appears that, with some slight exception, the reports correctly represent what he said. Now, my Lords, I do not intend to discuss the wisdom of the policy of the Act of Parliament which passed in 1871; but I may say that it threw a very grave and weighty responsibility on the Government of Ireland, and more particularly on the Lord Lieutenant, who is mainly responsible for carrying it out. I endeavoured, when in Ireland, to use the powers which it conferred on me with prudence, justice, and watchfulness; and when exercising them I was in constant communication on the subject with the other Members of the Irish Government. Having said so much on the general question, I shall now endeavour to give your Lordships an accurate statement of the case of Patrick Casey, and then leave it to your Lordships to say whether there was any foundation for the statements made in "another place." First, my Lords, the hon. Member states that the prisoner was kept in solitary confinement for several years. It was wisely provided in 1871 that rules should be laid down as to the manner in which imprisonment under the Act should be carried out, and on referring to these rules, I see that during six hours a day prisoners confined under the Act were to be allowed to join other prisoners. I do not know myself exactly how those rules were carried out; but I do know that while I was in Ireland I made frequent inquiries, and that during nearly the whole of his time the prisoner was in communication with other prisoners. Within the last few months of his release he was the only prisoner charged with the same species of offence in the place where he was confined, and consequently he was in "solitary" confinement. But, my Lords, that is a very different thing from what was stated. I need not say anything as to the alleged statement about the prisoner having been cut off from all connection
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  with the outer world, because the hon. Member takes exception to that part of the report; but when I come to the statement that the prisoner had been overlooked until the notice of the House of Commons was directed to his case, I think that a very serious charge against the Government of Ireland, and a particularly serious charge against myself, who was responsible for the Government of Ireland at the time to which allusion was made by the hon. Member. Now, my Lords, the warrant for Casey's arrest was signed on the 8th of December, 1871; he was arrested on the 13th of the same month, and I left Ireland on the 25th of February, 1874. Through the courtesy of the right hon. Gentleman, the present Chief Secretary for Ireland, I have been able to refresh my memory by a reference to official documents. I find that from the 13th of December, 1871, to the 25th of February, 1874, there were eight memorials on behalf of Casey considered by the Irish Government—and I may mention that one of those was addressed to me by the late Mr. John Martin, Member for the county of Meath. I am quite sure, from the honesty and straightforwardness of that Gentleman, that he would have been no party to such a statement as that which has rendered this explanation necessary on my part. Well, there were four special medical reports in the case, and I myself made 14 special Minutes in reference to it when brought under my consideration. On the 1st of January, 1872, application was made for permission for the prisoner to marry, he being then in the prison of Naas; and though the marriage did not come off, the permission for it was accorded. I mention this to show how carefully these cases were kept under view. In a memorial presented in November, 1873, it is stated that the prisoner "had no cause to complain of his treatment." I have further to say that at one time, with my entire approval, the prisoner was removed, by order of the Lords Justices, from Naas to Dublin, in order that he might have additional medical treatment; and in a Minute made by me on the 26th of December, 1873, after stating my decision respecting an application for his release, I added—"If his case is not brought forward by memorial before the 31st of March, let it then be submitted." I may mention that when such an ap-

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  placation was brought forward it was always my desire, if it could be done with safety, to release the prisoner; but I considered that in this case we could not do so. I hope, my Lords, I have shown there was no justification for the statement made in "another place." I confess, my Lords, that if the statement were well founded, I should have felt unworthy to sit in your Lordships' House, and certainly most unworthy of the trust confided to me by Parliament when it placed in my hands as Lord Lieutenant powers which are inconsistent with the spirit of the English law, and which are to be justified only by the urgent necessity of protecting life in Ireland.

REGIMENTAL EXCHANGES BILL.

  [NO. 44.] SECOND READING.
  (The Duke of Richmond.)
  Order of the Day for the Second Beading, read.
  THE DUKE OF RICHMOND, in moving that the Bill be now read the second time, said: My Lords, I trust your Lordships will not judge of the importance of the measure now submitted to the consideration of the House by the multitude of its details, for in that case it might assume a somewhat miserable character, but I can hardly imagine a measure more interesting to the officers of the Army, and, through them, to the country at large, than the one now before your Lordships. I am happy, however, to think that its advocacy does not call for any elaborate or eloquent address on my part; because, though large as are the interests at stake, the proposition itself, when thoroughly and carefully examined, will be found to resolve itself into so very simple and moderate a one, that I should not be justified in detaining your Lordships at any great length. Now, my Lords, I wish at the outset to state—and I do so with confidence—that what is called the subject of Purchase is by no means attached to or bound up with that of exchanges—the Bill to which I ask your Lordships to give a second reading has no more to do with the re-introduction of Purchase than almost any subject altogether irrespective of Army interests. Purchase was put an end to by the Royal Warrant of 1871. I assure noble Lords that I am not going back to the controversy on that subject; I shall
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  deal with the abolition of Purchase as an accomplished fact, and not go back either upon that system or the question of the means taken by the late Government to put an end to it. What has been done I accept as an accomplished fact, and I do not wish to re-open that part of the question. I allude to the subject only to give myself the opportunity of stating that Purchase and Exchange are two different things. Under the system of Purchase an officer bought the steps by which he advanced himself in the Army. Under the system of Exchange the officer exchanges from one regiment into another; but he rather loses than gains, because, by means of an exchange, he loses the seniority he holds in the regiment he is leaving. I confess I was somewhat astonished to find that some persons have objected to exchange on the ground that it has a tendency to reestablish the Purchase system, inasmuch as it gives occasion to the payment of a bonus. It is argued that the officer who exchanges out of one regiment into another derives an advantage for which he would be willing to pay, and that under such a system the junior officers might bribe a senior officer to exchange into another regiment, that those remaining behind might benefit by the step so taken. Those who advance that argument—and it has been advanced more than once in "another place," and perhaps will be advanced here to-night, though I do not expect that the noble Viscount the late Secretary for War will advance it, because he knows that it is unsound, can scarcely be aware of the true nature of exchanges. Suppose a man is a senior captain in a regiment, it is highly improbable that he would be induced by a bonus to retire from a position he had been endeavouring to attain for many years, because not only would he not obtain in the regiment to which he exchanged the position he occupied in the one he had left, but he would find himself in his new regiment at the feet of some 10 or 20 captains who in that regiment would be his seniors. Therefore I say that, even supposing the payment of a bonus were possible in accordance with the regulations of the military authorities, I say that on the face of it the arrangement would be so extraordinary that men would not be found to enter into it,—it would naturally arrest the attention of the authorities, and pro-

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  voke inquiry. There is, therefore, really nothing of Purchase in the proposition before your Lordships. I hope it is not necessary to assure your Lordships that my right hon. Friend the Secretary for War has no desire to bring back the system of Purchase—did he do so, he is far too straightforward and honourable a man to attempt it by an indirect and underhand course—he would have proposed it in a straightforward and open manner, in a way that would afford Parliament an opportunity of expressing a direct opinion on the proposal.
  It may now, my Lords, be convenient that I should state the way in which Purchase and Exchange were carried out up to the time when the Royal Warrant of 1871 was issued. By a statute of Edward VI. the purchase and sale of offices were rendered illegal, except in the case of commissions in the Army. The Act 49 of George III. extended that statute to military commissions, unless the prices paid were such as had been laid down by regulation. With regard to exchanges the same rules did not prevail—the regulation prices for Purchase had been fixed, but there were no regulations laid down for exchanges, and up to the issuing of the Warrant of 1871 payment on exchanges were illegal. But when Purchase was abolished the noble Viscount (Viscount Cardwell) who was then Secretary for War, found that it was necessary to legalize and authorize a system of exchanges, and he did so under certain regulations into the details of which I must ask your Lordships to follow me. I have to apologize to the noble Viscount for having to allude to him so often, but circumstances render it necessary that I should do so. The noble Viscount, I think, very wisely admitted that a system of exchanges was necessary for an Army portions of which are sent to our Colonial possessions and to India—an Army which finds itself scattered in so many different parts of the globe. I cannot think that any of your Lordships fail to thoroughly understand and appreciate the necessity of allowing a system of exchanges in such an Army; and I was astonished to find that in "another place" a right hon. Gentleman had expressed surprise that such a system was allowed, basing that surprise on the fact that such a system would not be permitted in any other profession. The right hon. Gentle-
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  man (Mr. Lowe) gave an illustration to show how it would work in another profession, but I cannot help thinking that his illustration was neither appropriate nor happy. He said—"What would be thought if a Judge in the Court of Common Pleas, finding himself overworked, wished to exchange with a Judge in the Exchequer, and if the Lord Chancellor—who holds a position in the law analogous to that occupied in the Army by the illustrious Duke the Commander-in-Chief—sanctioned an arrangement by which that exchange was brought about." The cases are not at all similar. To put them on all fours with one another you must imagine that the Lord Chancellor, as legal Commander-in-Chief, had the power to order the Judge of the Common Pleas off to Gibraltar within a month, from which, after some time of good service, he is sent to the Cape, from which, after an efficient administration of the law, he is told he is wanted to proceed to Madras, from which, after a period of judicial labour, he is requested to proceed to Australia, with an intimation that he will be expected to dispense law and justice in China, and, perhaps, the West Indies before his return home. Now, that would be something like the course of duty which an officer in the Army may be called upon to perform; and if the typical Judge of the Common Pleas could be called on to go round the world in that way, the surprise of his exchange with another Judge being sanctioned by the noble and learned Lord on the Woolsack might not be so great as was suggested in "another place." I think we should not see on the Bench all those eminent persons who now occupy that position, and that those who are there would be quite as clamorous for a system of exchanges as are now the officers of the Army. Then, my Lords, consider the benefit the country has received in the service from the existence of liberty to exchange. Remember how many distinguished officers have by it been enabled to gain a reputation in India, and render the greatest service to their Queen and country. I allude to such officers as Sir Henry Havelock and others whose career would have been lost to themselves and their country had they not been able to remain in India at a time when it would have been inconvenient for them to return home.

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  Indeed, I think it is admitted by all military authorities, as well as by the late Secretary for War, that such a system is absolutely necessary as well for the interest of the country at large as for those of the Army, if the two interests are not absolutely identical. When military and naval subjects are being discussed in Parliament we are accustomed to hear frequent references to what is being done in other countries. It was so in the discussion on guns the other night, when we were told that we must go on, however tentatively, in the direction of the adoption of breech-loaders, because France and other countries had adopted them. But, my Lords, take up the French military newspapers and what will you perceive? Why, that they are full of advertizements of proposed exchanges; and I am informed that in the case of exchanges in the French Army, the only requirement is the sanction of the two commanding officers of the respective regiments. The only condition annexed in addition to that requirement is that no money whatever shall be required from the State.
  Now, my Lords, having, as I hope, established the first point—namely, that exchange is necessary, I shall now endeavour to establish the second—namely, that money must be allowed to pass. And here, again, I find the noble Viscount the late Secretary for War assenting to the proposition of the Government, for he not only admits that exchanges must be allowed, but that money must pass, though only in a limited manner. I think, however, that I shall show it is not desirable money should pass in the way proposed by the noble Viscount. He allows of the Exchange, but he will only allow money to pass to the extent necessary to provide for an outfit. I shall name to your Lordships the items which, under the noble Viscount's Regulation, are allowed to be paid by an officer exchanging with another for the convenience of the richer man. The poorer man sends in to the Military Secretary expenses of which the following may be regarded as example:—First, there are mess and band subscriptions; next, there is change of ordinary uniform—the amount of that the tailor might determine; and it would not be difficult to arrive at the amount to be paid for the passage of the officer. Next to that comes passage of officer's
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  wife, and after that passage of his children. Well, these expenses it may not be difficult for the Military Secretary to estimate. But when we come to item No. 6, we find it to be "expenses and passage of female servants." I think it is trenching somewhat upon the duties of a distinguished officer like Sir Alexander Horsford, or any other Military Secretary, to cast upon him the duty of deciding how many female servants are to accompany a gentleman's family—he cannot tell what may be their requirements, and he may have to inquire in such a case whether the lady's maid is to do duty as nursery maid also during the voyage. These are duties which the Military Secretary ought not to be called upon to undertake; but next comes a still more embarrassing item for a Military Secretary, "Outfit for wife and children." How in the name of wonder is the Military Secretary to say what is a proper outfit for a lady and her family, whom he may never have had the good fortune to set eyes upon, whose habits he knows nothing about, and of whose belongings he is perfectly ignorant? It is next to impossible for him to come to a satisfactory conclusion on the point—more especially as the value of the outfit varies from £30 to £100. How, I ask, can distinguished officers be expected to be judges of the quality of underclothing a lady should take out, or the number of frocks the children will need? I pass over item No. 8—"Hotel expenses for officers," and come to No. 9—the final one. This is "Baggage expenses." Is the number of trunks and portmanteaus for the officer, his wife, children, and servants all to be considered by the Military Secretary? Manifestly, there will be inequality in such a system, because unmarried officers will gain advantages which married officers with families cannot derive from it. My Lords, if you have an open exchange, untouched and unembarrassed by calculations such as those to which I have been referring, the arrangement will be of a nature satisfactory to all parties. The principle of this Bill is—first, that exchange should be allowed; secondly, that it ought to be open and unlimited. A Commission was appointed by the late Government to inquire into the Memorials and Petitions of a number of Officers praying Her Majesty for relief from Grievances of which they com-

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  plained. That Commission took a great deal of evidence, and, if I may be allowed to say so, most valuable evidence was given by the illustrious Duke who commands-in-chief Her Majesty's Army. I think I cannot do better than quote a portion of this, commencing with Question 157:—
  "Your Royal Highness is aware of the practice of exchanging on the part of officers from one corps to another?—Yes.
  "Under certain restrictions for the benefit of discipline, they were freely allowed by your Royal Highness to do so?—Certainly.
  "And by your Royal Highness's predecessors?—Certainly.
  "It was considered advantageous to the public service to allow those exchanges?—They were most beneficial to the public service.
  "No question was asked as to what sum of money passed in consideration of the exchange?—None whatever.
  "It was perfectly well known to your Royal Highness and your predecessors, and generally to the authorities, that money did pass for those exchanges?—I have no doubt of it.
  "And no inconvenience, but, on the contrary, benefit arose to the public service from that system?—Certainly. No exchange took place without my authority, and if I did not consider it of advantage to the public service, or just to the officers in each regiment concerned, I would not allow it. I never asked any questions, of course, as to the money, but I judged of each case entirely on its merits. If afterwards money passed, that of course was no concern of mine.
  "Your Royal Highness had the perfect power of controlling it to any extent you thought proper?—Yes; it was entirely in my option to allow it, or not.
  "I believe that when an exchange of that sort took place each officer went to the bottom of the list of his new regiment?—He went to the bottom of his rank; that was invariably the case.
  "The benefit of the service was the first consideration?—That, of course, was the first consideration; but I think that the public service would have been injured if any discontent had been caused by allowing a very junior officer to be put over the head of a senior in the junior rank."
  Those are the opinions of the illustrious Duke, and I think it goes to show your Lordships that a well-regulated system of exchange is of great advantage to the public service. We hold, then, that no account of the money that passes should be taken by the military authorities, who should decide on the proposed exchange principally on its merits as regards the Army and the public. The next quotation I shall make is from the evidence given before the Commission by Sir Richard Airey, whose authority on the subject will be recognized by noble Lords who are not connected with the Army,
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  and still more by noble Lords who are members of the military profession—
  "With regard to the practice of exchanges, His Royal Highness has stated that no inconvenience arose to the public service from the freely-permitted practice of exchanges from one corps to another, but that, on the contrary, there was an advantage to the public service, and a considerable benefit to the individual officers concerned; is that your opinion?—In my opinion it was of very great advantage to the service. Putting the question of the convenience of officers out of consideration, although I believe that that is an element in the matter, the great question is the efficiency of the service, and I think that it was of very great advantage. A good officer from particular circumstances was perhaps obliged to be in England; he could not be in England except by exchange into a regiment at home, and it was allowed without any question of what mutual arrangement took place between the individuals.
  "And very often to poor officers the sum received was of very great benefit?—It was of very great advantage to them."
  I could make elaborate quotations to the same effect; but I shall not detain your Lordships by doing so, because the Blue Book containing it is before your Lord-ships—I may, however, quote from the recommendations of the Commission, and I think I may assume that the Royal Commissioners were honest and impartial men: and I do the noble Viscount opposite the credit of believing that he would not have named them for appointment by Her Majesty if he did not regard them as men competent to deal with and come to a decision on the questions referred to them. The Commissioners say—
  "It has been repeatedly and forcibly urged upon us that the prohibition of paying and receiving money for exchanges, between Officers on full pay, is a serious hardship to some and a serious loss to others. It does appear to us that the complaint is a legitimate one. The new rule has obviously proceeded from an apprehension that to allow any pecuniary bargaining between Officers in respect of their commissions might be as a letting out of the waters, bringing back bonuses, over-regulation prices, and the other incidents of the abolished system. We are not satisfied that there is any real danger of this, and we are satisfied upon the evidence before us that a return to the old practice as to exchanges would be very acceptable to the Army. There are many good Officers of slender moans who would be willing to serve in India or elsewhere for a consideration, and there are many good Officers more blessed with the world's goods who, for family or other reasons, or under medical advice, would be willing to give such a consideration. The exchange is an unmixed benefit to both, and would probably be a benefit, and certainly would not be detrimental to the service. It ought only to be effected with the sanction and under the control of the authorities, and

