The Sun.
London, England, 1863-04-17 00:00:00

THE BUDGET.

The house having resolved itself into Committee of Ways
and Means, Mr. MAssair in the chair,
The CHANCELLOR of the EXCHEQUER rose, amid
loud and general cheering, to make his financial statement
for the year. The right hen, gentleman spoke as follows :
Sir, the causes which have during recent years attracted an
unusual degree of interest to the annual financial statement
are not of such a nature that any well-advised lover of his
country should desire them to be permanent. They may be
summed up thus—that the few years which have lastpassed
have been years of unusual pressure upon our resources,
and that times of unusual pressure are necessarily times of
unusual anxiety. That anxiety during the course of last
session found irs most legitimate method of expression in a
resolution of the House of Commons. In that resolution her
Majesty's Government found it declared by the house, the
legitimate organ of the sense of the country, especially upon
such a subject, that while it was the desire of the house--1
am not now quoting the words, but referring to the spirit of
the resoluticn—that ample provision should be made for the
honour and security of the country and for the efficiency of
the public service, it was likewise the feeling of the house
that the burden of tax-ttion was inconvenient, and that
efforts ought to be made by the Executive Government to
afford relief to the people in that respect. Therefore, sir,
the statement which I have now to submit is not merely a
statement of the annual account and estimate of receipt and
expenditure, but it is likewise, I may presume to any, the
answer of the Government to a solemn, deliberate, and I
believe I may add, a unanimous resolution of the House of
Commons. (Hear.) And, sir, it is well the people should
understand what the Government by the mouth of my noble
friend the First Lord of the Treasury fully acknowledged,
that that resolution was not premature, but on the contrary,
was well founded and justified by the circumstances of the
case. It is well they should understand how rapid, how
peculiar, I will venture to say how Exceptional, has been up
to a certain point the growth of our expenditure, and how
much of it was to be desired, and, indeed, required, in the
interests of the public that particular attention should be
paid to the subject. The expenditure of the financial year
1858.9, which followed the Russian War, was an expendi-
ture very considerably exceeding that which had prevailed
before the Russian War. It amounted to £64,664,000 ; but
in the year 1859-60 the expenditure increased to £69,502,000,
showing an augmentation of £4,838,000. In the year 1860-1
it rose to £72,842,000, showing an augmentation within two
years of £8,178,000. (Hear, hear.) The average of the four
years, from 1859 to 1863, which I take because they are the
years to which the general description of the rapid growth
and augmentation peculiarly applies, was £71,195,000, in-
cluding the amount laid out in fortifications, and £70,678,000
without the fortifications. The increase upon the aggregate
occurred at a time when we had been enjoying a peculiar
relief from expenditure in consequence of a diminution Of
more than £2,000,000 on the charge of the National Debt,
owing to the lapse of Long Annuities. Now, Sir, it may
bring this statment and the state of facts which it is in-
tended to illustrate more clearly and fully to the mind of
the committee, if, instead of comparing the aggregate ex-
penditure at two periods, I compare that portion of the ex-
penditure which may be said to be matter of option and
choice on the part of the Legislature, because a la-ge part
of the expenditure of the country—first of all, that which
is devoted to the payment of dividend on the National Debt,
and, secondly, that which is devoted to the discharge of
other engagements placed upon the Consolidated Fund—is
not in point of fact practically within the control of Par-
liament from year to year. There is another important
item—that, namely, connected. with the collection of the
revenue—which is regulated invariably by certain fixed
rules, and does not partake of the remarkable upward
movement to which I have referred. I wish to say
that these two items are items which it is de-
sirable to exclude from the account. I desire, therefore, to
state briefly to the committee what wee the growth of our
expenditure at the period to which I have referred. After
striking off from the total the two very important items,
and the only two of great consequence, which may be re•
according to certain
garded either as Axed or as varying

