Sitting of 23 April 1877

MINUTES.
—NEW MEMBER SWORN— Oliver Ormerod Walker, esquire, for Salford.
PUBLIC BILLS—Second Reading—Customs, Inland Revenue, and Savings Banks [143]; Registered Writs Execution (Scotland) [133]; Boundaries of Boroughs and Sanitary Districts [120].
Withdrawn—Army (Courts Martial) [93].

QUESTIONS.
  METROPOLIS—PAROCHIAL CHARITIES OF THE CITY OF LONDON.

    QUESTION.
    MR. DUNDASasked the Secretary of State for the Home Department, Whether his attention has been called to the following paragraph, which occurs in the last Report of the Charity Commissioners for England, and relates to parochial charities of the City of London:—
    "In these circumstances, we are compelled to recur to the suggestion made by us as long ago as the year 1866, in the Report quoted above, that these funds are in effect so far liberated by
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    the altered circumstances of the locality in which they are applicable as to require re-appropriation to new charitable uses, a work which can be carried out only by some special extension of existing jurisdictions by the authority of Parliament;"
    and, whether Her Majesty's Government can say whether they will propose any inquiry or legislation this Session, with a view to secure a more beneficial application of these funds?
    MR. ASSHETON CROSS, in reply, said, that his attention had been called to the paragraph, and he was in communication with the Charity Commissioners as to what steps, if any, could be taken for securing the object in view.

  ARMY—ADJUTANTS OF VOLUNTEERS

    QUESTION.
    MR. CHARLES ALLSOPPasked the Secretary of State for War, What steps the Government are about to take to increase the pay of Adjutants of Volunteers appointed prior to 1871?
    MR. GATHORNE HARDY, in reply, said, that a Circular was about to be issued that would contain the terms on which Adjutants of Volunteers appointed prior to 1871 would be paid. With certain exceptions, all adjutants would be paid at the rate of captains in the Army; and these exceptions would be enumerated in the Circular.

  TURKEY—THE TURKISH LOAN OF 1854.

    QUESTION.
    MR. RUSSELL GURNEYasked Mr. Chancellor of the Exchequer, Whether he has any objection to lay upon the Table of the House any communications which have passed between the English and French Governments and the English and Turkish Governments on the subject of the Turkish Loan of 1854?
    THE CHANCELLOR OF THE EXCHEQUER, in reply, said, that the communications were still in progress; and as soon as a reply had been received from the Turkish Government, the Correspondence would be produced.

    PEACE PRESERVATION (IRELAND) ACT.—QUESTION.
    MR. RICHARD SMYTHasked the Chief Secretary for Ireland, Whether the condition of the rural districts of the county of Londonderry is not such as to

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    warrant the Government in withdrawing from them the Lord Lieutenant's Proclamation under the Peace Preservation Act?
    SIR MICHAEL HICKS-BEACH: Sir, the only rural districts of the county of Londonderry now proclaimed are the barony of Loughlinsholin, and a small district adjoining the city of Londonderry itself. Inquiries were made last autumn as to the necessity for continuing the proclamation in the former district; hut, having regard to the strong feeling on party subjects, it was not considered advisable to revoke it, and the reports from the district of the proceedings on the 17th of March last justified that decision. Fresh inquiries will in due time be made, and of course the action taken will depend on their result. I hope that the proclamation of the rural district near the city of Londonderry may before long be revoked.

  FOOT-AND-MOUTH DISEASE (IRELAND).—QUESTION.
  MR. BOWENasked the Chief Secretary for Ireland, If a stricter inspection of cattle, sheep, and pigs, previous to exportation, cannot be enforced in Ireland, so that the ratepayers of Pembrokeshire may be spared the expense and anxiety of providing quarantine at Neyland for the constantly occurring cases of foot and mouth disease from that Country?
  SIR MICHAEL HICKS - BEACH: I believe, Sir, there is very little foot-and-mouth disease in Ireland at present, and I am not aware of the basis for the hon. Member's reference to the "constantly recurring cases" of that disease which he states arrive at Neyland, Pembrokeshire, from Ireland. If he has any private information which he will furnish to the Government, I shall be glad to inquire into it. I believe, however, that the inspections of cattle at those ports of Ireland from which the exports were made to Pembrokeshire, are most carefully made.

  SPAIN—EXECUTION OF THE CREW OF THE "VIRGINIUS."—QUESTION.
  SIR CHARLES W. DILKEasked the Under Secretary of State for Foreign Affairs, Whether General Burriel has yet been brought to trial for the execu-
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  tion at Santiago de Cuba in November 1873, of nineteen British subjects, and of thirty-four Americans, constituting part of the crew and passengers of the "Virginius;" and, whether he will lay upon the Table any Correspondence on the subject?
  MR. BOURKE: Sir the Virginius at the time of her capture having been under the American flag—and the promised investigation into the conduct of the Spanish authorities having formed one of the conditions of the Protocol signed by the Representatives of Spain and the United States on the 29th of November, 1873—the leading part in the endeavours to obtain a fulfilment of the promise has naturally been taken by the United States Government, but in pursuance of instructions from Her Majesty's Government Her Majesty's Representative at Madrid has used his utmost endeavours to support his United States Colleague. General Burriel was promoted and appointed Governor of Bilbao in August, 1875; but in February, 1876, he was recalled from Bilbao to Madrid, where his trial in now proceeding before the Supreme Council of War. Delay has occurred in the progress of the trial, which is attributed by the Spanish Government to the necessity of sending to Cuba for various documents, but there is now, according to the Spanish Government, reason to hope for a speedy conclusion. When the trial is concluded, there will be no objection to produce Papers on the whole subject; but as many communications have passed between Her Majesty's Government and that of the United States we shall have to consult that Government upon the matter. There will be no unnecessary delay in bringing them before Parliament.

  NATIVE CUSTOMS AND COLONIAL LEGISLATION.—QUESTION.
  MR. ALDERMAN W. WARTHURasked the Under Secretary of State for the Colonies, Whether it is true that a Bill introduced into the newly constituted legislative council of Natal by the Secretary for Native Affairs and passed by that council, and which enacts that the "customs and usages" of the natives shall be administered in courts of law in that colony, has received the assent of the Crown; whether Her Majesty's Go-

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  vernment is aware that, within the terms "customs and usages" is included woman purchase and sale under the guise of marriage—that cattle unpaid for her marriage can be recovered as a common debt in courts of law presided over by paid British magistrates, and that polygamy is also freely practised by law; and, whether Her Majesty's Government is aware that said Bill contains no provision to relieve natives, when becoming Christians, from native law—does not recognise a marriage between natives even when performed by a clergyman as legal; and that the official staff of the colony prevented these necessary provisions from being inserted in the Bill?
  MR. J. LOWTHER: Sir, I am afraid that it would be impossible for me within the limits of a reply to a Question to do justice to the subject referred to by the hon. Gentleman, who will, I have no doubt, now that he has had an opportunity of seeing his Question fully before him in print, agree with me in thinking that the subject would be more conveniently dealt with in the form of a Motion, which would admit of a fuller explanation than I could now venture to ask the indulgence of the House to permit me to make. Meanwhile I would observe that I cannot admit the accuracy of all the information upon which the hon. Gentleman has founded his Question, and I ought to mention that this law was passed by large majorities in the local Legislature, and that it is the opinion of the authorities that it will work advantageously to all interests concerned.
  MR. ALDERMAN W. M'ARTHURgave Notice that he would take an early opportunity of calling attention to the subject.

  INDIA—THE STRAITS SETTLEMENTS.

    QUESTION.
    MR. ALDERMAN W. M'ARTHURasked the Under Secretary of State for the Colonies, Whether the attention of Her Majesty's Government has been called to the insufficiency of the Judicial Staff in the Straits Settlements; and, whether there is any intention to meet the wishes of the community by the appointment of an additional Judge?
    MR. J. LOWTHER: The complaints which have been made respecting an in-
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    sufficiency of the Judicial Staff in the Straits Settlements have been mainly due to temporary causes—namely, the absence of the Chief Justice on leave, and the delay in appointing an acting Judge. During that period there was only one Judge actually officiating in the Supreme Court. Directions have, however, been given for the appointment of a second acting Judge, and Her Majesty's Government have directed that power shall be taken to appoint a third Judge of the Supreme Court, if such a course should be found necessary; but before deciding upon incurring this additional expenditure we are awaiting fuller information as to the possibility of so re-arranging the business as to relieve the Supreme Court of much that is now unnecessarily thrown upon it, and petty debt cases below a specified amount have been already removed from that tribunal.

  THE SLAVE TRADE—ZANZIBAR.

    QUESTION.
    SIR ROBERT ANSTRUTHERasked the Under Secretary of State for Foreign Affairs, Whether Her Majesty's Government are in possession of any information showing that the efforts of the Sultan of Zanzibar for the suppression of the Slave Trade on the East Coast of Africa have hitherto proved ineffectual, and that large gangs of slaves are being constantly moved northward, along the coast, for exportation or sale at Pember and other places; and, when the Papers relating to the Slave Trade will be laid upon the Table of the House?
    MR. BOURKE: Sir, the last reports from Dr. Kirk show that attempts have been made, apparently with some success, to revive the inland Slave Trade to the North. The traffic by sea, we believe, is practically stopped, with the exception of a small current that is carried on between the mainland and Pember. The Sultan has shown the utmost willingness to act against the traders. His authorities lately seized 14 dealers and 100 slaves. He has degraded and imprisoned a relative of his own—the Governor of Kilwa—who was proved by Dr. Kirk to be engaged in the Slave Trade. There is no doubt of his being zealously backed up by Dr. Kirk. The delay in the issue of Papers is accounted for by the mass

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    of Papers on other subjects lately issued by the Foreign Office.

    HELIGOLAND—REPORTED CESSION TO GERMANY.—QUESTION.
    CAPTAIN PIMasked the Under Secretary of State for Foreign Affairs, Whether it is true as reported in the "Field" newspaper of April 7th, that
    "Negotiations have been re-opened with the British Government for the acquisition of Heligoland, which the Germans desire to possess as a fishing rendezvous and naval station;"
    and, whether if such is the case he has any objection to lay any Correspondence upon the subject upon the Table of the House?
    MR. BOURKE: Sir, there is no truth whatever in such reports, and there are no Papers to produce.

    THE ARCTIC EXPEDITION—THE OUTBREAK OF SCURVY.—QUESTION.
    CAPTAIN PIMasked the First Lord of the Admiralty, If he can say when the Report of the Committee appointed to inquire into the outbreak of scurvy on beard the ships of the late Polar Expedition will be laid upon the Table?
    MR. A. F. EGERTON, in reply, said, that the First Lord of the Admiralty was waiting for the Report referred to, and that as soon as it was completed the Papers would be laid upon the Table.

  NAVY—H.M.S. "VANGUARD "—COMPENSATION ALLOWANCES.

    QUESTION.
    COLONEL NAGHTENasked the Secretary to the Treasury, Whether he will take into consideration the granting extra allowances to the Officers of Her Majesty's late Ship "Vanguard," in compensation for the losses of clothing and equipment incurred by the sinking of that vessel, the maximum sum allowed by existing regulations being insufficient to replace the articles lost?
    MR. A. F. EGERTON, in reply, said, regulations were laid down as to the amount of compensation that was granted to officers who had lost their effects in consequence of such disasters as the sinking of the Vanguard. Compensation had been paid in this instance under those regulations; but since then representations had been made to the Admi-
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    ralty as to the insufficiency of that compensation, and those representations were now being considered.

  TRAMWAYS—USE OF STEAM.

    QUESTION.
    MAJOR BEAUMONTasked the Secretary to the Board of Trade, If he will state what steps the Government proposes to take with reference to the Bills of three Tramway Companies, the consideration of which was postponed until the report of the late Committee on the application of mechanical power had been made?
    SIR CHARLES ADDERLEY: Sir, I propose to introduce a short Bill giving effect to one of the recommendations of the Select Committee on the use of mechanical power upon tramways, enabling the Board of Trade to authorize the use of steam on tramways, under certain conditions, for experiment, during the ensuing year. In this Bill I also propose to schedule the Bills and Provisional Orders of this Session which apply for steam power, and which have been postponed pending the Report of the Committee, so that they may be taken up next Session, without additional expense, but specially subject to any conditions which Parliament may in the meantime impose.

    LAW AND JUSTICE—EXPENSE OF CROWN PROSECUTIONS. — QUESTION.
    MR. WHALLEYasked the Secretary to the Treasury, If he will be good enough to inform the House, whether the expenditure by the Solicitor of the Treasury in the conduct of Crown prosecutions is subjected to any other audit or supervision than that of the general audit of receipts and payments by the Accountant General; and, if so, what is the nature of any special audit or supervision of such expenditure by the Solicitor of the Treasury, and by whom exercised?
    MR. W. H. SMITH, in reply, said, that the expenditure in question was subject to the audit, not of the Accountant General, but of the Auditor and Controller General, as provided by the Act 29 & 30 Vict.. c. 59, and the Treasury Solicitor, in conducting these prosecutions, was subject to the supervision of the Lords of the Treasury.

  THE CATTLE PLAGUE COMMITTEE.

    QUESTIONS.
    MR. WILBRAHAM EGERTONasked, Whether in the event of the Vice President of the Council moving for the Select Committee on the Cattle Plague that evening, the Government would accept the Amendment of the right hon. Member for Chester (Mr. Dodson), in order that there might be no further delay in the appointment of a Committee?
    THE CHANCELLOR OF THE EXCHEQUER, in reply, said, that the object of the Government was to get this Committee appointed as soon as possible, and he had hoped that the House might have had the discussion on Friday evening. If there was any less ambiguous Motion or any idea in the mind of the right hon. Member for Greenwich that there was something in the Notice given by his noble Friend that gave a turn to the Motion, such a bias was not intended, and he should be willing to substitute the words suggested by the right hon. Member for Chester. He hoped the House would assent to the Motion that evening, as the matter was acquiring additional importance.
    In reply to Mr. FOLJAMBE,
    VISCOUNT SANDONsaid: I am very sorry to say, in answer to my hon. Friend, that there have been three outbreaks of Cattle Plague since the House last met. On Saturday it appeared in a fresh dairy at Willesden, and 64 cattle have been slaughtered there. On Sunday an outbreak took place at Notting Hill, all the 13 cattle in the dairy were affected, and have been slaughtered. To-day a cow has been officially reported to have died of Cattle Plague at Kensal Green, and unfortunately this herd consists of 67 animals.
    MR. W. E. FORSTERwished to know, whether it was intended to take the Motion for the appointment of a Committee any time that evening?
    THE CHANCELLOR OF THE EXCHEQUERhoped that it would be taken at any hour, and that it would be agreed to without discussion. If, however, there was any wish to discuss the subject there might be some difficulty, as the discussion might be a long one.

  RUSSIA AND TURKEY — SUSPENSION OF DIPLOMATIC RELATIONS.

    QUESTION.
    MR. W. E. FORSTERwished to know, as a matter that interested both sides of the House, Whether the Chancellor of the Exchequer could give the House any information as to the present relations between Russia and Turkey?
    THE CHANCELLOR OF THE EXCHEQUER: I do not know that we have any very special news to give except what my hon. Friend the Under Secretary has received in a telegram. Perhaps the House will allow him to read it.
    MR. BOURKEsaid, his noble Friend the Secretary of State for Foreign Affairs had received a telegram, just before he (Mr. Bourke) came down to the House, from Mr. Layard. It stated that the Russian Chargé d'Affaires had received orders to suspend diplomatic relations with Turkey. He had also received a telegram that morning from General Mansfield, our Consul at Bucharest, stating that a small detachment of Russian officers and men had arrived there. He had received the permission of his noble Friend to read these telegrams to the House as being matters of some importance.

ORDERS OF THE DAY.

  CUSTOMS AND INLAND REVENUE BILL.
  (Mr. Raikes, Mr. Chancellor of the Exchequer, Mr. William Henry Smith.)
  [BILL 143.] SECOND READING.
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. William Henry Smith.)
  MR. DODSONsaid, he wished to make an explanation in reference to a statement he had made the other evening in comparing the financial condition of the year 1877-8 with that of the year 1872-3, and to the reply of his hon. Friend the Secretary to the Treasury. He (Mr. Dodson) said, that the estimated expenditure for 1877-8 was, roundly, £79,000,000, exactly £78,794,000; and that the actual expenditure for 1872-3 was, roundly, £71,000,000, exactly £70,714,000. Admitting the accuracy of the statement of the Chancellor of the Exchequer, that in order to

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  ascertain the net burden of taxation it was necessary to deduct £13,400,000 which would be derived from other sources than taxation from the entire estimated expenditure, it would reduce the exact burden for 1877-8 to £65,394,000. He went on to say that in order to render the comparison a fair one, it was necessary to make a corresponding deduction from the actual expenditure of 1872-3 of the revenue derived from other sources than taxation. This amounted to £10,703,000, which reduced the actual burden for expenditure in 1872-3 to £60,011,000, as against £65,394,000 in 1877-8. The explanation of the difference of the figures mentioned by his hon. Friend and himself was that his hon. Friend included in his statement the surplus of the year 1872-3, which amounted to £5,896,000, but which really formed part of the revenue, not of the expenditure of the year; and so far they had been at cross purposes. He would like to know if the hon. Gentleman the Secretary to the Treasury had any reply to make to that explanation?
  MR. CHILDERSdesired to say a few words as to the general effect of the Budget of his right hon. Friend and as to our present financial position. After the Financial Statement had been made, he ventured to put one or two questions to his right hon. Friend, and on most points he admitted that the explanation given was satisfactory. One question had reference to the receipts more especially under the head of Income Tax during the last week of the year just closed, as compared with the receipts for the first week of the present financial year; and he had accepted as satisfactory the reply that nothing had been got into the receipt of last year except what belonged to it. He had, however, noticed that during the last two years the balance in the hands of the collectors of Inland Revenue had steadily diminished, the payments into the Exchequer in those two years not merely representing the receipts of the year, but a considerable sum besides—namely, £105,000 in 1874-5, and £90,000 in 1875-6 —the payment of which into the Exchequer had diminished the balances, and by the same amount swollen the Exchequer receipts. It would be very interesting to watch that process this year, as it would show whether the receipts within the year,
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  including the large receipts of the last week to which he had referred, fairly represented the revenue of the year. Then, as to Miscellaneous Revenue, the estimated receipts last year amounted to £4,100,000, while this year the amount was £4,840,000. In the explanation given on the subject some of this was accounted for, perhaps between £300,000 and £400,000; but he did not see anything to justify so large an increase as £740,000, the fact being that an expected increase of £300,000 or £400,000 only was accounted for. With reference to Customs, Excise, and the Land and House Taxes, the amount received under these heads no doubt fluctuated, but he feared the Chancellor of the Exchequer took too sanguine a view. During the last half-year these fell short of the Budget Estimate by no less than £1,390,000 per annum, while this year they were taken at only £540,000 less. The evidence that had been adduced by his right hon. Friends the Members for the City of London (Mr. Goschen) and Montrose (Mr. Baxter) went to show that the depression of trade continued; that things were going from bad to worse; that the consuming power of the people was diminishing; and that there was no prospect of a better state of affairs this year than had existed last. It might, perhaps, be said that in using this language he was relegating himself to the class which was described a few nights ago as being one of "good-natured croakers." If this were so, he should not object to the term, because he found himself in very good company. His right hon. Friend the Member for the University of London (Mr. Lowe) brought forward five Budgets, and in reference to four of them he was charged with being too sanguine as to the Budget Estimates. This was thought by Her Majesty's present Advisers, who were then in Opposition, to be a fair and reasonable species of criticism, and he did not remember that any of his hon. Friends who now occupied the Opposition Benches applied the appellation of "croaker," in any form, qualified or otherwise, to the critics. In every case the late Chancellor of the Exchequer was within the mark. There had been cases, however, in which the estimated revenue had not been realized, and in which the non-realization had caused considerable inconvenience. For instance, the Budget of 1861 was, apparently, one