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  on such conditions as to insure that nobody else is superseded or affected. These are the substantial grounds of this complaint which appear to us to be well founded, and we do not hesitate to recommend that the above-named prohibition should be removed."
  If I were to speak for a week, I could not put the case for the Bill stronger than it is put in that passage of the Report of the Royal Commission:—and I would beg of those who object to exchanges under such a system as we propose to remember that the advocates of the abolition of Purchase recommended it on this among other grounds—that it would be for the advantage of poor officers. But, my Lords, having a great respect for those who comprised the Royal Commission, I am bound to notice something that has been said "elsewhere." It has been urged against the recommendation of the Commissioners that as to this part of their Report the Commissioners had failed ultra vires, and that the subject of exchanges was one with which the Commissioners were not competent to deal. I do not know that this objection will be taken in your Lordships' House; but as it was taken "elsewhere" by one who occupies a high position and is entitled to great respect, I think it necessary to notice it. Now, my Lords, the Royal Commissioners were Lord Justice James, the noble and learned Lord opposite (Lord Penzance), and, though last not least, my right hon. Friend the First Lord of the Admiralty. Your Lordships will perceive that the objection to which I have just alluded involves the supposition that these three Commissioners did not understand the terms of the Reference in the Commission which was laid before them and under which they were appointed. As for myself, I should be content to take the opinion of any one of them as to the nature of that Reference; but it would appear that all three agreed in thinking that the terms of the Reference enabled them to consider the question of exchanges. Now, let us look at the terms of the Reference—
  "Whereas by our Royal Warrant, dated the 20th day of July 1871, We were pleased to cancel and determine all regulations made by Us or any of our Royal Predecessors or any Officers acting under our authority, regulating or fixing the prices at which any commissions in our Forces might be bought, sold, or exchanged … And We do give and grant to you or to any two of you full power and authority to call before you such persons as you may deem necessary, and to obtain information from
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  them upon the subjects of your inquiry, and of every matter connected therewith, and also to call for, have access to, and examine all such official books, documents, papers, and records as may appear to you, or to any two of you, likely to be of use in affording you the fullest information."
  Your Lordships will have perceived that by the first part of the reference the matters to be discussed are "commissions in our Forces which might be bought, sold, or exchanged; "and that by the second part full powers are granted to any two of the Commissioners to do the acts mentioned in that portion of the Reference. I cannot think that this of itself would be sufficient to dispose of the objection that when the Commissioners dealt with the subject of exchanges their action was ultra vires: but when I look at a certain correspondence I find that the noble Viscount himself admits the power of the Commissioners to deal with the subject of exchanges, because in a reply to the Commissioners which Major Vivian wrote by the authority of the noble Viscount there is this passage:—
  "There were doubtless many instances in which exchange being the subject of a pecuniary transaction was a gain to one of the officers concerned at the expense of the other. The extent to which exchanges have obtained in the purchase corps during the last ten years is shown in the table marked (G). Evidence, however, can be given by the Army Purchase Commissioners that the present rule, which admits of the actual expense being paid by one of the parties for the other, does not operate in all eases to reduce the amount which would have been paid under the former system. The object of the new rule is to render the practice conformable to the law (49 Geo. III., c. 126), as well as compatible with the reasonable requirements of personal convenience. How far it has accomplished the latter object will appear also from the Return G. In connection with this subject it may be observed that under the new system of linked battalions when it shall have come into full operation, a great facility and advantage in respect of exchange will be given, inasmuch as an officer abroad will be able to exchange with an officer of the same brigade at home without loss of position on the list."
  That shows the noble Viscount was perfectly well aware that the Royal Commissioners were dealing with the subject of exchanges and that he did not object to their doing so. I think, therefore, the noble Viscount will not adopt the objection raised "elsewhere," that the Commissioners were acting ultra vires. But there is the other objection, which struck me as extraordinary—namely, that though the Royal Commissioners

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  were perfectly competent to deal with the legal parts of the question—two of them being very eminent lawyers, and the third being a Chairman of Quarter Sessions—they were perfectly incompetent to deal with the future of the Army. It was said in support of that objection that we could not leave the future of the Army to two lawyers and a country gentleman. If that objection is to prevail, I am afraid that the Army under the late Government must have been in a most lamentable condition, and I am afraid that, under the present Government, it is in even a worse condition. If I mistake not, at the head of the Army, as Secretary for War in the late Government, was a lawyer and country gentleman; at the head of the Army, as Secretary for War in the present Government, is a lawyer and country gentleman. I believe we do not in this country think the worse of heads of the War Department because they may happen to be lawyers and country gentlemen, and therefore I think the objection urged to the competency of the Commission is of a shadowy, and I may add flimsy, character.
  I would ask your Lordships to give this Bill a second reading on its own merits. Its object is to enable the military authorities to deal with exchanges in a manner wholly irrespective of pecuniary arrangements, and to legalize what, up to 1871, was illegal—though it had long been tacitly recognized—namely, exchanges except based on regulations. My Lords, I may be permitted, with all deference, to say that many of those who have talked so strongly against permitting exchanges really know nothing about it—they know neither the manner of exchanges nor the way in which they are managed. Many people, I believe, imagine that when two officers desire to exchange, all they have to do is to go together to the illustrious Duke and say—"Will your Royal Highness have the goodness to have the necessary papers made out? "But the process is a very different one. Some reason must be assigned. I have told your Lordships what the form is in France. What is it in this country? Two officers wishing to exchange, first of all get the assent of their commanding officers; that, with the application, is forwarded to the military authorities by the General commanding the district. After most minute
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  and searching inquiries by the Military Secretary and the Assistant Military Secretary as to the views and feelings of the officers wishing to exchange, and the effect of the exchange, if allowed, on the Service generally, the matter comes before the illustrious Duke, who by no means grants the exchange as a matter of course. I believe I am correct in saying that frequently His Royal Highness has refused to sanction an exchange because he was not satisfied that it was for the interests of the Service. It is, therefore, a great mistake to suppose that an exchange is an arrangement which can be made off-hand and without inquiry. I submit the question resolves itself into a feeling of confidence, or want of confidence, in the military authorities—I include the Secretary for War and the illustrious Duke, the Commander-in-Chief. If they are not fit for the duty which devolves on them in the matter of exchanges, the sooner we have a War Secretary and a Commander-in-Chief in whom the country will have confidence the better. But you have imposed a most disagreeable, invidious, and onerous duty on the illustrious Duke in throwing upon him the duty of selection. If he be fit to undertake the duty of selection, he is fit to undertake the duty which this Bill will impose on him in reference to exchanges. But if he be not, then, with all respect and reverence, I say, in the presence of the illustrious Duke himself, that the sooner we have some one else at the head of the Army the better.
  My Lords, in conclusion, I move that your Lordships read this Bill a second time. I believe that in doing so you will do an act of justice and one of sound policy, because you will be stamping with your approval a measure which, while fostering a spirit of loyal content in the Army, will, at the same time, promote the interests of the nation at large.
  Moved, "That the Bill be now read 2a."—(The Duke of Richmond.)
  VISCOUNT CARDWELL: My Lords, this is a measure which has been recommended to your Lordships by the Crown, which has been approved by a great majority in the House of Commons, and the noble Duke, the Lord President, also has stated that it will be acceptable to a large portion of the Army. I do not

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  doubt it; though I know that many officers of the highest standing are not in its favour; and it would have been a source of great pleasure to me had I felt that I could join in passing a measure which would be acceptable to so large a class of officers. But I feel it to be my duty to give your Lordships this opportunity, before we are committed to the second reading of the Bill, to consider what appear to me to be strong and important objections to it. The noble Duke has said that the proposals in this Bill are recommended in the Report of a Royal Commission appointed by the Government of which I had the honour to be a member. I should not have noticed that fact but for the reference made to it by the noble Duke; but if after that reference I left it unnoticed, the supposition might arise that the late Government were in some degree parties to the recommendation of the Royal Commissioners. The noble Duke has referred to the high position of the three eminent personages who composed the Commission. Now, no man can speak more highly than I am prepared to do of those eminent persons—the late Government were extremely gratified that they undertook the duties of the Commission—we had entire confidence in their qualifications, especially for a Commission of a judicial character; but we did not at all compromise ourselves. It never entered into our minds that we were referring to them any other question than that of the grievances of which the officers were complaining, and the compensation, if any, to be given for those grievances; nor in the Order of Reference did we put any other question than this—
  "Whether any of the grievances alleged by the officers in their memorials are such as should be compensated in the manner hereinbefore mentioned as falling within the principle of the Act 34 and 35 years of our reign, chapter 86, though not expressly included by the words thereof."
  My Lords, I think no words could be found more calculated to exclude any question with regard to the future policy of the Army, and to include only the grievances of officers and their claims to compensation. The noble Duke also referred to a letter written by my direction, and signed by Mr. Vivian, to be found in the Appendix to the Report. I cer-
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  tainly answered the question put to me by the Royal Commission, because I considered it was within their power to consider the effect of the abolition of the sale of exchanges on the question of compensation; and though I cannot at this moment put my finger on the passage in the Evidence, I think the noble Duke will have no difficulty in doing so; and he will find that the first time the system of exchange was referred to, the President of the Commission said that the question was scarcely before them. But I readily admit any one of the three gentlemen was quite as competent as I could be to be placed in the situation of Secretary for War, and I never stated that they were not competent to consider military questions, if military questions were referred to them; but when it is said that this subject was referred to them I quote the Order of Reference, and I venture to say it was not referred to them. The reason, my Lords, why I object to exchanges is not that they are illegal, for when Purchase was abolished we did that which was never done before—we established regulations to make exchanges legal. I do not now speak from official statistics, but I am told we were not altogether unsuccessful. I saw a letter from Colonel Loyd Lindsay in The Times the other day, in which he says that exchanges in the Royal Artillery have increased 50 per cent under the operation of the new Rules. The new Rules, therefore, have not been unfavourable to exchanges in the Artillery. But why have they increased in the Royal Artillery when they have not increased in the battalions of the Line? I can only conjecture the reason; but my conjecture is this—that the Artillery being one regiment, exchanges have no effect upon promotion, but are resorted to only for the purpose of health and convenience; whereas in the battalions of the Line exchanges were very largely ancillary to promotion by Purchase, and now Purchase is abolished it was natural that exchanges in the battalions of the Line should diminish in number while exchanges in the Artillery went on increasing. As I say, we have never objected to the system of exchanges when made for reasonable objects of health and of convenience. What we did was this—we agreed that in an Army situated like ours, and called upon

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  to serve in the most distant parts of the world, it is desirable and necessary that there should be a reasonable system of exchanges, and we were not indifferent to that subject; but in 1871 we believed—and I think the country believed—that we had, by the payment of a great sum of money, got rid once and for all of the interference of private pecuniary transactions for the purpose of profit in the affairs of Her Majesty's Army; and what we object to now is, not that there should be exchanges with every convenience for officers, but that there should be the passing of money and a profit made by those exchanges. The Royal Commission of 1857 remarked that it was not surprising that pecuniary transactions should prevail in the Army at a time when places in civil life were the subjects of Purchase: but it will, I think, hereafter be a matter of surprise that when purchase had been utterly abolished, not only in civil life, but even in the Army itself, the Acts of George III. and even of Edward VI. should have been repealed, and for the first time in our history a special invitation have been given by Parliament to a traffic in exchanges. I cannot see why it should be requisite to give a pecuniary stimulus to the officers of the Army which is not asked for in any branch of the Civil Service, which would not be endured in the Navy, and which no one was ever heard to propose for the non-commissioned officer or private soldier. But what are we doing now? This Bill consists of only 24 lines; but it repeals, as far as regimental exchanges are concerned, the Act of 1809, which was passed after so much difficulty and controversy, which was intended to put an end to irregular pecuniary transactions in the Army; but, more than that, it goes back to the Act of Edward VI. and repeals it as far as regimental exchanges are concerned. The noble Lord near me (Lord Cottesloe) has for 30 years been Chairman of the Customs. During that period he had many exchanges to sanction. Did he ever hear of its being proposed that those exchanges should be the subject of pecuniary consideration? On the contrary, he will tell you that everybody coming to him for his sanction of exchange had to make a declaration that no money had passed. When a gentleman has given what the Royal Commission call a "consideration" he is very apt to imagine
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  that he is possessed of a property in that for which he has given a consideration; but I do not think that it will tend to facilitate business in the War Office if so large a number of exchanges and for such large sums of money should be effected under this Bill as we find in page 175 of this Appendix. When an officer has been permitted to obtain an exchange for a large sum of money, under the sanction of an Act of Parliament, and the authorities know that he has done so, it is impossible that his services can remain at the disposal of the Crown as freely as they ought—as freely as they would if no such payment had been made. It is argued, indeed, that they will, and so they will in law; but so they will not in fact: they ought not, and they cannot, so long as human nature continues what it is—so long as genial and kindly men continue to administer the affairs of the Army. Is there any necessity for a pecuniary stimulus to be given to exchanges? There are many volumes of Blue Books on the subject, and they are full of evidence on this point. First the Duke of Wellington, next Lord Hardinge, and then the illustrious Duke—they all discourage a great number of exchanges. In every discussion which has ever taken place on the subject of the Army, how great has been the stress which has been laid upon the excellence and importance of the regimental system. In the evidence of 1857, the noble Duke who sits behind me (the Duke of Somerset) asked the illustrious Duke whether, with reference to the regimental system and to the maintenance of the esprit de corps, he thought it desirable to encourage numerous exchanges; and the answer of the illustrious Duke was that it was not desirable. The rule laid down by the Duke of Wellington and by Lord Hardinge was this—to allow no one to exchange when his regiment was ordered on foreign service; and the illustrious Duke said that he had walked in their footsteps in this respect. Is it, then, desirable that when a regiment has reached its station, individual officers should be encouraged to return? Tour Lordships will remember the statement by Lord Clyde. That distinguished soldier told the Royal Commission of 1857—
  "I had one of the nicest corps of officers, when I was ordered out to China. All those men embarked with their regiment; but as

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  soon as that service was over, and they had to remain in a climate like that of China, most of them immediately exchanged, and I lost all my young friends whom I so much loved."
  Lord Clyde drew the moral of that state of things; he said—
  "There is no sacrifice too great for the State to make to those men who will remain with their regiments, in every colony, and above all in India … to continue with the soldiers, to share their difficulties, to remain with them, to encourage them when sick, and to fight with them, when they are required to do so. I do not think that any sacrifice would be too great on the part of the State to effect that object."
  If such be the policy of the country and of the regimental system, of which we have heard so much, then I ask, what is this Bill? It is not unimportant, repealing the Act of George III. and repealing the Act of Edward VI., and creating pecuniary inducements in order to make officers more ready to leave their regiments, to impair the regimental system, and to frustrate the policy which Lord Clyde said it would be worth any sacrifice for the country to promote. The noble Duke (the Duke of Richmond) referred to that illustrious soldier, Sir Henry Havelock. Well, the result of the old system was that Sir Henry Havelock spent all his life in India. Is it a good thing that there should be one set of officers who spend all their lives in India, and another set who spend all their lives in the comforts and luxuries of London? Would it be a reassuring thing, if you suddenly found yourselves obliged to face a foreign enemy, to have to call home the Have-locks from India because your officers at home had not the advantage of Indian and Colonial service? It may be one of our inconveniences with respect to the Army that we should have some 60,000 men in India and between 20,000 and 80,000 in the British Colonies; but what is our consolation? It is that in time of peace these men obtain an experience which would be denied them at home, and that in time of war we have always officers and men on whose practised skill we can rely. But when you change your system—when you have half your officers constantly in India and another half constantly at home—you will lose that advantage. Then there is another consideration—one set of officers will be rich and the other class poor. In every society we have poor and we have rich; but it is always our duty to minimize that
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  distinction as far as we possibly can. The Army is not for the rich and the Army is not for the poor; it is for those who, whether rich or poor, have zeal to serve their Queen and country and to discharge the duties that the Service may impose upon them. But this Bill has this defect—it tends to distinguish the rich from the poor; it is unduly favourable not to the poor but to the rich officer. I will tell you why it is not likely to be favourable to the poor man serving in India. The poor man serving in India, and finding himself or his wife overcome by the climate, has, under the present regulations, a fair chance of obtaining an exchange upon paying the limited sum allowed; but when this Bill passes an exchange will become the property of the person who can open his purse widest, while the poor man who may be sick or who may have a sick wife will have no chance of obtaining an exchange as long as there is a richer man in the country desirous of coming home. The consequence will be that you will have the poor man always in a disagreeable climate and the rich man always at home. My Lords, the advantage pointed out by the Royal Commission is nothing but "the consideration" of which they speak. I demur altogether to that question of "consideration," where the inconveniences of the Service will go to one class of men and the advantages to another. And this I say, that the argument that the poor officer cannot live upon his pay is not an argument that ought to be heard from the Crown or accepted by Parliament. It is the business of the Treasury of this country so to pay our officers that every man can live upon his pay. [Laughter.] Noble Lords may laugh; but I do not say this because I have ceased to be charged with the burdens of office. At all events, something was done towards that end by saving the officer the interest of his purchase money. And this besides was done. So long as the Purchase system was in existence, you had always an answer to applications for increased pay and advantages to officers. Suppose I had asked the Chancellor of the Exchequer to increase the pay or allowances of officers, his answer would have been—"Do you suppose I am going to part with public money for the purpose of increasing the over-regulation value of officers' com-