constant rules—namely, the interest of the debt and the
charge of between 4000,000 and £5,000,000 for the collec-
tion of the revenue, in the year 1858-9 our expenditure—
that
opinion in the country and upon the vote of Parliament—
was £31,621,000. In the year 1860-1 it had risen to
£42,125,000. There had been an increase of £10,500,200, or
about 25 per cent., in two years only. If we make the com-
parison with the year which immediately preceded the Rus-
sian war, it is still more remarkable. In the year 1853 4 the
optional part of the expenditure of the country—the com-
mittee will understand the sense in which I use that epithet
—was £23,511,000. In the year 1860-1 it was £42,125,000.
(Hear, hear.) The increase in a period of seven years was
£18,614,000, or more than 80 per cent. That, sir, was the
state of facts which attracted the particular notice of the
House of Commons last year. Let it not be supposed that
in mentioning these facts I mean to imply that that in-
crease was a causeless increase. The causes are well known.
They are subject, I believe, to little controversy or dispute.
There were the extensive and costly transformations which
were required by the progress of military and naval science,
There was also the progress of philanthropic views in re-
gard to the condition of those who serve their country,
which had led to great expenditure, but an expenditure
grudged, I believe, by none, with the view of adding
to the well-being of these services. There was a great
increase of our military establishments, having refer-
ence in no inconsiderable degree, as must always be the
case—such is the sympathy that now prevails between
nation and nation—to the like increase of military establish-
ments abroad, and to the general circumstances of Europe.
There was a desire in which, I think, the public, whether
unanimously or not I do not say, but in which they very
generally partook—namely, that the fixed defences of the
country should be strengthened. And, lastly, there were in
1860-1 direct war charges which came to a very considerable
amount. I should not do full justice to the circumstances
of the case if I did not add that while these causes prevailed
another cause came into operation which is quite sure to
appear whenever, from whatever reason, a vast and sudden
increase of expenditure takes place. I mean that together
with the increased expenditure itself there grows up what
may be called a spirit of expenditure—(hear)--a desire per-
vading the country, insensibly and unconsciously, perhaps,
but yet really affecting the spirit of the people, the spirit of
Parliament, the spirit of the departments, and perhaps even
the spirit of those who are most immediately responsible—
: a spirit of expenditure and some relaxation of those prin-
ciples and rules of prudence which direct and require that
whatever service is to be performed for the public should be
performed in the most efficient manner, but likewise at the
lowest practical cost. (Hear.) bir, it is not on the part of
the Government that I make that statement, All I have to
say on the part of the Government is this—and it may be
said without reproach to any other body or any other Power
—that I do not think that in proposing to Parliament the out-
lay of these vast sums her Majesty's Government in the
slightest degree outran the general state of public opinion
and conviction, but if it were necessary it could be proved
from the annals of the time, and in particular, perhaps, from
the annals and journals of this house, that instead of having
outrun the course of opinion their proposals rather fell some-
what short of it. But the effect of all this has been that
the finances of the country have been kept in what may
be called a state of tension for a period of four years. And
having spoken thus far without reference to the special part
taken by any organ of the State in regard to this expendi-
ture, I do not hesitate to make the admission that that ten-
sion was in reused by the policy pursued by the Government
and recommended by them to the House in the year 1860.
For one result of introducing in a period of high expendi-
ture a policy involving remissions of taxation, although it
might have been warranted under the eircumstances, was
undoubtedly to produce an increase of that tension and a
necessary aggravation of whatever solicitude might have
prevailed in respect to the condition of our finances. Well,
that is the general position of affairs anterior to the state of
circumstances which I have to describe to-day. And in
now coming to consider the balance-sheet of the year just
expired, which I have to submit to the committee, I must
beg hon. members to remember the peculiar terms in which
the estimates of last year were presented, because I do not
think it possible to form a just appreciation of the real con-
dition of the country, or of the power and elasticity of its
resources, without taking those particular circumstances
into view. The mere figures of a comparison between one
year and another, in the first place, requires to undergo a
careful analysis before we can arrive at sound conclusions ;
and, in the second place, they require an accurate regard to
be had to the main circumstances determining the commer •
cial and material condition of the nation before our conclu-
sions can be such as will be fully sufficient to warrant any
course of policy which we may seek to found upon them,
Sir, I submitted the estimates of last year to the House of
Commons on the part of my colleagues, and speaking
their sense, with particular reserve. Wo are able to
present only estimates of income and expenditure which
may be said to have precisely balanced one another,
and we were compelled to accompany the presentation of
that too nicely balanced statement with a reference to the
particular causes which we thought it was obvious might
disturb, and fatally disturb, that balance in an unfavourable
sense. The account of receipt and expenditure for the last
x,ser which Iva hnsra now in Inuit, vrnri to nrmoiri4v. tr. T I hint,
a remarkable and hopeful account. But in order to judge
whether it is really, and how far, remarkable and hopeful,
it is absolutely necessary to have regard to the specialities
in the state of the country. I don't now refer simply to the
fact that the harvests have now fur a series of three years
been in no instance equal to an average yield; but I refer to
two causes, both special, and both of which, also, as it hap-
pens, have been mentioned in the short conversation which
preceded the n,mmencement of our principal business to-
night. There is, in the first place, the condition of the Lan-
cashire cotton manufacture. Towards that Lancashire to
which up to this time every Englishman has referred, if not
with pride, yet with satisfaction and thankfulness, as among
the most remarkable, or perhaps the very most remarkable of
all the symbols that could be presented of the power, the
progress, and the prosperity of England—(hear, hear)—to-
wards that Lancashire we feel now more warmly and more
thankfully than ever in regard to every moral aspect of its
condition, (Cheers.) The lessons which within the last 12
months have been conveyed, if in one aspect they have been
painful, and even bitter, yet in other aspects, and in those,
too, which morn intimately and permanently relate to the
condition and prospects of the country, have been lessons
sueh as I will venture to say none of us could have hoped
to learn. For, however sanguine may have been the
anticipations entertained as to the enduring power
and pluck of the English people, I do not think
that any one could have estimated that power of en-
durance, that patience, that true magnanimity in humble
life, at a point as high as we now see that it has actually
reached. (Cheers.) But, sir, with respect to the material
condition of Lancashire, no doubt for the time the tale we
have to tell is a melancholy one. It was my duty, so me-
nacing did we regard the state of the case 12 months ago, to
state frankly to the Committee, in presenting the Estimates
of the year, that vie had before us a deficiency in the supply
of the material of labour in Lancashire of so alarming a
character that if it continued throughout the year wecould
not presume to say that our estimates would be justified by
the result; that the case was so serious that it was useless
for us at that time to pretend to ask the house to make such
provisions as might be adequate to the calamities which
were impending over us; and that consequently we thought
it best to wait for the teaching of experience, and to meet
the evil when it arose. Now, the anticipations of that evil
were founded on the supposition that the scarcity would
continue at the point which it had then reached; but what
has been the fact ? The scarcity has not only continued at
that point, but, unhappily, it has proceeded much further.
The price of cotton, which I quoted to the Committee last
year as having been in the spring of 1861—the price of
those which are commonly taken as the average descrip-
tions of American cotton—viz., the Upland and the New
Orleans, which in the spring of 1861 had been between 7d,
and Bd. per lb., had risen at the time at 'which I spoke to
between 13d, and 14d. per lb. And that NI as the state of
things which we regarded as so formidable to the revenue
of the country. But in the course of the last autumn that
high price was nearly doubled, and at this very moment,
as I find from the latest quotations, the price of the cotton
required to carry on our manufactories, and which usually
sells at 6d. or 7d. per lb., has risen to 24d, and 25d per
lb. (Hear, hear.) So that the calamity which has be-
fallen Lancashire, viewed in its material and com-
mercial aspects, has not only continued at the point it
then reached, but has become far more severe. It has
attained, undoubtedly, a degree of the most afflicting strin-
gency; and the partial and temporary mitigations which
have arisen—and, thank God I they have arisen—during
the last few weeks, do not, I am afraid, warrant us in enter-
taining any sanguine hopes for the immediate future. And
yet it is with, I may almost presume to say, the wealthiest
portions of the country, and with perhaps the very wealthiest
portion of its labouring population, in that condition of
prostration and stagnation that the balance-sheet which I
am about to present to the Committee has been arrived at.
The other special cause of depression is one which has been
little mentioned in the house, but it is one which I think
the committee will agree with me I should'not be justified_
in altogether overlooking,—it is the state of Ireland, _enl
and,e
very much doubt whether the British public has I
awakened to the depression which during the last
rn f.evi
That
has befallen that portion of the United King"_
vo 10
That
depression is no doubt partly balanced by the fm our
condition of the linen manufacture, and is
like
ot concentrated
and driven to an extremity at a local point, the distress
in Lancashire. It is diffused over the surf ace of the country,
its extent is as broad as the agricultural area, and it is ex-
clusively connected with the failure of the crops. But it will
be a matter of peculiar interest to the committee to receive
the
with information which her Majesty's Government have
regardre-
ceived to the extent of the failure in Ireland of
late years. (Hear.) Her Majesty's Government have caused
statsnients to be carefully drawn up, as far as they are able,
to exhibit the facts of
_the case, and I need hardly remind
English and Scotch members that with respect to Ireland
they have the peculiar aid of a very highly organised and
elaborate system of agricultural statistics carried on by
public authority. (Hear, hear.) I shall avoid all details;
it is enough for me to present a single statement,only
endeavouring to convey to the committee a
clear view
of the basis on which it is founded. The statement refers
to the crops of the last three years, 1960, 1861, and 1862, and
the standard of comparison is with the crops of the preced-