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  which had been based upon fair Estimates, but it ended in a very serious falling off in that part of the revenue which was derived from taxes. The Budget of 1868 was apparently well balanced, but it failed in that the revenue did not reach the Estimates; and these Budgets were stated to the House, the first by the right hon. Gentleman who had since become the Earl of Beaconsfield, and the second by the right hon. Gentleman who was now First Lord of the Admiralty. This, however, was not all. The country had had before this year three Budgets from the present Chancellor of the Exchequer, and in the cases of two of them the revenue derived from Customs, Excise, and Stamp Duties had fallen short of the Estimates. In the financial year 1874-5 but for the extraordinary amount of postal revenue received in excess of the Estimate, and the fact that a sum of £300,000 was transferred from the capital of the Treasury chest to revenue, there would have been a deficit, and in every year the expenditure exceeded that given in the Budget. On the whole, he thought Her Majesty's Government had no right to complain of criticisms such as he was offering in reference to the present proposals of the Government. After all, however, the responsibility attaching to the financial proposals for the year must rest upon the Government, and it was only open to the Opposition to offer criticisms as to the way in which the responsibility was discharged. He would now refer to the aggregate figures of the Budget. Comparing the receipts in the financial year 1873-4 with the estimated revenue for 1877-8, he found an increase in the taxation of the country amounting to £3,278,000 for the year in addition to no less than £2,047,000 of revenue drawn from the Post Office, Crown Lands, the Telegraph Service, and other sources which formed no part of the direct taxation of the country. On the other side, the increased charge between 1873-4 and the present Estimate was £5,271,000, of which the augmentation in the Army and Navy Estimate amounted to not less than £1,702,000. There had also been an increase in the purely establishment Votes of the Civil Service (omitting the Board of Trade, Post Office, and Education Departments) amounting to £305,000, but this had been been made
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  up for to a great extent by the reduction which had occurred in the amount paid for permanent public works. The estimated charge for the Army and Navy for the present year was £1,700,000 above that for the year 1874, regulated by the present Government, and admitting that special circumstances had led to an extraordinary expenditure on those services during the years 1875 and 1876, those circumstances had now passed away, and the expenditure should have been brought back to its normal amount. Had the estimated expenditure for these Services for the year been reduced to that of 1874, it would have enabled the right hon. Gentleman to have taken ld. off the Income Tax. There were important branches of this subject which had been alluded to in former debates upon it on which further information ought to be elicited. In the course of the debate which occurred the other evening it was stated from the Ministerial Benches that during the five years the late Government were in office they took out of the pocket of the taxpayer on the average the sum of £65,102,000 per annum, while the present Government, since they came into office, had taken out of the pocket of the taxpayer on the average the sum of £65,205,000, and that thus the expenditure of the present Government had only exceeded that of the late Government on the average by the modest sum of £103,000 per annum. Those figures were, probably, correct as far as they went, but they did not give a fair view of the real state of facts. It was an important fact that whereas the late Government during their five years of office had remitted taxation to the amount of £12,500,000 per annum, and had left the finances in such a condition that the present Government, immediately on their accession to office, were enabled to remit taxation to the amount of £4,500,000 per annum; on the other hand, the present Government during the last three years had remitted taxation to the amount of £60,000 only, and had added £1,500,000 per annum to it. The late Government, however, had to pay various extraordinary charges, such as £4,600,000 for the Abyssinian War, £3,200,000 for the Alabama claims, £800,000 for the Ashantee War, and £2,000,000 in consequence of the Franco-German War in Europe, making a total of £10,600,000. The present Govern-

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  ment, on the other hand, had had to pay no extraordinary charges whatever. The late Government applied directly to the reduction of Debt the sum of £15,250,000, besides Terminable Annuities, and increased the balances by £2,700,000, while the present Government had applied directly £3,000,000 towards the reduction of the Debt and had reduced the balance by £1,500,000. It had been said that the late Government had left legacies of expenditure to their succcessors which the latter were bound to provide for. He had looked carefully through the whole of the operations of the late Government which had entailed an increased expenditure upon their successors, and he found that they were seven in number. They were the Education Act, the abolition of Army Purchase, the scheme for Naval retirement, the commutation of pensions, the Army localization, the extension of docks, and the advances for Irish Church operations. The additional expenditure for educational purposes for the year 1876-7, as compared with that of 1872-3, was £1,069,000, and that had been all but met by the additional net revenue derived from the Post and Telegraph Offices, which amounted to £987,000. In connection with the abolition of Army Purchase, the Chancellor of the Exchequer said the late Government had left a legacy of expenditure. The facts were that the expenditure under that head in 1872-3 was £946,000; whereas the estimated expenditure for the year 1877 was only £500,000, which, with the highest estimate of the Retirement charge, would amount to £830,000, or £116,000 less than the expenditure in 1872-3. The late Government introduced a Bill for the commutation of pensions. The result of that measure was for the first few years a considerable increase of charge, but relief would commence in 1879. Under the head of Naval Retirement the immediate increase was £54,000 a-year; but now the charge was £25,000 a-year less. As to Army Localization, the charge in 1873-4 was £250,000; it was not more now. The charge for Naval Works in 1868-9 was £749,000; for 1877-8 the estimated charge was £545,000. On each of these heads, the arrangements of the late Government, so far from leaving a legacy of expenditure, left a legacy of economy. The financial arrangement in connection with the abo-
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  lition of the Irish Church involved the raising of a very large sum indeed for the Irish Church Commissioners—no less than £8,200,000—in order to provide for the commutation of incomes and other charges, and all this was met by the late Government—larger repayment had been made since the change of Administration. But these were not all. There was an Abyssinian Expedition in 1867, the estimated cost of which was £3,500,000. Later it was said the cost would probably be £5,000,000. What did the Expedition really cost?—£8,300,000, of which the Government for the time being paid £4,000,000, leaving £4,300,000 to be paid by theie successors—the late Government. The purchase of the interest of the Telegraph Companies by the Government of 1866-1868 was spoken of as a great exploit. The Chancellor of the Exchequer of the day, on the second reading of the Bill to authorize that purchase, said the scheme would cost between £3,000,000 and £4,000,000. Now, what did it cost? £8,980,000, which was an excess upon the Estimate of £5,500,000. That was left as a legacy of expenditure to the late Government. But what was the present policy about deferred charges? Early in the Session of 1874 a plan was brought forward for the relief of local burdens, but when we came to look into the accounts we found that a large amount of charge under that head was deferred until 1875-6, and the other heads of expenditure were swollen by £850,000. It was very convenient to postpone the charge to a future day; but the Government got very great popularity indeed at the moment for having brought forward the plan for the relief of local burdens. We had heard something about prisons. The Bill on prisons was brought forward in 1876; but the first charge connected with the carrying out of that measure would not be made until 1878-9. The soldier was to be put into a very much better position; he was to be paid, in some shape or other, 2d. a-day more; but it was all deferred. Popularity for the present was obtained by the plan, but the charge fell on the future; and that, again, would be a legacy of expenditure for the successors of the Government. But there was a still larger item than that. The most popular plan of the present Government, which had been accepted by Parliament,

  1681
  had been the great Sinking Fund plan No. 2. It was very popular in the country. The charge for that plan, which began at £275,000 for the first year, would in 10 years rise to £960,000, which made an average annual charge of £680,000 during that period. During the next 30 years the amount to be paid to the Sinking Fund by the Chancellor of the Exchequer out of the taxes would begin at £4,090,000, and would end at £12,090,000, or an average of £6,200,000. Surely, then, if ever there was a legacy left by a Government to its successors, that Sinking Fund, averaging for 10 years £680,000, and then going on to an average of over £6,000,000, was an illustration of it. But there was another subject on which a thorough elucidation ought to be given by the Chancellor of the Exchequer. His right hon. Friend had impressed on the House and the country that the present Government had, as a cardinal feature of their policy, kept up the public credit by a systematic reduction of Debt. Now, he maintained that they had not systematically reduced the Debt at all. On the contrary, they had made things pleasant to local authorities by stopping the reduction of Debt and increasing loans from the Exchequer, which was a very different thing. According to his right hon. Friend's own figures, the Debt on the 1st of April, 1874, was £779,283,000, and on the 1st of April, 1877, it was £775,590,000, showing a reduction of £3,693,000. From that latter sum they must deduct £1,454,000 for the reduction in the Exchequer balances, leaving the net reduction of the Debt during the last three years as only £2,240,000, or at the rate of £747,000 per annum. But then the right hon. Gentleman said they must take into account the loans in excess of repayments, the payments for barracks, fortifications, the Abolition of Purchase, and the Telegraphs, all of which in those three years gave them an improvement of the national balance-sheet to the aggregate amount of £15,200,000. Well, but the late Government reduced the Debt from £805,500,000 on April 1, 1869, to £779,300,000 on April 1, 1874, making a total reduction of £26,200,000; while the Exchequer balances improved in the same period by £2,700,000, the loans in excess of repayments amounted roughly to another £4,000,000, the
  1682
  telegraphs which were purchased to £9,000,000, and the sum for barracks, fortifications, and Army Purchase together was £3,500,000. Those sums, added to the amount of Debt reduced between 1869 and 1874 by the late Government—namely, £26,200,000, gave a total of £45,400,000, or, after deducting the Chancery Funds cancelled, just £40,000,000, being at the rate of £8,000,000 per ann., against £5,000,000. The real reduction of Debt effected by the present Government during three years was therefore only £2,240,000, or at the rate of £747,000 a-year; whereas the late Government had effected a reduction of £28,900,000 in five years, or at the rate of nearly £5,000,000 per annum. Instead of the present Government having kept up public credit by the systematic reduction of Debt, it was just the reverse; and the demands on them had increased, and would continue to increase, for there was every reason to believe that the last three years' experience was a fair specimen of what was to come, and the net result was that £747,000 a-year, under the new Sinking Fund, was the whole amount applied to the direct reduction of Debt. What would happen, then, if this country should find itself under the necessity of adding greatly to its expenditure—say, in the event of war? If they were steadily reducing their Debt by processes formerly in force, when war came on those processes ceased, and they would have £5,000,000, £6,000,000, or it might be £8,000,000 at their disposal, to which they could add the additional taxation that might be imposed. But when they had launched on a system of large loans they could not stop, because they were made in instalments which spread over years, and they would not have at their command that immense weapon which a rapid reduction of Debt placed in their hands. There was a danger, then, when the lending system was carried to a length which interfered with the systematic reduction of the Debt, and to that danger the House ought to direct its attention. He had done his best to state these figures and arguments correctly, and he should be only too happy if his arguments and conclusions could be refuted. He had argued that the financial position of the Government was not as satisfactory as the Chancellor of the Exchequer had put it before

  1683
  them, and that there were dangers a-head in the shape of a falling-off in their estimated revenue, which, if they were realized, would do much to shake public confidence. He had shown as between the present and the late Government that the latter had reduced the expenditure to a point which enabled large remissions of taxation to be made, and the Debt also to be greatly reduced, while they had left to their successors a very full Exchequer; that the charge as to their having left large legacies of expenditure to their successors was perfectly unfounded; that in regard to nothing else but the Education Vote had they not borne their fair share, while, on the other hand, they had borne enormous legacies left them by their predecessors; and, further, with respect to the great scheme which the right hon. Gentleman opposite had proclaimed to the country, and for which he had received much credit; in point of fact, it was an entire myth; and, by stopping the reduction of Debt, the right hon. Gentleman had put our finances into a perilous position, which would become tenfold more perilous if the country were to be called upon at short notice to enter into a war, or to meet a great emergency.
  MR. W. H. SMITHsaid, he was sure the House would feel that he undertook a task of considerable difficulty in replying to the able speech of the right hon. Gentleman opposite (Mr. Childers). His speech bristled with figures, and no doubt also with a few facts; and anyone who had to reply to such a statement off-hand must feel placed at some disadvantage. In the first place, however, he might be allowed to rectify the misapprehension of the right hon. Gentleman the Member for Chester (Mr. Dodson) the other evening. He alluded to the revenue receipts from taxes during the years to which he (Mr. W. H. Smith) referred, and the facts were these—In 1872-3 the revenue receipts, excluding fee stamps, amounted to £65,902,946, and the revenue receipts in 1873-4 to £65,353,724, also excluding fee stamps; while in 1876-7 the revenue receipts from the same sources were £65,590,500, and therefore it was perfectly accurate to say that the pressure on the taxpayers was less in 1876-7 than in 1872-3. He admitted the right hon. Gentleman was right in saying that
  1684
  there was a large surplus in 1872-3 which was applied to the reduction of the Debt—there was a surplus of £5,894,322. The right hon. Gentleman (Mr. Childers) travelled through all the figures to be found in the Estimates, and he understood him to say that the Estimates of expenditure for this year would place a charge on the taxpayer in excess of the year 1873-4 by the sum of £5,000,000. Now, he was quite unable to follow the calculations by which the right hon. Gentleman arrived at that result. In the year 1876-7 the actual receipts from taxes—i.e., Customs, Excise, Stamps (excluding fee stamps), Land Tax, House and Property and Income Tax—were £65,590,500, and the estimated receipts for the year 1877-8 were £65,615,000. That was the actual imposition of taxes; what was done with the amount was quite a different matter. The right hon. Gentleman quoted the remissions which were made in 1874. They amounted to £3,000,000 — the Sugar Duties, the relief to Income Tax payers, the Horse Duty, the Servants Duty, and the adjustment of Brewers Licences, amounting together to £3,000,000. The net relief to the taxpayer was £3,000,000 as compared with 1873-4. But, said the right hon. Gentleman, the late Government left a large surplus in the Exchequer of £5,500,000. Now, the question naturally arose, what was done with this surplus? The fair way of stating it was this—There was first a reduction of £3,000,000 in taxation. There had been an increase in the Votes for Education of something over £1,000,000, which they would all admit to be a very proper and just expenditure. Then there was £1,450,000 which was given back to the ratepayer, who was also a taxpayer, in the shape of relief to local taxation. There was also in the Budget an increased provision of £1,160,000 for the payment of Debt, altogether apart from the interest upon the loans advanced to local authorities, which was available to meet the charge for the New Terminable Annuities. He had thus accounted for £6,610,000, which disposed of the surplus of £5,500,000 left to the present Government in 1874. But the right hon. Gentleman said the expenditure on the Army and Navy was something enormous. The excess of expenditure under this head, he said, was £1,700, 000 over the estimate in

  1685
  1874-5. He had looked carefully into the figures, and could not make out the calculations of the right hon. Gentleman. The net Exchequer issue for 1874-5 was £24,212,000 for the whole of the Army and Navy Services, including a sum for the Abolition of Purchase of £579,000, and the Ashantee Vote of Credit. The net issue for the year 1876-7 was £25,485,000, and the estimate for the coming year was £24,969,000. So that the excess of the year 1877-8 over the year 1874-5 was £757,000, and not £1,700,000 as alleged.
  MR. CHILDERSsaid, what he compared was simply the Budget Estimate for the Army and Navy, plus the Navy Supplementary Estimate in 1874-5, and the Budget Estimates for the Army and Navy in the present year. He could not compare it with the expenditure, for he could not say what that would be. He could only take the Estimates.
  MR. W. H. SMITHthought he had given the House the best and fairest information, which was the net actual expenditure, with regard to the past. The expenditure for the present year was, of course, only in estimate; 1874-5 was a year which was not properly the subject of comparison. The comparison was with 1873-4, a year for which the late Government were almost wholly responsible. In that year the net expenditure on Army and Navy, including £800,000 for the Ashantee Expedition, was £24,358,000, and the increase was, no doubt, considerable since that time; but the question was, whether the increase was justifiable considering the circumstances of the case. He did not stand there to defend the Estimates for the Army and Navy; the Government were responsible for them. The Government presented those Estimates to the House which they believed were necessary for the security of the country and the good condition of the Services represented. He could only refer to one single fact—that in 1870, when there was, as at present, an apprehension of great disturbances arising in Europe, the late Government thought it necessary to come down to the House and obtain a considerably increased Vote for the Army and Navy; but now the present Government felt it was possible to maintain the honour and dignity of this country without coming to Parliament with any such demand, and, in the face of circum-
  1686
  stances calculated to cause great anxiety and to lead to great apprehension for the peace not only of Europe, but of the world, it had been able to effect some considerable reductions in our military and naval expenditure. As to the Customs and Inland Revenue receipts falling short of the Estimates, he would give the figures for the three years. In 1874-5 the Customs revenue receipts exceeded the Estimates by £549,000; the Excise and Stamps fell off £555,000; the taxes were £80,000 in excess; so that apart from the taxes there was a difference of £6,000 to the bad, and the taxes gave a surplus of £74,000, and the Income Tax was £346,000 more than the estimate. In 1875–6 the Customs had increased £520,000, and the Excise had fallen off £114,000; Stamps had increased £402,000, and Land Tax and House Duty £46,000. In 1876-7 there was a considerable difference, which had been explained and commented upon. As was well known fluctuations between Customs and Excise depended upon the relative consumption of foreign and British spirits. The general result was that, during the time for which the present Chancellor of the Exchequer was responsible for them, except in the unfortunate year just passed, the receipts had fully justified the anticipations his right hon. Friend had formed from time to time. Reference had also been made to the Miscellaneous Estimate, and the right hon. Gentleman the Member for Pontefract said that the great increase of £740,000 in the Estimate for 1877-8 over that for 1876-7 had hardly been justified by the explanation given to the House; but it should be recollected that a very large sum of that increase, £200,000, was due to interest for loans advanced to local authorities through the Public Works Loan Commissioners, and on the purchase-money for Suez Canal Shares, £58,600 to fees at public offices and County Courts, and £467,000 was the estimated increase in the contributions from Indian Revenue. An examination of all the items would show that the receipts were, if anything, under-estimated rather than over-estimated. He understood the right hon. Gentleman to complain of the facilities afforded for the increase of local obligations by the low rate of 3½ per cent., and he seemed to charge the present Govern-

  1687
  ment with setting up a system which increased debt all over the country; but the system of loans out of the Imperial Exchequer was set up in its integrity by the late Government. He (Mr. W. H. Smith) found no fault with it, except that it did afford a temptation to local authorities to increase an expenditure which ought to be considerably restricted. It began with the Education Act of 1870, when local authorities were authorized to claim advances at 3½ per cent for capital outlay; the precedent had been followed in respect of the Public Health Act and the Sanitary Acts, and so far as the present Government were concerned, it had been the disagreeable task of the Treasury to watch Bills that had been introduced with the object of obtaining loans at the public expense. Formerly these loans were advanced without the special attention of Parliament being drawn to them; but the Chancellor of the Exchequer had determined that they ought to be brought under the notice of Parliament from year to year; and now, under an Act passed two years ago, the Public Loans Act, it was no longer possible for the Commissioners to grant them without coming to Parliament and stating the local indebtedness of the local authorities. In this way Parliament was forced to pay some regard to the consequences of its own work; and it was a matter that deserved grave consideration, for the facility of getting into debt was a dangerous one to give to either public authorities or private individuals. As, however, the late Government thought it right to give local authorities power to borrow money at a low rate, he had done his best, in conjunction with his right hon Friend, to secure that they should consider the circumstances under which this favour was sought. With the actual figures before him he was unable to follow the right hon. Gentleman opposite (Mr. Childers) as to the increase of the charges on the Civil Service Estimates. For the three years 1871-2 to 1873-4, they amounted to £16,985,000, or £5,660,000 a-year, and in the three following years to £17,387,000, the difference between one period and the other being £400,000, or an average excess of £130,000 a-year. The Post Office revenue was £5,792,000 in 1873-4, £5,670,000 in the following year, and this year it was estimated at £6,100,000; the average
  1688
  during the past six years had been £5,500,000 a-year; and the average increase might be put down at from £100,000 to £150,000 a-year, very much depending upon the condition of trade. If we increased by £400,000 or £500,000 in four years, we did exceedingly well. The Miscellaneous Receipts were largely increased by bringing in the income derived from interest on loans. There was brought into the account the payment of £200,000 from Egypt; but such items were only cross entries, increasing the apparent income and expenditure by about £1,000,060. The increase in the revenue from Miscellaneous Receipts other than taxes had certainly been marked, and some credit for the result might be claimed for the permanent officers of Departments. The average of the receipts for the three years ending 1873-4 was £11,000,000 a-year, and the sum now reached was £13,400,000. Sources of income had been found which did not formerly exist, and income had been improved by good administration. He thought he had said enough to show that although they had apparently swollen the expenditure of the country, that expenditure had not been swollen to the extent which the right hon. Gentleman the Member for Pontefract had so eloquently and fully described. One point which had not been so fully insisted upon as it ought to be was the effect of the present system on the reduction of the Debt. They were steadily keeping in view that reduction; but it should be remembered that the £28,000,000 applicable to the Debt did not increase; but as the Debt decreased, the interest diminished, and that diminution increased the balance available for the reduction of the Debt from year to year, and that without any pressure upon taxation. The right hon. Gentleman took credit to the late Government for having, when the Income Tax was at 6d. and 4d., paid off a large amount of Debt; but he (Mr. W. H. Smith) thought the country preferred closer Estimates, and setting aside a definite sum every year, just as a man might set aside a certain sum for payment of interest on a mortgage on his estate, while he looked forward to a redemption of that mortgage. He did not think the Government would be justified in levying a 3d. Income Tax, in order that the Government might be left at the end of the year with a large