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  missions?" We took away that argument from the Chancellor of the Exchequer by the abolition of Purchase, and I advise you not to give him by this Bill another argument, and if, at any time, you consider that you have a claim upon the Treasury for any increase of pay or allowances, enable him to say—"Parliament has taken the matter into its own hands, and has given a mode by which the poor officers may obtain money out of the pockets of the rich." My noble Friend has given me credit by anticipation for not raising in this debate the question of Purchase. I am sorry that I feel compelled to disappoint the hopes of the noble Duke. I should be extremely sorry by any oversight to fall into any argument which would be unfair or could not be properly sustained; but perhaps I may be able to elicit from the noble Duke some information which may show me that I am entirely mistaken in the view that I have hitherto taken of this subject. I understand that the first justification of this Bill, as stated by the Secretary of State for War in the House of Commons, was expressed in these words—"A man may be dissatisfied with the battalion to which he is posted." If that is so, I presume this Bill will find him the power to give his money in order to be transferred to a battalion which he does like. If that be so, what price is to be paid for the exchange? I presume he will pay the price of the better battalion which may be in the market. I do not suppose that there will be any regulations by which the left hand will take back what the right hand has given, and therefore everybody will be encouraged to make these exchanges. If that be so, I do not understand how it can be said that these exchanges have nothing to do with Purchase. It is true that they will have nothing to do with Purchase in reference to entering the Army. The mode in which young men can obtain access to the Army at present is either by competition in examination or in consequence of service in the Militia. But that is entrance to the Army. It does not give the right to a Commission in any particular battalion. When they are posted to a battalion, it is either to the Guards, by the selection of a colonel of the Guards, or by the appointment of the illustrious Duke, if it is to a battalion of the Line.
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  Do I understand that any young man who does not like the battalion to which he has been posted may, if he chooses, negotiate with one appointed to a battalion of the Guards, or any favourite battalion of the Line, and make an exchange? If so, then every commission given by a colonel of the Guards, and every commission in a more favoured regiment, given by the illustrious Duke, will become a saleable commission, and bear its market price. Then the noble Duke says that it is impossible that there should be a purse made up for the purpose of inducing senior officers to exchange to another battalion. Why is it impossible? At first sight it would appear to be not impossible, but inevitable. It is true that promotion depends upon selection; but selection pays a due regard to seniority on the regimental list. Advancement on the list will always be of money's worth. But this, I understand, is to be provided against by regulations, and by a declaration. I do not at all dispute the value of regulations or the value of declarations, and I should be the last person to attribute to anyone that he would forfeit his honour and make a false declaration. But I think it is not very wise legislation to put the temptation in the way. I think it an impolitic measure to create this strong temptation, and then to rely upon strong declarations to counteract it. It has not been our experience that strong declarations have been effectual safeguards against strong temptations. When I first entered the House of Commons we had to produce our qualifications; but it was found many of them were not worth the paper on which they were written, and it is to the honour of a Conservative Government that they abolished them. We are at this moment occupied in passing a Bill for the prevention of simony in the Church, which would not be necessary if the declarations of clergymen, or of the patrons of livings could prevent it. And in regard to the Army, nothing could be stronger than the General Order by which in 1783 over-regulation payments were forbidden, or the declarations by which the honour of the officer and the gentleman was pledged for the observance of that General Order. These declarations proved to be of no effect whatever. In 1824 they were discussed by the House of Commons, which thought

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  it was extremely hard that officers should first be exposed to strong temptation, and then be subjected to stringent declarations to prevent the temptation taking effect. What was the result? Did the House of Commons enforce the observance of these declarations? Quite the contrary. It abolished the declarations, and left the practice where it was. I hope I shall not be misunderstood as implying for a moment that anybody will make a false declaration; but I say it is very doubtful policy to adopt a system which shall afford strong temptations, and have no other safeguard than stringent declarations. It is said we have another protection—we shall have the greatest possible vigilance on the part of the military authorities. I believe this will be so; but we know that the military authorities, like everybody else in civil administration, are subject to this difficulty—that they cannot know a thing at all unless they know it officially; they may be almost certain that a particular thing exists; but unless they have full and official information they cannot act—they cannot refuse what on the face of it appears a fair and reasonable request because they have some suspicion or have been told something privately. When they had conceded a point as to which they had no adverse information, another officer will come next day and ask for the privilege conceded to his predecessor. Perhaps there may be almost a certainty that there is something wrong, but nothing can be done without official information. Thus each of these acts is a precedent for a future occasion; a body of precedents is piled up until a general rule is established, and so evils creep into systems—Parva metu primo. The concessions asked for are always described as small matters—little conveniences to a large number of gentlemen—then little difficulties are dealt with; little by little the rule grows up, and the time comes when you regret having ever entered into the career at all, and endeavour to retrace your steps. If, however, you have to retrace your steps in this matter, do you think you will be able to do so without another compensation? It is quite true that the strongest statements have been made that no compensation will be allowed. But what will be said? Why, it will be said—"In 1871 you were dealing with acts which Parliament had declared
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  to be a misdemeanour and a crime, and yet you compensated the officers to the full. Since then an Act of Parliament has passed expressly inviting us to do this. We have been acting," it will be added, "not only in compliance with the permission of Parliament, but in obedience to an invitation to us by Parliament." If such a case is set up, what answer can you make to it? My Lords, I have endeavoured to state—at greater length than I had intended—the danger now before us if your Lordships invite the agency of money in dealing with the Service of Her Majesty. I have shown that you will deprive the Crown of a portion of its just control over those whom you permit to purchase their exchanges; that you will divide the officers into classes—the rich and the poor—those who have experience, and those who have not; that you will teach the poor officer to look to his richer brother for the pay for which he ought to be indebted to the State alone; that your measure will tend to create, at every step of the ascent, from the first commission to the command of the battalion, a saleable value, and a market price; and with that value and that price, to revive the system of barter and traffic which used to prevail. I have shown you that the obsolete securities which you propose to restore, the declarations of officers, and the vigilance of the authorities, have never been effectual either for officers of the Army, or for clergymen, or Members of Parliament; and that if these securities shall fail you now, you will inevitably be called upon for the payment of a second compensation. It was only three years ago that we were able to get rid of the system of Purchase, and I can only hope that your Lordships may never have occasion to regret that the evils then existing have been renewed by the Bill now before you.
  Amendment moved, to leave out ("now,") and add at the end of the Motion (" this day six months.")—(The Viscount Cardwell.)
  THE EARL OF DERBY: My Lords, I can say on my own behalf, and I think I may say for my Colleagues, that we are glad the noble Lord and his Friends have challenged the second reading of this Bill, and have thus brought this question to a direct and simple issue. No man is better entitled to speak on

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  this subject than the noble Viscount; and if in the public mind, or in the mind of any part of the public, there exists—as I believe there does—mistake and misapprehension as to the objects and as to the probable working of this Bill, it is far better that whatever can be said against it should be said here—said in the presence of competent and unbiased judges—and said by those who, like the noble Lord, are capable of doing justice to their own side of the case, and ready also, as I believe, to do justice to the arguments of those who take an opposite view. We do not shrink from—on the contrary, we invite a close and full discussion. We know—that is not disputed—that we carry with us the opinion of the Army. We believe that we have in our favour the opinion of the great majority of the public which interests itself in these subjects; and we think that the objections which have been taken to our proposal—or at least those on which the greatest stress has been laid out-of-doors—are of the kind which look large and formidable at a distance, but which when you examine them closely shrink to very small proportions indeed. I do not want to dwell for more than a moment on the competency of the Commissioners to entertain this question. The noble Viscount and his Colleagues are, no doubt, the best judges of what they intended to refer to the Commission: but, whatever the intentions of the noble Lord and his Colleagues, the fact remains that the course which we adopt is recommended by three Commissioners selected for their eminence and impartiality, and appointed to deal with a subject which appeared to include this question. No man contends that the late Government are bound by a decision to which they are not parties; but it is fair, on the other hand, that we should support ourselves by the authority of gentlemen selected for such a purpose, and who undoubtedly brought to the study of that subject a greater amount of care and attention than could reasonably be expected from any outside authority. My Lords, I will grapple at once with that which, as I believe, lies at the bottom of the opposition which has been made to this Bill—I mean the idea that we are trying insidiously, and by a side-wind, to restore the abolished system of Purchase.
  VISCOUNT CARDWELL: I disclaimed that idea.
  THE EARL OF DERBY: The noble Lord, I think, conveyed the idea that if this were not our intention, it would be the result of the Bill. If this were so—if I could even see any plausible ground why the suspicion should be entertained—I think we should have been very shy of dealing with this question. There may have been—there were—wide differences of opinion as to the expediency of the Purchase system while it lasted. Personally—I do not take credit to myself for it—but, as a matter of fact, I believe I am one of the oldest opponents of that system in this House; for I remember speaking against it nearly 20 years ago, before the Commission of 1857 was appointed. But whatever anyone may have thought before Purchase was abolished—whatever anyone may think of the constitutional character of the proceeding by which it was abolished—I apprehend that no rational man considers its restoration now either possible or desirable. The thing is done: the inconveniences attending every large change are mostly got over; the officers have many of them received their money—to try and revive the Purchase system openly would be insane; to try and do it insidiously would be dishonourable, even if it were possible. But, except in the fact that under Purchase, money passed between officers under certain circumstances, and that money will under quite different circumstances pass for Exchanges in future—except in that, where is the likeness of the two things? I confess I cannot see it. Under the Purchase system an officer bought his step, gaining thereby, in return for the money which he paid, higher pay and higher military rank. The officer who could not pay was passed over, and his promotion retarded. The officer who could and did pay got a better chance of high commands, with all the distinctions they bring, and got his chance at an earlier age. That was the system which we, who objected to Purchase, considered unjust to the poorer officer and injurious to the efficiency of the Service. Practically, there may have been alleviations; but in the main our argument was sound, and it was successful. But how is it under this Bill? Can an officer buy himself into higher rank or higher pay? No; all that

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  he gets by exchange is an appointment exactly similar to that which he held before; and in point of fact he is rather a loser, for, if I understand the matter rightly, he goes to the bottom of his own rank. Does he stand in the way of anybody else's promotion? No; all he gains is to be quartered in a place which, for purely personal feelings, whether of health, family, or taste, he finds better suited to him than another. But, my Lords, this is not all. In the many discussions which were held between 1856 and 1872 on the Purchase system, those who opposed it, the Army reformers, were never tired of pointing to the non-Purchase corps—the Engineers and Artillery—and, they always argued—I think quite justly—that they got on perfectly well without Purchase. What was the answer made to that? Did anybody ever say—"Your argument does not apply; you are resting on a fallacy; you are assuming that which does not exist; these corps have the Purchase system in another form, because exchanges are allowed and money passes?" My Lords, nothing of the kind ever was said; nor could it be. Whether for praise or blame, everybody agreed as to the fact that in these corps Purchase did not exist. And I cannot understand how we are to be charged with the design of restoring it, when we simply aim at putting the rest of the Army on the footing on which these—the non-Purchase—corps stood before 1871. Even if a system of exchanges were like the Purchase system, likeness is not identity—you do not sentence a man without trial because he has the misfortune to have a relative who has been lately hanged. But the truth is that till this year, and except for the purpose of these debates, no likeness between the two was ever discovered, and the officers of the corps concerned will be the last persons to admit its existence. Now, my Lords, I come to what is, after all, the main issue before us—what will be the working of this measure, if it passes—what interests will it affect, and now will it affect them? My Lords, there are four distinct sets of persons to be considered. There are the officers who are willing to pay for exchanges; there are the officers who are glad to be paid; there are the non-commissioned officers and privates; and there is the public outside the Army, which is in-
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  terested in its discipline and efficiency. I will deal with these classes separately. As to the officers who want to buy exchanges, it may be assumed that they are in favour of the Bill. It is quite certain that their interests are promoted by it. But, undoubtedly, they are a small minority—and that fact—if you look at the facts—is one of the strongest arguments for the measure. No one doubts that its passing is desired by officers generally. No one disputes that the great majority of officers in the Army are persons who, though not wholly dependent on their pay, are yet possessed of but small private means. Is it conceivable that a large body of educated and intelligent men, dealing with a matter which intimately concerns their professional life, and which they perfectly understand, should be not only not averse from, but eager and anxious for, the granting of a privilege which is to make against their interests, which is to sacrifice the advantage of the numerous poor officers to the comparatively small number of rich officers? That is an absurdity on the face of it. Whether they are right or wrong in the view they take you must admit that the class of officers who would be sellers and not buyers in these transactions desire to have the right of engaging in them restored; and the presumption, at least, is that they know what they are about. But why, if we come to reason on the matter, should they take any other view? What do they lose by permission being given to exchange on these terms? The transaction is purely voluntary. An officer who, in the chances of the service, has got appointed to a station where most officers are glad to be sent, cannot be compelled or induced to leave it. If he wishes to exchange, he may benefit his pocket; if he does not wish to exchange, he is where he was before this Bill passed. The only possible objection which can be put forward on behalf of this class—and it is one which they do not put forward for themselves—is, that it may seem to give an invidious advantage to wealth. And the question is, whether that purely fanciful feeling—confined, as I hope and believe in an Army like ours it is, to a very few—ought to be set against the substantial advantage of enabling a poor man to pay his debts, or to help his family, by shifting from a pleasant to an