ing four years, from 1856 to 1859. Up to 1859 we have the'
consolation of believing that the state of Ireland was one of
steady and even of remarkable progress. In 1859 that pro-
gress was materially checked, but still the four years I take
as representing what I may call the normal or average con-
dition of Irish agricultural wealth are from 1856 to 1860.
The mode of estimating has been this : the three principal
crops are taken—the oats, wheat, and potato crops—and '
then an attempt is made to estimate the value of the residue
of the principal agricultural products of the ground by es-
cortaining the number of the head of stock, valuing them
at the prices which are known to have ruled during the
period, and assuming that one-third of the total value of the
stock of the country represented the annual return of stock.
That may be perfectly correct or slightly incorrect, but at
any rate it seems quite sufficient for the purpose of compari-
son. Now the amount of these four items—the oats, wheat,
potato crop, and one-third of the annual value of the live
stock—in this country was, from 1856 to 1860, on an ave-
rage, £39,437,oooperannum. In 1860-61 it fell t0i34,893,000,
a decrease of £4,550,000. In 1861-62 it fell to £29,077,000, a
decrease of £10,360,000. In 1862.63, low as was the previous
point, it descended yet lower, and fell to £27,327,000 from
an average of £39,437,000, showing a decrease of some-
what above £12,000,000, nearly one-third of the total
value of the estimated agricultural products on the prin-
cipal items or constituents of agricultural wealth, and
not very far short of the full amount of the
established annual valuation of the country, which is
£13,400,000. Now, that was a very remarkable state
of circumstances in Ireland, and I may mention, as a fact,
in all cases the first effect of pressure on the labouring
classes is to tell on the consumption of strong liquors. It
was no wonder that under these circumstances the consump-
tion of spirits, which in Ireland was in 1861-62 2,463,000
gallons, fell in 1862 63 to 2,292,000 gallons, a decrease of
171,000 gallons. Now, the operation of these two special
cases, the one in Lancashire and the other in Ireland, must
certainly be to deprive the revenue of the country of a very
large amount which under other circumstances it would
have received. It is not for me to estimate that amount ;
but it is quite essential that we should bear circumstances of
so unusual a character in mind when we form our judgment
on the actual revenue and expenditure of the country dur-
ing the year just expired. The expenditure during
the year that expired on the 31st of March last was es-
timated at, and the amount for which provision was made
by Parliament was, £70,040,000 ; it was afterwards raised
to £70,108,000. The actual expenditure was £69,302,000
—less than the estimated expenditure by £806,000. There
is very little to call for observation here. lam happy to
say there were no supplementary estimates. There was an
excess on the army estimates of about £200,000, but that is
very likely to disappear on the final settlement of accounts.
The miscellaneous estimates, again, show an augmentation
of something like the same amount—about !00,000—I be-
lieve entirely due to the change of system that took effect
on the 31st of March last, when, for the first time in our
financial history, all the services were required to surrender
the balances found to their credit; and I presume it is na-
tural, both with individuals and departments, when there is
a certain date on which they must surrender a balance, to
take care that that balance shall not be larger than they
can help. (A laugh.) The amount of expenditure in former
years is matter of considerable interest, and in stating the
figures I shall compare the expenditure with former years,
not as standing on the account of the 31st of March, but as
it stood in the final account, when all charges were brought
home. The expenditure of 1852-63 was £69,302,000, and that
of the immediately preceding years £70,830,000, showing a
decrease of £1,500,000, and, as compared with that of 1860-
61, which was £72,504,000, of £3,200,000. As compared
with 1859-60, which was £70,017,000, there was still a de-
crease of £1,700,000. But, in point of fact, the decrease was
still greater, because in .1862-63 there was brought to ac-
count as expenditure and revenue a sum of about £1,125,000
which had not appeared at all in the account of formes
years, and after rectifying the account by the addition of
this sum the real diminution in the expenditure of last year
was, as compared with 1860-61, £2,061,000 ; as compared
with 1861-62, £4,327,000 ; and as compared with 1859.60,
£1,840,000. The expenditure of the financial year just ex-
pired is £69,302,000. The revenue as known to the com-
mittee, having been already published in the journals, is
£70,603,000, showing a surplus of £1,301,000. (Hear, hear.)
Then with regard to what is always matter of considerable
interest—namely, the comparison of the actual outturn of
the revenue, as compared with the estimate formed of it be.
fore. I estimated on the 3d of April, 1862, the probable
outturn of the revenue at £70,190,000 ; hut, as part of the
general restrve I made with regard to the cotton district, I
likewise stated that a sum would have to be deducted from
that account, intercepted on its way to the Exchequer, in
respect to the drawback on hops, if the home adopted the
proposition I made for the remission of duty, both as to
stocks on hand and for export. I took the two at £140,000,
so that the estimated revenue of the country as corrected
was £70,050,000, and the actual revenue was £70,603,000,
showing an excess of £553,000—not a very large excess, it
we consider it absolutely, hut a very large excess if we con-
sider it with reference to the actual circumstances of depres-
sion to which I have adverted. Now with regard to the
particular branches of the revenue. The Customs exhibit an
increase of £484,000. That was variously affected by an
An„;‘,„ aseash bed anon abroad of a nrobable change in the
duties on tea and sugar, and likewise by a bill which I in-
troduced for altering the duties on tobacco. The revenue
was injured to a certain extent by the expectation of some
possible change in the duties on tea and sugar; on the
other hand, the effect of the Tobacco Duties -Bill was partly
to injure and partly to benefit the revenue. On the whole
the tendency was to keep the Customs' revenue below what
it might have been, but not, I think, to any material extent.
The income tax produced an excess of £467,000 over the
estimate. That excess was due to a new assessment of the
property of the country, which has never failed, whenever
it has been made, to disclose a very considerble increase in
the amount to be paid upon. (Laughter.) No, I mean an
increase not due to the discovery of malpractices, for I am
not aware that they vary much with time, but an increase
occasioned by the natural growth of the wealth of the coun-
try. The amount of credit taken for payments from China
which I estimated at £170,000, was really £212,000. I might
have taken it at a somewhat greater amount, because we are
morally certain we have received money since the last
amount taken into account which has not reached us, the
last account only coming down to the 13th of last Novem
ber. Still it is safer to adopt that date, only taking credit
for the actual receipt of so much into the Exchequer. Then
comes the head of the Excise. The Excise shows a large
deficiency in comparison with the estimate, and likewise
some deficiency, not considerable, in comparison with the
previous year. The deficiency, as compared with my first
estimate, is not less than £1,185,000; from that we have
to deduct the hop drawback, which was about £150,000 or
£160,000:; but still there was a deficiency of somewhat
over £1,000,000 in the Excise, as compared with the esti-
mate. That deficiency is practically divided between the
two articles of malt and spirits. The malt duty, which
was estimated at £5,800,000, produced only £5,322,000 in
the financial year, leaving a deficit of £408,000. This de-
ficit was in part owing to the difference of the seasons, the
former having been a very favourable season; but it was,
also in part owing to othe- causes. One of them was that
the season of 1861-62 was a particularly early season. As
it was a particularly early season the malt was brought to
malting at a very early period, and an unusual proportion
of the whole receipt therefore entered into the revenue of
the year. Although there is this large deficiency in the
comparative portion of the malt duty which we have re-
ceived for the present year, yet the portion which has yet
f
a e 4132;01
in this
prevailed.
upon
thohneeßy thea
r labouringes
class
ats os
to come will, as is anticipated, show an improvement upon
e
the revenue of the previous year. Spirits, which were esti-
mated to yield £10,000,000, have yielded only £9,394,000,
showing a deficiency of £606,000 as compared with the esti-
mate. These two items do not precisely, but practically,
dispose of the question as respects the deficiency in the
Excise ; and it is upon those two items that I hope the
Committee will fix their attention. There is a remark that
has been made with regard to malt which affects perma-
nently all the estimates of Excise now and hereafter to be
presented. Under the old system the practice was to give
in round numbers six months' credit to the maltster; and,
inasmuch as malting only begins in the month of Septem-
ber, and then for the most part but lightly, the consequence
was that nearly the whole of the duty levied upon the malt
of one year entered into the revenue of the next yett7,
and as the charge is taken at the time when the
.00m
mal.2;
malted the amount was ascertained, and tebe
stated
matter ais a
malt revenue could, under the old spite
eirintrTohduiseelds
matter of fact. Now, on the contrary, da 0
over
rte nYetioyaf
ee
malt revenue is received within they eall;1
enue
accurate estimate
it cannot be made the subject of equally
£:
3 stateoo,oo °of the or
not a matter of very vital cot
at the time of the previous
nfinseasquilcao:tabluerat
arzanr(l3"ev
true ut
r
an uncertainty to the
eptrhee..
surprise atoovoo,ooothai nttovrthihec
li estimate
e apurses spirits.
iifo
roiu°
trssi
truth is that I see
tnoand
irevenue from 1
bteatjeat luxuries,e( ecil (Scan)
cowafrh sehoadictni °as distress
casesaeb be them,
bwhich
greatdispensed f
owrel'xi
gchhiseweighs
pressure
wi t comforts,l2 are those upon
Which
at w
e see economy
some I do not think the wonder is
h
in the receipts of Excise; the
that
takes
falling place.off
true wonder is that we do not see much more of correspond-
ing decrease in other branches of the revenue. (Hear.)
With respect to the spirit duty, that
tohf
eg
dutyreat interest,
hasthat is, of course, a matter
beenrai havinged, regardrand th eto c
confident
dheingthpoint assertionto
which
blieseend,repaalirstelyd It is undoubtedly
has been made that the
dulye expected from ftrhoemwhitolheasof pct
the
revenue anticipated from the spirit duty has not been rea-
lised, think, owing to distress in the country.
That, however, may be in some degree a matter of opinion,
but as a matter of fact it is not true, nor is it anything near
the truth, that no part of that anticipated revenue has been
realised, for the greater part has been realised. The tots!
amount expected was £1,400,000—£400,000 upon foreign
and colonial spirits, and £1,000,000 upon British spirit.
The £400,000 upon foreign and colonial spirits has been re-
ceived, and the figures which I am now giving to the com-
mittee with respect to British spirits will show that although
undoubtedly not nearly the whole has been received, yet
some part has been received. lam speaking of a year not
ending in Dec. or in April, but ending at the date nearer
to the time when the new duty was imposed. The new duty
was imposed in July, 1860. I therefore take the 12 month