  1689
  surplus. That was not the policy of the present Government. He did not say that it was the policy of the late Government, but they held office during a period of commercial excitement, when the prosperity of the country was advancing by "leaps and bounds," when wages and profits were rapidly increasing, and when the Customs and Excise naturally produced an income in excess of what had been estimated. No greater misfortune, in his idea, could befall a country than that such periods of commercial excitement should occur; but when they did occur, it was no doubt just and proper to take advantage of such times and apply the balance of any excess of receipts over expenditure towards the reduction of the National Debt. To estimate for them would be a totally different matter. To a commercial nation like ourselves no greater misfortune could happen to a country than the exceptional and factitious prosperity of 1872-3 and 1873-4. The result of the wages of labour being so suddenly driven up was that profits were disturbed and many trades were injured, and it was now only reasonable and natural that a re-action should set in and that trade and employment should suffer. They were, however, suffering less than might have been supposed. In some trades wages had now fallen enormously, leading, no doubt, to suffering on the part of many persons, but they had fallen so as to render it possible that those trades should be carried on so as to allow reasonable profits to be made. A period of depression naturally followed a time of great excitement and unusual profits, and no doubt the production of coal and iron was enormously less than at the period in question. The wages of labour were also less, but although in many trades not so many men were employed, yet in others they were working steadily and constantly. There were other industries, too, which were not suffering under great depression, and in which, while excessive profits were not being made, at least there was fairly continuous employment. The reduction in the present amount of production was by no means so excessive as had been supposed. The receipts of the railways in regard to goods traffic were not falling off, except in the mineral districts. A misapprehension had arisen, because it was unfortunately the habit of many persons
  1690
  to suppose that unless there was an increase in the operation of their own trade, every other industry was carried on at a loss; but, looking back at the commercial history of the last 10 years it could not be expected to go on at the same rate of increase, and no one who made large profits at such a time could reasonably expect to continue to increase his net income in the same way. The world was not wide enough to afford scope for the employment of capital at a continually-increasing ratio and for the increase of wages in the same ratio. With regard to the Budget, he believed that the Estimates of income for the coming year which had been carefully prepared by the Revenue Departments and for which his right hon. Friend the Chancellor of the Exchequer and himself were responsible would be supported by the result. He did not say that every item would be realized; but if they were short in one point the deficiency would be made up by an excess in another, so that the result of the income and expenditure of the year 1877-8 would be found to justify the Estimates laid before the House.
  MR. MUNDELLAsaid, that if ever there was a time when the finances of the country should be criticized it was at the present moment. He and his Friends upon the front Opposition bench had been charged with "croaking;" but the example was first set by the right hon. Gentleman the Chancellor of the Exchequer, when he told the House that the elasticity of the Revenue was gone. It behoved the House to be very careful in watching the finances and seeing whether any reduction could be made in outgoings; and he trusted he should not be regarded as a croaker, if he took a less favourable view of the Estimates which had been submitted than had been taken by the hon. Gentleman opposite (Mr. W. H. Smith). The expenditure for a peace Budget was very excessive, and taking the instances of the financial operations of the present Government, he had never found the Budget Estimate cover the amount of the expenditure. He did not complain of the way in which the right hon. Gentleman proposed to meet the expenditure for the year, but he complained of the amount itself. For the first time in their history they had a peace expenditure of £78,800,000, and the Chancellor of the Exchequer esti-

  1691
  mated that he would have a small surplus of £226,000. The time had come when they should look that large expenditure in the face, and see whether such a large sum was necessary to maintain the honour and dignity of the country. Financial prosperity could not for a length of time be coincident with commercial and industrial depression, and in the case of this country he believed the coincidence had come to an end. He denied that it was foreign competition which was causing the trade of this country to suffer. All industries were suffering from a depression of trade, and this country was not alone in that matter, although, upon the whole, we were suffering less than some, for he believed the industry which was suffering most of all was the silk manufacture of France, in which that nation was so supreme. There was no trade in this country—not even the iron trade—in which there was such depression and lowness of wages. But wherever the depression to which so much reference had been made existed, it was brought about by the same causes that had checked our own industries— namely, over production; from excessive expenditure on the part both of individuals and of Governments—particularly by Governments in maintaining "bloated armaments;" from the dread of war and want of confidence; and in respect of our own country, he might add, from other causes, and especially from the stupendous losses which had been sustained in bad investments in loans to bankrupt foreign Governments, and in bad investments at home as well as abroad; and the best evidence of our superabundant wealth was to be found in the way in which we had borne those losses. Notwithstanding the prodigious amounts that had been taken out of the pockets of the investing class, the credit of the country stood as well at this moment as ever it had done. The failures were exceedingly few, the country was rich, and the sums spent in luxuries great. But it would be easy to show how our financial position was likely to be affected by the financial arrangements of the last few years. He had alluded to loans to foreign and bankrupt Governments, not including those of Spain and Egypt, and it was estimated that up to February last the total loss amounted to about £335,000,000, of which no less than
  1692
  £276,000,000 had come into default since 1873. Not that all that was held by this country, but it was to be feared that a very large proportion of it was so held—to the extent, it was estimated, of fully £200,000,000; and when there were added to this the bad investments in foreign railways, mines, and other enterprizes, in countries where there was neither a sense of honour nor a chance of law and justice, it would be found that the amount due to the British investor was something between £300,000,000 and £400,000,000. What was the consequence of this fact so far as the Chancellor of the Exchequer was concerned? One only he need mention, and it was this—a falling off of payment of income tax on at least £20,000,000 a-year. All this, he regretted to say, told injuriously on our internal trade and our financial arrangements. It was inevitable that the industries of the country should be affected by the inability of investors to become purchasers to the extent they would otherwise do, while the finances would be affected by a large reduction of the Income Tax. They would all be most thankful if the estimates and expectations of the Chancellor of the Exchequer were realized; but when expenditure and income ran so closely together it behoved them to look the matter straight in the face, so that if they could not secure a surplus at least they might be able to make both ends meet. It was within his own knowledge that wages in the coal and iron trade had been greatly reduced. The change in the rate of wages in connection with the textile trade had been slight; but even where there had been no reduction in that respect there had been an enormous reduction in the pay sheets. Other industries had suffered similarly. He believed there was hardly any branch where the workmen were on full pay excepting in the cotton trade of Lancashire. The trades which suffered most were those which produced, not articles of necessity, but of luxury. Under these circumstances the question was what ought to be done? As an independent Member of the House he thought that these financial debates ought not to be left entirely to the two Front benches, which confined themselves very much to the purely financial view of the subject. It was well that men engaged in business should tell the Chancellor of the

  1693
  Exchequer what they thought on the matter, and that he should know what were the views of the country. The right hon. Gentleman had asked the other day—"Do you want to increase taxation?" No; there was no desire to increase taxation, for that could not be done under existing circumstances; but what did all prudent people do when they found their income falling away? Why, they always reduced their expenditure, and what he would urge upon Her Majesty's Government was greater economy. Without economy, said the Chinese proverb, no man could be rich, and with economy very few men could be poor. Economy became a popular cry some three or four years ago, and it had been one of the boasts of those who supported Her Majesty's Government that they were opposed to economy, or what they called cheese-paring economy; but we had heard very little of that recently. There were various directions in which economy might be effected. With regard to the Civil Service, ho was inclined to question the accuracy of the opinion expressed the other night by the right hon. Member for Montrose (Mr. Baxter) that there was no great saving to be effected in that direction. When sinecures fell in they ought not to be renewed. It seemed to him that there was a most unnecessary creation of offices for the purpose of putting men into them, and a great deal was spent on inspectorships for factories and other industries when the work could be done by local authorities at a vast diminution of expense. Again, how many men were pensioned off in order merely to make room for somebody else. How often it happened that men were allowed to retire in the prime of life on full salary. In some Departments, moreover, it was notorious that employés were not fully occupied. There was one Department where, if any one called at a quarter to 2 o'clock to make an inquiry, he would be told that none of the clerks had yet come, whereas as Berlin those functionaries were at their posts and working hard at 10 o'clock in the morning. But he admitted that any saving that could be effected in the Civil Service would be small compared with what might be done in the Naval and Military Services. It was particularly in the manufacturing establishments of these Services that economy might be looked for. If, for
  1694
  example, Government trusted to private enterprize for the construction of their iron-clads he believed they would find the work done cheaper, and that they would be saved from the temptation to increase their stock of stores and the number of their employés beyond what was really necessary. He had been looking at the growth of our naval expenditure, and he found that it had increased by about £1,100,000 per annum since the present Government had been in office. The expenditure of the late Government on shipbuilding, including the Store Vote, &c., since 1869-70, was a total of £10,161,000, or an average of £2,540,000 per annum. In his present comparison he was omitting the year 1873-4. The expenditure of the present Government was £14,584,000, or an average of £3,646,000 per annum. In the omitted year the expenditure had amounted to £3,109,000, the reason of the greatness of that sum being the enormous cost of iron and coal. Now all that the country had received for that additional expenditure was the building of 22,000 tons per annum instead of 20,000, or, say, for the whole period during which the Government had been in office, an extra iron-clad. And what made it more astonishing was, how we should be expending so much in our dockyards when there were such enormous changes in the cost of the material? The price of material, so far from having risen, had since the year 1873 fallen 50 per cent. He would compare the cost of material for a few years. Cleveland iron, in 1872, cost 104 s. 6d. per ton; in 1873, 115 s.; in 1874, 75 s. 6d.; in 1875, 52 s.; and in 1877, 42 s. 6d.. Ordinary coal, again, was at just half its former price, while steam coal had fallen from 21 s. in 1873 to 10 s. per ton in the present year. The consequence was that while iron steamers cost £21 a-ton to build in private yards in 1873, they now cost £14 or £15 only, and sailing vessels, which in the same year cost £19 a-ton, were now built at £12 or £14. How, then, was the enormous increase of expenditure to which he had referred to be accounted for? He could not help thinking that it was in a great measure owing to the Government having manufacturing establishments which could not be easily controlled, and which were not subject to the wholesome

  1695
  influences of competition. In spite of what was said about false economy, he believed with the late Mr. Cobden, that the large cost incurred on our manufacturing establishments was unnecessary, and he would impress upon the Government that open-handed, lavish, expenditure was one of the greatest evils to which an Administration could be subjected, and that wherever a wise economy prevailed there you would find prosperity and good management.
  MR. A. F. EGERTONsaid, he was prepared to defend whatever increase had taken place in the Navy Estimates. The hon. Member for Sheffield (Mr. Mundella) seemed to argue that because the tonnage built since the present Government had been in power was not very much in excess of that built by the last Administration, therefore, there must have been some want of economy in both the acquisition and use of stores. Not having the figures at hand, he could not follow the hon. Member through the comparison he had just instituted. It was true that shipbuilding was a very considerable part of the dockyard work, but a great portion of it also consisted of the repairing of ships. His comparison had been between a year when the iron-dads were comparatively new and the present time. But such ships wore out, and the boilers wore out, and had to be replaced. When the present Government came into office a great number of the boilers were worn out, and the consequence was that the present Government had to replace them at very considerable expense. Instead of there being want of economy he would tell the hon. Member that in the year 1876-7 the Admiralty had saved £67,612 (chiefly in coal and metals) on the estimated price of articles under the Store Vote. There was, he might explain a number of demands pouring in in the course of the year which had to be met, and in many instances the Admiralty had no control over the expenditure until it had been made, and one item of naval expenditure which could never be estimated exactly, was the extra expenditure on foreign stations. Now, for the year 1876-7, this extra expenditure on foreign stations amounted to £38,000, which of course swallowed up a considerable amount of the saving on prices. Moreover, although that saving had been effected on the price of articles originally
  1696
  estimated for, it became necessary to provide other articles which had not been estimated for. That was always the case in dockyards, and, he had no doubt, in private establishments as well. It was found, for instance, that armour plates of particular dimensions were not wanted, and that others had to be provided. Generally speaking, he could assure the hon. Gentleman that in the Store Department of the Admiralty the strictest watch was kept on the purchase of stores for the Navy. The hon. Gentleman seemed to think that private builders could produce ships at a less cost to the country than the Royal Dockyards. Now, when he (Mr. Egerton) first went to the Admiralty, he had gone very minutely into this question, and he found that, allowing a fair sum for establishment charges, there was remarkably little difference between the two expenditures, not only as applied to iron-clads but to wooden ships. But then there was this to be said—he did not wish to throw any disparagement on private building yards, but they had a greater security in the Royal Dockyards that all the materials were of the first quality, from being under the eye of the Admiralty, than they could have in any private building yard. That was a great advantage. His own impression was, that shipbuilding should be divided between the two, the one being an efficient check on the other. The hon. Member had made a curious statement, of which some notice should be taken. He understood him to say that the excess of Admiralty expenditure over the Estimate of 1873–4 amounted to £900,000. [Mr. MUNDELLA said, he meant on the whole expenditure.] The actual expenditure over the Vote was little over £200,000. The Admiralty had given great attention to this subject—the importance of accuracy in the Estimate. And he thought they had at last succeeded. Last year there was much less excess than in any previous year. This year he hoped and trusted there would be no excess at all over the Estimate; and, in that case, he thought the Admiralty would be entitled to some credit for the attention they had paid to the subject.
  MR. PEASEthought it must be a great satisfaction to the House that this subject had not been disposed of before his right hon. Friend the Member for Pontefract had delivered his

  1697
  able and important speech. The right hon. Gentleman opposite (the Chancellor of the Exchequer) appeared to imagine he had brought in a Budget so exceedingly satisfactory that no remarks should be made upon it. When his Estimates were criticized he seemed almost to resent it. He (Mr. Pease) wondered at the time that the right hon. Gentleman should be so thin-skinned; but after the debate on the Resolutions he again looked at the figures and found that the right hon. Gentleman was wrong in his Customs Estimate by £328,000, in Stamps by £110,000, in Excise by £112,000, and in various other items, and that but for an excess on some two or three articles he would have had a deficit of £850,000. Comparing the expenditure in the last year of the late Government with the Estimates for this year, there was an estimated excess in the latter of no less a sum than £4,000,000. Of that the Army and Navy would take £1,229,000, and £3,000,000 would go to the different Services. He thought the Secretary to the Treasury deserved great credit for having produced the Estimates at so early a period, and for many details he had given, which helped hon. Members better to understand them; but he could not help calling his attention and that of the House to the constant extension of expenditure, independently of the increased Education Votes and the Vote in aid of local rates. The lesson that the figures he had referred to should teach was that the House itself must watch the growth of these Estimates more carefully in future than had been the case lately, because the increase in those items, which was entirely independent of the extra charge for the relief of local taxation and for the purposes of education, being something like £190,000 per annum, indicated a want of proper control on the part of some person or another. The Chancellor of the Exchequer had characterized his Budget as a satisfactory one; but it was satisfactory on two points only; the first being that it showed that owing to fortuitous and happy circumstances the revenue for last year was sufficient to meet the expenditure, and the second being that no increase in taxation was asked for to meet the expenditure of the current year. The Chancellor of the Exchequer had thrown the taunt across the
  1698
  House that many hon. Members had come down expecting to find quite the contrary, and that they were disappointed at the result; but he (Mr. Pease) objected to his corn being measured with such a bushel, inasmuch as all commercial men were greatly relieved when they found that there was to be no increase in the taxation of the country. He would now proceed to ask whether no change was required in the incidents of the taxation? In his opinion it would be worth the while of any Government to devote their attention to affecting an alteration in the incidents of the Income Tax, and of the wine, beer, and spirit trade, and the last was a point he especially thought the right hon. Gentleman would have touched upon. The last and the present Government had established a vast monopoly for the sale of intoxicating liquors throughout the country, by which great fortunes had been thrown into the hands of the brewers and spirit merchants, and that monopoly had been considerably aided by the action of the licensing authorities, and the Government had asked nothing and had received nothing from those who were benefited by that monopoly. In his opinion, however, where there was a large monopoly granted which produced an admittedly large profit it was the duty of the Government to obtain something in return. With regard to the Estimates for the future, it was all very well for the Chancellor of the Exchequer to say that he had taken the best advice on the subject, and had consulted experienced men and the heads of Departments with reference to them; but it became the duty of independent Members of that House to criticize them, and to bring to bear their practical experience and common sense upon them, when they appeared to be based upon unsatisfactory data. The right hon. Gentleman estimated his receipts from Customs and Excise for 1876-7 at £17,800,000, and for 1877-8 at £47,350,000, but he (Mr. Pease) thought from the signs of the times that there would be a far greater falling off this year. The state of railways had been alluded to as showing that the state of trade was not so bad as had been represented; but, with regard to railways, what caused the most alarm to directors and managers was the falling off in the third-class traffic. There

  1699
  had been of late a gradual diminution in the spending power of the working classes, arising from the badness of trade in every manufacturing department as well as in trade generally. Whoever he conversed with in the City, whether they were engaged in the Home or Foreign trade, the same complaints were made as to the depressed state of trade, and he was afraid that the sanguine expectations of the right hon. Gentleman as to the produce of those duties would not be realized. It was also more than probable that there would be a great falling off in the produce of the income tax under Schedule D arising from various causes, especially in the case of annuitants, who derived their incomes from foreign investments, and from the depressed state of trade affecting professional men and traders generally. On the other side of the account, so far from there being any economy exercised, the estimates of expenditure showed an increase of about £1,200,000 above the expenditure of 1873-4. Although the cost of materials and labour had been largely reduced, the Navy Estimates were still maintained at a high figure; and the same was the case with regard to the Army expenditure. The additional 20,000 men raised by the last Government in the time of the Franco-German War had ever since been retained. Things certainly did look gloomy abroad now; but if he understood the feeling of Her Majesty's Government aright they were neither prepared to preach a crusade against Turkey, nor to go to war on behalf of the Porte. In his opinion the position of this country was never safer than at present, and in times like these greater economy should be exercised in order that money might find its way into the channels of trade rather than be squandered in unnecessary expenditure.
  GENERAL SIR GEORGE BALFOURsaid, he wished to say a few words upon Army and Navy expenditure, and upon the difficulty of accurately ascertaining what that expenditure really was, owing to the many different modes adopted in stating that expenditure, and necessarily in taking out the figures, and also to the fact that the audited accounts, which could alone be relied on, were so much in arrear as to prevent any accurate comparison with the present year's estimated expenditure. The hon. Gentleman the
  1700
  Secretary to the Treasury had, however, very courteously given him information on which to base his calculations of comparative expenditures for different years, and he had, therefore, framed them upon the actual issues of money from the Exchequer. The hon. Gentleman himself had, he was glad to find, followed that rule that evening, and although his figures had been in some degree questioned, yet the statement he had made in regard to some portions of the public receipts and expenditure, based upon the issues and receipts from and into the Exchequer, was, he conceived, as fair and honest a method of treating the matter as was possible. For himself, he had previously adopted the Exchequer transactions during the eight years ending with this financial year 1877-8, and had been able to compare the expenditure on the Army and Navy, and he found that during the four years for which the present Government was responsible, the gross expenditure for the two Services was £107,092,879; whereas in the previous four years, during which the last Government was in office, it was only £101,412,803; but in this latter sum there was included the large amount of £2,251,096 on account of the war in Europe and for the expenses of the Ashantee Expedition, whereas in the former the only sum charged was £125,000 on account of Ashantee. By deducting these extraordinary expenses the total for the four years for which this Government was responsible amounted to £106,967,879, against £99,211,847 for the last four years of the late Government. There was another mode of looking at this expenditure, and that was the net sums spent after deducting Army and Navy receipts, which had varied very considerably during the past eight years. These receipts, for the four years this Government was responsible, amounted to £6,813,489, and for the four years of the late Government to £7,135,364; therefore, after allowing credit for the various sums which were received on account of the Army and Navy, he found the net amount to be £100,279,390 for the four years the present Government had been in office, and £94,277,439 for the previous four years. There was thus a difference by the first calculation of £5,680,076, and by the second of £6,001,951. Therefore the present Ministry was fairly responsible for an