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  unpleasant quarter? The noble Lord says, we ought to hear nothing of poor officers or of rich officers; every one ought to be able to live on his pay. I should be heartily glad if that were possible. But this is not the case now, except in rare cases where the strictest economy is practised. To effect that object generally, it would be necessary to increase the pay of all classes of officers; and then all the economical policy of which we have heard so much during the last few years, and which we desire to maintain, would be scattered to the winds. Next, take the case of the private. It has been argued that he will be more dissatisfied than before with his condition when he sees that his officers have the power of exchanging out of disagreeable service while he is obliged to stay where he is sent. But those who argue in that way forget that the conditions of service in the two cases are different from the beginning. An officer can retire from the service when he likes. A private if he tries to do so is punished for deserting. There is room enough already for envy, if you suppose that feeling to exist; but the inferiority of the one position to the other is not aggravated by the mere fact that officers will be more free than before to make their own arrangements as to the place in which their duty shall be done. The position of the two classes, taking them as classes, remains what it was. But, my Lords, if no injury is done to officers or to privates by this Bill, is there none to the efficiency or discipline of the Service? That is the point on which most stress has been laid. It is assumed that the power of buying exchanges, however limited by regulation, will enable officers to make a plaything of the Service; will break up the Army into two classes—those who pay to stay at home and those who are paid to go abroad; that rich men will exchange into regiments where promotion is expected to be more rapid; and that competent officers preferring to stay in England or to return there will leave posts for which they are fitted and hand over their duty to men less competent to discharge it. I have tried to state these adverse criticisms fairly, and I will try to meet them. First, as to making a plaything of the Service. Surely, my Lords, it is a great mistake to argue as if it were mere fancy or the
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  wish for pleasanter quarters that makes men desire to exchange. Exchanges may be matters of health or of family necessity. An officer may be perfectly competent to do his work in Europe, who is warned by his doctors that the Indian climate will kill him; or he may be fit to serve in India, but not to face a Canadian winter. What do you gain by driving such a man out of the Service? The Army loses a good officer and society gets a discontented idler, and yet you do drive him out of the Service if you do not allow him to exchange on the only terms on which an exchange from India may often be possible. Take, again, the ease of an officer of independent means, married, and with a young family, whose regiment goes to India in time of profound peace. He cannot take his children with him. He runs considerable risk if he takes out his wife. He has the option of leaving them for five years or of quitting the Service. He likes the Service, but he is not dependent upon it, and rather than sacrifice his home he throws up his commission. Nobody can blame him—he is doing what he has a right to do; but what do you get by driving him to that determination? My Lords, there are many other reasons why officers may wish to change their regiments. One man has most of his friends in another regiment, and wishes to join them. One prefers to serve in a regiment which possibly his father commanded for many years. One has had some little unpleasantness with his brother officers, not reflecting on his character, but which makes a change better for all parties. One has a feeling of nationality, which makes him, as a Scotchman or an Irishman, prefer a Scotch or an Irish regiment. Surely, it is not to be said that motives of this kind are unreasonable or unnatural, or that in acting upon them a man is doing what is blameable. But I may be told, nobody objects to exchanges, it is only the paying for them that is objectionable. My answer is that if you forbid exchanges in all cases except where the respective situations are of exactly equal eligibility, you really do forbid them in the great majority of cases; and that has been so much felt that, as stated just now, the recent prohibition is relaxed to this extent—that any expense actually incurred in removal consequent on an exchange may be borne by the

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  other party to the exchange. Surely that is a very fine distinction. A man is not to receive money for his own use or for his family requirements, but he is to receive repayment for his travelling expenses, fixed by some authority which must either exercise a very arbitrary discretion, or else—which is the more probable alternative—neglect its duty altogether. Is there no risk of evasion in such a rule? Are you sure that you can enforce it? Does it commend itself to man's reason—and, if not, is there not a constant tendency to evade, to treat as a dead letter, a regulation which is against the interests of both parties concerned, and the necessity or utility of which is not evident? But I come back from that. It is contended, as I said before, that if you encourage exchanges, a competent officer sent to a post which may be important is liable to be replaced by one less able. But as far as that argument applies at all it applies to exchange in any form. I presume that, whether this Bill passes or not, there will always be, as there is now, power to prohibit an exchange which for whatever reason is considered as not for the interest of the Service. While that power exists the objection which I am referring to disappears. If it ceased to exist, then, with or without this Bill, the military authorities would be left without the power which they ought to have. But, my Lords, we may safely trust in these matters to the action of those motives which ordinarily regulate human conduct. The officer who is most eager to put himself forward for any post where there is a chance of active employment is not the man who will do the work least well when it comes to him. Take two officers equally competent, but one of whom is anxious to get out to India because he thinks he may have a chance of seeing service there; and the other, being in India, is only eager to get home to his hunting and shooting and pleasant society in England—and I say the man who is eager for work is the better man to go out where there is a chance of distinction. The process is one of natural selection, and I do not see why you are to interfere with it. As to the other apprehension which has been expressed—that rich officers will exchange out of regiments where promotion is slow into others where it is rapid—I must speak, as a civilian, with reserve; but,
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  though I have often heard that danger referred to, I have never seen proof that it is real, or had it explained to me how the thing is to be done. Who is to know beforehand that promotion will be slow in one regiment and quick in another? Are not these things very much matters of chance? Can they be foreseen and speculated upon? Will you find men ready to invest their money in a speculation of this kind, of which they, knowing the circumstances, know better than anybody the uncertainty? I hear it answered—"Oh, the agents will manage it;" and I admit that Army agents are an acute class, but they must be sharper than I give them credit for if they know who among the seniors of half-a-dozen regiments are going to die next year. They may think it probable that such and such an officer is thinking of retiring; but calculations of that kind are very apt to be mistaken, and they can have no monopoly of information in that respect. I remember a saying ascribed to an eminent Prime Minister long ago, that if he had been dishonest enough to speculate in the Funds with the supposed advantage of his official knowledge, he should certainly have lost his money; and I suspect those who trust to agents professing to have secret intelligence of the intentions of senior officers will come, sooner or later, to the same conclusion. My Lords, there is another class of objection with which I am bound to deal. I have heard it argued, if this system is good for the Army, why not for the Navy, why not for the Civil Service? My Lords, a more plausible fallacy never was uttered. The conditions of service in the British Army are utterly unlike those of the Navy or of the Civil Administration. In the Army, if a regiment moves, say, to India, every officer in it must go, or he must exchange, or he must leave the service. You have nothing analogous to that in the naval profession. You have not there, and you cannot have, anything like the regimental organization. A regiment is a permanent body; a ship's officers are a body brought together for a temporary purpose. Commands in the Navy are for short terms; and if an officer's health unfits him for tropical service, I apprehend that he would be able to decline a command without prejudicing his claims to employment elsewhere. There is, therefore, in the Navy no question of

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  exchanges, and the discussion in which we are engaged could not take place in connection with that profession. The same thing may be said of the Civil Service. You have civilians, no doubt, serving in all parts of the world; but you have no class of men like lieutenants, or captains, or majors serving now in one part of the world, now in another, performing wherever they are exactly the same duties, holding exactly the same rank, and therefore interchangeable with one another. If you had such a class in the Civil Service I think it very likely indeed that the question of exchanges among them would arise. But you have no such class, and therefore that question does not arise. My Lords, I will not dwell on the merely declamatory argument—though much stress was laid on it "elsewhere"—that it is improper and unjust that a man should be able to escape by a mere money payment from the performance of irksome duty. Just look where that doctrine leads you. A private cleans his arms and accoutrements for himself; that is part of his duty. A cavalry soldier grooms his own horse; that is also part of his duty. Is not an officer escaping irksome duty by a payment of money when he employs his soldier servant to black his boots or brush his cloak or his groom to clean his horse? You cannot look at matters from that point of view. As long as the work is done, as long as it is done properly, as long as it costs the country no more, what does it matter to anybody except the parties concerned whether it is done by A or B, or in what proportions they share the doing of it between them? Recollect that the British Army is a very peculiar body. It is the only large Army in the world recruited on an exclusively voluntary principle; and that tells on its composition as regards officers as well as men, for with a conscript Army promotions from the ranks are easier. It is the only Army which is scattered over the whole face of the globe. Its officers are paid very little. But for the social position which their commission gives them, it may be said that they hardly get a fair day's wages for a fair day's work. You ought to be careful how you deal with the traditions and even with the prejudices of a body so composed. It is not a question of what is most agreeable to the officers, but of what is best for
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  the State. Make the service distasteful and you will not get as good men, nor get them on the same terms. You might conceivably have a system under which all exchange was forbidden, and every officer was bound to go with his regiment wherever it went. But you must pay for it if you do. And at a moment when the gains of other professions are increasing, when money does not go as far as it formerly did, when the pay is, therefore, really less than before, measured by purchasing power; when you are very properly requiring higher qualifications from your officers, and putting heavier burdens of duty upon them, it does not seem wise to go out of your way to make military life unnecessarily harsh and repulsive to those who, with possibly a choice of careers before them, are doubting whether they shall enter it or not. My Lords, I do not wish to detain you further; but I have heard with surprise the language held. When on one side it has been pleaded that any abuses which the Bill did not absolutely render impossible might be checked by regulations, the answer has been—"We do not trust regulations. Parliament ought to rely on nothing except an Act of Parliament, and not take for granted that any abuse will be avoided which the law makes possible." My Lords, do you act on that theory in any other branch of the public service? There is scarcely a limit to the mischief which those who hold administrative power might not do without breaking any law. They might turn all the clerks out of the Public Offices, and replace them by their own friends; they might recall Governors from the Colonies and diplomatists from abroad; they might throw the whole public service into confusion in a hundred ways. But nobody is afraid of their doing these things, because there is an unwritten as well as a written law—a law of custom and of opinion—a law enforced, not merely by individual conscience, but by Parliamentary criticism and the power of the Press. My Lords, is Parliament less vigilant than formerly? Is the Press less powerful? Are jobs more readily tolerated? You can answer those questions for yourselves. Depend upon it, if the country does not mean that the administration of the Army shall be jobbed—and it does not—abuses may be legally possible, but practi-

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  cally they will not be in question. If I could see in this Bill one-tenth of the evils and dangers that the noble Viscount (Viscount Cardwell) anticipates from it, I should be as little ready to support it as he is; but, as I believe those evils to be unreal and those dangers illusory, I ask you to give it a second reading.
  THE DUKE OF CAMBRIDGE: My Lords, the same views and the same sentiments that have just been expressed by my noble Friend are those which will guide me in making the remarks which it is my desire to express to your Lord-ships. I am exceedingly anxious that it should be distinctly understood that I am about to make my statements upon strictly military grounds. I do not look upon this as a party question, and, as far as I am personally concerned, my sole desire is to speak as the exponent of the sentiment of the Army as I believe it to exist, and to elucidate some points in reference to the question which do not seem to be quite clearly understood, and with which, in my official capacity, it will become my duty to deal. Exchanges in themselves are certainly not acceptable to any of the authorities; and I entirely go with the view of the noble Viscount when he read the remarks of Lord Clyde, and referred to the evidence given by myself and others before the Royal Commission presided over by the noble Duke who sits behind him (the Duke of Somerset). On that occasion I said I objected to exchanges, and I entertain the same objection still. But I am bound to state frankly that it is utterly impossible to carry on the administration of the Army without great injustice, hardship, and, I believe, great injury to the public service unless exchanges are allowed. The noble Viscount himself admitted the principle of exchange when he specified the form in which exchanges should be effected. The object of this Bill is to alter that form, and the reason for it is that this form has been found extremely inconvenient and detrimental to the Army. I have said that I object to exchanges—I do so because I wish to maintain the regimental system, and have no desire to see officers moving about from one corps to another—I wish every officer to be attached to his own corps—but at the same time I am far from advising your Lordships to reject the arrangement proposed in this Bill. If the public
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  or the officers of the Army have an idea that because this Bill is passed officers will come in shoals to ask for exchanges, I think they will find they have made a great mistake. When an officer asks for an exchange, the first thing which the Commander-in-Chief has to consider is the effect it would have on the public service—what there is in the applicant's position to justify it—whether it is desirable in the interests of the corps themselves that the exchange should be made—and whether it would injure any other officer's chances of promotion. If it is found that there is no special objection to it on that score, the next question is, does there seem to be sufficient ground to justify the officers in question exchanging—is there any reason for assuming that anything irregular is being done? Should anything of the sort be perceived, the military authorities will instantly refuse to sanction the exchange. The decision of this matter is, perhaps, the only arbitrary power which the military authorities possess. If they see that the interests of the public service do not justify an exchange, there is an end of it. The whole power of granting or refusing an exchange rests with them, and they are not required to give reasons for their decision. So that the question of exchanges is one of confidence or no confidence in the military authorities. I am satisfied that this was not in the mind of the opponents of this Bill—but I desire to point out that this is the logical result. So long as the military authorities thus watch jealously the interests of the public service I contend that this is as safe a measure as could well be devised. I can give my noble Friend an instance or two of the working of this system. An officer, who shall be nameless, was allowed three or four years ago to exchange for the purpose of returning home from serving in India. There was nothing in the circumstances of the case which did not justify the exchange being made. But, unfortunately for him, the very regiment which he had entered was subsequently ordered to India also, and on his applying again for permission to exchange that permission was refused. Why? Because the military authorities did not deem the proposed exchange justifiable under the new set of circumstances. The interests of other officers would have suffered. If the exchange in question had been refused, these officers

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  would probably have left the Army and the country would have lost their services. I mention this case merely in order to show the care and attention with which every exchange is looked into. If I thought this Bill would introduce the question of compensation at anytime I should be as much averse to it as I am now favourable to it. But this is a matter which need not even be alluded to. We are now going on an entirely different principle, and we ought to put the idea of Purchase completely aside. As to its introducing the possibility of giving bonuses, to bring this forward at all as an argument against this Bill would almost imply that the military authorities were blind to the interests of the public service. I can assure your Lordships that no exchange would be allowed, unless the military authorities were perfectly satisfied that the public interest would not suffer, and that the desire on the part of the officers to exchange arose from other than pecuniary considerations. I think this Bill necessary. I admit the inconveniences attending exchanges, but I also know as a matter of fact that you cannot avoid them. It is a choice of evils. Therefore I say—"Accept this arrangement, which is calculated to meet the necessities of the case in a plain matter-of-fact way." I really believe that when once it is known and felt that exchanges are not to be worked to the extent that some people seem to imagine the question will soon find its level—officers will not be disposed to give money for what does not produce money. The question of exchanges formerly occupied a very different position from what it does now. It was all very well when rich men could exchange into a corps with a view to promotion, jumping over the heads of five or six poorer officers; exchanges had then a marketable value; but now this "leap-frog system" has entirely disappeared. Besides, the power of selection which is given to the Commander-in-Chief by the Abolition of Purchase Act will stand good to prevent anything in the shape of money passing to an extent that might be considered at all improper or even questionable. Under these circumstances, I confess I have a strong opinion that this measure should recommend itself to your Lordships' approval. And, as regards the officers of the Army, should you pass this Bill, I have no doubt the
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  large majority—I believe the whole—of the officers will feel in a much more safe position as regards their interests if they are allowed on moderate conditions to exchange. I have heard this question argued in the interests of the poor officer; I agree in that view; I believe it is really a poor man's question—but, of course, for a different reason from that advanced. The officers who come to me and urge me to promote exchanges are poor men. When they are serving at home they find their pay in England so small that they would in many cases have to leave the Service if they could not go abroad again, where the pay is better. I believe the code of regulations which will be framed is such that the system may be carried out successfully. I do not know, my Lords, that I have much more to add. I have argued the matter in a purely military sense. I hope I have shown that my answers to questions put to me by the Royal Commission are quite consistent with my support of the present measure. And if your Lordships have that confidence in the military authorities, which I infer from your having given the Commander-in-Chief the power of selection, you may rest assured that no ill effects will result from carrying out this measure as proposed; while at the same time you will have a well-contented Army, with the assurance that in no respect has the profession retrograded from the passing of this measure.
  THE DUKE OF SOMERSET: My Lords, the illustrious Duke has spoken on this occasion, as he always does, without favouring either party, and with that earnest and anxious desire to promote the interests of the public service and the officers of the Army which has always distinguished him. Having heard his statements and read his evidence, as quoted by the noble Duke, I cannot help thinking that both are very satisfactory. He does not allow exchanges, except where they tend to the benefit of the public service and are consistent with justice to all the officers concerned. When, however, I look at the evidence before the Royal Commission, I must say I see a very different state of things—the evidence shows that underlying the system of exchanges there has grown up a practice of sale and purchase, even a market price. What do the officers say? They talk about their

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  right to exchange. Captain Campbell, in reply to Question 432 says, "I had a right to exchange;" and to Question 434 he says, "I might make any pecuniary arrangements." Lieutenant-Colonel Bray, in answer to Question 554, says—
  "The loss of the power of exchange was very great. (555) There was a certain market price. The market varied, and poor men were obliged to watch the market."
  Captain Moffatt (596) "The right of exchange was a valuable consideration in the eyes of all officers." Captain Gonne (703) "I should have said to the agent,—' Find me an exchange as major to India."
  (704) "Was that a thing which could be obtained by going into the market?—I have never known any one search for it in vain."
  Captain Backhouse (2,827)—
  "I had a right to exchange if I thought proper, receiving or paying money according to the part of the world in which my regiment was situated."
  Lieutenant-Colonel Johnstone (907) speaks of the power of obtaining by exchange the command of a Line regiment, and (912) he says it was worth about £3,000. Colonel Burnaby says (1,114), large sums could be received by Cavalry officers exchanging to the Infantry. Captain Spottiswoode says—
  (1,177) "Under the old system officers were always allowed to exchange to half-pay. Exchanges were not limited to regiments going abroad."
  I might quote a great many more extracts to show that officers were still treating the question as a matter of right. But the illustrious Duke tells us that no officer has any right to exchange—he can only exchange where it is for the benefit of the public service; or at least, where it cannot be at all detrimental and where it is seen to be just to the other officers concerned. If that line be taken, of course many of the evils expected to arise from the system of exchanges will be done away with. They had grown up, no doubt, in connection with the Purchase system, which tainted everything connected with the service; but if exchanges were carried out strictly on the principle laid down by the illustrious Duke, I think this Bill may safely be allowed to pass; and for my part, I should be very sorry if, a Royal Commission having reported in its favour, the other House of Parliament having passed it by large
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  majorities, and the whole Army being anxious for it, the House of Lords should oppose it. I admit the danger and difficulties of the question, but I say the illustrious Duke will be responsible for carrying it out, and I trust he will carry it out in the spirit in which he has spoken to-night, and that when hereafter a Committee looks into the question to see how the system of exchanges has worked under this measure they will be able to report that the principles of the illustrious Duke have been fully and fairly carried out.
  LORD SANDHURSTsaid, it was with great reluctance he rose to address their Lordships, because, as he had the honour to hold an executive office under the Crown, he approached the subject with considerable difficulty, and he had the misfortune to differ from the illustrious Duke on the cross-benches. The noble Duke who had last spoken (the Duke of Somerset) dwelt at considerable length on the dangers which beset this measure, but concluded by saying that, while admitting the risks to which the discipline of the Army might be exposed, he was yet prepared to vote for it. Under these circumstances, he (Lord Sandhurst), for one, could not follow the noble Duke into the Lobby. If this measure was attended with such risks, it was the bounden duty of those who agreed with the noble Viscount (Viscount Cardwell) by every means to oppose the Bill, and, if possible, to throw it out. The question did not rest on the point put before their Lordships by the illustrious Duke on the cross-benches. It was a question totally foreign to the responsibilities of the military authorities. The question was one of the morality of the Army—of the morality of the officers—whether they should be regulated by the same principle as regulated other professions, or should be invited to barter that principle for money considerations. In the year 1832, a great measure of reform became law. That was the first great step in this country towards educating the people in the true path of political morality. It was not merely an electoral reform; it was a declaration that the trust confided for the performance of a public duty should not be so corrupted or changed as to become a freehold, to be used for private purposes and private interests. What had we been saying during the last 40 years?