ending on June 30 which immediately preceded the impo-
sition of the duty, and I compare with the receipt of those
12 months the receipt for the corresponding 12 months in
the three years ending on June 30 which have fallen since
then ; and these figures will show pretty exactly—l might
have been still more exact, and produced a statement more
favourable to my own argument—but these figures show
with sufficient exactness what is the real state of the
case. In the last year of the Bs. duty—the year ending June
30, 1859—the receipt en British spirits was £9,410,000.
Under the new duty in 1860 it was £9,750,000, in 1861
was £9,702,000, in 1862 it was £9,988,000, and in 1863 it

was £9,837,000. If Re take the two years together which
preceded the new duty they would show about £9,600,000.;
and some, if not the greater part of the anticipated revenue
has been received.
Sir S. NORTHCOTE—Up to what period is the last
year's statement

The CHANCELLOR of the EXCHEQUER—Up to
June 30. It is, of course, an estimate
up on the last quarter
of the year; but the estimate is based upon
goud grounde,
and may be taken, I think, as the produce of the revenue in
that period. Tha material point, after all, comes to this—
at least such has been our view—since the change in the law
is the failure to receive the full amount of revenue which
was anticipated from the additional duly due to illicit dis-
tillation? (Hear, hear.) That is the only question, I think,
which ought to exercise an influence upon the judgment of
the house. lam not aware that we have ever adopted the
principle with regard to spirits which we have adopted with
regard to commodities in general that are consumed by the
public—namely, the principle that it is desirable to raise the
money we want off as large an area of consumption as pos-
sible. I think the principle of Parliamentary legislation with
respect to spirits has rather been that we should raise the
money which we want off as small an area of consumption
as possible, only taking care that we do not stimulate illicit
distillation. That is the essential limit to be imposed upon
legislation. Now, upon that question I am, of course, very
much dependent upon those whom I consult; but this I can
say, that whenever allegations of illicit distillaeon have been
made to me by those interested in the trade, or by others.
we have invited the communication of facts and details,
which we have usually and almost uniformly been unable
to obtain, and that the firm conviction of those who super-
intend the collection of the revenue in the three king-
doms taken together, founded upon the information
they derive from their large staff of very intelligent officers
and likewise from that most respectable body, I must say,
the distillers themselves, though not with uniform testi-
mony so far as they are concerned—l say the conviction of
the revenue departments is, and I fully share and am pre-
pared to defend that conviction, that there never was a
period when illicit distillation has been so small as during
the last three years. (Hear.) It is a matter of very consi-
derable interest to draw a contrast between the effect of dis-
tress—and I think it was pointed out that distress had an
important influence—upon the Excise and upon the Cus-
toms revenue; and we find the revenue from malt and the
revenue from spirits, as far as they are dependent upon
consumption, show that effect before the revenue from tea,
sugar, and tobacco. I think it is impossible fully to com-
prehend these figures and this state of facts—this compara-
ratively unchecked amount of Customs' revenue and this

very serious check to the revenue from Excise —without
taking into view a circumstance which seems to me esta-
blished by full evidence, and which is undoubtedly of a gra-
tifying character—namely, that there is slowly, gradually.,
but steadily proceeding a change of taste in the country,
and a transition from the use of the strong and the more
inflammatory beverages to milder and more wholesome
drinks. sir, comparing the general revenue oftheyear which
has last passed with the revenue of thelyear that immediately
preceded it, I will endeavour to present the figures to the
committee in what I believe to be a perfectly accurate form.
I need not observe that it is impossible, in the dry state-
ment of figures which appears on the last day of the finan-
cial year, to convey this explanation. It is not possible to
give this explanation to the public except on the authority
of the Executive Government. Hence arises a good deal of
misunderstanding, the main source of which is in the item
called Miscellaneous. It is commonly supposed that this
item consists of various branches of revenue which it is not
worth while to enumerate with specific names, and which,
therefore, are combined under this one head; but in
point of fact, the proper term is "Miscellaneous Receipts,"
and, though the distinction may appear fanciful between
receipts and revenue, there is a distinction, and it is this :
A very small portion of this item consists of revenue at all
—this year, only £200,000 or £300,000, With respect to the
great bulk of the amount which appears under this head, it
partly consists of the repayment of money which has been
voted by the house, and a very large portion of it is made
up of repayments made by the conversion into money of
what are called " old stores." Therefore, the safer way to
compare the revenue of two years is to begin by deducting
from both accounts what appears under the head "Miscel-
laneous." If the committee will follow me, bearing that in
mind, I will endeavour to give them the revenue of last year
as compared with the revenue of the year preceding, This
is a matter of iu p ,rtance, for it enables us to measure the
elasticity of the resource+ of the country. The gross revenue
for the year 1861-2 was V 9,674,009 ; but if we deduct the
miscellaneous revenue and the China indemnity, the real
ine gross