  1701
  excess of about £1,750,000 per annum. He did not find that they had spent, as the Chancellor of the Exchequer seemed to think, more money on account of the abolition of Purchase in the Army than their Predecessors had spent. The sum appropriated during the late Government amounted to £2,000,473, against £2,079,115 in the present Administration. But there was an excess of about £3,000,000 in Naval expenditure. They had, however, spent a fraction more for localization, and something less for fortifications than their Predecessors. Although he did not think the expenditure for the Army had increased in an equal proportion to that for the Navy, still it had very considerably increased. He admitted that the cost of buying up the commissions of officers of the Army had fallen on the present Government, and they were not therefore answerable for that item of charge; but he thought the purchase-money for these commissions ought to have been paid down to the officers at the time the system was changed. Until all claims of officers for money invested in commissions was cleared off, he could not agree with the remark of the right hon. Gentleman the Member for London, that they had bought back the Army from the officers, because that reform in the organization of the Army could not be said to be feasible until they had really repaid to the officers the money invested in their commissions. He had all along regretted that this payment had not been made at the time Purchase was abolished, the sum needed might have been about £8,000,000; and if this had been raised in the way the £4,000,000 were obtained for the purchase of the Suez Canal Shares, then an annuity for £400,000 would, in 35 years, have cleared off the entire debt, and then it would have been possible to have made those Army changes which economy and efficiency dictated. At present the question of Promotion and Retirement was under consideration. He must raise his voice against such a measure, until all the improvements which, by the abolition of Purchase, were required in the organization of the Army were made, and out of these reforms the pecuniary means ought to be provided by which the Promotion and Retirement scheme could be carried into effect. He gathered from an answer of the Secretary of State for
  1702
  War to a Question which he had asked, that the right hon. Gentleman considered himself competent to make the changes involved in the scheme, without allowing the House of Commons to have a voice in the matter. If that was so, then if the House of Commons should have any objection to the right hon. Gentleman's plan, they would have a right to refuse to provide money for the purpose. But the fair and right way was to lay the scheme before the House; and, if approved or amended, then the House would vote the funds. They had heard a great deal to-night about the Miscellaneous Estimates, which had, within the last few years, doubled in amount; and to the year ending 1878 the estimated receipts amounted to £4,800,000, of which no less than £2,100,000 was received from India on account of the Army and Navy. He strongly objected to the Miscellaneous Estimates being swelled by such receipts. These were monies due by India for actual outlays incurred by the Admiralty and War Offices for services performed by these Departments for India. There were many other payments made both by India on account of England, and by England on account of India. These were mainly settled between the respective accountants general of the several Departments without passing through the Exchequer. So ought nearly all the accounts now entered as Exchequer receipts. Again, he could not understand why the present generation should be burdened with a payment which might be spread over a number of years. We had spent £4,000,000 in buying up officers' commissions; he believed £4,000,000 more would be required—about the same amount as had been paid for the Suez Canal shares. Why should not the Chancellor of Exchequer do as he had done in the case of those shares, borrow the money and spread the payment over a number of years by means of Terminable Annuities? So also as to the aid granted to local taxation, he objected to the system of taking money into the Exchequer and paying it out again in aid of local taxes. It, like the military receipts, swelled the expenditure.
  MR. MONKsaid, that he rose to put a practical question to the Chancellor of the Exchequer, and to call the attention of the right hon. Gentleman to the

  1703
  amount of stamp duties now levied upon appointments to ecclesiastical benefices. Those duties, which fell with exceptional hardship upon poor clergymen, were regulated by the Stamp Act of 1870, which imposed duties on various kinds of appointments, civil and ecclesiastical. The right hon. Gentleman opposite had inserted a clause in the Act of 38 Vict. c. 23, repealing the duties as to civil appointments, and he (Mr. Monk) now asked for an explanation of the distinction made between the two classes of appointments. The right hon. Gentleman the Home Secretary had said the other day that in the case of presentations to Crown livings not exceeding £200 a-year no less than £30 was payable, and that the greater part went into the Exchequer; and that thus the most direct taxation possible was levied on the poorest class of persons, who could possibly be called upon to pay it. It would only cost £4,000 a-year to remit this burden on the poorer clergy. [The CHANCELLOR of the EXCHEQUER: £8,000.] That made it a stronger case, then, for consideration on the part of the right hon. Gentleman.
  MR. LOWTHIAN BELLthought that for many purposes the iron trade might be considered an index of the prosperity of the country. The right hon. Gentleman the Member for the City of London had asked from what quarter we might expect the resuscitation of our trade. Was it from America? He thought not, for he had some recent experience of the trade with that country which he thought would not be very agreeable to the Chancellor of the Exchequer. What was the state of our trade with that country? In the year 1871 we exported 1,250,000 tons of iron and steel; in 1875 that quantity had fallen enormously, and he saw no prospect of a return of the prosperity of that trade, especially as the iron made in America was more than enough for the home consumption of that country. Again, in 1871 the value of the iron and steel exported from this country was not less than £9,000,000; but last year that quantity had fallen to £3,000,000. The hon. Member for Sheffield (Mr. Mundella) said he was not afraid of competition; neither was he (Mr. Bell), if he depended upon the skill of our manufacturers and our men, in which, in the iron trade, England was without a rival; but if he meant that we would still be able to
  1704
  force our way into all the markets which formerly took large quantities of our goods, ho must join issue with him; for this reason, that some of those countries had made great advances in their own manufactures. The United States now not only supplied their own wants, but they had commenced the exportation of machinery, in which we thought ourselves without any rivals. They now had almost the exclusive supply of locomotives to Brazil. If we were to keep our ground, both employers and employed must be careful what they were doing, and the Chancellor of the Exchequer must not overweight them with taxation, but must make it as light as possible; and without wishing to be a croaker, he could not but think that the right hon. Gentleman the Member for North Devon had taken too sanguine a view of the financial prospect. It was true that an increase might be calculated upon account of the natural increase of population; but since 1871 the population had only increased about 2 per cent, yet the estimate for the Excise in the current year was about 20 per cent higher than it was in 1871.
  MR. SAMUDA, after complimenting the right hon. Gentleman the Member for Pontefract (Mr. Childers) on his speech, said, that he thought the right hon. Gentleman the Chancellor of the Exchequer had been quite right in coming to a conclusion in favour of the gradual reduction of the National Debt. That was certainly a wise policy and everyone would be indebted to him for the course he had taken upon that point. He must say, too, that he had never heard a speech more convincing as to the general finance of the country than that which the right hon. Gentleman had made on the occasion of the Budget. Last year the Financial Secretary to the Admiralty (Mr. A. P. Egerton) complained that it was necessary for the Government to engage largely in the manufacture of ships, because, in many instances, when they allowed vessels to he manufactured for them, they had found bad contractors. He (Mr. Samuda) protested against that statement, for the truth was that the Admiralty were responsible for that result, for they adopted exactly the proper course to find out bad contractors, as they would only take the lowest tender, without reference to the character of the firm making it. The

  1705
  tenders could never be executed at the price given, for the work to be remunerative; and the consequence was that if they were carried out in a satisfactory manner, they involved a loss either to the children of the contractor, or to his creditors. The inevitable result of bad times must be to produce good ones. A great many mines and industries had been opened on the Continent in consequence of our artificial prices, but the moment the business returned to its original channel, these artificially-supported industries must collapse, while those which existed in this country must regain their primitive and natural position. In conclusion, he expressed a hope and believed that the expectations of the Chancellor of the Exchequer would be realized, and that at the end of the year we should have no cause to regret that we had passed through our present state of depression without increasing the burdens placed upon the country.
  MR. GOSCHENsaid, he would take that opportunity of explaining an error in the construction put on some remarks he had uttered on a former occasion. He had never stated that wages had fallen 50 per cent. What he did say was intended to apply only to coal and iron industries and, generally speaking, to the Cleveland district. He desired to set the matter right, because his statement had been commented upon by The Economist, a journal for which be had the greatest respect. He took this opportunity of expressing his concurrence with every word which had fallen from the Chancellor of the Exchequer with regard to the loss the country had sustained by the death of Mr. Bagehot, the late editor of the journal in question. That gentleman was the life of The Economist and enjoyed a respect as universal as it was well deserved.
  MR. BIGGARthought taxation was based upon a false system. It should be the object of the Chancellor of the Exchequer not to tax anyone who did not possess more than would procure him the necessaries of life; but instead of that he obtained too little from the rich and too much from the poor. As an illustration of what he meant he might mention the case of spirits and wine. The former was not of as much value as the latter. It was also the drink of the poor, while wine was the drink of the rich, yet spirit paid very much more duty than
  1706
  wine. Tobacco was another instance of the unfair manner in which taxation was levied. He also complained that at the present time the income tax was levied in a most unreasonable and unfair way. He urged that certain incomes should be taxed at a much higher rate than those which were uncertain and fluctuating, and that in imposing the tax the Government should discriminate between the value of different kinds of property—between, for example, the money derived from Consols and that which might be derived from Turkish bends, or the money obtained from railway debentures and that which came through shares. He hoped that, in his next year's Budget, the Chancellor of the Exchequer would impose a heavier income tax upon the wealthy people of the country who could well afford to pay it, and a lighter tax upon those of the poorer classes of the community.
  THE CHANCELLOR OF THE EXCHEQUERsaid, the hon. Gentleman who had just spoken (Mr. Biggar) had contributed some novelty to the debate. The hon. Member had raised the question, which had been often raised before, as to the incidence of the income tax upon different classes in the community; and had argued, what others had argued in former times, that there ought to be a distinction between the rate laid upon certain incomes and that imposed upon uncertain incomes. But the hon. Gentleman had gone further than he remembered anyone to have done previously. The hon. Member had not only maintained that incomes from fixed property—funded property for example—ought to be rated more heavily than incomes derived from professional gains, but he had actually proceeded to distinguish between the value of different kinds of fixed property, and had invited the Government, in imposing the tax, to discriminate between money derived from Consols and money derived from Turkish bends; between money derived from railway debentures and money derived from railway shares. He was bound to say that from the point of view which he evidently took of the matter, the hon. Gentleman had made out a good case. But his argument furnished another illustration of the difficulty of discriminating between the different classes of income in levying the tax, for it was obvious that if distinction within

  1707
  distinction were to be made, the policy which the hon. Gentleman advocated might be carried out ad infinitum, thus showing that the attempt to differentiate as he proposed was in reality an impracticable undertaking. As to the tax on spirits, it turned not only on the question how much was derived from that source by way of revenue from the poor, but whether spirits were or were not in themselves a proper subject for taxation; and he very much doubted whether the hon. Gentleman would not be disposed to take a different line from that which he has just taken on the point if he were discussing the advantages of temperance. He would not follow the hon. Gentleman into the topics he had raised; there were several things he had said with which they must all agree, and there were many points upon which they must differ. Turning to the speech of the right hon. Gentleman the Member for Pontefract (Mr. Childers), he felt bound to join in what had been said by many hon. Gentlemen, and to express his entire concurrence in the remark that it was a speech of very great ability, and one worthy of his high reputation in matters of finance. He thought, however, several of the points which the right hon. Gentleman had urged, if not all his important points, had been exceedingly well answered on the spur of the moment by his hon. Friend the Secretary to the Treasury. He (the Chancellor of the Exchequer) was not at all disappointed with the comparison which had been drawn between the expenditure of one Government and that of another, and he should not be dissatisfied at such comparison being left to the judgment of those by whom the debate would be impartially read; but they were now discussing, not so much the comparative merits of one or the other Government, but the merits of the Budget of the present year, and he was anxious that the House should not be led away by arguments wide of the particular subject for discussion. The practical main question before the House was, would they or would they not accept the scheme of finance for the present year submitted to them by the Government, which was to make no alteration in the taxation for the year. Government were met by the observation that their Estimates were sanguine Estimates; and this observation was justified by the remark that
  1708
  trade was very bad, and that there was no prospect of a revival. They were quite aware that trade was very bad and did not anticipate a revival; and, therefore, they had presented what they deemed cautious Estimates. The hon. Member for Hartlepool (Mr. Bell) had spoken as if, in preparing the Budget, he had taken into account a probable increase of the Excise revenue. The fact was, he had taken it at less than last year, and the Customs also had been taken at less. He could assure the House that these matters had all been considered with great care and consideration. It filled him with surprise, not that there should be occasional miscalculations in the Estimates presented by the Revenue Departments, but that looking to the enormous amount of revenue the calculations came so close to the amount as they did. He confessed he was mainly governed in presenting the Estimates by the knowledge that the heads of the Revenue Department had had all the subjects connected with their Departments under consideration, and they had carefully and critically examined them, and arrived at the conclusions which had been presented to the House. Now, before presenting the Estimates he looked into various facts connected with the state of the country. He endeavoured, as far as he was able, to ascertain what had been the falling off of the revenue in former periods of depression, and in what classes of taxes the falling off had been greatest. Perhaps the information he obtained would be more suitable for communication to a statistical society than to that House, but he would venture to give some of the results at which he arrived. One of the questions which he tried to investigate was which sections of the taxpaying community paid best under the present circumstances, and which taxes were most and which least affected by stagnation of trade. Well, it was found that the taxes might be arranged in the following order, beginning with those most affected by the state of trade:—first, mercantile taxes, which varied, in the case of bills of exchange, from an increase of 31 per cent in 1863–5, to a fall of 16 per cent in 1875–7; secondly, taxes on articles consumed chiefly by the upper classes. These appeared to take a longer time to feel the full effect of bad times, but showed a stronger rise and fall than

  1709
  the taxes which were paid by the masses, which were more immediately but not so strongly sensitive. They varied from a rise of 21 per cent in 1865–7, when the financial distress of 1866, it would seem did not fully reach them, to a fall of 10 per cent in in 1857–9, after the commercial panics of 1856–7. They had shown during the last few years the same backwardness to feel the distress of trade. Up to 1875 they continued to rise, and it was only in the past year that a fall set in. Thirdly, taxes on articles consumed by the masses. These showed a smaller range of rise and fall, but they felt the influence of the times more immediately. Next came the direct taxes, which exhibited a still more confined range. Income tax and house duty showed a steady and almost uninterrupted increase. The stamps on deeds had a greater disposition to follow the course of trade, but with no great certainty; while legacy and probate duties on two occasions—namely, after the crisis of 1868 and in the past year—showed a fall. The Post Office showed a steady increase, which apparently followed no law and could not be found to have any connection with the state of trade. He had also made comparisons between the financial condition of the country now and what it was at some former periods of stagnation, and upon the whole he had arrived at the conclusion that the increase on articles consumed by the upper classes reached a, higher point, and the decrease in bad times reached a lower point, than was attained by articles consumed by the masses. The general result was that even in bad times, so large was the area with which they had to deal, the revenue kept up, on the whole, in a manner which might at first sight appear incredible, but which gave one some consolation and confidence in the steadiness of our financial basis. They must pass through bad times, but they told less severely than might be expected from the large extent of the area which was affected. He would not take the House more into these matters. He would only once more assure them that he had looked not only into the condition of British trade, but also into the condition of foreign trade; and he could confirm what had been said by the hon. Member for Sheffield (Mr. Mundella) and others as to the way in which the distress mani-
  1710
  fested itself elsewhere. A remarkable proof of the severity of the crisis was to be found in the Report of the Tax Commissioners of New York, whose Return of the assessment on real and personal estate in that city showed that in 1873 the total value of the personal property amounted to £43,000,000, and that in 1876 it had fallen to £26,700,000—a decline in four years of 37 per cent. A curious Return had been published in The Economist from an American house, showing that in the four years 1873–6 one house in every 21 engaged in commercial business had fallen. In Germany, the cessation of the war and the payment of the indemnity was followed by a great deal of wild speculation in joint-stock companies. From the passing of the German Joint Stock Law in 1870 to the close of 1874 there were 857 companies formed in Prussia, with a nominal capital of over £200,000,000. This was far more than in the 70 years from 1800 to 1870, in which period only 441 companies were formed with a capital of £156,000,000. These figures showed that there had been an extraordinary state of excitement, which accounted in a great measure for the re-action which afterwards set in. In Vienna, in 1873, there were 294 joint-stock companies, with a paid-up capital of £142,000,000. During the four years 1873–6, 135 of these companies, with £32,000,000 of paid-up capital became bankrupt. He mentioned these matters because they threw light on the causes of the depression from which this country was suffering, and showed that other countries had suffered quite as much; and also because he was anxious to make the House aware that all these various matters had entered into his calculations. Under the circumstances, he ventured still to present his Estimates to the House with the same confidence that he had felt at the commencement of the financial year. He might be wrong in some items—some might turn out less well than he hoped; but he hoped for the best, and he was sure he would be utterly wrong, and would have no justification whatever if he asked Parliament to take so very gloomy a view of their financial position as to impose additional taxation. If the times were bad, surely they ought not to make them worse by taking more taxes out of the pockets of the people. It was said on the other side of the House—"We do not want

  1711
  to mend matters by putting on more taxes, but by reducing expenditure." Government were anxious in the matter; they had done and would continue to do their best to keep down expenditure; but there had been calls upon them which they had not been able to resist, and they had been obliged to increase the expenditure on both the Army and Navy. With regard to that particular increase he thought that both the House of Commons and the country recognized that it was fair and reasonable. Perhaps he might venture to say in answer to the hon. Member for Sheffield (Mr. Mundella), whom he was glad to hear criticizing their expenditure, that example in these matters was better than precept, and that it would be more satisfactory if he and some others would abstain from supporting propositions the object of which was to press an increase of expenditure upon the Government which they did not think was necessary. The other night there was a proposal to give increased pensions to the Irish Constabulary, and it was natural that Irish Members should have supported it, but a good many other Gentleman were on the same side, and it was remarkable that almost all of the Gentlemen in question were among the leading economists of the House. That was an example of the difficulties in which they were placed by those who preached economy but did not always practice it. He did not propose to re-enter on the old question as to the comparative extravagance of one Government and another. It seemed to him, however, that there had sometimes been a little want of logic in the arguments employed. It was asserted that Government had increased the expenditure. They replied that the expenditure had increased, partly because of certain legacies of expenditure that had been left them. The rejoinder to that was—"But you left us certain legacies of the same kind." This was really no answer at all. It reminded him of an old story told, he thought, of a Lord Chancellor of Ireland, who was going to Court one day, in a great crowd, when a carriage ran into his from behind. He cried out to his coachman—"What are you doing? The carriage behind has run into me," and the coachman's reply was—"Oh, it's all right, your honour; I have run into the one before." The right hon. Gentleman opposite had
  1712
  said, much to his astonishment—"You talk of our having left you legacies; but you are leaving us a legacy by your scheme for the payment of the Debt." He could not understand that statement at the time it was made, and he had been trying to understand it ever since without success. But taking it in the only possible way in which it could be understood, he might reply by quite as good a tu quoque as the right hon. Gentleman had made use of. It was the particular merit of the suggestion he had had, the honour to submit to the House, and which it accepted, that it was not one for incurring a fresh charge, but for continuing an old charge. It proposed to fix £28,000,000, the previous charge for interest, as the payment to be made every year, and, after the interest was paid out of that sum, to apply the balance to the redemption of the Debt. Under that plan the country would year by year pay off more and more of the Debt with the same expense to the taxpayers. If he understood the complaint of the right hon. Gentleman opposite, he said—"Oh! but that is laying a burden upon the future, because year after year more of this money will go towards the redemption of the capital and less to the payment of the interest, and yet the same sum will be levied." Was he right in that interpretation of the right hon. Gentleman's language? [Mr. CHILDERS assented.] Then he could not understand the right hon. Gentleman's objection, because precisely the same principle was adopted with regard to the Terminable Annuities. What was being done with regard to the Fortifications. They had been undertaken in 1860, when, instead of paying for them at once out of moneys voted by the House, they were paid for by a loan which was to be extinguished by means of Terminable Annuities, and year after year more capital and less interest was being paid off, and, therefore, in 1877 we were discharging a burden due to the capital account of 1861–2. That scheme, therefore, was open to exactly the same reprobation as the Debt scheme of the Government, and it was quite unreasonable for hon. Members to bring this charge against the Government in the way they had. If that course had been adopted in connection with the Terminable Annuities in that case, how could it be alleged that

  1713***
  the Debt scheme of the present Government was throwing a burden upon posterity, because it was based on the same principle. The right hon. Gentleman had also asserted that the Debt scheme would weaken the financial position of the country, because, as he said, under the old practice the redemption of Debt could be stopped in case of emergency, and thereby the financial resources of the country would be greatly strengthened. But that was precisely what the Government proposed doing, and they could do it much more easily under their Debt scheme than it could have been done by means of Terminable Annuities. Assuming that in years to come it should be necessary to put a stop to the redemption of Debt, what could be easier than by a short Act of Parliament to reduce the sum of £28,000,000 now appropriated to the paying off the interest and capital of the Debt to £25,000,000, or to such other sum as would be sufficient to discharge the amount of interest alone, leaving the capital to stand where it was. Surely having such a power at command would give ns great financial strength instead of weakness, and must be, he thought, a perfect answer to a remark he had heard with great surprise. But he was told that this Debt scheme was but a very trifling matter after all. Well, he had never introduced it to the House as being a great matter, at present it was a slight matter, but it would grow as time went on, and would at length become a very important one, and would produce very sensible results upon the Debt. Then the right hon. Gentleman said that compared with what they had done in reducing the Debt the present Government had done much less. His answer was—True; but give us back the taxation you had and we would do the same. You had a period of prosperity, while we have fallen confessedly upon bad times. You had that prosperity which advanced, as you boasted by leaps and bounds, but in producing which you had nothing to do. You were levying income tax at 4d. and 6d. in the pound—["No, no!"]—well, at any rate, it was levied at higher rates than now, and the condition of things otherwise was much more favourable for you had the sugar and other duties, which were now given up, and it was no great wonder if you did pay off debt rather faster than our modest and moderate proposal. The
  1714
  right hon. Gentleman had also charged him with having stopped the reduction of the Debt in order to make advances to the local authorities. That was not very intelligible; but what the Government had done was to introduce a stricter principle, and say—"The interest of the money which is lent, and lent on good security, to the local authorities is revenue, and as revenue it ought to be treated." As revenue it was treated, and as revenue it came into the Exchequer. When the Government had to make advances, they got the money by Vote of Parliament, and lent it out on good securities for a fair return, and the whole system was of great advantage to the country. Nor was it all the doings of the present Government. In what they were doing they were only giving effect to the policy which was initiated by their Predecessors, as in the case of the loans under the Education Act, advanced for the purpose of school buildings, and in the Public Health Act. The Government were not responsible for that policy. They were advancing the money in the best way they could; they considered that it was advanced on good security and that it was making fair returns. Their Predecessors in office, having initiated a policy, left the Government to find the money. The Government were endeavouring to carry out 'that policy to the best advantage. These were things which were left to them in the shape of legacies. They did not blame their Predecessors for that; they only urged in their own justification that since that policy had been adopted, it was necessary that they should, as far as they could, apply the means for giving effect to it. So much for the difference between the expenditure of the Government and the expenditure of those who preceded them in office. For his own part, he was not curious to go into these comparisons, and to say—"You have done this and we have done that," or to show that their Predecessors might not have done some things better than they; but, on the other hand, the Government claimed to have done some things as well as their Predecessors. All that he said was that Her Majesty's Government believed that upon the whole their Budget was an honest one, and that the expectations it put forward would be fully realized. If hon. Members opposite had anything

  1715
  better to propose, let them bring it forward, but if not, he trusted that they would read this Bill a second time, and would give them credit for what they had done.
  Question put, and agreed to.
  Bill read a second time, and committed for Thursday.