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  Whichever party was in power, the education of the people was proceeding in the same direction. They had seen one Bill after another which had caused the people to become more alive to the necessity of enforcing practical morality in the transaction of Public Business. That was the principle which animated the House of Commons when it gave the people a new Charter, and when it relinquished the right of trying Election Petitions. Just as in 1832, a new Charter had been given to the people of England, so, in 1871, a new charter was given to the Army of England, and under it a contract was formed with the nation, by which the people were induced to tax themselves to the amount of seven or eight millions for the purpose, not merely of giving compensation to officers for their commissions, but still more of stamping out the notion that the trust incurred for the performance of duty could be any more corrupted or changed so as to became a freehold for the purposes of private interest. That was the cause which alone reconciled the people of England in 1871 to pay this enormous sum. But by the Bill before the House this great principle was violated. The contract for which this vast sum was paid was broken; and it was impossible too often to reiterate the assertion that private interests were preferred to public interests, and money considerations took the place of those obligations by which every man in the public service ought to be bound. It must be remembered that in all the speeches to which their Lordships had listened that evening the true distinction had been lost sight of between money paid to meet particular circumstances and money payments which were neither more nor less than bribes. It was impossible that two things could be more different than a bribe in the one case and in the other a sum of money paid to enable an officer to proceed to the scene of action. Under the administration of the illustrious Duke, exchanges had been regulated as far as was in his power. But, Administrations changed. We might not see the illustrious Duke always in the position which he filled with such remarkable distinction; other men might come to fill that office, with other views; and he would ask their Lordships whether the integrity of the Army—whether the morality of Her
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  Majesty's service—was to depend on the views of the individual holding the office of Commander-in-Chief? He might, perhaps, be allowed to give an instance in his own experience. When he was a young man, a captain in a Line regiment, what happened? It was a time when the saying was "That officers must either sell or sail." But this did not represent the true state of things. Exchanges were permitted wholesale under the system thus prevailing. At the very time they were about to sail, 10 young officers walked into the harbour in the place of 10 others who exchanged—four captains and six subalterns. Their Lordships might judge of the disorganization which existed in that regiment for many months afterwards. That occurred under the great Duke of Wellington. He was talking of the year 1844, when war was threatening in India. The regiment to which he belonged, within a few months after its landing, found itself in the presence of the enemy—those 10 officers had actually exchanged from a regiment which in a brief period was engaged on the frontiers of India. This was done unconsciously on their parts, although the authorities well knew the state of the case. He was only too well able to confirm what had been stated so emphatically by Lord Clyde, when he deplored the facilities given to officers to exchange when they were in dangerous foreign climates. If there was one thing which destroyed discipline more than another, it was when a regiment was on a distant frontier, when perhaps every third man was down, and when officers left their men to sicken while they sought healthier or more comfortable quarters. Were not such officers open to the same imputation as though they were actually guilty of misconduct? He did not mean to say that such things occurred; but if this Bill passed, such temptations would be put in the way of officers that we must expect the weak ones sometimes to yield to these temptations. He said this advisedly, after long experience of the way in which men did yield to temptation under these circumstances. It was matter of history that during the Peninsular War, the Duke of Wellington was exposed to great difficulties from this cause, and was obliged to take measures to coerce the weak men among his officers.

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  He appealed to every officer who had been in command or had held high Staff appointments, whether the great difficulty was not to keep regiments complete and retain the officers when what might be called the honour and glory had passed away. But when the honour and glory had passed away, the most difficult, if not the most dangerous, part of the service often remained, and by committing themselves to the principle involved in the Bill, their Lordships would render it possible for officers to avoid this part of their duty. It was said that the officers of the Army were generally in favour of the measure. But they were officers who had been brought up in the Purchase system, and who might be said to be saturated with Purchase. As a rule, the officers desired to return to the Purchase system; and though he believed that the Government were as hostile to the re-introduction of this system as noble Lords on his side of the House, they had forgotten the motives by which the human mind was in general swayed, and by that forgetfulness had laid themselves and the Army open indirectly to the re-introduction of something like Purchase. It was contended that no possible money profit could arise through exchanges. Now there might very well be cases in which it would be of advantage to officers to pay large sums to be allowed to exchange. He would give two or three instances, by which it would appear that appointments, if not commissions, might be directly bought. It sometimes happened that colonels wished for service in India, for the purpose of achieving a brigadier-generalship, which not only carried the command of a brigade, but very considerable allowances. Now it was quite worth the while of a colonel at home to give £2,000 or £3,000 to a colonel in India if, by reason of his seniority on arriving in India, he could see his way to the command of a brigade. Thus he would buy through an agent, not a commission, but that which would be of still greater importance to the State—the reversion of the post of brigadier-general in India. Then take the case of the Guards or a heavy Cavalry regiment. The prestige of the Guards carried great weight, and the officers enjoyed solid advantages by remaining in London with their families and friends. Suppose a young man 30 years old were tired of
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  London life, and proposed by-and-by, to retire from the Army altogether, having no objection meanwhile to visit India. The value of a commission in the Guards 10 or 20 years hence, as compared with one in the Line was problematical; but it was possible that an officer in the Guards who had not paid a shilling for his commission might by the time he became captain, if he chose to exchange to India, acquire a property worth £3,000. Would not this be permitting sale and barter—especially as the Secretary for War had determined to know nothing of the prices given, and to ignore the question of money, though it was really a question of money from beginning to end? If the Guards were to be excepted from the operation of the rule of exchanges into the Line, their Lordships ought to be informed of the intentions of the Government. He was aware that under the administration of the illustrious Duke exchanges between the Guards and the Line had been discouraged; and he greatly admired this policy, because by such exchanges the position of many of the older officers in the Line was prejudiced. He believed that for many years past the exchanges between the Guards and the Line had not exceeded one per annum.
  THE DUKE OF CAMBRIDGE: There has only been one for each of the seven battalions of the Guards during the last 10 years.
  LORD SANDHURSTsaid, that if the Bill passed, he did not see how if officers of the Guards asked for an exchange, they could be excluded from the privilege any more than officers in Line regiments; and if so, Parliament would have secured to them a property of considerable value which they would be able to dispose of under the Bill. The same thing would happen in heavy Cavalry regiments. These regiments were not sent abroad. Therefore a sub-lieutenant appointed to a heavy Cavalry regiment by the time he became a captain would be able to dispose of a property of considerable value if he chose to exchange for India: and this through no fault of either officers or agents, but simply as a logical consequence of the Bill. A great deal was said in 1871 in consequence of the Bill proposed by the Government of the day, about the mind of the Army being unsettled; but now, after the lapse of only four years, we

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  were again landed in a discussion of the principle of that measure. This, in his opinion, was a result greatly to be deplored. He could use no term less strong. That the present Bill would pass he entertained no doubt; but still noble Lords opposite ought to recollect that the question would not be settled by the passing of this Bill; and that when the Party now in Opposition were again on the other side of the House the question would certainly be re-opened, unless it could be shown on the most indisputable ground that the evil consequences they now feared had not been brought about. It had seldom been his lot to speak on a subject which had given him more pain than this. He was aware that he was opposing the wishes of the great majority of the officers of the Army. That was, of course, a disagreeable position to occupy; but it was his firm conviction that time would show that the concession now sought to be made to their wishes would be the greatest mischief and the greatest injury which had ever been done to them.
  THE DUKE OF CAMBRIDGEsaid, his noble and gallant Friend had made a very serious statement with regard to officers exchanging in order to avoid dangerous service. He could not leave such a question unchallenged, and therefore he hoped his noble and gallant Friend would, by naming the regiments, and giving the date of the occurrence, give him an opportunity of seeing how the matter really stood.
  LORD SANDHURSTsaid, that as regarded officers leaving the regiment abroad at a time when the men might be suffering from sickness, he had already stated that he spoke hypothetically, but that the Bill before the House led directly to encouragement of such conduct.
  THE DUKE OF RICHMONDthought that the noble and gallant Lord ought to state the number of the regiment the officers of which he said had exchanged in order to avoid a dangerous service. He wished to impress upon the noble and gallant Lord that he ought to do one of two things—either to withdraw his assertion that any officers of any regiment in Her Majesty's Service had effected an exchange for the purpose of avoiding a dangerous service, or to give the name and number of the regiment referred to.
  LORD SANDHURSTsaid, with regard to the question put to him by the noble Duke, he (Lord Sandhurst) must remind their Lordships that he was most particular in saying that the officers to whom he referred, like the public, were at the time doubtless unconscious of the war which soon afterwards broke out, although such a contingency was considered imminent in official quarters at the time, and that the Government and the Horse Guards of course knew the reasons of their actions. He was talking of what took place some 30 years ago, when sailing ships were the only means for the conveyance of troops, and when, of course, the communications between distant countries were greatly more tedious than at present. It was a fact that within a year and a quarter after leaving for India the regiment to which he alluded had to engage with the enemy on the North Western frontiers.
  LORD PENZANCEsaid, that, as one of the three Commissioners on whose recommendations the Bill was founded, he hoped the few observations he had to make would prove of a more tranquillizing nature than those which had fallen from those noble Lords who were more directly interested in the question than he was. He did not complain of the terms in which the noble Viscount (Viscount Cardwell), who did him the honour of placing him on the Commission, had spoken of the way in which the Commissioners had discharged their duty; nor did he complain of their being styled in "another place," "distinguished and amiable persons," though everybody knew what that meant in such a connection. It was true that the Commissioners were three civilians. They had no interest in the matter, and as little knowledge of it—speaking for himself, at least, he would admit he had no knowledge of it at all. Well, the Commissioners were authorized to investigate the question, and to ascertain how far the complaints of the officers could, without injury to the public service, be met by withdrawing the restrictions which had been placed on their exchanges. It had been said that the Commissioners exceeded their Instructions. He was sorry if they did so. They certainly did not desire, in their inquiry, to travel over any region where they were not authorized to place their feet; certainly, they had no desire to

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  carry their inquiries beyond the limits assigned to them; and it appeared to them their duty to carry their investigations to the extent to which they did carry it. The noble Viscount read a portion of the Commission under which they were appointed. He (Lord Penzance) begged leave to read another passage—because it was a passage that, in their humble judgment, thrust upon them the duty of investigating the subject of exchanges. The Commission recited that certain officers had alleged certain grievances—
  "And whereas an humble Address has been presented to us by the Lords Spiritual and Temporal in Parliament assembled praying us to issue our Royal Commission for inquiry into the allegations of the said Officers.
  "Now we appoint you our Commissioners "—for what?—"for the purpose of examining the allegations contained in the Memorials before referred to."
  Those Memorials differed very much. Some memorials laid great stress upon one complaint, and some upon another; but one and all put forward as a great grievance the interference with the free right of exchange. Therefore, if the Commissioners were to examine the allegations in the Memorials, it became their first duty to take the evidence of a large body of officers on that question, and they accordingly did so. But, said the noble Viscount, what the Commissioners were appointed to do was to see whether there were any grievances that could be compensated by a money payment. The Commissioners considered that question; but he (Lord Penzance) thought very little reflection would show any Member of the House that a money compensation for the loss of the free right of exchange was simply impossible. Could it be said in any one individual case that an officer in the course of a certain number of years would exchange with somebody else under the system of exchange? How, then, could they estimate the compensation in such a case for the loss of the right of exchange. They were, therefore, compelled either to pass over this particular grievance, or to take the course they did take with respect to it. After examining the allegations in the Memorials the Commissioners found that the officers had a real grievance with reference to exchange. He was sorry if the Commissioners exceeded their Instruc-
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  tions. They had no desire to do so; but to that hour he had not heard how they practically could have done anything else. The complaints of the officers were based upon this—they said they had entered the Army when certain facilities were open, and some complained that they were ordered to a foreign station, where their health did not enable them to carry on their duties. But the majority of the officers who complained were officers of the poorer class so called, who had always looked forward to this right of exchange which they had always practically enjoyed. The noble Duke behind him read evidence to show that there was no such right; but it was the practice—and the officers therefore complained that that practice was abolished by the Warrant issued on the subject. Let him remind their Lordships what the system of Purchase was—for it was much misunderstood out-of-doors. It was, in truth, simply a system of retirement, the retiring officer receiving a sum of money from the officer who succeeded him. The inequality which the system created between the rich and the poor was by no means the whole thing. No doubt, there were officers who could not purchase a step; but those were the very men who complained loudest of the abolition of Purchase. No doubt, other men went over their heads; but then they remained until they got to the top of their rank, and then when a vacancy occurred they took it without Purchase. This step they could turn to money account, and there were instances in which men who had risen from the ranks in this way got some thousands of pounds on their retirement. Well, then the question arose in the minds of the Commissioners, whether the abolition of Purchase made new Regulations, as to paying for exchanges, necessary. The Commissioners were resolved that nothing ought to be done under the Commission that tended in any way to restore the system of Purchase. It was an objection to Purchase—and an objection which, to his mind, was fatal to it—that under that system every officer had, as it were, a vested right to promotion on certain terms of payment. He had a right to buy a seniority upon its becoming vacant. The authorities were perpetually tied by those vested interests in the selection they wished to make of