----7 -""."

revenue for the year 1862-3 was £70,603,000; but deduct-

ing the miscellaneous receipts, the China indemnity, and a
sum paid to the credit of the revenue from Stamps, which
did not appear in the previous year, the real revenue was
£67,790,000. As the figures which appeared in the news-
papers were too favourable to the year 1862-3, so the figures
which I have now stated, if left without correction, would
be too unfavourable to it, because, to obtain a fair compari-
son, we must deduct so much of the revenue of 1861-2 as
corresponds with the amount of taxation remitted in 1862 3.
The sources of loss by remission are three. In the year
1861-2 there was one quarter's income tax at 10d., which
afforded an additional sum of £350,000. That was lost to
the revenue in 1832-3. Then, by the remission of the duty
on paper there was a sum of £351,000 lost to the revenue
without deducting drawbacks. Again, there was a sum
of £241,000 for hops, and there was one of £152,000 for
drawback allowances; making in the whole £942,000,
which must be deducted from the revenue of 1861-2 in
order to make a fair comparison. When that is done
the relative amounts for the two years will stand :
For the year 1861.2, £66,985; for the year 1862-3, £67,790,
showing an increase of £805,000 in the revenue of the year
1862-3, not a very large and striking increase, but one
which, under all the circumstances, I think eminently satis-
factory. (Hear.) Certainty it is an increase which I could
not for a moment have ventured to anticipate 12 months
ago if I had been aware of the severe distress which was to
continue and be aggravated in Lancashire and Ireland.
(Hoar, hear.) I need not trouble the committee with de-
tails of what the growth of the revenue has been in each of
several years from 1858.9, but I may observe that the
amount which I have just stated as the increase in the year
1862-3—namely, £805,000, has been al:out the average an-
estiwateaosrsa
enable
whichr
eanttahe
whatrit epneao thecot
it may be t, *heir
an-
nual increase for the last four years. (Hear, hear.) There is
one branch of the revenue on which I will say a word to
the committee. It is material to see what has been the con-
sequence to the revenue of the great changes which hats
taken place since '5B-59. In 1858-9 the Customs' revenue
amounted to £24,118,000, or, deducting the charges for col-
lection, £1,063,000, to £23,055,000, In 1860 extensive
changes were made in the Customs' revenue, which involved
abolitions and remissions amounting to £2,450,000. In 1862-3
itnhge
chargesCustoms'
£991,000, re venue t amountedo4 23 toll,taoheb4et3lree,
hst
o.£to
estimates,
againstaa, Ottee3 s 4 to,ow xhho,2i
30,
or ,55d
,eood u 0 tn-
-1858-9 ; the year before £2,450,000 of duties had been
exre-
mitted. (Cheers,) 'We now come to the account of t
penditare and revenue for the current financial year.
CH
s
debt, according
F For the he yteoa r
the the chargepreee
present
t for funded
charges,ad nsoe4fde :::::ei:onsotte,aoifour
aw: unfunded
do
ott eehi
'tierdavYto•l'tlh'' house,
426, 330, 000 ; the Consolid alot
se dno:ddoFy0:0;
itshpenee
e
etltehh7til e:obh a:23ernchyn settled.t. Miscellaneouso
Pa ; Therer
ef Estimates,tw hEi
which
sii
hnn
I.heave:lllllsaa Therea
r already
are
not
cidiuhtyavteondoot,
ff,
company—(some ironical cries of
mainly
connected with some
ch tahnedG•alway
HI, hear) —a r e niano
pt
et.hys;
Government to make
with
and the arrangements
tsy:ovec°efapur proposal, ppaoltasucarele,tdho ea
sr
r et
ot
with those
service are still under consideration,respect to the West India mail
observe, therefore, thatl The c-mmittee will
figures which relate to thoseeannot present to them the precise
matters. There is a bill be-
fore Parliament which I hope may become law, and which
proposes for the benefit of tlr
further transfer of stocks with the
vietwo eenfabeleenuesttto. make a
yete.e r finallyalli certain
items
deEi Committer:s connectedsept
oi readeo
per-
petualc
into terminable annuities. If that billvpasisnigt will
add £140,000 to the annual charges, though for this year
the amount will be only about £lO,OOO. Taking these three
items—the packet service, which we may put down at be-
tween £900,000 and one million, the other miscellaneous
charges whichlare not at present before the house, and the
charge connected with the funded debt—we may estimate
them at £1,270,000, which, added to the £7,692,000, will

bring the miscellaneous up to £8,962,000, and give no a
total of £67,749,000 as the estimate for the year 1863-4. As
the statement forms in some measure an answer to the re-

solution of thevhoute, TOUght toput this estimate of ex-
penditure in comparison with that of former years. It is
less than the actual expenditure for 0362,3 by .C 1,50,000,
and higher than that of 18689 by £3,086,000, although the
charge for the debt was then greater by £2,197,000. Hear,
hear.) The estimate of revenue stands as follows :
Customs revenue estimate is £24,180,000. For the purpose
of affording a clear understanding of this account to the
committee, I assume a renewal at the present rates of
all taxes
which expire this year. In estimating.) the:
tCoutshteempsaayt,
£24,180,000, there is taken into account the alteration in the
tobacco duties. It is not easy to estimate its effect on the
e The actual Excise receipts for it
estimate. The estimate for Excise is A 17,600,000. After
revenue, but I take it at
0£0:100:8a,t0tala0d,
what I have already
55oI:aid
u,
ti
the
hmeyay
were
ea
rtuera:
ulytb.ee asked whythan
j
produced should
lnlast
y e
yea
rt h.
the last
meat,
rt7anterior to their arrival in the E
deduction's, such as from £150,000 to xxche
of hop drawbacks. The 160,000 on acc'l t
onding
datlclionthecUrrent.nig portionof
year 1* better the mal
ticioirrie,ocefluvdaerdioiottri