  PUBLIC WORKS (CONSOLIDATED FUND). RESOLUTION.
  Public Works [Consolidated Fund], considered in Committee.
  (In the Committee.)
  MR. SCLATER-BOOTHsaid, he rose to move a Resolution, leading to the introduction of a Bill, the effect of which would be to place the sum of £4,000,000 at the disposal of the Public Works Loan Commissioners, with the view of their making advances under various Acts to different local authorities. It had been explained by his right hon. Friend the Chancellor of the Exchequer the other day that this sum would suffice for the current year, although a larger sum had been applied for. He must also explain to the Committee that the £4,000,000 did not represent the total amount of money which the local authorities would require in the course of the year, nor did it represent that, the borrowing of which, his Department would have to sanction. On the contrary, only one-fourth of that amount would be applied for under the Public Health Act, the greater part of the whole being required by the Education Office for School-Board purposes. It had been the intention of the Government that he (Mr. Selater-Booth) should take advantage of the opportunity afforded in moving this Resolution, to make a Statement in continuation of that which he had made last year as to Local Finance, and also that his Statement should have been made immediately after the Financial Statement of his right hon. Friend the Chancellor of the Exchequer. Although he should have felt at a disadvantage in following his right hon. Friend so closely, still much benefit would have resulted from the two Statements, one relating to the Imperial and the other to Local Taxation being placed in immediate juxtaposition. Perhaps, the Committee would
  1716
  bear in mind that the amount raised by means of rates was equal to one-third of that raised by means of taxes, the produce of the rates being £26,000,000, and that of taxes being £79,000,000. When his right hon. Friend introduced his Budget last week everyone must have been struck by the great interest and anxiety exhibited on both sides of the House as to the results of the Statement which he was about to lay before them; and when it appeared that no additional Ways and Means would be proposed to meet the expenditure of the year the greatest satisfaction prevailed. And yet, the worst anticipations of the prophets of evil were that there might possibly be a deficit to the amount of £500,000, or thereabouts. But suppose some measure had been before the House, laying new obligations on local authorities, the effect of which would have been an addition to the rates of 1d. in the pound, that, perhaps, would have been treated with a good deal of indifference, and yet the sum of money to be produced from the rateable property of the Kingdom would have amounted to the same sum—namely, £500,000. Suppose, again, it had been necessary to propose an addition to the income tax of 1d. in the pound, that would have created consternation, not only in the House, but in the country; great unpopularity would have resulted to the Government, and much would have been said as to the unsoundness of our financial policy. Yet the burden entailed by the addition of 1d. to the income tax was no greater in amount, and less burdensome to the taxpayer, than a 3d. rate to the ratepayer; such, for example, as was involved by the passing of the Education Act, one of the consequences of which, almost unnoticed at the time, was to impose a School-Board rate of not less than 3d. over a great part of the Kingdom. He would endeavour to lay before the Committee, as shortly as he could, a comparative Statement of the local indebtedness of the past years, and he would follow the same course as regarded the local income of the country. Last year he stated the corrected income of outstanding loans for three years past to be as follows:—For the year 1872–3, £80,000,000; for 1873–4, £85,500,000; for 1874–5, £92,820,000; and he estimated, after deducting re-payments to the extent of £4,500,000, and adding

  1717
  £9,500,000 for the loans authorized by Local Acts or sanctioned by the Local Government Board, the indebtedness of 1875–6 would amount to £97,820,000. On reference to Hansard he found the sum stated at £95,000,000, but that was an error; the circulations there given showing that the sum was £97,820,000. The actual state of the Loan account, as now ascertained up to December last, was fully £2,000,000 in excess of that Estimate, and the discrepancy was explained in this way. More complete information now received enabled him to correct the Returns quoted, and he found that a sum of £1,477,200 — nearly £1,500,000 — had not been included in the Returns of previous years. These chiefly related to Birmingham, Bury, Birkenhead, and Macclesfield, and, in addition, the margin allowed for loans of which they had no official cognizance was found to have been insufficient by the sum of £700,000. The detailed state of the Loan account, therefore, for 1875–6 was as follows: — The ascertained debt of 1874–5 was £92,820,000, the sum of £1,477,200 remained to be added, making £94,297,000. To this there fell to be added—1st. Loans to Boroughs, £480,000; Urban Sanitary Authorities, £5,062,900; Rural Sanitary Authorities, £75,700; and School Boards, £1,466,500; in all, £7,085,500. 2. Poor Law Authorities, £139,100; County ditto, £226,700; Metropolitan Board arid Vestries, £283,400; Drainage and Embankment, £40,400; Burial Boards, £90,600; City of London, £281,200; and Harbours, £1,565,500; in all, £2,629,900, which together made £9,712,400; showing the total indebtedness £104,009,700, of which £4,334,200 had been paid off, leaving £99,675,500. In 1874–5 the outstanding loans charged on Rates amounted to £66,241,700; on Tolls, £26,215,600; and on Duties, £1,840,000; in al1, £94,297,300. For 1875–6 the same account stood thus—Loans charged on Rates, £70,664,200; on Tolls, £27,186,400; and on Duties, £1,825,000; showing a net increase of £5,378,300. The chief increase was in the case of the following authorities:—Urban Sanitary Authorities, £3,326,500; School Board, £1,336,700; City of London, £505,500; and Harbours, £507,282. But, leaving out of account the loans charged on Tolls and Duties, and confining attention to loans charged on Rates, the total for 1876 was £70,664,000.
  1718
  Of this there was charged on the Metropolis:—Local Management, £1,763,700, and Board of Works, £10,937,400. Total, exclusive of School Board and Poor Law, £12,701,100. And on the Urban Authorities — Boroughs, £5,730,000; Urban Sanitary Authorities, £38,541,100; in all, £44,271,100; making together £56,972,200; the balance of £13,691,800 being for Poor Law, County, Highway, and Rural Sanitary Authorities. An estimate for the ensuing year could not in the nature of things be accurate, but as nearly as it could be made it was as follows:—The loans outstanding at the end of 1875–6 amounted to £99,675,000; and deducting £4,675,000 as likely to be paid off, there remained a balance of £95,000,000. The additions to be made to this sum included first £2,767,800, for which loans had been sanctioned by the Local Government Board. This included £500,000 which was to be raised by the Corporation of Birmingham under the Artizans and Labourers Dwellings Act. The loans authorized by local Acts last year amounted to £3,797,900; and the other Estimates were—Education Department, £2,000,000; for the Metropolitan Board of Works, £1,351,400; Vestries, £171,200; Guardians and Managers of the Poor, £179,200; and Burial Boards, £255,700, making together £10,500,000, or there about. It was known that portions of sums already sanctioned would not be required, and that certain other sums, of which no estimate could be made, would be required, and the one class might be set off against the other. The Returns being more complete than last year, he should expect the local indebtedness of the country to stand at £105,000,000 at the close of the year. These loans were mostly for purposes of a beneficial and important character—namely, to provide suitable dwellings for the poor, to improve the sanitary condition of the great centres of population, and to provide for the educational requirements of the people. Large as the local debt was, it did not amount to an alarming sum when compared with the rate-able value of England and Wales, which was about £120,000,000. The debts charged upon the rates were £70,000,000, or rather more than one-half of the rateable value. This would not be considered too great a proportion, when it

  1719
  was remembered that under the Public Health Act the borrowing powers of localities were restricted to two years' rateable value. It should also be remembered that a great amount of valuable property in the shape of the rights and plant of gas and water companies was included in the securities upon which the loans were raised. He made these qualifying observations at the risk of being told, as last year, that he took too rose-coloured a view of the subject. Still, having stated those somewhat portentous figures to the House, he could not but feel it his duty also to remind them of what could be reasonably stated in mitigation of the uneasiness which might otherwise be felt by the Committee and by the country. The sum which he had given as the net increase of indebtedness for 1876 — namely, £5,378,300 — large as it was, was less than the average for the last six years, which was £6,000,000. It was to be observed how much was accounted for by a few large loans recently sanctioned by private Acts. The following were sanctioned in 1875:—Oldham, £250,000; Rochdale, £200,000; Cardiff, £298,000; Bradford, £655,000; Salford (tramways, &c.), £943,000; Manchester, £1,250,000; Birmingham, £2,250,000—seven towns, £5,836,000. The following were sanctioned in 1876: — Halifax, £385,000; Southport, £376,000; Huddersfield, £800,000; Stockton and Middlesborongh, £1,166,000—four towns, £2,727,000. In these and similar cases, valuable properties were acquired; they were, or were intended to be, profitable borrowings, and, in case of gas and water purchase, if the financial arrangements were correct, the difference to the consumer and ratepayer was that he paid his Town Council, instead of a company. It was the co-operative principle on a large scale. As for private Acts, which were the means resorted to in the most important cases, Parliament had in all cases the amplest opportunity of seeing that the financial grounds on which an application was made were sound and practicable. In many cases the land and property acquired were of great value. The only other heavy item of growing charge which he need notice was that which had arisen under the Education Act, which was £1,500,000 for 1875 and £2,000,000 for 1876; but the capital outlay was, of course, greatest in the
  1720
  earlier years, and as time went on we might expect or hope for diminished applications under this head. He must next notice the taxation or income on which these loans were charged, and out of which the repayment of principal and interest, as well as current expenditure had to be met, and the increase or diminution of rates, comparing the two years 1875 and 1876. He took the triple division of Rates, Tolls, and Duties. In 1874–5, Rates produced, £22,175,700; Tolls and Dues, £4,012,000; Duties, £332,900 — total, £26,521,300. In 1875–6, Rates produced, £22,659,700; Tolls and Dues, £3,876,200; Duties, £366,700 — total, £26,942,600. Comparing the total for 1874–5, £26,521,300, with the total for 1875–6, £26,942,600, he found the corrected increase for 1876 to be £431,300. It was convenient to leave out of account the income derived from Tolls and Duties and to confine attention to the income derived from Rates. The chief items of increase in the income derivable from rates were as follows (in round numbers): — Metropolis — Local Management and Consolidated Rates, £152,700; Urban Sanitary, £489,000; School Board, £215,000. The chief item of decrease was £432,000 on the Poor Rate, partly due to diminishing pauperism, and partly to better management by Boards of Guardians, who were exhibiting an increase of knowledge and of energy in their desire to do the best for the ratepayers and the poor. There was no doubt that the advance made was of a real and permanent character. There was a diminution in the Police Rate and also in the rates levied under rural sanitary authorities of £15,000. This was attributable to the continued absorption of rural into urban districts now going on under the sanction of the Local Government Board. He might here repeat a remark that he made last year, to the effect that upon the whole the rates appeared to be either stationary or receding, with the exception of those raised in respect, first, of borrowed money, and secondly, which were for School-Board current expenditure and for highway rates in certain districts where the Turnpike Acts were discontinued, and where increased burdens were thus thrown upon the ratepayers. Although he spoke of the general pressure of the rates as stationary throughout the country, yet it could not

  1721
  be denied that every £1,000,000 of money borrowed involved an additional charge of about £60,000 a-year for the payment of interest and repayment of the principal within a limited period, and this increment, which had been going on so long, was not likely soon to come to an end. The ratepayers were only now beginning to reap the full benefit of the Votes of Parliament in aid of local rates. The subventions had not yet fully come into the accounts; but if they might be regarded as perpetual or replaced by a substantial equivalent, they must be equivalent to an addition of many millions to the rateable value of the country. It had been said that the subventions of the present Government were intended as a bribe to the rural districts and hamlets. Nothing could be more fallacious. Many hon. Friends of his who had taken an active part in the agitation for the reduction of local burdens and who represented, no doubt, important rural districts, and Chambers of Agriculture had also supported the movement. But if the subventions were taken as a whole, it would be found that the urban districts derived the benefit of these subventions in the proportion of six to four, and that where the urban districts got £600,000, the rural districts received only £400,000. The same observation would apply to the annual sum voted by Parliament for the rates on Government property. That property had been carefully valued and the process was not yet complete, but the Government now paid the rates on property which must be valued at not being worth less than £800,000. Another boon to the ratepayers had been the addition to the rateable value of the country effected under the Rating Act of 1874, which he (Mr. Sclater-Booth) had been fortunate enough to pass. Under that Act three important classes of property were brought under assessment for the first time—Woods, Game, and Rights of Sporting, and Mines (other than coal and iron). A circular had been issued by the Local Government Board, and 627 Unions had been asked to furnish Returns under the Rating Act. These Returns could not as yet be fully made up, so that the information he was about to give the House was for 481 Unions only. The amounts of the rateable value were respectively—Woods, £265,052; Rights of Sporting, £442,167; Mines, £507,823; making a
  1722
  total of £1,215,042. He anticipated that when the operation of the Act was fully completed, the addition under this head would not be less than £1,500,000 added to the rateable value of the country, and this added to the sum upon which the Government paid would amount altogether to about £2,500,000. The county which gave the largest value for Woods was Northumberland—£16,995. The largest amount under the head "Rights of Sporting" was in Yorkshire and Norfolk—£27,090. The highest for Mines was Cumberland—£184,721. The amount of the rateable value of property in England and Wales, according to the last published Return in 1875 was £119,007,715, which, added to the sum of £1,215,042 under the Rating Act, made a total of £120,222,757, or an addition of 1 per cent. There was an indisposition in some Unions to put the Rating Act in force pending the passing of the Valuation Bill. It was only natural, indeed, that Unions should be unwilling to incur the expense of employing professional valuers when they had the prospect of seeing a uniform system adopted throughout the country. The question then arose, whether anything could be done to diminish the increasing charge for Local Loans. In the first place, it was, he thought, the duty of the Government and of Parliament to make these statistical Returns as perfect as possible, and if future Governments continued to exhibit these figures yearly, a greater interest would be felt in the subject, which might be productive of beneficial results. The difficulty of making out an exact statement was increased by the fact that the local authorities made up their accounts to different periods of the year. The Poor Law accounts were made up to Lady-Day, the Municipal accounts mostly in August, the County at Michaelmas, and the Highways in December. It was therefore impossible for any one filling his office to give the exact state of the case on any particular day in the year. He did not wish to cast any blame upon the local authorities in reference to the matter; but as a remedy was required, he thought it might be possible by a short measure to improve the Act under which the Returns were made to the Government Department; and if the House regarded the proposition with favour, he

  1723
  would introduce a Bill which would not unduly interfere with the independence of local authorities. He thought also, Parliament would do well to pay a little more attention to private Acts of Parliament, not with the view of checking the expenditure which the local authorities thought advisable to incur, but with the view of securing a greater efficiency of financial arrangements. Whereas it was an axiom with the Local Government Board that the period for repayment of any loan should be in accordance with the probable duration of the works to be constructed, they found great difference in the practice of Parliament with regard to Private Bills; and, again, that whereas the departmental view was that repayment of the capital should commence at the earliest possible date, Committees varied very much on that point. As instances of Private Acts granting what he thought must be considered primâ facie, an undue period for the duration of loans, he would mention the Birmingham Gas Act of 1875, giving 85 years; the Birmingham Waterworks Bill, 90 years; and the Rochdale Bill, 100 years. And in 1876 the term named in a Leicester Bill was 80 years, in a Stockton and Middlesborough Bill, 90; in two Halifax Bills, 100 and 110 years; and in a Huddersfield Bill the term for repayment of the loan was 100 years. So, again, as regarded the time for the commencement of repaying capital, five years appeared to be the normal period allowed, and up to that time no portion of the loan was repaid. He was not prepared to say that was not a reasonable period, but in some Acts passed in 1876 the time allowed before the sinking fund was to be commenced was seven years, and in some, as in the Huddersfield Waterworks and Oldham cases, 10 years. He thought the clause introduced in "another place" requiring an annual Return to show the amount set apart for repayment, and, in case of default, empowering the Local Government Board to make an Order for the repayment, was one which would meet with the approbation of the House. They would, he thought, admit that a good deal had been done to secure uniformity in these matters; but Parliament also had it in its power to do a great deal in this direction. But the public and the ratepayers were also protected. These things were not done in a corner. The eyes of all who were interested
  1724
  might see what was going on. In the first place, protection was afforded in the case of private Bills by the Borough Funds Act, under which the cost of a private Act of Parliament could not be charged on the rates until the ratepayers had been consulted, and in the case of Provisional Order Bills, which were increasingly numerous, by an elaborate local inquiry preceded by statutory notices. The publicity and the greater attention paid to the subject by Parliament and the country would also be of service in the same direction. Well, then, the rates must continue to be charged with those local expenses. What substitute had they? They had no other means of local taxation—no octroi, such as existed in foreign countries, and which he believed would be more unpopular than the charging of those loans upon the local rates. Whatever the ultimate incidences of the rates might be as between the owner and the occupier, the value of the house occupied had become, in thickly-populated districts, the measure of a man's ability to contribute to local burdens. Thus measured, a man paid in proportion to the moans he was presumed to have. An interesting discussion had arisen last year as to the division of rates between the owner and occupier; this could not, however, well be gone into. The present Government had been careful, in proposing new charges on rateable property, to provide that during the term of existing contracts, the new rate should be divided. If that rule had been followed in the cases of the Public Health Act and the Education Act, much heart-burning would have been saved, and a good precedent would have been set. He did not at all dispute the policy of making the owners pay a fair proportion, but he doubted whether it would be possible to remove the burden from the shoulders of one class to the shoulders of another. The charges were undoubtedly heavy; but the ratepayers had at least the power of giving their consent. It seemed to him that political economy would settle who paid the rates eventually, and all Parliament could do was to take care that they were levied equally and fairly. The right hon. Gentleman concluded by moving the Resolution.
  MR. RATHBONEthought the speech of the right hon. Gentleman the President of the Local Government Board was