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  men whom they wished to promote. In the Artillery and Engineers, which were non-Purchase corps, a system of exchanging similar to that contemplated by the present Bill had long existed, without tending, in the slightest degree, to call into existence a practice of purchasing commissions such as that which the late Government passed a Bill to abolish. It was not fair, therefore, to say either that the measure now before their Lord-ships would re-enact Purchase or call it into existence where it had previously been unknown. The Bill would not enable officers to obtain anything which they could exchange for money; it would simply put it within the power of officers to exchange precisely similar functions, with the sole difference that those functions would be discharged in countries other than those in which they would have been discharged if the exchanges had not been effected. With regard to the broad question which was constantly raised in discussions upon the present Bill, he had no hesitation in expressing his opinion that exchanges were beneficial, not in the abstract, but as affording an opportunity of choosing the least of two evils, one of which must of necessity exist. It had been urged that this measure was a retrograde proposal as compared with the Brokers Act; but it seemed to be forgotten that that Act permitted the exchange of commissions, subject to the condition that no more money should pass than was to be fixed by the Queen's Regulations. No such Regulations were, in fact, ever drawn up, and the present Bill would simply carry into effect that which would have been done by the Brokers Act if the necessary Regulations had been drawn up subsequent to its enactment. The present Bill would restrict the money payment on an exchange being effected to the sum necessary to defray the travelling expenses of the officer accepting the exchange. The change that the Commissioners proposed amounted to no more than this—they put it in the power of the illustrious Duke the Commander-in-Chief and the Army authorities to sanction exchanges in certain cases where it might seem desirable. What, then, was the objection to the Bill? If the power of permitting officers to exchange on payment of expenses was sufficient to induce them to exchange, why should they suppose that larger sums would
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  pass? Officers in the Army were not, as a rule, so rich that they paid more for anything they wished than the sum prescribed by law. One of two things was certain, either that the sum to be paid was a real restriction, or that it was not; but no doubt, practically speaking, this payment did act as a restriction on exchange between officers. He had seen a statement by a person who seemed to have a practical knowledge of the question, and who remarked that it was easy for persons to say that they did not object to exchanges, but only to the passing of money for exchanges. When one regiment was going out to India another might be coming home, and many officers of the regiment ordered home who had contracted ties in India might be not only willing but anxious to remain where they were, while some of those who happened to be enrolled in the list of the officers of the regiment ordered out might have an equal desire to be stationed at home. In such a case why should not an arrangement for mutual convenience be sanctioned? The opponents of the measure indulged in prophecies as to what would happen under its operation; but they seemed altogether to forget that exchanges were no innovation, but had existed for 100, or, for aught he knew, 200 years. It was said that the rich officers would live in comfortable quarters, while the hardships of the service would be left to their poorer brethren. But if such a thing was likely to happen it would have happened already, and who could say that it had? Again, it was said that the Regulations controlling exchanges could not be relied on. But they had the same guarantee on that head, as they had for the fulfilment of other Regulations of the Service. As for the purchase of promotion, such a thing might have been possible under the old system; but it was impossible now when there was no right of succession to any vacancy, the right of selection being vested in the Commander-in-Chief. The argument that an inferior man might exchange into a position for which he was unfit, was also fallacious; for, the Commander-in-Chief having the right of selection, it was absurd to suppose that he would with one hand appoint a properly-qualified officer to a particular post, and then with his other sanction the substitution of an officer who was

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  incompetent. It was said the officers of a regiment might "make a purse" to induce the senior officer to retire, and thus give them an opportunity for advancement. But that was a thing which had never been done, and what ground had they, therefore, for believing that it would be done in future? He came now to what might be called the sentimental side of the question. They had heard a good deal about a "degrading traffic," "higgling and huckstering," and so on. It was said "there were three things which ought not to be bought or sold—the virtue of a woman, the integrity of a statesman, and the honour of a soldier." Now, if that meant anything, it meant that the honour of the Army was compromised in this question, and that if exchanges were allowed the honour of the Army was impugned. That was a statement so alarming that one almost shrunk from exposing it. What said experience on the matter? Had the honour of the Army suffered from the Exchange system? It was the first time he had ever heard of it. Then it was said the morality of the Army would suffer; if this "higgling and huckstering" system were allowed to go on, officers would become so degraded in the eyes of the soldiers they would no longer care for them. Had this ever happened? Was that the spirit evinced in the lesson taught at Inkerman? The moment they came to look back to experience these delusions were entirely dissipated. Those who used these arguments substituted prophecy for the past and imagination for experience. He hoped their Lordships would deal with this question as one of a practical nature. It was of supreme importance to the State that the Army should be satisfied and efficient; and therefore it was a matter that should be treated on purely common-sense principles. If it was once affirmed with success that the payment of money was dishonourable, then it was immaterial whether officers were paid sufficient to cover their expenses, as at present, or something more. An accusation of having made a mistake as to military affairs would not have troubled him; but when he was told that he had recommended a course which tarnished the honour of the Army, he was not inclined to subscribe to this new definition of honour, which depended
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  upon whether they paid travelling expenses or something besides. He had two regrets on the present occasion—first, that in dealing with this question he found himself opposed to those who were around him, and the other was that the debates in that and the other House of Parliament might create some amount of irritation in the officers of the Army; but he was satisfied that in the long run they would find that, whatever course it was necessary to take, the interests and honour of the Army would be safe and clear in the hands of both sides of the Houses of Parliament.
  THE MARQUESS OF LANSDOWNEsaid, he had listened with great interest to the noble and learned Lord's defence of the Royal Commission of which he had been a distinguished Member. The noble and learned Lord would forgive him if he told him that he could not help feeling that his language was that of one who sought to extenuate an indiscretion rather than to repel an accusation. The Order of Reference was perfectly clear, and he could not see that any other interpretation could be applied to it than that of his noble Friend the noble Viscount. The Commissioners were required to report to the Crown whether any of the grievances alleged by the officers were such as should be compensated upon the principle of the Army Regulation Act. The principle of that Act was pecuniary compensation for a pecuniary loss, and who could ever have supposed that a Commission limited by such a reference as that would recommend, not compensation for the loss of the abolished right, but the restoration of the right itself—a right which, if not identical with those of which the Act assumed the abolition, was, at all events, very closely related to them. Nor could he persuade himself that the Commissioners themselves were unconscious of this. If he turned to their Report, what did he find? Every line of it which referred to the matter of exchanges breathed diffidence and doubt. The Commissioners, after enumerating the dangers apprehended by those who objected to all pecuniary bargaining between officers, stated—
  "We are not satisfied that there is any real danger of this, but we are satisfied, from the evidence before us, that the return to the old practice of exchanges would be very acceptable to the Army."

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  Their Lordships would observe that the evidence was appealed to in support of the proposition, which no one had questioned, that the restoration of this privilege would be popular with the Army; but there was no appeal to the evidence in support of the other and more important proposition—that the step would be unattended by those dangers which many anticipated from it. And the Commissioners were prudent in their reserve upon this point, for, with the exception of one or two leading questions to the Commander-in-Chief and the Adjutant General, they had not examined a single witness with regard to the dangers of a system of unrestricted Exchange. The Report of the Commission was, therefore, no justification of this Bill; and, whether it did good or harm, the responsibility must rest with the Government, and not with the Royal Commission. What would be the operation of the Bill? He was a little puzzled to answer that question, for the answers given to it were by no means consistent. They were told on the highest official authority—that of the Prime Minister—that the intention of the Bill was to stimulate exchanges; but what did the illustrious Duke the Commander-in-Chief say? He said that exchanges were necessary—he did not like them, but they were necessary to satisfy the Army, and the fewer there were the' better he should be pleased. Was that stimulating exchanges? Now, it had been said that the circumstances of the officers of the Army had altered, and that it was necessary to make up for that alteration of circumstances; but the fact was, that one of the principal reasons for which officers were formerly in the habit of selling an exchange had disappeared altogether with the abolition of Purchase. Under the Purchase system it often happened that an officer had no means of buying his step except by exchanging, if he could obtain a sum of money for doing so; and this fact was elicited by Sir Percy Herbert in his examination of one of the witnesses before the Commission. He asked this Question—
  "I believe that it was open to an officer previously to that Regulation being passed, and previously to the passing of the Warrant, to receive a considerable sum for an exchange, and thereby, if he was a poor man, to obtain the means either of purchasing his promotion at a future time or of repaying money which he had
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  borrowed in order to purchase his promotion?—It was so. In fact there was no restriction, and he might receive anything he could get."
  One of the few arguments seriously advanced by the supporters of the Bill was that it was impossible, with the present arrangements of the War Department, to regulate the recognized payments between two officers effecting an exchange. But surely there must be some one in the War Office sufficiently ingenious to devise means by which these complicated matters might be adjusted. He wished, however, to point out that while Her Majesty's Government were seeking to relieve the War Department of this trivial and unimportant duty, they were going to saddle the military authorities with a duty much more irksome and odious—that of saying that exchanges in a particular regiment had reached such a point that it was necessary to interfere. So that they would have His Royal Highness stepping in and refusing an exchange in one case where it had been permitted in a similar case a few days before. And then let their Lord-ships mark the wonderful discrepancy in the statements of the supporters of the Bill. The Secretary of State for War said in his place in the House of Commons that we were bound for the future studiously to ignore the amount of those payments. What, in substance, had His Royal Highness said that evening?—"Whenever I hear of an excessive payment, that will be an occasion when the military authorities will step in and interfere." By which of these views, he should like to know, were they to be guided in giving their votes this evening? Another statement was that the passage of this Bill would facilitate what he might call, for the purpose of this argument, the typical exchange—that, namely, between an officer suffering from bad health in India and another officer suffering from temporary money difficulties at home. Such a case as that he would be perfectly willing to concede at the outset. He readily admitted that there were circumstances in which exchange had been useful by enabling us to retain the services of two gallant officers who otherwise might have been lost to the country. But the argument told both ways. It was quite true that, under a system of unrestricted exchange, some sickly officers might be able to come home from India; but it was equally true

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  that other sickly officers, equally or more deserving, would be kept in India, because they would not have money enough to pay the price in the Exchange market. But what did the noble Lord the Secretary for Foreign Affairs tell the House? He said this was a question between two officers, A and B; it suited A and it suited B, and therefore the Government had nothing at all to say to it; the transaction was purely a voluntary one, and nobody was the worse for it. But there were surely numerous instances of purely voluntary transactions between parties which were detrimental to the highest interests of society, although, as far as the parties themselves were concerned, they might be advantageous or useful in the highest degree. Take a case of which the House had lately heard a good deal—the case of a simoniacal bargain in the Church. A patron might make a corrupt and illegal contract with a clergyman; the clergyman might be perfectly well fitted for the duties of the cure; the patron might spend the price received in building a school, or as a marriage portion for his daughter. This was a purely voluntary transaction, and its immediate results were beneficial to all parties, and yet it was one which we should certainly not wish to encourage by legislation. Not long ago there was a brisk traffic in Parliamentary boroughs, and the only way in which a man who did not wish to stand under an obligation to another could enter Parliament, was very often by purchasing a seat. Sir Samuel Romilly, for instance, entered the House of Commons in that way, and the House gained very much by his admission to its ranks. And yet no one would ever have proposed the introduction of a measure for stimulating the traffic in rotten boroughs. In his opinion, the results of the Bill would be two-fold, and the first result would be this—that whereas the service of the Queen involved, perhaps, more than military service in any other country in the world, rough places and smooth, officers who were able to buy exchanges would gravitate to the smooth places and officers who were obliged to sell would gravitate to the rough. His Royal Highness, when before the Duke of Somerset's Commission, in 1857 (Question 4,194), spoke of the English Army as one
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  "Scattered over the face of the globe, some performing very painful and disagreeable duties, not much known to the public, and others performing much more agreeable duties, but which come more under the notice of the public."
  Nobody could question the accuracy of that statement; and the result of this Bill would be that under the ordinary laws of supply and demand the rich officer would get more than his fair share of the agreeable duties which would bring him under the notice of the Crown, while the poor officer would get the work which was not only more "painful and disagreeable," but less in evidence, and less likely to be "noticed" by the public and by his superiors. It was said that this state of things would not be new, for exchanges had been before and would be again. But he could not admit the force of that statement. The military authorities said now—"Find a substitute, and if you can do so we will not be so pedantic as to prevent you from paying the legitimate expenses of the transaction." But under this Bill they would say—"You want to quit a disagreeable place in which you serve the Queen. Now we give you carte banche to go into the market and buy a substitute." The Royal Commissioners said that there were many good officers with slender means, who would be willing to serve in India or elsewhere for a consideration. What was that but saying, Ibit eo quo vis, qui zonam perdidit. Now, he should like to remind the House what those duties were which would in nine cases out of ten be avoided by officers buying their exchange out of one regiment into another. Foreign service, now that the troops had been withdrawn from the Colonies, meant, speaking generally, service in India. The duties of the English officer in India might be painful and disagreeable, but he could not conceive a moment more important in the career of a young officer than that in which he found himself for the first time serving Her Majesty in Her Indian dominions. There was a country of 1,000,000 square miles, with a native population numbering some 200,000,000, kept in control by 60,000 or 70,000 English troops. Every part of the country was consecrated by memories of the great men who had won our Empire and held it afterwards; the colours of his regiment very likely bore upon them the names of the vic-

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  tories which they had achieved. Everything conspired to make an officer proud of the Service and the career on which he was entering. Were they at that moment to allow a Mephistopheles in the shape of an army agent to come forward, and by some tempting proposal to induce him to exchange that glorious service in India for an uneventful life in an English cathedral town? These, then, would be some of the effects of the Bill. But it would have others not less mischievous. Under the Bill it would come to pass that whereas some corps possessed exceptional prestige and popularity, both those things would henceforth be expressed in terms of money, for the purpose of the sale and purchase of exchanges. This proposition was stated in his evidence by Colonel Burnaby with the most cynical frankness. He spoke of the custom of selling the intrinsic value of the prestige of commissions in the more privileged regiments, such as the Guards, Household Cavalry, Heavy Cavalry, not quartered in India, and Light Cavalry. According to this gallant officer, it would appear that the prestige and popularity attaching to commissions in certain regiments were to be used for the inglorious object of providing for the necessities of officers who happened to be in embarrassed circumstances. Observe how this would work. The late Government hoped to establish a local connection between the English Army and particular localities. But if a sub-lieutenant in the Militia got a commission in the county regiment, he might by-and-by convert it, if the regiment happened to be a popular one, into a sum of money wherewith to pay his debts, and the intention of the military authorities in posting him to a particular regiment would be frustrated. These evils were, at all events, possible. The safeguard proposed was that the military authorities would prevent these things. But were the military authorities always able to prevent abuses under the old system? The late Mr. Higgins, who was examined at great length before the Purchase Commission, referred to the ease of the 43rd Regiment, which went to the Cape, and then on to India—
  "It was a Light Infantry regiment, and was considered to be a very good regiment; when it went to India there were eight or nine sons of Peers in it, but in about 18 months after it had
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  been there only one son of a Peer remained in it, and he had got an S attached to his name, having got on the Staff somewhere. I then looked back to see what had become of those men who had thus evaded the wish of the Horse Guards that they should take their tour of Indian duty, and I found that nearly everyone of them had fared much better by returning home than if he had remained with the regiment."
  Could anything be more mischievous than that this kind of impression should obtain in the Army or in the public mind? The same witness continued—
  "I think that the abolition of the system of exchanging would be beneficial, because the way in which you occasionally see an officer with good interest manage to dodge his way upwards by exchanging from one regiment into another is most scandalous. Civilians cannot understand it. I recollect perfectly one man on the Staff whom I met in Dublin, who had exchanged so often that it had become quite a joke; when his friends asked him what regiment he was in, he used to call his servant and say, 'What regiment are we in now?' He was a man of very good interest, or he could not have done it."
  "The hardest work as well as the most dangerous work is done by poor men."
  But the Report of the Duke of Somerset's Commission was most explicit upon this point. The Commissioners distinctly admitted the inability of the War Department to keep these practices within limits—
  "Exchanges from one regiment to another, "the Commissioners said," and sales to officers on half-pay, facilitate an evasion of the Regulations which the higher authorities of the Army are unable to prevent."
  The noble and learned Lord (Lord Penzance) said that no mischief resulted from the old system of exchanges, and that for this reason no mischief was likely to result if this Bill became law. But it must be remembered that the Bill would do more than restore the old system. It would introduce the purchase and sale of exchanges into a non-purchase Army, which was a widely different thing from the old system. It would deliberately consecrate, with all the solemnity of an Act of Parliament, a system never yet recognized by the law of the land; and this being so, their Lordships must not delude themselves into the belief that they were simply reverting to the state of things which existed before the passing of the Army Regulation Bill. Noble Lords on this side of the House had been severely taken to task for stating their apprehen-