portion was for the last year; and this, together with eeer
rain minor augmentations due to the gradual growth of the
licence duties and other duties of Excise, places the esti-
ina-e for Excise at £17,600,000. The stamps I take at
.0,000,000, taxes at £3,160.000,the income- tax at L 10,500,000,
the Post-office at £3,800,000, the Crown lands at £300,000,
the miscellaneous at £2,500,000, and the China indemnity
at £450,000. There again it will be asked why so much
larger credit is taken for this item than in previous years.
The answer to this is two-fold. First of all in the year
which has jug, elapsed we made a large payment to tho
merchants of nearly £200,000—£192,000, I believe—on
account of their claims, and there is no corresponding item
of deduction from the receipts of the present year which
will come net to the public service. Again, though I have
only taken credit in the account of last year up to the 30th
of September, I believe in the preeent year we shall be
able tc take credit up to the 3/et of December,—in fact,
£4i0,000 from this source is an estimate which I feel per-
fectly justified in making. All these items together
bring up the estimated revenue for the year 1863-4 to
£71,490,000. The estimated expenditure for the year
is £67,749,000; consequently there is an excess of income
over expenditure of £3,741,000. (Cheers) The committee
will, perhaps, think that when the Government. has no im-
pediment in its way to prevent it from proceeding to the
agreeable duty of the remission of taxation, it is idle for
them to trouble themselves with the consideration of any
questions tending to the augmentation of revenue. At the
same time in the complicatee and extensive financiel system
of this country anomalies great or small are always being
brought to light, sometimes from the representations of in-
t, rented persons, sometimes because they are found to have
been anomalies when originally embodied in the law, and
sometimes because, thouuh not originally such, they have
become anomalous, and even mischievous, in consequence of
the alteration of circumstances. It is the duty of the Go-
vernment steadily and continuously, in a great degree with-
out reference to popular pressure, though always paying a
due regard to popular opiaon to remove those anomalies
upon fitting occasions by judicious proposals to Parliament.
(Hear.) The first proposal of the present year which has a
bearing upon financial matters, though mainly relating to
trade, is that which has to do with the tobacco duties, and
which has already become law. We have already taken
credit for that alteration of the law in the Estimate of
the Customs revenue which I have laid before the com-
mittee- The next claimant to our attention is familiar
to the committee—l mean the duty on chicory. (A laugh.)
The state of the case is very simple. There appears to be
a very general agreement among persons of au: hority
b )th in the revenue departments and in he commercial
world that, as chicory and coffee are used strictly for the
same purposes in a combination together which is indis-
tinguishable to the ordinary consumer, they ought to pay
the same tax. (Hear, hear.) Then comes the divergence,
because one portion of the world says " raise the duties on
chicory," and the other says " lower the duties on coffee." (A
laugh) if that be the alternative, my own inclination is very
decidedly f o raise the duty on chicory,not only because it tends
to greater gain, but for these two very plain reasons. At the
present moment coffee is lightly taxed in proportion to its
value, when we compare it with tea or any other article with
which it can be compared (hear, hear), and consequently if
we lower the duty we hazard a very considerable rever ue—
some £loo,ooo—without having any hopes of so acting upon
prices or improving the circumstances of consumption as to
give any sensible relief to the people, or of producing any
corresponding or even fractional improvement to the revenue•
I propose, therefore, to equalise the duties on coffee and chi-
cory. I propose that the duty on foreign chicory, with a cer-
tain amount for waste, shall be 265. 6d , as compared with
275. on coffee, and in regard to chicory grown at home that
the tax with a small allowance, shall be 245. 4d. I may
take this opportunity of stating that, while with regard tc)
the other resolutions which I amabout to introduce to the
committee, we shall propose to take them on this day week,
with regard to the resolution on the chicory duties I shall
ask the house to take it at once, without prejudice to the ul-
timate judgment of the house on so grave a question, in
order to prevent the release of the article at the present
duty to-morrow morning. There are several other ques-
tions of no great magnitude which I shall endeavour to
pass over, if I can, in a single sentence. It is an evident
anomaly in the law, as it is now worded, that strong liquors
sold at clubs are sold without any licence. (Loud laughter.)
These clubs are for such purposes in direct competition
with coffeehouses and hotels, which pay license duties. We
propose that they shall pay the same rates of license duties
as the occupiers of hotels and coffeehouses—(oh, oh, and
hear, hear)—but, of course, effectual provision will be made
to prevent any annoying accompaniment—any interference
at the discretion of a magistrate which may be unnecessary
—any liability to the visitations of the police. It is merely
a question of the equality of taxation, and my whole object
is to establish that equality. The next proposal is one of a
similar character. At present this case is not unfrequent.
A. person applies to a justice of the peace for a license to sell
strong liquors. He obtains a licence to sell spirits, and he
then takes out a licence to sell beer, for which he only pays
£1 He afterwards drops the licence to sell spirits, and con •
tinues the licence to sell beer; but every other person want-
ing to sell beer, and not arriving at it through the medium of
a spirit licence pays £3 6s. I, therefore, propose that a man
who arrives at a beer licence through the medium of a spirit
licence shall pay the same duty as he who takes it out at
once, without any such process. (A laugh.) I am sorry
to detain the committee with these details; but all persons
interested in the financial proposals of the year expect as a
matter of course that at this season of the year a full state-
ment shall be made of those proposals, and it would not be
fair to those parties if I were not to deal with all that
affects them in detail. (Hear.) A year or two ago we re-
moved a great anomaly, by which no person except a publi-
can was permitted to sell less than a dozen bottles of wine ;
and there is a similar anomaly still existing, which forbids
every one except a publican from selling less than two dozen
of beer. I propose to remove that anomaly, and to give
an additional licence for selling a less quantity of beer—of
course taking care that there shall be no possibility of sell-
ing on the premises. There is another question, of competi-
tion, which also demands our consideration. The proprietors
of omnibuses have been before the Chancellor of the Ex-
chequer, seeking for a reduction of duty. Their case really
divides itself into two parts. One of their complaints is the
amount they have now to pay, and they have another com-
plaint of the undue competition they have to sustain. With
respect to the amount of duty they have to pay, it is only a
quarter of what they had to pay 25 or 30 years ago ; and
about eight years ago this house took the matter into its
own hands, and did grant considerable relief to stage coach
proprietors. I confess it appears to me that the only case
they have to make at present is that of undue competition,
owing to the mode in which other persons are dealt with.
The proprietors of stage coaches in the country complain
that carriers who profess to travel under four miles an hour
and carry passengers pay no duty whatever. It is impos-
sible to know whether they travel at four miles an hour or
not ; but their carriages are not of a character to pay at the
same rate as stage coaches; and what I propose is that they
should pay half the duty now paid by stage coaches. The
other part of the complaint of the omnibus owners is with
respect to the competition of the railways and of the un-
equal manner in which railways are taxed. The house is
aware that railways are supposed to pay 5 per cent on their
passenger receipts. But in 1842 a sort of compact was made
between the Government and the railway c mpanies, and it
was ratified by the legislation of this house, under which
the railway companies undertook the obligation to run a
certain number of trains at fares not exceeding one penny
per mile, upon the condition of the exemption of those
trains from taxation. It may be said that it was a
covenant then made between them and the Government,
and that if the exemption be discontinued they are re-
leased from the obligation of running the trains. It is a
question not within my department, and upon which I am
not prepared to give an opinion. But since that time an
anomalous state of things has grown up. Exemptions are
usually bad, and, although a good deal may be said for this
particular exemption, a system has prevailed by which ex-
cursion traffic is entirely exempted from duty, while the re-
gular traffic is liable to pay a duty of 5 per cent. on the re-
ceipts. The Government submit most confidently to the
house that that is an anomalous and injurious state of
things. In the first place, it is wrong to draw a distinction
between one kind of traffic and another, and to give a pre-
mium to railway Companies to cultivate one kind of traffic
in preference to another, In the second place, it is not only
wrong, but absurd, to give that particular premium in the
case of what we term excursion traffic, which, no doubt, is
very useful and valuable in its way, but, at the same time,
e,
seems to be attended with considerable' inconvenience and
considerable danger. (Cheers.) Far be it from we to say
that Parliament should presume to discourage or repress
excursion traffic, but we ought not to stimulate and force
it by direct pecuniary encouragement at the expense of the
general traffic of the country. (Hear.) The effect of this
singularly anomalous arrangement is, that while railways
are supposed to pay 5 per cent. on their receipts, they only
pay between 3 and 4 per cent., and in the case of some rail-
ways, which deal only in a particular kind of traffic, only 2
per cent. ; and so far they give a fair subject for complaint
to competing interests. 'What we propose is this, to destroy
the exemption altogether and to commute the payment of 5
per cent. with exemptions into a payment of 3i per cent.
without exemptions. The result will be nearly the same. It
will be slightly in favour of the Treasury ; but we shall
establish a ssund principle instead of an unsound principle,
and an equal state of things between rival interests. (Hear,
hear.) We propose to assimilate the law in Ireland as to cha-
ritable legacies to the law of England. Charitable legacies
in Ireland at the present moment are insignificant, and do
not pay legacy duties. We shall repeal that exemption. This
connects itself with a more important subject, to which I
wish to invite attention. It is to the removal of an exemp-
tion in the Income-tax Acts, granted to charities and cor-
porations, with respect to such part of their income as they
shall prove to have been expended in charity. The grounds
upon which this proposal rests are as follows, and I ear-
nestly hope and confidently expect it will receive the sanc-
tion of the house& In 18e3it was proposed to lay the suc-
cession duty on corporations. _ o legislation, could be carried
in that year fir the purpose, although think the principle
was approval by the house. 1 think it was felt that there
was no reason in the world why corporate property should
receive a premium at the expense of individuals; because
it Must be Lorne in mind that all these exemptions mean
non-payment by one man at the cost of another. (Hear,
hear.) The consideration of the question of succession dirty