  1725
  somewhat defective, inasmuch as he had treated the question of indebtedness and rating as applying to the country equally, instead of making a distinction between the urban and rural districts. Unless he (Mr. Rathbone) was mistaken it was only in the urban districts that the great increase of expenditure and indebtedness had occurred; in the rural districts it had hardly increased at all. There was an increase of local indebtedness last year alone of £4,400,000, being an increase of 6 per cent. The rateable value of the whole of the urban districts was only £41,000,000. Some of the urban districts were indebted to more than three years' rateable value—18 to 2 or 3 years, and 57 between 1 and 2 years. Looking back at the great increase of indebtedness and rating, ho found that in four years the increased charge of debt was 109 per cent, and of rates 103 per cent. The right hon. Gentleman stated that the urban debt, exclusive of that of municipal boroughs, amounted to £31,000,000, and in any arrangement of our local authorities that was an element that ought not to be left out of consideration. He suggested that in future the statement should distinguish between the increase of debt in the urban and in the rural districts. He was glad to find that the right hon. Gentleman the President of the Local Government Board was taking up the question of the imperfect manner in which Returns of expenditure and income of these different local authorities were made. Some of the returns were three years old, others two years, and, again, some were one year old, which prevented comparison one with another, and the ratepayers from making a comparison of their expenditure with that of other districts. One thing was deserving of especial consideration—namely, the dangerous powers given by local Acts. In five years no less than £4,000,000 had been raised by Private Acts of Parliament, independent of the money raised by the borrowing powers, and a dangerous practice had grown up of slipping into these Bills clauses extending the time for the payments of the old debts—a practice which ought to be carefully watched by the right hon. Gentleman and by the House. It was a fallacy to say that the rent of a man's house might be accepted as a test of his power of payment. It might be so in some in-
  1726
  stances, but in others, in the cases of professional men for instance, it was different; for the lawyer and the doctor were obliged to live in good houses in a particular situation, which might be regarded as part of their stock-in-trade, and could not be fairly accepted as a test of their power of payment. The case of the occupier altogether was a very hard one, and he hoped it would receive the careful attention of the Government.
  MR. STORERcomplained that the Rating Act of 1874 excluded timber as such, providing only for underwood, and he hoped that imperfection in the Act would be remedied. The injustice referred to by the hon. Member for Liverpool (Mr. Rathbone) as affecting the occupiers in towns affected in a much greater degree the occupier of land in the country, who had to pay, not according to his ability, but on double his income; or, rather, he had to pay for himself and his landlord also. A Valuation Bill would never be popular that did not convey provisions protecting the occupier to the extent that he should only pay in proportion to the interest he derived from his occupation. The country occupier had to pay poor rates, education rates, and others; and, although it used to be said that these burdens were taken into consideration in fixing the rent, that argument for continuing the burdens had been long since given up by the right hon. Gentleman the Member for the City of London, who now admitted that the burden fell on the occupier.
  MR. CHAMBERLAIN, referring to the remark of the hon. Member for Liverpool (Mr. Rathbone) as to the great indebtedness of local authorities, said, he thought that indebtedness was a matter of congratulation rather than fear, because it was not a debt in the ordinary sense of the word, but an investment for the benefit of the whole community, bearing often very remunerative interest. To give an instance from his own borough: in 1875 the Corporation of Birmingham had, he thought, a local debt of something like £600,000; at the present time it owed nearly £5,000,000 sterling; but if anyone would take the trouble to inquire into the assets, they would find that they represented more than that amount, and that the interest on the total debt was more than met by the receipts from the pro-

  1727
  fitable undertakings in which Birmingham had put the money—namely, water, gas, and tolls. The hon. Member for Liverpool complained of the length of the terms for repayment of these local loans, but, in his (Mr. Chamberlain's) opinion, there were some reasons why debt of this kind should not be paid off at all. The security given by the local authorities consisted of tangible freehold property, buildings, and other undertakings, and he must again say that he did not see, except in some cases as a matter of prudence, why they should be called upon to pay off their indebtedness at all. If we invested money in a railway, we did not think of requiring repayment of our investment so long as the market value of the shares of that undertaking were fully equal to the amount of our investment. The securities in the case of these loans was better than the security for the National Debt, which had no representative except the prosperity of the nation. Yet the country did not find it necessary to pay off that Debt at anything like the rate at which it compelled local authorities to pay off theirs, although it had in many cases much less to show for the expenditure than the latter for theirs. There was, of course, a great deal of other expenditure which it would be wrong to consider unprofitable, yet which did not yield a direct return. The expenditure which was now imposed on local authorities for sanitary, educational, and other works was an investment which, it was true, did not pay money dividends, but which returned large dividends in the shape of an increase of the health, happiness, prosperity, comfort, and intelligence of the whole population. He ventured to say that those who seemed to consider our local authorities were only machines for saving money made a great mistake. On the contrary, they were machines for spending money, but for spending it wisely, and he believed they spent it for good purposes, and more economically than they got credit for. With regard to the proposition of the right hon. Gentleman to renew the powers of the Public Loan Commissioners, he had no objection to offer; but he should like to call attention to the regulations under which the Board now acted, which seemed to him to some extent to frustrate the intentions of Parliament, to reduce to a minimum the convenience granted to
  1728
  local authorities, and also to diminish the average security of the money which the Exchequer invested in these local securities. He repudiated altogether the idea that the assistance rendered to local authorities by the Public Works Loan Board was of an eleemosynary nature. If they granted a loan which returned them a profit, he did not think they could take credit for charity. The operations of the Board ought to be so conducted that while the loans were a convenience to local authorities, they were a source of profit to the Exchequer. He did not see why the Board should not be the bankers of the local authorities, as although local authorities offered better security for loans than Consols gave, yet they were so little known that when they came into the market for a loan, they could not raise money at a reasonable rate. He said the security in the case of these local loans was better security than Consols, because the nation might repudiate the national security; but in no conceivable circumstances would it allow any local authority to repudiate its debt. It would be a very great convenience to these local authorities if some central body would undertake to raise the whole of the loan which they required. As an instance of what he complained of, he would refer to the fact that the Artizans Dwellings Act of the Session before last contained a clause providing that the money for making the improvements contemplated by that Act might be advanced by the Public Works Loan Commissioners at 3½ per cent, or such other rate as the Treasury should find it necessary to fix to prevent loss, and for a term not exceeding 50 years. Accordingly, the Corporation of Birmingham, being engaged in an enormous improvement scheme extending over an area including a population of nearly 20,000 persons, and involving purchases amounting to £2,000,000, made their calculations on the assumption that the Public Works Loan Commissioners would lend them the sum required at 3½ per cent, repayable with a sinking fund in a period of 50 years. But when they went to the Commissioners they were told that, acting under regulations issued by the Treasury, they could only let them have the loan at 4 per cent for 50 years, or at 3½ per cent if they took it for a much shorter period. The result was that the

  1729
  Corporation of Birmingham respectfully declined the assistance of the Commissioners, and were now in the London market for £1,500,000 sterling, which they hoped to obtain on better terms. Again, they required an advance for the carrying on of some sewage works, but the terms were 5 per cent for 20 years, which was also declined. Now, as the Public Works Loan Board raised the money at 3¼ per cent, they could profitably lend it to local authorities at 3½ per cent; but if they charged a higher rate, the result would be that they would ultimately lose all their customers, as they had done in this case. It was said the Commissioners had to charge that high rate to cover the possibility of losses; but it was surely unfair that great corporations like those of Manchester, Leeds, or Birmingham should have to pay an excessive rate of interest because Little Peddlington might become insolvent. He hoped, therefore, that the regulations issued to the Commissioners in that matter would be reconsidered, as it seemed to him to be undesirable that what was intended by Parliament as a great convenience to those local authorities on whom Parliament was imposing new duties should be frustrated by regulations which were red-tape regulations. He thought that the extension to large bodies of the accommodation now given to small bodies would prove of great advantage to the Exchequer.
  MR. CLARE READ, differing from the last speaker, regarded the length of time to which those loans extended as really dangerous. When gas and water companies had a term of 80 years to pay off loans, the period was excessive. It was all very well to say the money was advanced on the security of real property, but would any bank or insurance office give it on those terms? Even gas and water works might wear out before the expiration of 80 or 120 years, and discoveries might long before then be made of new methods for supplying gas and water at a cheaper rate than now. From his experience at the Local Government Board, he was persuaded that these extremely long periods had a pernicious influence upon other loans, as applications were made by other bodies for advances on the same terms. He was glad to hear the Government contemplated the introduction
  1730
  of a Bill to oblige local authorities to make up their accounts at one time. That was really most essential, because there were so many different times at which these accounts were made up that it was impossible to say what the exact expenditure was. He begged to thank his right hon. Friend for the interesting statement ho had made. Although the Local Taxation Budget did not create so much enthusiasm as the Imperial Budget, it was of great importance, and ought to command the consideration of the House.
  MR. HUTCHINSONsaid, the borough of Halifax had bound itself by successive Acts of Parliament to supply water and gas to a number of the outlying districts, so that the town taxed itself not for its own benefit merely, but for that of the surrounding districts, which thereby reaped all the advantage and were not liable for the indebtedness. The hon. Member for South Norfolk (Mr. Clare Read) complained of the long period allowed for repayment; but when a Corporation borrowed money for water purposes it had to think of seasons of drought, to look forward 10 or 15 years, and to undertake works greater than were actually required at the time. It was, therefore, not unreasonable to ask that an extended period should be given for repayment. He was sorry to hear any suggestion that the central authority should be encouraged to interfere more than they did at present with the local bodies in the administration of their funds. He thought it ought rather to be abridged.
  MR. STANSFELDsaid, as he was the person responsible for the clause which enabled the Public Works Loan Commissioners to advance money under certain limitations to local authorities, ho wished to explain that the intention was that such advances should be only made where there was no probability of a loss being incurred. Those Commissioners were, in a manner, to act as bankers and to make a fair profit. His hon. Friend the Member for Birmingham (Mr. Chamberlain), in his desire that the local communities should have the advantage of these loans on favourable terms, however, went further than arguing the contrary of that proposition, for he stated that where the loan was made on freehold property it should be a permanent loan. That, he (Mr. Stans-

  1731
  feld) considered, would be most unwise. When he introduced the Bill just mentioned, very great pressure was put upon the Local Government Board to lengthen the term of years, but he had resisted that pressure, though he was very desirous that the public should be able to borrow money upon easy terms. He did not think it would be desirable to extend the term of years over which the local communities could borrow money from the public; but he had always thought it wise that the money should be advanced at the lowest possible rate of interest, and was prepared to take upon himself the responsibility of the advocacy of that principle. That policy, of which he entirely approved, had been the policy of the Local Government Board. The statement of the right hon. Gentleman had been called a Budget Statement. What had been submitted to the House was not a Budget—indeed, the right hon. Gentleman did not call it one—but an estimate of local expenditure and a statement of account, and it did not therefore offer the same scope for comment as a statement involving financial proposals. He noted that the right hon. Gentleman drew a distinction between remunerative and unremunerative expenditure, and he also noticed how small a proportion of indebtedness—£13,605 out of £70,000,000—had been incurred on account of rural districts. The fact that local taxation, except that of a remunerative character, was stationary, if not decreasing, was the best possible answer to the complaints that had been made recently; it showed that they had been exaggerated, and they had been sufficiently met by the contributions and subventions already provided. As the question of local taxation had already been discussed, and as there would be further opportunity for such discussion, the present debate need not be extended.
  MR. BIGGARcomplained that the right hon. Gentleman the President of the Local Government Board had not given them the full detail of the indebtedness of the rates. The question was a most important one to the ratepayers of the country. With respect to the corporations, he thought they ought to receive encouragement to expend money on necessary and useful works, subject to due restriction as to the expenditure. Great scandals had doubtless occurred
  1732
  in the manner in which the ratepayers' money had been expended; and in reference to the local rates, they should have a power to raise the question whether or not the local authorities should have the power to raise money with facility, to meet which the ratepayers might be heavily taxed.
  Motion agreed to.
  Resolved, That it is expedient to authorise further advances, out of the Consolidated Fund of the United Kingdom, of any sum or sums of money, not exceeding £4,000,000, to enable the Public Works Loan Commissioners to make advances for the promotion of Public Works.
  Resolution to be reported To-morrow.
  House adjourned at a quarter before One o'clock.

Preamble
The House met at half after One of the clock.
RUSSIA AND TURKEY—THE WAR— ALLEGED ATROCITIES.

  QUESTION.
  MR. KNATCHBULL - HUGESSENasked the Under Secretary of State for Foreign Affairs, Whether Colonel Wellesley has temporarily returned to England for the special purpose of reporting upon the atrocities alleged to have been committed by the Russian Army; whether his reports express disbelief in such allegations; and, whether they will be laid upon the Table of the House?
  MR. BOURKE: With regard to the Question of my right hon. Friend, I have to state that one of the purposes for which Colonel Wellesley has returned to England for a few days is to report on the subject mentioned in the Question of my right hon. Friend. That Report has already been laid on the Table of the House, and will be published in a few days. The Report will speak for itself, and therefore I think it will be more satisfactory to wait for it.

  ARBITRATION ON INDIAN AND WAR OFFICE CLAIMS.—QUESTION.
  GENERAL SIR GEORGE BALFOURasked the Government to make a statement and to lay a Memorandum upon the Table of the House as to the formation of the Committee of Arbitration on Indian and War Office Claims, and to explain whether the views of individual Members of Parliament will be received and considered by the Committee of Arbitration?
  THE CHANCELLOR OF THE EXCHEQUER: I do not know that we can lay any Memorandum on the Table at the present moment. There are communications going on with regard to the formation of this Committee, and I think it will be composed of one member nominated by the India Office, one by the Treasury, and three by the Lord Chancellor, so as to obtain an arbitration which will be considered fair by all parties. We shall be able before long
  824
  to settle the details of the reforms; but we could not lay any statement of them before Parliament at the present time.

  ARMY — COMMISSARIAT AND TRANSPORT DEPARTMENT.—QUESTION.
  SIR HENRY HAVELOCKasked the Secretary of State for War, with reference to his reply of 26th March last, "that the responsibility of inquiry into the grievances of Officers of the Commissariat and Transport Department rested with himself," What steps he has taken, or proposes to take, to deal with those grievances; and, if he can hold out any prospect of a speedy settlement?
  MR. GATHORNE HARDY: Sir, at the time I gave the Answer to which the hon. and gallant Members refers, the Committee on the question of Promotion and Retirement was sitting. That Committee has now reported. While it was pending the question of grievances was not taken into consideration; but it will be immediately taken into consideration during the Recess.

  IRISH ANTIQUITIES—THE ANNALS OF ULSTER.—QUESTION.
  MR. SULLIVAN: In asking the Question of which I have given Notice, as to what progress has been made with the publication of the Annals of Ulster, I beg to say that I am sure the explanation which the right hon. Gentleman (Sir Michael Hicks-Beach) will give will be satisfactory. I do not mean to impute that there has been any delay; but it is very desirable, as so' many people take an interest in the subject, that the explanation should be made public. I therefore ask, What progress has been made with the publication of the Annals of Ulster?
  SIR MICHAEL HICKS-BEACH: The hon. and learned Member is aware that this work was entrusted by the Government to the Royal Irish Academy, and I believe that leading parts in the work have been undertaken by those well-known Irish scholars, Dean Reeves and Mr. Hennessy. I understand that the transcription and translation of the Annals are in a forward state, and that a large mass of materials has been accumulated by Dean Reeves, which will

  825
  before long be in a condition for the press. It was anticipated that four years would be occupied in the work, and there is no reason to suppose that it will not be completed within that time.

  CRIMINAL LAW (IRELAND)—ALLEGED OUTRAGE IN DERBY.—QUESTION.
  MR. SULLIVANasked the Chief Secretary for Ireland, What special steps, if any, have been taken to discover the person or persons who placed a jar of powder, with fuse prepared, close by the line of march of a recent public procession in Derry City; and, whether the Government intend to offer a reward for the apprehension of the authors of the intended outrage?
  SIR MICHAEL HICKS-BEACH: I presume the hon. and learned Member for Louth refers to an occurrence that occurred on the 17th of March last? I have inquired into the matter, but do not find any sufficient proof that an outrage, properly so called, was intended; and, consequently, there are no authors to be apprehended. I believe the fact was, that on the occasion referred to some persons were anxious to fire off some powder, and that a jar containing some powder was left unexploded in consequence of the approach of the police. I do not think any harm was intended.

PRISON LABOUR—BUTTON MAKING.

  QUESTION.
  MR. HOPWOODasked the Secretary of State for the Home Department, If it is true that prisoners in Manchester or Salford Gaols are employed in the manufacture of buttons, and if machinery is used for the purpose, and how far it is proposed to extend the employment of prisoners in this trade?
  MR. ASSHETON CROSS: The manufacture in question was carried on not in Salford, but in Manchester Gaol, and it is not proposed by the visiting justices to extend it, although prisoners must be employed at some trade. No complaint was made to the Home Office on the subject, and the only complaint made to the visiting justices was not by poor working people, but by large and wealthy manufacturers.

ARMY—CASE OF CORPORAL CHAMBERS.

  QUESTION.
  MR. O'CONNOR POWERasked the Secretary of State for the Home Department, If he is aware that Corporal Chambers, a military prisoner confined at Dartmoor, has complained to friends who visited him recently that several memorials or letters which he addressed to the Secretary of State were suppressed by the prison officials in a manner contrary to the privileges allowed by the rules to each prisoner; if he will institute an inquiry into the grounds of this complaint, and the conduct attributed to the prison officials; and, if he will state the number of letters addressed to the Secretary of State by Chambers during the period of his confinement, and also the number of these that were suppressed, and the reasons in each case for such suppression?
  MR. ASSHETON CROSS: I am not in the least aware how many complaints may have been made by the convict in question to his friends, but I am told that Petitions to the Secretary of State have been made in the years 1868, 1869, 1870, 1871, 1873, and 1876; and so far as I can learn, and so far as the Director of Convict Prisons has been able to ascertain, no Petition to the Secretary of State by this prisoner has ever been suppressed.
  MR. O'CONNOR POWER: The right hon. Gentleman has not answered the latter part of my Question, in which I asked for information as to the number of Petitions from Chambers which were suppressed, and the reasons in each case for such suppression.
  MR. ASSHETON CROSS: I thought I had answered it. As far as the convict prisons are concerned, no Petition to the Secretary of State has been suppressed at all.

  RUSSIA AND TURKEY—THE NEUTRALITY LAWS—CONTRABAND OF WAR.—QUESTION.
  MR. GOURLEYasked Mr. Attorney General to state, How far British shipowners are amenable to British Law when carrying contraband of war for neutral peoples other than British for the use of Russian or Turkish Governments; if trading in horses by sale or transport for either of the belligerents

  827
  by British subjects is a breach of the Foreign Enlistment Act; and, if he can define the meaning of " contraband of war?"
  THE ATTORNEY GENERAL: Sir, the carrying of contraband of war exposes the owner of, the ship to the risk of having his ship seized, and the confiscation of anything contraband found on board; as a rule, there is no other consequence. With respect to the trading in horses, by sale or transport, for either of the belligerents, I cannot say whether such trading would be a breach of the Foreign Enlistment Act or not until I was made acquainted with the precise circumstances in which it occurred. I should prefer not to attempt to define what would or what would not constitute an infringement of this Act, as any statement by me on the subject might be regarded by British subjects and Foreign Powers as a declaration proceeding from the Government, and not merely the expression of the opinion of a lawyer. As to the concluding Question of the hon. Gentleman, "contraband of war" may be defined roughly to consist in articles which it is probable will be used for the purposes of war, and which are being carried to a port of a belligerent.

  MALTA—COUNCIL OF MALTA—FREEDOM OF SPEECH.—QUESTION.
  SIR GEORGE BOWYERasked the Under Secretary of State for the Colonies, What course the Government will take to secure freedom of speech and debate in the Council of Malta?
  MR. BOURKE (for Mr. J. LOWTHER): In reply to the Question of my hon. and learned Friend, I have to state that the Secretary of State for the Colonies is of opinion that a local Ordinance should be passed securing freedom of speech within proper and clearly-defined limits in the Council of Malta; but the exact terms of the Ordinance have not yet been decided upon.

  PARLIAMENT—DISQUALIFICATION OF MEMBERS.—QUESTION.
  MR. MACARTNEYasked Mr. Attorney General, Whether the disqualification which arises upon a Member of Parliament being declared a bankrupt
  828
  applies to a Member of Parliament who was an uncertificated bankrupt at the time of his election?
  THE ATTORNEY GENERAL: With regard to English Members, the disqualification attaching to bankruptcy under the provisions of the English Bankruptcy Law is confined to Members who have become bankrupt after their election; but with regard to Irish Members, seeing that by the combined action and effect of the Act 19 & 20 Geo. III. c. 25, s. 9, and the Irish Act of 41 Geo. III. c. 52, s. 2, it is, at all events, arguable that a person who, in Ireland, has been declared bankrupt is not capable of being elected a Member of Parliament until his debts have been paid. I have considered the matter very carefully, but I have not been able to form any definite opinion on the subject. The point is one full of difficulty, which perhaps my right hon. and learned Friend the Attorney General for Ireland will be able to solve.