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  sion that this measure would affect the honour of the British Army. Now, he did not wish to speak lightly of the honour of the British Army. In every calling, however, and in every profession, there was a standard of honour based not only upon unchangeable moral precepts, but upon other considerations much more variable and conventional. In no profession was this more true than of the British Army; and he feared that if their Lordships allowed it to go forth that officers of the Army, when called upon to perform painful and disagreeable duties in out-of-the-way parts of the world, might avoid these duties by paying poorer men to perform them, the standard of honour within the British Army, in so far as it was a conventional standard, would be appreciably lowered, while the estimation in which that Army was held, particularly by those classes from which its ranks were filled, would suffer, and suffer materially. He feared that their Lordships were about to pass a measure which he could not but regard as likely to prove a serious misfortune to the Army and to the country. He was, however, not without hope that such a law would not be allowed permanently to disfigure the statute book; and if, at some future time, no matter how distant, the House was called upon to re-consider this question, their Lordships would be reminded of the solemn protest which those who sat near him would, at the termination of the debate, record against the passing of the Bill.
  EARL CADOGANwould venture to say that many of the questions imported into this discussion by the opponents of the Bill did not come within the four corners of the measure. For example, a large portion of the arguments against the Bill were directed against the revival of the Purchase system. Everyone seemed agreed that, as the illustrious Duke had said, exchanges were indispensable to our Army; but as to the re-establishment of Purchase, if he (Earl Cadogan) thought this measure would lead directly or indirectly to such a result, he should decline to support it. It was said that, wherever money passed, a purchase and sale were intended. But exchange and purchase differed materially. In purchase under the old system a new office was acquired and a new emolument; whereas, in paying for
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  an exchange you acquired neither of these things. Then it was contended that you might purchase not promotion, but the prospect of promotion. Since the abolition of Purchase, however, there was no certain prospect of promotion. It was now a system of seniority tempered by selection. But men would hardly purchase when there could be no certainty of obtaining the promotion desired. Mr. O'Dowd stated that with ordinary vigilance on the part of the authorities the system of exchanges now proposed would not be liable to abuse under the non-purchase system. Considering the recommendation of the Commissioners, the Government were bound to take action in some manner, and he did not see how they could have done so better than by preparing the present Bill. The members of a noble profession had been censured in no measured terms for their desire to see this Bill pass into law, and one of the noble Lords who had taken part in the debate seemed to think that the mere name of money would be enough to make officers in the British Army lose all sense of honour and patriotism. He, however, altogether denied that that would be the case. In order to dispose of the argument that an officer would have a vested right in whatever station he obtained under an exchange, he might mention the case of a lieutenant in the 35th Foot, who in 1845 obtained leave to exchange with a junior officer when his regiment was going to Mauritius. The money was paid; but news arrived soon afterwards of disturbances in Madagascar, and the result was that the lieutenant sailed in the same ship with the officer to whom he had paid the money for the exchange. If the Bill merely allowed liberty of exchange without supervision, it might be open to grave objections; but he felt sure that proper regulations would be made, and entertained no doubt whatever that they would be enforced. He thought that in framing the Bill every care had been taken to guard against the evils its opponents apprehended would arise from its operation, and he should therefore support the second reading.
  THE DUKE OF ARGYLL: My Lords, my noble and learned Friend who spoke from this side of the House in favour of the Bill (Lord Penzance) said, he was induced to interpose in this debate in

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  order to restore it to calmness. My Lords, I must say I think this debate has been on the whole conducted, not only with great ability, but with perfect moderation and good temper; and certainly I shall endeavour not to use any exaggerated language. I confess I have been wholly unconvinced, even by the able argument of my noble and learned Friend, that the Bill will not lead to evil and injurious results. Both sides are agreed, as I understand, that under certain conditions exchanges may be tolerated and permitted. We are both agreed that there may be many circumstances under which it is a matter of perfect indifference to the public service whether a given officer serves in this regiment or in that. Indeed, my noble Friend behind me (Viscount Cardwell) himself made Regulations for the purpose of facilitating exchanges wherever they were considered to be legitimate. I admit, therefore, with my noble and learned Friend, that we have no right to use any arguments which imply that exchanges must necessarily be mischievous; but you have no right, on the other hand, to use any arguments which imply that this Bill is necessary under existing circumstances—because you have yourselves admitted that exchanges are perfectly free on condition that they cost nothing more than the actual expenses incurred. It has been argued that the introduction of sale and purchase into the system of exchanges will make no difference in the conditions of the ease. Now, I listened attentively to the speech made by the noble Duke opposite (the Duke of Richmond) in opening his case to-night, and I think I am correct in saying that he adduced no evidence whatever to show either that the Bill would make no change or only a slight one, or that the measure was necessary in the interests of the public service. If it be so, there is no great object in passing the Bill. The only argument which the noble Duke brought forward was that it was exceedingly inconvenient for an officer in the War Office to draw up a schedule of expenses—it was to get rid of that inconvenience and for no other reason that he advocated the Bill. Yet the noble Duke was not wholly consistent in his argument, for he said—
  "If your Lordships think the importance of this Bill is to be measured by its length and the number of its clauses, you will be much mis-
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  taken, but it will contribute materially to the loyalty and contentment of the Army."
  It is plain, however, that this Bill is intended to effect important alterations in the system of exchanges, and that it will introduce a new motive for exchanging. At present exchanges are regulated by the personal convenience or the health of the officers, and they are strictly subject to the conditions imposed by the War Office; but henceforth they are to be regulated by the question of money and price. The illustrious Duke on the cross-benches spoke as if the Bill would make hardly any change at all; but, if so, why did the officers attach so much importance to the passing of the measure? They wished it to pass because, in the language used by Mr. Disraeli in the other House of Parliament, it would stimulate exchanges. Then, I ask, is it consistent with the public service that exchanges should be artificially stimulated by being made the subject of sale and purchase? I cannot understand how it is consistent with the argument used and quoted from the evidence of the illustrious Duke on former occasions that exchanges are in themselves an evil, and that the regimental system of the British Army consists essentially in the connection—the almost family connection—between the officers of a regiment and their men; and that the discipline and efficiency of the Army would be injuriously affected by a breaking up of that system. But this Bill will make the officers a fluctuating body, and thus the regimental system will lose its distinctive advantage. We are bound in the interest of the public service to see that riches as such shall not give a great and fatal advantage to the rich over the poor. An argument used by the noble Lord the Foreign Secretary to-night, which I have often heard "elsewhere," has a certain force; and it is this that this Bill, whatever you may say of it, is popular with the poorer officers. To a large extent I believe that is true. The reason of it is plain. The poorer officer who has his exchange to sell will be no doubt a gainer by this Bill; but when he comes to buy his exchange he will be a loser by the exchange—because this Bill will unquestionably raise the price of exchanges. Each man, it is true, trusts to his own luck, and does not look to the latter contingency. But a poor man will have

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  little chance of exchanging from an unhealthy climate, for undoubtedly the Bill will have the effect of raising the price. This is the way in which it is proposed to consult the interests of the poorer officers of the Army. But it is said that the Regulations will prevent mischief from arising. My Lords, I do not think it will be possible for the illustrious Duke by any Regulations he may make to prevent the making up of purses by officers to induce officers who are before them to exchange into other regiments. This Bill will, for the first time, formally give the sanction of Parliament to the doctrine that money is to be made by the sale of exchanges of posts in the Army. I quite admit that this Bill will not re-introduce the old system of Purchase;—it will not enable one officer to buy over the head of another; but this it will do—it will introduce a sense of property among officers in the positions which they hold in the Army; and I am bound to say that that argument seemed greatly strengthened by the speech of the noble Earl the Foreign Secretary. The most stringent regulations in the old Indian Army system, and as to our own Regulation prices, could not prevent the evils arising against which they were intended to guard, nor will they do so in the present instance. Our officers, as a body, are poorly paid; and instead of passing a Bill to enable the poorer officers to increase their incomes by exchange, I think it would be infinitely preferable to give them better pay. I most heartily agree with my noble Friend (Viscount Cardwell) in desiring that this Bill should be rejected by this House. I know very well that is a conclusion we cannot hope to attain. I believe this Bill will pass, and I can only say I earnestly trust it will never become necessary to retrace the step. I think it would be most unbecoming and most injurious to the public service if we on this side of the House should hold out any threats that when changes of Government occur in the course of time we shall do this and the other. I trust we are not actuated by a desire to do anything that is not for the good of the officers and the Welfare of the Army. If our predictions are undeserved and it proves that the mere regulations of the War Office can prevent the continuous pressure which arises from the accumulation
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  of personal and private interests we shall be happy in the failure of our anticipations. But if it shall be found, on the other hand, that this system leads to underhand negotiations which it is impossible for you to oversee or to suppress, then unquestionably there will be changes made—and made probably with the authority of the Crown and Parliament—in order to meet the necessities of the case. I regret this because I think it important above all things that this question should be permanently settled in order that in the Army a feeling of contentment may spring up, based upon the conviction that a final settlement has been reached. I cannot see that this feeling is likely to arise from the passing of the present Bill; but, at the same time, I repeat my hope that our prophecies may prove unfounded.
  THE EARL OF DONOUGHMOREsupported the Bill, which he regarded as a measure of justice to the officers of the Army, and therefore likely to produce a feeling of contentment. Nothing could be more injurious to the Service than to permit a spirit of discontent to continue in existence when it could be removed by adopting a course that would confer a boon upon a large class, and, at the same time, tend to the advantage of the Service. The subject had been very carefully considered by a body of most able and impartial Commissioners, and the time that had since elapsed had enabled the Government to embody their recommendations in the present measure. He hoped it would pass. In his opinion, young men would hesitate to join the Army if exchanges were not allowed.
  EARL GRANVILLE: My Lords, although this debate has already extended to a considerable length, perhaps you will bear with me while I make a few observations in defence of the vote which I intend to give this evening. I paid particular attention to the speeches made by my two noble Friends the Members of Her Majesty's Government, and I gather that, in their opinion, exchanges are so necessary and so beneficial that it is not sufficient they should be permitted under proper supervision, but that an additional stimulus should be applied in the shape of sums of money to be paid by the richer to the poorer officers. I also gathered that the agencies to which they trust for the proper administration of the system are an inquiry

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  on the one hand, and the discretion of the military authorities on the other. The noble and learned Lord (Lord Penzance) seemed to think we were disposed to make attacks upon him and his Colleagues on the Royal Commission. So far as I am concerned I entirely disclaim any such intention. I think it would be most unjust and excessively ungrateful on the part of those who had the honour to represent the late Government in this House to make attacks on the gentlemen who at the request of that Government, and in deference to the command of the Queen, undertook an onerous and in some respects an invidious duty. I may, perhaps, recall the circumstances under which that Commission was issued. Very loud complaints were made by officers that they were ill-treated under the new Army Regulations. Your Lordships were so impressed with the justice of those complaints that you agreed to an Address to the Queen for the issue of a Commission of Inquiry. That Commission was appointed, not on the merits of the ease, but from a sincere respect for your Lordships who voted for the Address in such large numbers, and from an earnest wish to do something towards soothing the feelings in the officers of the Army. The Commission agreed in the main with the late Government; but a question arises as to their authority to make the particular recommendations on which the Bill is founded. My noble and learned Friend says he came to the inquiry perfectly ignorant of the subject before him. Well, what persons were examined before the Commission? A series of officers, some of the highest distinction, who all acted really as counsel for exchanges, and not one word of evidence was given the other way:—so that it is not remarkable if the noble and learned Lord and his Colleagues, admirably adapted though they were to consider the points referred to them, should in a matter concerning the discipline of the Army have made a mistake. The noble Duke (the Duke of Richmond) says you must do one of two things—you must either vote for this Bill or declare your belief in the incompetency of the military authorities and that in that case the sooner they are changed the better. Now, I admit that. I do not know any one who so well understands all the different parts of the Army as the illustrious Duke; I do not know one who has
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  worked with greater zeal and anxiety to promote its efficiency and welfare; but because he tells us that he is determined to watch over the system of exchanges with the same strictness he has hitherto displayed—because he tells us he will maintain that strictness to the uttermost—is that any reason why I should vote for a Bill which is not limited to the duration of the illustrious Duke's possession of office, but establishes a principle which I think will be most injurious for the future? And with regard to confidence in the military authorities, I must say it is much more likely that the Government will fail in that confidence than that we on this side should do so. It has already been remarked that the Prime Minister tells us it is necessary to encourage and stimulate exchanges; but what says the illustrious Duke? He says that exchanges are detrimental in themselves to the Army, following the Duke of Wellington, Viscount Hardinge, and Lord Clyde, whose remarkable evidence was quoted to your Lordships by my noble Friend the noble Viscount (Viscount Cardwell). But the illustrious Duke went still further, for he said that he should watch the system most strictly, and that it was not his intention that more exchanges should take place than have been made hitherto; and he said he should inquire whether excessive sums of money were paid—although that is contrary to the declaration of the Secretary for War that he was determined to know nothing as to whether the sums were large or small. The noble Earl the Secretary of State for Foreign Affairs said, as one of his principal arguments in favour of the Bill, that officers were poor, and he looked to the system of exchanges as a mode of remunerating them. Now, first of all, I hold that system of remuneration is as bad as any one can conceive, but what comes of that argument if the illustrious Duke is to keep the number of exchanges the same as at present? The noble Duke (the Duke of Richmond) referred to the opinion of "the Intelligent Foreigner." Now, I do not know of any foreign Army except the French which tolerates exchanges, and in the French Army practically the resemblance is much greater to the system of my noble Friend the noble Viscount than to that which it is now proposed to sub-

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  stitute. It is, I know, the opinion of some of the most eminent French military authorities that the system of exchanges in the French Army had in the last war a very bad effect; it destroyed to a very great degree the esprit de corps of the French regiments. My Lords, we do not object to exchanges. We have sanctioned exchanges in various departments of the Public Service. The only question is, whether in the Army alone the passing of money should be legalized between officers in order to promote exchanges. I have at different periods held various offices in the State, as Secretary for the Colonies, Foreign Minister, and President of the Council. I have often been applied to to sanction exchanges, and my answer has always been—"You have been a good officer; when there is a vacancy I will take care to put the new man in your place and you in a more southern district. But, what would have been my feelings if I had learnt that £500 had been pocketed by either of the parties on the occasion of the exchange? The noble and learned Lord (Lord Penzance) stated that these persons had established a grievance, and the only alternative the Commission had was either to ignore the grievances of the officers or to make the recommendation they did. I do not think that was the only alternative. If it were a pecuniary grievance it would have been easy to recommend a money compensation, or another thing which might be perhaps more difficult—that this compensation should be continued to the officers who had entered the Service before Purchase was abolished. The noble and learned Lord repelled with some indignation the idea that the Commissioners recommended a course which would be pernicious to the British Army; and in the only part of his speech in which there was any warmth referred to the word "huckstering" as applied to officers who might take advantage of this system. He said that a thing which had not happened for 100 years was not likely to occur in the future. But my noble Friend the noble Marquess (the Marquess of Lansdowne) read just now a sentence from a noble Lord of high authority on the subject, saying how impossible it was for the military authorities to check abuses under the circumstances referred to. But in the very sentence before I find such words as these—
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  "A mercenary spirit is created in men whose guiding principle should be a nice sense of honour and a loyal attachment to the Service."
  These are words which I do not wish to adopt; but coming from such high authority, they do not justify the noble and learned Lord in what he has said. Now, with regard to the noble profession of arms, I venture to say that there is no one who has more respect for the British officer than I have. I will remind your Lordships of what the British Army is in time of danger. At the outbreak of the Ashantee War a young officer volunteered for the service. Immediately afterwards one of the most eminent surgeons in this town, hearing of the fact, wrote to him, saying, "You know that I know you well. If you go to the West Coast of Africa it is simply death." Well, my gallant young friend put that letter in his pocket, did not tell one of his friends or relations about it, but wrote back to the surgeon that it was too late to change his plans. He went out—but did not return. That young man was the heir to a high fortune and to a seat in this House; but the minute he heard that fighting was going on he determined to go out. I do not mention this because he was a friend of mine or of any of your Lordships, but as a type of what the British officer feels when fighting is going on. But it is not only the British officer, but the British non-commissioned officer also: and, as for the British soldier, we sometimes hear complaints of the difficulty of recruiting. But the illustrious Duke will tell your Lordships that once there is war recruits come in abundantly. Therefore, I will not say a word against the British Army once there is a question of fighting. But when the question is one of irksome duty I will not say that the same readiness is found; and I am sure it is a mistake for Her Majesty's Government and the Legislature of this country to invent artificial modes of stimulating the desire of retiring from the Army. I have not a hope of the possible rejection of this Bill; but I should be wanting in my duty to my noble Friend behind me and to myself if I did not by my vote to-night utter a solemn protest against this most pernicious and unnecessary Bill which has been presented to your Lordships this evening.
  THE MARQUESS OF SALISBURY: My Lords, as it seems to me, the debate this