terecorporaticins brountEtTo le mind of the Government
this further nritarkable fact, that in this country we have
i levied during the financial year which has just cl - ed about
15 millions of hard money in direct taxation, bur that every
shilling of that money ie taken out of the poc z, is of indi-
viduals, and that whatever is held strictly in u ortmain, in
the hands of corporate bodies, or professes t) i remote cha-
rity, does not contribute one shilling, as I se el contend, to
those £15,000,000. (Hear, hear.) I venture to say that
this is an unjust state of things. It is not fair that the tax-
payers of this country, the fathers of families, men labouring
to support their wives and children, should pay taxes aug-
mented in order to encourage. gentlemen on their death-beds,
when they can no longer enjoy the money themselves, to
deviseenni a
ry p
reingeniouspreference
emethodsoctos
tof
disposingthe ofg e ntheirera wealth, ecaolmthm, which
y
shall cause their names to be written up in enormous capital
letters, and create governors of trusts who shall meet toge-
ther
at sumptuous dinners from year to year in order to
glorify the pious and immortal memory of the man who has
devised this ingenious method of disposing of his proper y.
(Loud cheers.)
i I am not going to say one word in disparage-
ment of these institutions, except up to the point that they
ought not to enjoy that very large amount of positive pe-
. which is a earded to them by the present state of the law.
(hear, hear.) I refer now to what is the principal part of
I the whole matter, that when the exemption was first grantee 4
the state of the case was very different. At that time the
, State undertook no direct expenditure for education—one of
the main objects of endowed charities. The State under-
took no direct expenditure for the poor—another main pur-
pose of these endowed charities. Far less did the State
undertake any expenditure on account of charities them-
selves. How stands the case now ? The votes which are
submitted to this house for the present year for those pur-
poses include—for education, £1,111,000; for the Poor-Law
i oard, £227,000; for Universities, £35,000; and for these
charities themselves a little item of £IB,OOO a-year. So that
the public are now called upon, not only to have the pro-
perty of these charities maintained and improved at the cost
of these gene: al taxes, without contributing a farthing, but
are called upon to provide the expenses of a board, secre-
taries, clerks, and a considerable establishment, in order to
manage charities of this description. There are other
points upon which I do not intend to dwell. One is, that
it being hardly possible to construe the law, it is obliged to
be administered roughly and hand-over-head, as it canbest
be done. The opinions of law officers come to throw great
doubt upon any exemption. If a person leave property for
the benefit of the poor (.1 his parish, one would suppose that
that is charity. But, no ; that is net charity, because it goes in
aid of the poor-rare. An infinity of questions of the most
perplexed kind arise, and the difficulty in the execution of
the law is beyond anything that can be conceived. I have
spoken of the £IB,OOO a year ior the maintenance of the
Charity Commission, It is a very u: eful and beneficial ex-
penditure. But, over and above that, the revenue depart-
ment is at a great expense for the purpose of endeavouring
to administer this law. The complexity and minuteness of
the claims are indescribable. A single institution has pro-
perty in 40 or 50, and sometimes in 100 different parishes,
and on each of those properties are charged piffle beqaesits
and little payments, into the investigation of which it is
impossible to enter with the view of ascertaining whether
they are for the purposes of charity or not. Therefore, upon
the sound general ground that all property ought to contri-
bute to those taxes, which, if they are justly paid, are not a
penalty on property, but are the means of ke-ping property
available for the enjoyment of the owner, upon the ground
of the altered practice of the State, and upon the ground of
the difficulty and confusion of administering the law as it at
present stands, we propose that that exemption shall cease
to exist. At the same time there are certain provisions
which it is necessary to keep alive. Part of the exemption
refers to buildings belonging to hospitals, colleges, and cha-
rities of various descriptions. We do net propose to take
away t hat part of the exemption, and simply on the practical
ground that having in view the simplification of the law we
should not assist our object, as it would be extremely diffi-
cult to arrive at a principle upon which the buildings and
their sites could be valued. We propose also to continue
the exemption for the repairs of places of Divine worship.
With regard to what are termed voluntary subscriptions,
they stand on a totally different footing. No person will
be assessed in respect of them. The property of endowed
charities will be taxed by being taxed at its source, but all
incomes from voluntary subscriptions comes from persons
who have paid the tax already, and it will remain as now
unaffected by
.this change in the law. Another reserva-
tion justice requires us to make, and it is thus. Where
there is an individual whose income is under £IOO, and who
receives a portion of that income from charity, he shall in
no case be liable to any abatement. If we were to refuse to
return him the tax, which otherwise we should be obliged
to do, we should place him in a worse position in derogation
of rights acquired anterior to the passing of the enactment
which we now propose, and therefore a provision is made to
secure him the same amount of income. (Hear.) This is a
matter of detail, but I am anxious to state completely what
the change will be. (Hear.) I might detain the committee
longer in dealing with this subject, inasmuch as it is one on
which there is a good deal of perplexity involved. I, how-
ever, now omit many points connected with it, to which I
may take an opportunity of adverting on some future occa-
sion. We do not, I may add, precisely knew +h. ~,nro.
' financial importance of this question ; but this we do know,
that we retain taxes on £2,500,000 of property. We like-
wise know that a very large amount of property in the coun-
try is discharged from assessment altogether, and that has
been dune as a mode of meeting the hopeless difficulties of
the case. But it is very probable—indeed, it is almost cer-
tain—that much of this property has passed from charities
into the hands of private individuals, who now pay no tax
upon it. In fact, we have completely lost sight of a consider-