CIVIL EMPLOYMENT OF SOLDIERS, SAILORS, AND MARINES.

  QUESTION.
  SIR HENRY HAVELOCKasked the Secretary of State for War, Whether he will, during the Recess, take steps in conjunction with the Horse Guards, and the heads of the various Civil Departments, to give effect to the recommendations of the Select Committee on the Civil Employ of Soldiers, Sailors, and Marines, so as to allow the Country, as early as possible, the advantage of the largely increased impetus to recruiting of superior men that may be anticipated from the operation of those recommendations?
  MR. GATHORNE HARDY: The Report of the Committee has only been made public a short time, but I have taken steps to have it carefully considered immediately. I cannot say what view the other Departments may take of it; but I am quite sure that every one of the recommendations contained in it will be very carefully considered.

  CRIMINAL LAW — THE DETECTIVE POLICE.—QUESTION.
  SIR CHARLES W. DILKEasked the right hon. Gentleman the Secretary of State for the Home Department a

  829
  Question of which he had given him private Notice—namely, Whether any, and if any what, steps will be taken by the Government with a view to the reorganization of the Detective Police Force?
  MR. ASSHETON CROSS: I must express a hope that hon. Members will not give credit to everything that is said in the examination now going on in the police court. I thought it right that very careful inquiry should be made not only with regard to the accusations which have been made against the detectives, but also with regard to the Force generally, and a Committee has been appointed for the purpose, such Committee consisting of Colonel Fielding, Mr. J. B. Maule, Mr. Overend, and my hon. Friend, Sir Henry Selwin-Ibbetson.

  RUSSIA AND TURKEY—THE WAR— ALLEGED ATROCITIES AT ESKI SAGHRA.—QUESTION.
  MR. LTON PLAYFAIRasked the hon. Gentleman the Under Secretary of State for Foreign Affairs, Whether his attention has been called to the accounts in The Times and The Daily News of the alleged massacre of Christians by Turkish troops at Eski Saghra; and, if so, whether Her Majesty's Government have received any information on the subject?
  MR. BOURKE: The only information the Government have received is in a telegraphic report received a day or two ago, and that will be found in the Papers I have laid on the Table of the House, and which will be published in a few days. The Paper is Turkey, No. 22.

WATER SUPPLY (METROPOLIS).

  QUESTION.
  In reply to Colonel NORTH,
  MR. SCLATER-BOOTHsaid, that the inquiry as to the condition of the water supplied by the Vauxhall Water Company and of their reservoirs was being conducted by the Metropolitan Water Examiner, and he hoped to receive his Report within a few weeks. When it came to his hands he would give it careful consideration.

FOREIGN ENLISTMENT ACT—RUSSIA AND TURKEY—THE WAR.

  QUESTION.
  SIR GEORGE CAMPBELLasked the Under Secretary of State for Foreign Affairs, Whether Her Majesty's Consuls having jurisdiction over British subjects in the countries which are the scene of the present war have been or will be instructed to exercise their powers to restrain British subjects from breaches of the Foreign Enlistment Act, and especially to bring to the notice of Her Majesty's Government the case of any officers holding Her Majesty's commission?
  MR. BOURKE: I conclude the hon. Member refers to the 4th section of the Foreign Enlistment Act on the subject of illegal enlistment. That section applies to British subjects either within or without Her Majesty's dominions. Her Majesty's Government have no reason to believe that in Turkey, where Her Majesty's Government exercises extraterritorial jurisdiction, the Consular authorities will neglect to enforce the provisions of the Foreign Enlistment Act, where they can do so with propriety. In these circumstances no special instructions are necessary.

  COAL MINES—NEW HOMER HILL PIT ACCIDENT.—QUESTION.
  MR. H. B. SHERIDANasked the Secretary of State for the Home Department, Whether, in the case of Thomas Shaw, a miner, whose body now lies in the New Homer Hill Pit, near Dudley, he will give directions for some further inquiry to be made as to the practicability of recovering the body, considering that it is stated by Mr. Levi Britain, the miners' agent, in the local papers that the body can be readily recovered; and, further, whether the pit should be allowed to continue working while the body of Shaw lies in one of its gate-roads without an effort to recover it?
  MR. ASSHETON CROSSin reply, said, he had within the last few weeks directed an inquiry to be made into the subject alluded to by the hon. Member, but was informed that the recovery of the body was impossible without serious risk to life and property. He would, however, cause further inquiry to be made; but he would remind the hon.

  831
  Member that he had no power to order an investigation with a view to the removal of the body.

  PROROGATION OF THE PARLIAMENT.
  Message to attend The LORDS COMMISSIONERS:—
  The House went;—and a Royal Commission to that purpose having been read, the Royal Assent was given to several Bills.
  And afterwards Her Majesty's Most Gracious Speech was delivered to both Houses of Parliament by the Lord High Chancellor (in pursuance of Her Majesty's Command).
  Then a Commission for proroguing the Parliament was read.
  After which,
  THE LORD CHANCELLORsaid—
  My Lords, and Gentlemen,
  By virtue of Her Majesty's Commission, under the Great Seal, to us and other Lords directed, and now read, we do, in Her Majesty's Name, and in obedience to Her Commands, prorogue this Parliament to Tuesday the 30th day of October next, to be then here holden; and this Parliament is accordingly prorogued to Tuesday the 30th day of October next.

MINUTES.
— SELECT COMMITTEE — Conservancy Boards, &c. nominated.
PUBLIC BILLS — First Reading — Elementary Education Provisional Order Confirmation (London) (48); Settled Estates (49).
Second Reading—South Africa (40); Drainage and Inprovement of Lands (Ireland) Provisional Orders (38).
Second Reading—Committee negatived—Considered —Third Reading— Marine Mutiny; Mutiny.
Committee—Report — Customs and Inland Revenue (Duties on Offices and Pensions) (35).
Third Reading—Justices Clerks (42).

RUSSIA AND TURKEY—THE WAR.

  QUESTION.
  EARL GRANVILLE: I wish to ask my noble Friend the Secretary of State for Foreign Affairs, Whether he is in a position to give your Lordships any further information as to the situation in the East?
  THE EARL OF DERBY: My Lords, I am glad my noble Friend has put this Question. Within the last two or three hours I have received two telegrams which are of some importance, though I am afraid your Lordships will not consider them of a very satisfactory character. One is from Mr. Layard, who states that the Chargé d'Affaires has received instructions to announce a suspension of diplomatic relations with the Porte; and Mr. Layard adds that he believes the Russian Chargé d'Affaires will leave Constantinople in the evening. The other is from Colonel Mansfield, our Agent at Bucharest, who states under date of 11 o'clock this morning that a small detachment of Russian officers and men had arrived there by railway.

  PRIVATE BILLS.
  Ordered, That no Private Bill brought from the House of Commons shall be read a second time after Monday the 18 th day of June next:
  That no Bill originating in this House authorising any inclosure of lands under special report of the Inclosure Commissioners for England and Wales, or confirming any scheme of the Charity Commissioners for England and Wales, shall be read a first time after Tuesday the 5th day of June next:
  That no Bill originating in this House confirming any provisional order or provisional certificate shall be read a first time after Tuesday the 5th day of June next:
  That no Bill brought from the House of Commons authorising any inclosure of lands under

  1645
  special report of the Inclosure Commissioners for England and Wales, or confirming any scheme of the Charity Commissioners for England and Wales, shall be read a second time after Monday the 25 th day of June next.
  That no Bill brought from the House of Commons confirming any provisional order or provisional certificate shall be read a second time after Monday the 25 th day of June next:
  That when a Bill shall have passed this House with amendments these orders shall not apply to any new Bill sent up from the House of Commons which the Chairman of Committees shall report to the House is substantially the same as the Bill so amended.

MARINE MUTINY BILL. MUTINY BILL.

  SECOND READING. THIRD READING.
  Bills read 2a (according to Order.)
  THE DUKE OF RICHMOND AND GORDON, in moving the suspension of Standing Orders, Nos. XXXVII. and XXXVIII., in order that they might be forthwith passed through their remaining stages, said, the Government were not responsible for the fact that the first reading of this Bill and the Mutiny Bill had not been moved in their Lordships' House till Friday night last. He did not wish to characterize what bad occurred in the other House of Parliament with reference to those Bills—it would be neither expedient nor convenient for their Lordships to discuss that subject—but he wished to exonerate the Government by stating that though both Bills had been delayed for a long period in their passage through' the other House, neither of them contained anything essentially different from that which was to be found in the Mutiny Acts of former years.
  Motion agreed to. Standing Orders, Nos. XXXVII. and XXXVIII., considered (according to Order), and dispensed with: Bills read 3a, and passed.

SOUTH AFRICA BILL.
(The Earl of Carnarvon.)
SOUTH AFRICA BILL.

  (NO. 40.) SECOND READING.
  Order of the Day for the Second Reading, read.
  THE EARL OF CARNARVON, in rising to move that the Bill be now read the second time, said:—It is now, my Lords, 10 years since I had the honour of moving the second reading of the Bill for the Confederation of the Dominion of Canada, which Bill became law
  1646
  from that time. The Bill now before your Lordships is founded in a great measure on that statute, but there are both analogies and differences which, though I cannot explain at length, I may in a very few words indicate. Analogies will be found in the variances of race, language, creed, and laws; the difference consists in that great Native question which has long been, and must be for many years to come, the hinge upon which South African policy must turn. But in Canada, since the time that the Confederation Act passed, there has been a great development of population, of revenue, of the exports and imports, of all, in fact, which marks the advance of a great country; and yet, with this development, and with the growth of those large Imperial questions which call for the exercise of high constitutional qualities, and which, in their absence, would cause grave political friction, happily the relations between the Canadian Colonies and this country have become still closer. My noble Friend who preceded me in the Colonial Office, 1867, (Lord Cardwell), and who had, with no common patience and ability, brought the Canadian measure into such shape that I was enabled to bring it to a practical conclusion, will remember that for a very long time before that measure was introduced the subject of a confederation of the Canadian Provinces had been much discussed in this country and in Canada, and that before the Bill was brought before the Imperial Parliament almost every point of difficulty and controversy had been brought into the way of settlement by personal explanation and preliminary discussion. The same thing cannot be said in respect of this Bill. Although the question of confederation in South Africa has been much discussed, many matters of opinion are necessarily still left in doubt. Consequently, as Her Majesty's Government thought that a measure for Confederation ought not to be longer delayed, they have been compelled, when framing this Bill, to pursue a different course from that which was adopted in the case of the Canadian Act. The Bill before your Lordships is one of outline and principle. It is one containing the framework of a future Confederation, but leaving the details to be filled up after free communications between the Imperial and local Governments. It is essentially permis-

  1647
  sive—one by which no sort of pressure would be put on the Colonies, while it will at the same time give them every opportunity of confederating, if they should think it advisable to do so.
  It is, however, hardly possible to consider this measure without recalling the present political circumstances of South Africa, which may be said, in relation to the scheme, to fall into three groups—the English Colonies, the Native tribes, and the Dutch States. Of those English Colonies you have, first and foremost, the Cape, with its broad area, its great resources, its varied interests, its mixed population, and the traditional pre-eminence which its past history confers. As showing the advance made during the last five years, I may, in passing, mention that, whereas in 1871 the revenue of the Cape was £750,000, it has risen since then to £2,250,000, and that nearly 800 miles of railway are in course of construction. Next you may look to Natal, with its great natural capabilities in climate and soil, and mineral wealth, and its equally great causes of Native anxiety. Yet here, too, the revenue has risen from £125,000 to £260,000 within the same period. Lastly, we may turn to Griqualand, with its strange mixture of as yet uncultivated land, and its almost fabulous products. In that province the value of the diamonds found in the five years ending February 1876 has been estimated at from £12,000,000 to £20,000,000, whilst the out-put of diamonds is supposed to be not less than £2,000,000 per annum. But besides these English Colonies, there are outlying districts inhabited by Native tribes, with some few and scattered English officers resident amongst them, gradually civilising and bringing them under the mild influence of English law.
  So much as regards our Colonies. There remains next to consider the Native tribes, who, within and without those Colonies, constitute the greatest and most pressing of South African problems. It is difficult to form any reasonable estimate of their numbers. In the English Colonies there are not fewer than 1,000,000, and there are about that number in the Transvaal State. Of the Natives beyond our frontier who by some impulse from the far interior are continually pouring southwards upon us, I do not attempt a calculation. I will only say that,
  1648
  numerous as they are, they are still increasing in numbers. Formerly, indeed, the state of the barbarous warfare in which they lived kept down their numbers, but our civilization and gentler treatment have multiplied their strength and have induced them to come over the boundaries. During the last two years they have swarmed by thousands into Natal till it has been said that the Natives increased more in one day than the Whites did in a year. But they are increasing also in intelligence, and unfortunately that intelligence is too often directed to the use and the possession of arms. It is estimated that no fewer than 200,000 arms have been purchased in Griqualand, and I read an account the other day of a trader over the frontier whose stock in trade for arms amounted to not less than £30,000. On his return home from that country, Sir Garnet Wolseley gave it as his deliberate opinion that among the many sources of danger in South Africa there was none so great as this extensive possession of arms by the Natives. Lastly, they are increasing in wealth; and here I recognize a better side to the picture, for the possession of wealth implies a certain kind of civilization, and a certain element of political stability.
  So much, then, as regards our own Colonies and the Native tribes. I now pass to the Dutch States; and when I recall the history of those States, I own that I do so with regret. There was doubtless right and wrong intermingled, as it always is in human affairs, on each side; but whatever that right or wrong, and however distributed, I think with regret of these communities going out into the wilderness alienated from English feeling and policy, alienated, too, under the sense of injustice and wrong. I will not now revive the recollections of that unfortunate period; I will only venture to lay down two propositions which are, I think, as important as they are true. First, that the main European population of South Africa in its original element is Dutch rather than English; and, secondly, that it would be a grievous mistake to confound the steady, peaceful, prosperous, and conservative Dutch people of our settled Colonies with a factious, turbulent minority which has lately come into prominence in the barbarous warfare of the Transvaal. There are, as your Lordships are aware, two Dutch States.

  1649
  Of these the Orange Free State is the largest, oldest, most prosperous, and soundly organised. There have been here causes of irritation and suspicion, but I trust that these have now been removed by the agreement which I was fortunately able to conclude last summer with the President, Mr. Brand. That arrangement has been the means of bringing about a much-desired reconciliation. In the Transvaal, on the other hand, there is a still larger area, a smaller White population, and a very much larger Native population, with a far less soundly organised Government. But large and thinly populated as is the territory, there is, as so often has been seen in other countries, a hunger for land; and so it came to pass that last year some very unwise claims to Native lands were set up on the part of the Government of the Transvaal. I felt it my duty to protest repeatedly and strongly against the proceedings in reference to those claims, but those warnings were disregarded; war, and a disastrous war, ensued, which actually placed the whole State at one moment in the most imminent peril. Peace was patched up for a moment, but of a most unsatisfactory character so much so that if peace is to be had on such terms in South Africa, a great inducement for other Chiefs to follow in the same course will be given. Under such circumstances, it became necessary for Her Majesty's Government to take what precautions were in their power. They sent additional troops to the frontier, and they sent also as a Special Commissioner, and armed with the authority which they could give, Sir Theophilus Shepstone. But no authority which Her Majesty's Government could delegate to him is so great as that which his capacity, his knowledge of the Natives, and his great experience have given him. I have known him now for several years, and I am satisfied that there is no other man in South Africa more competent to deal with the difficulties of such a case as that which now exists in the Transvaal. It is, I believe, due to the influence of Sir Theophilus Shepstone that hostilities are not now raging along the whole frontier of the European settlements. Reports, indeed, reached this country that he had announced his intention to forcibly annex the Transvaal state. It
  1650
  appears to me that the language ascribed to Sir Theophilus has been very grossly exaggerated. His language has been frank, but at the same time conciliatory and temperate; and it has been received in the most friendly spirit by the local Government. Thoroughly understanding the nature of the dispute between the Natives and the authorities of the Transvaal, he did not hesitate to point out the extreme danger of the situation, to tell them that Her Majesty's Government cannot view with indifference the acts or circumstances which may involve a general conflagration, but that though treating them with all friendship and forbearance, and though for the present waiting to see what they could do for their own preservation, he recognised limits beyond which it would be impossible to protract a mere attitude of expectancy. I, too, may now state to your Lordships that, knowing as I do how large a portion of the people of the Transvaal desire to come under British rule, I cannot but anticipate that in the end the Transvaal will become a British State. I have no desire, if it can be avoided, to take over that State. We have territory enough and to spare in South Africa; nor need I say that I desire no unwilling members in this Confederation. The Bill before you is a sufficient proof of this; but if there is any calamity which I more deprecate than another it is the breaking out of a Native war, which would not only involve vast loss of life and property, and throw back for years to come the civilization of the South African frontier, but would impose liabilities and difficulties which it is hard to measure upon this country. It is at present difficult to do justice to the confusion, the anarchy, the political chaos of that country. The Whites are divided into factions, taxes are not paid, the Exchequer is empty, laws are as if they were not written, terrorism in some parts prevails; the coloured races are discontented and watching for the first opportunity; the Zulu King, with his 30,000 or 40,000 men, is ready to intervene for his own objects and interests. Now, if the danger were confined to the Transvaal alone we might, perhaps, run the risk of it; but we cannot view the kindling of great political fires in our immediate neighbourhood any more than the farmer can bear to see the

  1651
  prairie blazing all round his homestead.
  It is, my Lords, hardly necessary, perhaps, to give special reasons why a confederation of the South African Colonies is desirable. The subject is one on which public opinion locally has veered towards the present conclusion, whilst in England it has never wavered. It is, however, manifest that great difficulties must present themselves as long as different systems in important branches of administration prevail in the different Colonies. Let me for the sake of mere illustration take three points—the Franchise, Real Property, and Arms. As regards the franchise, in the Cape the Natives have it and use it; in Natal there are restrictions such as prevent the use of it, and in the Dutch Colonies there are none. As regards real property, in the Cape the Natives are on an equal footing with the Whites; in Natal they hold land by trustees or tribes; in the Orange Free State they possess only small plots; while in the Transvaal the Natives occupy at pleasure and without regulation waste laud. As regards arms, in the Cape there is a duty of £1 per gun, but no register; while in Natal there is no duty, but there is a register. Now, if there were a united Government by means of a confederation there would be probably better, more uniform, and more even arrangements. A strong Government would respect itself and be respected by the Natives. Under such a Government there would be less danger of insurrection on the part of the Natives, and less chance of panic on the part of the Colonists. In Canada the treatment of the North American Indians has been liberal, kindly, and humane; it has formed the subject of just praise alike by traveller and politician. But there is another advantage which may be fairly mentioned; and it is this. Under a large and common system of Government in South Africa many public works which are now neither undertaken nor dreamt of would become possible. That which is not the business of any one individual member of the family politic is the business of none; and considering her great resources, and, indeed, her great necessities, it must be owned that in this part of the race of civilisation, South Africa is somewhat, though very excusably, in arrear. But
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  perhaps of all the changes which this measure may produce, I anticipate with the advent of political and administrative union none more hopefully than a real union in sentiment of the Dutch and English race. The old quarrel to which I have alluded is dying out, and is fast becoming a thing of the past: real friendliness exists under the crust of political discord: one of the most graceful writers among modern travellers says, that the Dutchman at the Cape when speaking of England talks of it no less than the Englishman as "home:" all must gain in general political strength as in material prosperity by combination, and I will only add that my highest object has been to restore the union of sentiment between the two peoples. I am hardly obliged to anticipate objection to my own measure; but I have heard it said that there is coercion lurking under its provisions. I absolutely deny the fact. There is not the shadow of a shade of coercion. I may even go further, and point out that the earlier history of the question not unreasonably leads me to the belief that confederation is no uncongenial idea to any of the Colonies or States of South Africa.
  On the 22nd of December, 1858, this resolution was adopted in the Orange Free State—
  "This Raad is convinced that a union or alliance with the Cape Colony, whether on the basis of federation or otherwise, is desirable, and therefore resolves to request his Honour the President to correspond with his Excellency the Governor upon that subject …. for the purpose of planning the approximate terms of such union."
  Later in 1871 a Commission on Federation at the Cape was appointed, which could and did only consider the question with reference to the Cape Colony alone, but in whose report I find, amongst other remarkable matter, the following language—
  "Some, whose opinions arc entitled to great respect, are of opinion that until the Free State, the Transvaal Republic, and Natal show a disposition to federate with the Cape, and until West Griqualand and the country between the Kei and the Bashae, or between the Kei and Natal, shall have been annexed to the Colony, no change of the kind proposed will be either necessary or expedient. …The time may come when the advantages of a union among South African communities for the creation of a strong Government, powerful to protect, and, to a certain extent, to control its several members, will become apparent to all."