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  evening has divided itself into two main classes of arguments—those which affect, or are deemed to affect, the honour of the Army, and those which affect the interests of the public service. My noble Friend who has just sat down (Earl Granville) has set an example which if it could have been acted upon retrospectively would have had a most salutary effect on the debates in this House, and much more on the debates in "another place." No word was used by my noble Friend which could be justly complained of as impugning the honour of the British Army in relation to the provisions of this Bill. But that has been far from the tone adopted by many opponents of the Bill in "another place;" and I wish to ask on what grounds this charge of dishonour to the officers of the British Army, arising out of the practice of exchanges, can be justified? In the minds of many who have argued this question, we seem to be dwelling in some romantic and ideal country where the notion of money payments has been entirely divorced from the military profession. Nay, from the high tone occasionally adopted, my impression is that some persons have persuaded themselves for the time that we live in an age when men in every profession perform their public duties and shrink from contact with filthy lucre as any reward for what they do. Now, I fear that the time when the British soldier shall do his duty to the State and expose himself to hardships in a spirit procul negotiis ut prisca gens mortalium is very far from the day in which we live. Lest, however, our spirits should thereby be discouraged as to the present or future honour of the British soldier, let us remember that the same facts apply to other illustrious professions. I have heard that lawyers and doctors do not disdain to take fees; I believe that even Cabinet Ministers occasionally pocket their quarter's salary; and I cannot think that any practical advantage is derived by assuming that the British soldier performs his duties in disregard of any pecuniary rewards. If that is the case, what is the disgrace and dishonour of exchanges? The service undertaken by the British soldier is composed of rough and smooth. Every man who has engaged to serve the Queen engages to take his portion of rough—that is to say, the portion which by the practice of the Service naturally
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  falls to him—and if he demanded extra payment for this share of duty he would be unreasonable, perhaps even dishonourable. But if, besides this natural proportion of rough, he takes another portion of rough, why is he more dishonourable for asking to be paid in respect of this second portion than he was for taking his original pecuniary reward for the first portion? He is paid by the man who derives the benefit and not by the State. If to do this work for money is like the loss of integrity in a statesman or loss of virtue in a woman, the same stigma applies to every Indian official who takes his furlough and leaves behind him an official substitute to perform his duties. A good deal of pity was expressed for those unfortunate men who, in the Army, perform additional work for additional remuneration. I was struck by the romantic tenderness expressed for them by the noble Viscount (Viscount Cardwell), and the noble Marquess (the Marquess of Lansdowne), whose tenderness was only exceeded by the eccentric mode in which they bestowed it. They wish to minimize the difference between rich and poor; and we were told in an eloquent speech in "another place" that wealth is already a sufficient power, and ought not to be assisted in establishing a predominating influence over the poor. The way in which you carry out this benevolent theory is to say to the poor officers in the Army—"You might if you were left alone have got £1,000 by means of an exchange; but we are so determined to assist you that this £1,000 shall not henceforth go into your pockets." The noble Viscount, however, had in his budget some solace for the poor man deprived of his £1,000. He said—"Only think! If you abstain from earning this money, you will establish another argument in favour of an addition to your pay, and may induce a future Chancellor of the Exchequer to add to the Estimates for that purpose." Now I should like to take a plébiscite of the poor officers upon this question—whether they prefer the privilege of exchanging or the prospect that some future Chancellor of the Exchequer may add a penny to the Income Tax for the purpose of increasing the officers' pay. Then we have heard this evening once more of "the Intelligent Foreigner." As he appears upon the stage, I should

  281
  like to know what he would think of the character of the British Army as it has been depicted in these debates? In the first place, it appears from the speech of the noble Lord who in the last Parliament represented the War Office in this House (the Marquess of Lansdowne), that all the rich men will get into the smooth and all the poor men into the rough places. In other words, the general impression would be that the rich men of this country, or such of them as take to the profession of arms, are universally afflicted with a desire to escape from all that is disagreeable in their duty.
  THE MARQUESS OF LANSDOWNE: What I said was that those who were able to buy exchanges were likely to gravitate naturally towards the smooth places.
  THE MARQUESS OF SALISBURY: My impression was that the noble Marquess went a step farther and described what that process of gravitation would result in. At all events, the impression left by the debate upon the mind of any Intelligent Foreigner must be that the richer officers in the English Army are particularly anxious to spend their military career upon the pavement of Pall Mall, while the poorer officers are so anxious to get money from their richer comrades that, impose what regulation you will, their subtlety, cunning, and unscrupulousness will be more than a match for regulations. They will all combine, they will all conspire, they will all lie, they will all perjure themselves, to obtain this money. ["Hear!"] Well, I am merely placing on the language used a construction which it is open to any Member of the House who has listened to the debate to verify. What was meant when we were assured again and again that the Regulations would be nugatory? If they were of no use they must be evaded in spite of solemn declarations and in combination, and does not this point to the conspiracy, lying, and perjury of which I have spoken? These things are justified by an appeal to experience. Now, the experience, I venture to say is false, and the inference drawn from it is unjust. We are told that, do what we will, the accumulated pressure of private interests will drive aside any regulations which the military authorities may make, and in justification of this doctrine the his-
  282
  tory of the Indian Bonus is quoted. I assert that if in any case illicit and illegitimate rights have gradually grown up until their illegitimate character has been cast aside—if prohibitions which the State has fulminated have been disregarded, and if the disregard has ultimately been crowned with State approval—I will venture to say that it was the result of no pressure or combination of private interests, but was simply due to the fact that in each case the State thought it saw a good bargain before it and preferred that so it should be. This was the case with regard to the bonus of the East Indian Army. The Directors of the East India Company tried at first to discourage it, and it maintained itself in a hazardous sort of way without any real and recognized position; but as time were on the Directors became wiser, and found that it would be a hopeless difficulty without such a system to insure a proper flow of promotion by speedy retirement. Bear this in mind, then, that the system was allowed to grow up by the Directors of the East India Company, because they saw in it an advantage to their treasury and a benefit to their service. Do not assume, therefore, that it was because the officers were false to their oaths that this system attained the position it ultimately reached. The objection that the present measure will introduce pseudo-purchase has been so fully dealt with that I need not refer to it at any length. The answer to it is that as long as you have a system of selection any system of Purchase is impossible. I know it was said in the other House of Parliament that selection is practically dead, and that seniority is all in all. Well, some of us a few years ago prophesied that would be the case; but I refuse to believe that it is the case so soon as this. If it be true, however, that pure unmitigated seniority has fixed its grasp on the British Army, no system of Purchase which you can devise would be so fatal to the public interest as a system which would produce officers of high rank with exhausted minds and bodies, and in the lower ranks of officers permanent discontent. It is very difficult for those who scrutinize the advocacy of noble Lords opposite to ascertain what doctrine they hold; but I apprehend that the general sense of this House, and certainly the general sense of the military authorities, is that ex-

  283
  changes are an absolute necessity. The illustrious Duke on the cross-benches has used language which has been much quoted in reference to this subject. He said they were an inevitable evil—meaning not that he would wish under existing circumstances to prevent them, but that they are a necessary consequence of an Empire extending over so many climates as ours. We have to send men to Canada, China, and India. The men who have chests cannot go to Canada; the men who have livers cannot go to India. Most reasonable men will agree that if a man is not fit for the climate of India it is better to send him to a climate where he will be fit for service. Assuming, then, that exchanges are necessary, how are they to be obtained? Noble Lords opposite seem to assume that they will always come of themselves, and that there will always be an officer in England who wants to go to India for every officer in India who wants to come to England. This assumption is contra-dieted by the figures, which show that in the two years before the abolition of Purchase there were 159 exchanges, and only 97 in the two years following the abolition. The truth is that the difficulty of getting men to serve in India is still considerable. It is known to the illustrious Duke on the cross-benches that even now in the native Army of Madras there are as many as 30 vacancies among the local officers, while there are no candidates to fill them. Even with the high pay of India as compared with that of England there is no great pressure for exchanges. If you intend to keep up exchanges you must allow a free course of monetary considerations to act upon those who desire exchange. You must remember there are expenses which the War Office can never estimate. The noble Viscount was very confident that there was some accomplished person within the walls of the War Office who would be competent to say what amount of underclothing ladies would require. Well, the noble Viscount, I dare say, is well acquainted with and could lay his hand upon that competent man, but evidently my right hon. Friend is not yet acquainted with him. But there is one thing which this accomplished man would not be able to ascertain, and that is the amount which an officer would have to add to his insurance when he leaves this country. That is a legitimate expense.
  284
  On going to India he would have to pay a much higher premium. That money cannot be found by the State—it cannot be found by the outgoing officer—it can only be found by the officer who benefits by the exchange. In fact, it is impossible to estimate or control these expenses. The truth is that we have been sailing all along in very low latitudes. We have heard a great deal of the feelings of officers and very little of the interests of the public service. We have heard much of what the poorer officer would feel when he found he was unable to rise on account of his poverty; but I cannot admit that a feeling of that kind can legitimately be entertained on a question of this kind. If exchanges and the encouragement of exchanges are good to the public service, I do not care whether the system helps the rich man to Pall Mall and condemns the poor man to India. I do not care what theories in policy it violates; I do not care what sensitiveness or jealousy it may cause. If it is good for the public service that it should be so, all these considerations must be disregarded. My noble Friend the noble Marquess who represented the War Office in the last Administration (the Marquess of Lansdowne) told us what a fearful thing it would be if some Mephistopheles in the shape of an agent should tempt a young man to abandon the very glorious career that was opening before him in India. All my sympathies are with that young man. I think it is for the good of the public service that that young man should be tempted from a career for which he is obviously unfit, and relegated to the atmosphere of Pall Mall. Speaking as an Englishman, and in the interests of the public service, I should not much regret it. I will venture before I conclude to notice one mistake into which the noble Earl opposite fell in the course of his remarks. He told us about an Intelligent Foreigner, and that the Intelligent Foreigner was on his side, because exchanges were permitted in the French Army, and the French Army was not successful in the late war. I am speaking on very high authority when I say that exchange is permitted in the Prussian Army; and if that is the case, I am afraid the noble Lord made a mistake in the inference he drew, for whatever effect exchanges have had in the French Army, they have obviously had a good

  285
  effect in the Prussian Army. The hour is too late to permit me to continue this argument; but I will only venture, in conclusion, to urge upon you that, trivial as this measure may in some of its aspects seem to be, it is a matter of much importance, worthy of your serious attention and of your decisive verdict. The earnestness with which the measure has been debated shows that it is not its mere apparent value you are requested to estimate. If you pass it you will pronounce a condemnation which is much needed upon the application of theoretic and pedantic formulas to the practical interests of the British Army. Philosophers produce splendid chimeras in their closets, and if those philosophers had power in the Legislature they would try to apply their chimerical views to the practical interests and wants of the State. It is for your Lordships, judging of these matters with impartial mind, to check a tendency which threatens much evil to the public weal. And you have another duty to perform. This Bill has been recommended to you by high authority. That it has been supported by large majorities in the other House, and by the unanimous voice of the Commission, will commend it to your prudence, and you will not be sorry to be able to grant a boon to a portion of an Army which, in recent arrangements, has been somewhat neglected—perhaps I may say has been hardly dealt with. It will be no small recommendation to you that this boon will be accepted by the Army with gratitude. But you must remember that it has been opposed by arguments, assertions, and vituperations of which it is not too much to say that they are base calumnies on the Army of which they were spoken. It is for you now, not by a narrow, but by a great majority, to place your stamp of condemnation upon those false assertions, and in giving a well-deserved boon to an Army which has so long adorned its country's annals to declare that in your estimate its reputation is as high, and its honour as untarnished as it has been through many centuries of fame.
  On Question, That ("now") stand part of the Motion? Their Lordships divided; Contents 137; Not-Contents 60: Majority 77.
  Bill read 2a accordingly, and committed to a Committee of the Whole House on Tuesday next.

  CONTENTS.

  Cairns, L. (L. Chancellor.)

  de Vesci, V.

  Exmouth, V.

  Gough, V.

  Beaufort, D.

  Hardinge, V.

  Buckingham and Chan-dos, D.

  Hawarden, V. [Teller.]

  Hood, V.

  Grafton, D.

  Hutchinson, V. (E. Donoughmore.)

  Leeds, D.

  Manchester, D.

  Strathallan, V.

  Northumberland, D.

  Templetown, V.

  Richmond, D.

  Somerset, D.

  Gloucester and Bristol, Bp.

  Wellington, D.

  Rochester, Bp.

  Bath, M.

  Bristol, M.

  Abercromby, L.

  Bute, M.

  Abinger, L.

  Cholmondeley, M.

  Bagot, L.

  Exeter, M.

  Bateman, L.

  Hertford, M.

  Bloomfield, L.

  Salisbury, M.

  Boston, L.

  Brancepeth, L. (V. Boyne.)

  Abergavenny, E.

  Amherst, E.

  Braybrooke, L.

  Bandon, E.

  Brodrick, L. (V. Midle-ton.)

  Bathurst, E.

  Beauchamp, E.

  Carleton, L. (E. Shannon.)

  Bradford, E.

  Brownlow, E.

  Castlemaine, L.

  Cadogan, E.

  Clanbrassill, L. (E. Roden.)

  Cawdor, E.

  Clonmell, E.

  Clifton, L. (E. Darnley.)

  Denbigh, E.

  Clinton, L.

  Derby, E.

  Colchester, L.

  Doncaster, E. (D. Buccleuch and Queens-berry.)

  Colville of Culross, L.

  Conyers, L.

  Crofton, L.

  Ellesmere, E.

  De L'Isle and Dudley. L.

  Feversham, E.

  Fitzwilliam, E.

  De Mauley, L.

  Fortescue, E.

  Denman, L.

  Haddington, E.

  de Ros, L.

  Hardwicke, E.

  De Saumarez, L.

  Harewood, E.

  Digby, L.

  Harrowby, E.

  Dormer, L.

  Jersey, E.

  Dunboyne, L.

  Lanesborough, E.

  Dunmore, L. (E. Dunmore.)

  Lonsdale, E.

  Lucan, E.

  Dunsany, L.

  Malmesbury, E.

  Ellenborough, L.

  Nelson, E.

  Elphinstone, L.

  Poulett, E.

  Forbes, L.

  Powis, E.

  Forester, L.

  Romney, E.

  Foxford, L. (E. Lime-rick.)

  Rosslyn, E.

  Sandwich, E.

  Grinstead, L. (E. Ennis-killen.)

  Shrewsbury, E.

  Vane, E. (M. Londonderry.)

  Hampton, L.

  Harris, L.

  Verulam, E.

  Hartismere, L. (L. Henniker.)

  Waldegrave, E.

  Westmorland, E.

  Hawke, L.

  Wicklow, E.

  Heytesbury, L.

  Wilton, E.

  Inchiquin, L.

  Ker, L. (M. Lothian.)

  Bangor, V.

  Leconfield, L.

  287

  Lovel and Holland, L. (E. Egmont.)

  Stewart of Garlies, L. (E. Galloway.)

  Manners, L.

  Saint Leonards, L.

  Ormonde, L. (M. Or-monde.)

  Stratheden and Campbell, L.

  Penrhyn, L.

  Strathnairn, L.

  Raglan, L.

  Strathspey, L. (E. Sea-field.)

  Rivers, L.

  Romilly, L.

  Templemore, L.

  Rossmore, L.

  Tyrone, L. (M. Water-ford.)

  Saltoun, L.

  Sandys, L.

  Ventry, L.

  Silchester, L. (E. Long-ford.)

  Vernon, L.

  Vivian, L.

  Skelmersdale, L. [Teller.]

  Walsingham, L.

  Willoughby de Broke. L.

  Sondes, L.

  Stanley of Alderley, L.

  Winmarleigh, L.

  NOT-CONTENTS.

  Devonshire, D.

  Dinevor, L.

  Elgin, L. (E. Elgin and Kincardine.)

  Ailesbury, M.

  Lansdowne, M.

  Eliot, L.

  Ripon, M.

  Emly, L.

  Hammond, L.

  Abingdon, E.

  Hare, L. (E. Listowel.)

  Airlie, E.

  Hatherley, L.

  Cathcart, E.

  Houghton, L.

  Clarendon, E.

  Lanerton, L.

  Cowper, E.

  Lawrence, L.

  Granville, E.

  Leigh, L.

  Innes, E. (D. Roxburghe.)

  Lisgar, L.

  Meldrum, L. (M. Huntly.)

  Morley, E.

  Spencer, E.

  Monson, L. [Teller.]

  Sydney, E.

  Monteagle of Brandon, L.

  Canterbury, V.

  Mostyn, L.

  Cardwell, V.

  O'Hagan, L.

  Powerscourt, V.

  Ponsonby, L. (E. Bess-borough.)

  Aberdare, L.

  Annaly, L.

  Robartes, L.

  Ashburton, L.

  Rosebery, L. (E. Rose-bery.)

  Auckland, L.

  Belper, L.

  Sandhurst, L.

  Blachford, L.

  Sefton, L. (E. Sefton.)

  Boyle, L. (E. Cork and Orrery.) [Teller.]

  Selborne, L.

  Strafford, L. (V. Enfield.)

  Brougham and Vaux, L.

  Camoys, L.

  Sundridge, L. (D. Ar-gyll.)

  Carew, L.

  Carlingford, L.

  Vaux of Harrowden, L.

  Carrington, L.

  Waveney, L.

  Coleridge, L.

  Wolverton, L.

  Crewe, L.

  Wrottesley, L.

  House adjourned at half past Twelve o'clock, to Monday next, Eleven o'clock.