  1653
  Later again in 1875, when I had proposed with reference to this question a Conference of the Colonies and States of South Africa, the following resolutions were adopted by the Legislative Council of Natal—
  "That such a Conference will conduce to a future and closer union between the Cape Colony, the Orange Free State, the South African Republic, the Province of Griqualand West, and this Colony; an union that may be of material benefit to each, of disadvantage to none. To express a hope that our elder and sister Colony will yet regard with greater favour the prospect of a more friendly intercourse and closer union with Colonies and States whose interests are by nature and circumstances inseparable from her own, and which are peopled by a race, not only of common origin, but of kindred blood; and that delegates from the Cape, the Orange Free State, the South African Republic, Griqualand West, and Natal may meet in friendly conference."
  In the same year and on the same subject this resolution was passed by the Legislative Council of Griqualand West—
  "That, in the opinion of this Council, it is desirable and expedient that a Conference of Representatives of the South African Colonies and States should assemble for the consideration and discussion of questions of common interest with a view to the formation, if possible, of a Federal Union."
  And within the last two months the Volksraad of the Transvaal have agreed to this resolution—
  "That it is impossible, under present circumstances, for the Government to carry on the administration and control of the country."
  I hear that considerably more than a fourth of the male population of the Transvaal have signed a Petition praying for an intervention by Her Majesty's Government in the affairs of that distracted province. Nor even yet is this all. In the autumn of last year I held a Conference in London, in which the President of the Orange Free State and Representatives of Natal and Griqualand took part, and in which they unanimously agreed upon the expediency of a common system of police, of the regulation of arms, of the sale of spirituous liquors, of industrial education—in fact, of many of the primary and most important elements of a common Government. But if I am asked why the Government has not delayed this Bill for some clear and unmistakeable indication of the exact feelings of the various States and Colonies, such as would
  1654
  enable us to bring in a Bill framed on the precedent of that for the Dominion of Canada, my answer is, that we feel that a positive duty is imposed on us of at once placing within the reach of the South African communities a power to unite under the protection of the British Crown. To delay this to some future and perhaps indefinite Session of Parliament would be to invite calamity for those Communities and for the Imperial Government. It may, however, perhaps, be objected as against this Bill that it leaves too much to an Order in Council to decide. But if there must be no delay, then there is no other course than to adopt that method. Let it also be remembered that the various points of controversy—if, indeed, it can be admitted that controversy there is—are mainly matters for internal regulation, respecting which the Imperial Parliament would hardly desire to interfere. They are, in fact, questions which must be left to be adjusted by the Imperial and local Governments. The Bill, as originally prepared, has now been before the various Colonies and States of South Africa for a considerable time. Objections have been made to various provisions; the objections have been considered, and the provisions have either been amended or omitted from the measure as it now stands.
  And now in explanation of the Bill itself. About two months ago, in redemption of a pledge given at an earlier period, I sent out a Bill for consideration in South Africa, which will be found in the Blue Book which last week I laid on the Table of the House. That Bill met, as I consider, with a fair and favourable reception in South Africa. At the same time there were comments and criticisms, some of which I thought so reasonable that I have in a great measure recast the Bill so as to bring it to the shape in which it is now before your Lordships. It will not require much explanation. The first part deals with the voluntary union of the various Colonies and States; the next with Executive power; and the next with the Legislature and the distribution of Legislative powers. The third clause enables the union of Colonies or States under the British Crown; and it deals with such confederation on general principles. The details will be considered by the Imperial awl the local Govern-

  1655
  ments, and having been duly adjusted will be announced by Order in Council from Her Majesty. It is, I think, the best and simplest course to pursue in such a case; but if any doubt be entertained, there is a very sufficient precedent for this in the case of Queensland and New South Wales. Several years before the great Colony of Queensland came into existence, power was taken by Act of Parliament to cut off the northern districts of New South Wales, and to form them with all the machinery of civilized government into a separate Colony, leaving authority to the Crown to fill up and supplement all details by Order in Council.
  Next, as to the Legislative authority. I propose, as will be anticipated, and in conformity with the usual course, the system of a double Chamber. In the original draft I thought it best to propose that one of the Chambers should be a council nominated by the Crown; but considerable objection to that proposal has been taken in South Africa, and I feel no difficulty in leaving the question in abeyance. In the arrangement of Colonial constitutions there is no question more complex or difficult than the organization of the Upper Chamber. In modern times there have been but two Upper Chambers of authority and political prominence—the English House of Lords and the American Senate—the House of Lords legislative and hereditary; the Senate executive and elective. But it is simply impossible to create either in a Colony. The immemorial tradition of the one, the surrounding constitutional framework for the other is wanting. In the English Colonies, however, the form has considerably varied. In New South Wales the Upper Chamber is nominated for life with a minimum; in Queensland it is nominated for life with an understanding that it should not exceed two-thirds of the Assembly; in Victoria it is elective—a certain proportion periodically retiring by rotation; in Canada it is nominated for life, with a limited power of addition. But whatever these variations may be, I apprehend that the two principal and practical objects are, first, to secure such an authority for the Upper Chamber as to enable it to check hasty and imprudent legislation; and, secondly, so to constitute it as to avoid those deadlocks which are fatal to all
  1656
  legislation, and which have sometimes occurred in recent years. The Legislative Council at the Cape under its present constitution is elective, and if there be a strong inclination in South Africa generally to adhere to that principle of organization, I certainly should not care to oppose it. And now as to the Assembly. In the original draft of the Bill I went into considerable and minute details, founded very much on the Canadian precedent; but I have thought it better to submit this part of the Bill at present in outline, and to leave the Constitution of the Assembly to be a matter of discussion between the local and the Imperial Governments. This is in a great measure due to that most difficult and all-disturbing cause, the Native question. Let me give an illustration. The Colony of the Cape has a very large number of Natives, and to them it accords the franchise. The Colony of Natal has proportionately a larger number of Natives, but from them it virtually withholds the franchise. But if representation under the Confederation is to be based on numbers, exclusive of the Natives, it is clear that the Cape would obtain an undue share of Parliamentary power, and the interests of Natal would be placed at a disadvantage. It is necessary, therefore, to look for another principle, which I think may with patience be found, but which it will be necessary to have fully discussed between the parties concerned. It is proposed that the Assembly should be quinquennial, and that there should, for obvious reasons, be a decennial re-adjustment of the franchise.
  I next come to the Provincial Governments. The Bill provides that each Province shall be presided over by a chief Executive officer, to be designated and appointed in such manner as the Queen may determine. If the union of these Colonies is desirable, it is equally desirable that we should not sweep away the life and individuality of the different Provinces. They have a very distinct and remarkable character of their own; they cherish their history, traditions, and customs; and from them I would desire to tear no portion of their past existence. There is nothing in this Bill which injuriously touches this important matter. The next few clauses are in themselves very important, as they refer to the distribution of legislative power.

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  They are in a great measure founded on the Canadian model, with such modifications as are necessary. The principle is that there shall be certain powers reserved exclusively for the Central Government, certain others reserved exclusively for the Provincial, and certain which are concurrent between the two. Whilst, however, is assigned to the Central Authority the consideration of Native questions, every law on such subjects will be reserved for the sanction of Her Majesty at home, and that control over Native affairs which must, under present circumstances, still be preserved to this country will be upheld. As for the remainder of these clauses, there is nothing in them to which I need call special attention. They contain provisions for consolidating revenue, for apportioning charges, for the abolition of all Customs duties between the Confederate States, so as to secure complete union in commercial matters, and, finally, for the admission of other States that might desire to enter the Union.
  I have now, my Lords, gone over the principal points in the Bill, and need say but little on the general question. The principle of Confederation is not a new one. It existed, indeed, in ancient times under many forms and combinations, but there has been a remarkable tendency towards it of late years; connected, as it would seem, with feelings of nationality and race. The drift of the political current has certainly been towards aggregation rather than separation. We have seen it in Italy, in Germany, and even, I think, in the United States. In some, indeed, of the Colonies there seemed at one time to be a fluctuation of feeling. A process of disintegration appeared to be setting in in the Australian Colonies and New Zealand. In Australia, however, there is no evidence to show that this was a true indication of public feeling, whilst, as regards New Zealand, we have lately seen a remarkable proof of the strong feeling towards aggregation. The separate Governments of that great and prosperous Colony have passed away, in order to make room for a stronger and, as it is supposed, a more economical Central Government. A distinguished writer, indeed, has lately denied the applicability of the principle of Confederation to Dependencies under
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  British rule; but with all deference to him his reasoning seems to me to be founded on mere hypothesis: nor can I see any reason why in the nature of things, and apart from those fugitive causes which do not belong to the fixed and unchanging principles of political life, the Dependencies of the British Crown should any more than any other States be incapable of Confederation. It is quite possible that Confederation is only one stage in the political journey of the Empire, and that it may even lead in the course of time to a still closer union. But, be this as it may, the reason why I now urge this measure for the adoption of Parliament is that such a principle of Confederation must add strength to these Colonies, give larger objects, a higher policy, a wider political life, and, as I earnestly hope, a better security for the right treatment of the Native races. And if so, all this means greater prosperity and peace—a closer consolidation of Imperial interests. The English Empire is, no doubt, vast, various, and disconnected: and yet when all allowance and deduction have been made it is, I am prepared to maintain, one of the most wonderful pieces of human administration the world has ever seen, both in what it does and what it does not do. Other countries have founded Colonial Empires. France, Spain, and Portugal have left their mark on the Colonial history of the world, and yet as Colonising Powers they have virtually ceased to exist; and, among other reasons, for this—that they were founded upon a close principle of restriction. We have adopted a different system; we have discarded restrictions; we have looked to freedom of government as our ultimate object, and we have been rewarded by an almost immeasurable freedom of growth. And I look upon this measure as one more step in that direction. I have not said—and I do not desire to say—anything which may revive the controversies which have arisen at the Cape on this subject. I, personally, am satisfied with the course of proceedings, and with the spirit in which my proposals have been met. The criticisms and comments upon them have not been other than fair and reasonable, and I consider that with this Bill closes, so to speak, the most important era of the modern history of South

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  Africa. If Parliament should pass the Bill, Confederation becomes possible in these Colonies, and it is for them to say whether they will accept it. My duty is then at an end; but I believe that they will accept it, for policy and interest alike dictate such a course. And then I have every confidence that under this Bill these communities, now scattered and isolated by conflicting interests, will at no distant day form a strong, peaceable, and loyal Confederation under the British Crown. I beg to move the second reading of the Bill.
  Moved, "That the Bill be now read 2a." —(The Earl of Carnarvon.)
  THE EARL OF KIMBERLEYsaid, he had heard with satisfaction the speech of his noble Friend—the Bill was one to which he could give his cordial support. It had been rightly said that public opinion in this country had veered round on the subject; for it was not so long ago—in 1854—that those who were most in the habit of attending to Colonial affairs were of opinion that the wisest course on the part of this country would be to abandon all claim to Sovereignty over these Dutch States; whereas now it was the general opinion that they should be united under the British Crown in one Federation. Much information had been received with respect to the Transvaal State, and no doubt the state of affairs there was most alarming; but while he hoped for a satisfactory issue, he thought it essential that Federation should be a purely voluntary act, and that no State should be brought in except after the fullest consideration. The position of the Dutch States of South Africa was one which very intimately concerned the whole British Colonies in South Africa, because, if their population was still principally Dutch, every year the number of English settlers increased; so that no one with any knowledge of Colonial affairs could fail to recognize that it was absolutely essential that these settlements should be united to the other English Colonies in South Africa, and he trusted his noble Friend would be successful in bringing about that result. The question of Con federation was started some time ago by a Commission which inquired into the subject of imparting responsible government to the Cape Colony. Sir
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  Henry Barkly brought forward the whole matter in a despatch, suggesting that the Commission should take a wider scope, and asking for Instructions from Her Majesty's Government. The Instructions he (the Earl of Kimberley) gave at the time were to the effect that he was at liberty to summon delegates from all the States and Colonies to consult upon that question. He thought his noble Friend had acted wisely in proceeding by way of a permissive measure. The matter was urgent—otherwise we might have waited until the question had been fully discussed in Parliament; but, unfortunately, the affairs of those Colonies were in a most critical state. The Natives, indeed, were quiet, except in the Transvaal State; but the whole condition of the Colonies required prompt and vigorous treatment, and it was wise that the opinion of Parliament on the subject should be promptly shown. There were several points to be noticed in the Bill itself. The question of a second Legislative Chamber was a very considerable one, and, as his noble Friend had said, they had to decide between an elective Council, as in Victoria, or a nominative Council, as in the other Australian Colonies and in Canada. It was only natural that the colonists should prefer the kind of Council to which they were accustomed; and, perhaps, in some respects the American Senate might be imitated. Another and a greater question was that of the suffrage. It was quite obvious that the suffrage could not be general on account of the character of the Natives. There were about 300,000 Natives in Natal—and these were rapidly increasing — and not 20,000 Whites. The Natives were peaceable enough, but quite uneducated; and as soon as any impression was made on them fresh barbarians came from the interior, because, as they said—"the Government does not oppress the people." There was, therefore, great force in the objection raised against the franchise being given to them. On the other hand, though these were reasons why the suffrage should not be indiscriminately extended to the Natives, it would be most unwise that they should be entirely debarred from it. Many of them were quite sufficiently advanced in civilization, and their progress should not be discouraged. A great many plans had been suggested for the solution of

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  the question. He thought, however, that his noble Friend had taken a wise course, and that if, on the one hand, it was very desirable not to render the Whites discontented, it was also to be hoped that the entire population should have, as far as possible, a full share in the Government. The principle of Confederation was based on sound principles, and was likely to tend to the progress of our Colonies by giving them a wider field of action and of bringing them into closer connection with one another. There was nothing in it which could weaken the Empire, because whatever strengthened the Colonies must likewise strengthen the Empire.
  EARL GREYsaid, that though he had no wish to offer any opposition to it he could not allow this Bill to pass without calling their Lordships' serious attention to the dangerous condition of South Africa. In the opening part of his speech his noble Friend (the Earl of Carnarvon) had described very forcibly the extent of the danger arising from the immense population of barbarous tribes inhabiting British territory and a very large extent of country beyond it, but in close relations with it. These tribes were not entirely without a certain degree of civilization, were gradually acquiring wealth, and now extensively armed. That was a danger of a most serious kind; and he agreed with his noble Friend in thinking that in that state of things it was very necessary for the safety of the White population that some single authority should be created capable of ensuring concert among the several distinct communities of European race in that part of Africa, in the adoption of a consistent policy towards the coloured races. That he understood to be the main object of his noble Friend's Bill, and it was one of which he entirely approved, but he feared the proposed scheme would break down in practice, because the new central authority it proposed to create was to be formed on the principle of what was called responsible government." The state of things in the South African Colonies was utterly unfitted for any such scheme. His noble Friend had said most truly that in dealing with savages the great thing was to be firm, consistent, and just. But we could not hope to have a consistent and a firm government with a constitution under which changes of administrations were
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  likely to occur every six or twelve months. Everybody was aware that in Australia changes of government had succeeded one another with almost ludicrous rapidity; and although in that country, where very little government was wanted, this had practically not been so great an evil as might have been expected; yet it had certainly led to many blunders in legislation and to extraordinary mismanagement in many of the details of government. But in Australia the Government had no large Native population to deal with, the Colonies possessed such extraordinary elements of wealth in themselves, that there was little need for interference on the part of the Government. Hence the evil resulting from weak and ephemeral administrations in Australia had been comparatively slightly felt. In South Africa, however, the case would be totally different. There we had most urgent need for a firm and regular system of government; but just when one man was conducting the government on what he deemed to be a wise and proper scheme, he might find himself transferred to the other side of the House, and a total change of policy would be inaugurated. Nor was this all. There likewise existed the enormous difficulty of dealing with the question of the franchise. The White inhabitants would not willingly consent to give the franchise to the Natives who so largely out-numbered the more civilized race, and were totally unfit to exercise the overwhelming power which would be put into their hands by the possession of the franchise under the proposed constitution. It would obviously be most unsafe to entrust political power to a population only just emerging out of barbarism. On the other hand, all experience proved that while representative and responsible government might work well when all were represented, no tyranny was so grievous as that of an Assembly which represented, not the whole of the population, but only a minority. In proof of this assertion he need only refer to the Orange Parliament of Ireland. In South Africa we were placed in this unhappy position—that if we there established representative government with responsible Ministers, we should be compelled either to give power to savages who were utterly unfit to use it; or else we

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  must give power exclusively to one class of the population who might use it to the prejudice of the other. He was persuaded that when there happened to be living together a small civilized minority and a large uncivilized majority, the only safe system of government was one in which the impartial authority exercised by the Representative of the Crown under the superintendence of the British Government at home was so strong as to enforce the adoption of a system of fairness and equality to both. This belief was completely confirmed by our experience in New Zealand. In that Colony there was indeed a system of representation, but it did not, in the first instance, interfere materially with the authority of the Crown. While this was the case, and while the Government was impartially conducted by the Servants of the Crown, the Maories were gradually advancing in civilization and becoming amalgamated with the White settlers; but when this policy was changed, and what was called responsible government was set up, by which executive authority was virtually transferred to the representatives of the Colonists, the Maories soon found that they were exposed to injustice; they found that in various ways the interests were neglected, and that the fair treatment they had been accustomed to was no longer extended to them. Therefore they became naturally, and, he must say, justly discontented. Under that hunger for land which his noble Friend had described as being one of the most dangerous passions in these countries, the settlers adopted measures which everybody calmly looking back must now pronounce to have been unjust to the Maories, and which led to the first outbreak of the war. That war, of course, ended in the complete subjugation and almost the annihilation of the Maori race, which had now become a comparatively insignificant element in the population of New Zealand. In spite of this experience, however, successive Administrations formed by both the great Parties had concurred in forcing on the unwilling Cape Colonists a system of responsible government which he felt persuaded would yet bear fatal fruits. This unfortunate step, against which he had raised his voice at the time, might perhaps have made it impossible for his noble Friend to proceed on any other
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  principle than that which he had adopted, in trying to create a new central authority for the Government of South Africa. Still, he believed that by adopting this principle, we were sowing the seed of future evil, and he was persuaded that no one who really examined the actual state of things in South Africa could doubt that, in all probability, although this scheme might for the moment stave off the danger, yet, sooner or later, we should see in that country a fearful war of race of which it was impossible to guess what would be the result.
  VISCOUNT CARDWELLsaid, his noble Friend the Secretary for the Colonies had told their Lordships that the Government had no option but to proceed with the Bill; and he (Viscount Cardwell) agreed that this was so. It was quite evident that the Confederation of these Colonies must take place, and what evidence was there that this was not a most convenient time to bring it about? He should not have said anything except for the observations of the noble Earl who had just spoken (Earl Grey), which he thought ought not to pass without an answer, and he desired to point out that since responsible government had been introduced at the Cape the Native population had gone on increasing in prosperity and advancing in civilization. The noble Earl spoke of changes of administration every 12 months; but, unless he was much mistaken, the same administration which was in office, when responsible government was introduced at the Cape in 1872, was in office still, and continued to retain its hold upon the confidence of the Colony. Now, it was unnecessary to observe that this was by no means a short tenure of office even in this country; and, without saying anything of evil augury respecting noble Lords on the opposite bench, he had known administrations here which neither expected, nor perhaps even wished, to hold office at one time for more than five years. There was, indeed, the strongest evidence to show that the experiment had been in every way successful. In the case of New Zealand, also—which was no doubt a very peculiar one—since that Colony had been admitted to responsible government and permitted to manage their own affairs, peace had been more uniformly preserved than under the old system, and the Colony had continually

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  advanced in prosperity. He quite concurred, he might add, with his noble Friend opposite, that the circumstances with which he had to deal in the present instance were very different from those of the Canadian Confederation, and required a different mode of legislation. He need only say further that he cordially concurred in the second reading of the Bill.
  Motion agreed to; and Bill read 2a accordingly.

ELEMENTARY EDUCATION PROVISIONAL ORDER CONFIRMATION (LONDON) BILL [H.L.]
A Bill to confirm a Provisional Order made by the Education Department under "The Elementary Education Act, 1870," to enable the School Board for London to put in force "The Lands Clauses Consolidation Act, 1845," and the Acts amending the same—Was presented by The LORD PRESIDENT; read la, and referred to the Examiners. (No. 48.)
House adjourned at Seven o'clock, till To-morrow, half-ast Ten o'clock.