able portion of it. But the tax, as estimated, is over £IOO,OOO
a year, and the removal of the exemption would bring it
down to £75,000, which is all that will come into the cof-
fers of the State in the present year. The minor changes I
mentioned bring in about £58,000 a year; these, together
with others which were suggested for the amendment
of our fiscal system, amount to £133,000 a year, which
added to a surplus of £3,741,300, makes it £3,874,000
(Hear, hear.) Then comes the question of the manner in
which we are to dispose of that surplus. (Cheers.) The
first subject which I have to mention is one to which I can-
not allude without a pang to my self-love. I refer to the
penny charge on goods brought inward, which is sometimes
called a petty and sometimes asmall charge, and which was
proposed in 1860, It was originally proposed in the belief on
the part of the Government that it would be levied without
entailing any delay in the course of trade, or opposing to the
progress of trade any practical obstacle or hindrance. That
expectation has, I am bound to say, broken down. The
proposal was maintained for the purpose of getting the
money which was required at the moment. But, although I
think the state of the trade of the country amply shows
that the imposition of the charge amounts to no capital
grievance, yet a good deal of inconvenience does attend the
levying of the tax. It is liable to all the objections which
attach to chats de balances, or, as we call them, nominal
duties, and we have now, I am happy to say, arrived at a
condition of the revenue which enables us to dispense with
this particular duty. I therefore propose that after the Ist
of next July, this penny charge inwards should cease and
determine. Alongside this there runs another charge, one
of Is. 6d. en bills of lading outwards. The operation of
the two is, however, very different. There is no delay or
i obstruction connected with the levy of the Is. 6d. duty.
It was imposed mainly with the view to statistical ob-
jects. A committee of this house, presided over by my
hon. friend the member for Honiton, having examined into
the matter, reported that in their opinion there were no
important statistical advantages to be derived from its im-
position,
and the necessary statistical information could be
obtained without it. Now, having assented to the reference
of the question to that committee, the revenue derived from
the duty not being very important, and certain merchants
in this country, who are themselves most interested in
securing good statistics, and whose authority is entitled to
considerable weight, having stated it to be their opinion
that the tax was unnecessary for that purpose, we thought
it better to deal with it in the same manner as the penny '
inward. duty. We therefore propose that this ls. 6d. duty
sh,lldisappear from the same date. The total revenue re-
ceived from these charges amounts to £191,000, and as that
revenue will cease on the Ist of July we shall have the
charge for nine months, or £142,000, to deduct from the
surplus which I have stated. There have been times, in
ancient nations, at all events, when it was considered not
only warrantable but highly laudable for parents to bring
their own children to the scaffold or the axe. I now find '
myself in that predicament. (A laugh.) I offer up these
children of mine with the greatest cheerfulness and good
humour, as far as I am concerned, on the altar of the cone.
enerce of my country.
(Laughter.). The next subject
which I have to submit to the name of the committee is one
to which I feel very anxious to draw its favourable atten-
tion. It is of greater magnitude than the matters which I
have jest same time e
of
ff such
e
disposeustutdemasenttoioned; buot
fit
ais
surplus at our command. It relates to what may be called
the minor incomes now liable to the income tax, and I
verynot at
l at rhgee
must remind the committee of the course with respect to
it which has been taken by the legislature. When Mr.
Pitt first introduced the income tax, £6O was the limit
of the incomes to which the tax began to attach. But it
began to attach in a form so very mitigated as to be
of very little financial value, and I should be sorry to
be the man to return to such a provision in the
construction or rather reconstruction of the tax. Mr.
Pitt fixed the limit upwards at £2OO, and it was only
on incomes at and above that amount that the full force of
the tax fell. A very complicated series of arithmetical
tables of deductions was submitted by him to Parliament
which provided that the deductions should grow larger and
larger as the incomes became less and less down to the point
fixed. I have cited the authority of Mr. Pitt simply to
show that in his view, and in the view of the Parliament of
that day, £2OO censtitated the limit at which the full opera-
tion of the tax ought to begin to attach. It is undoubtedly
true that since the time of Mr. Pitt the wealth of the country
has enormously increased, and with that enormous increase
in wealth the relative value of a given pecuniary income has
become diminished by many pounds sterling. An income
of £2OO a-year at the present day gives less consequence to
a man, and less social standing than it did in the time of
Mr. Pitt; and an important part of the proposal I am about
to make is, that we should fix £2OO a year as the limit below
- which some deduction or i4v(,ur in autos tot rn should attach

to incom es liable to the income tat. (Hear, hear.) At a`l- . _ • •
later period, under the pressure of war, the limit was car-
ried down to £l5O. When Si. R. Pee! revived the tax in
1842, he revived it at that amount, but he did so entertain..
ing the hope of its early extinction. (Hear, hear.) When in
1853 the tax was renewed for seven years, and again with
a hope of its extinction which proved to be fallacious—
(hear)--the limit of the tax was taken downwards, and
fixed at £IOO instead of £l5O. The ground upon which that
was done, and I think justly done by Parliament was this—
It was shown that no class of the community had benefited
more by the genera! extension of trade and the increase of
profits resulting from the imposition of the income tax, and
the diminution of protective and other indirect duties, than
that class whose incomes ranged between £IOO and £l5O a
year. It was, I may ray, due in justice to those who had
incomes somewhat above £l5O per annum that those whose
incomes were immediately under that sum should not be
allowed to escape untaxed. I think we are about right in
saying that the application of the duty might commence
with incomes of £IOO. I do at the same time most confi-
dently state, having now held my present office for a
considerable term of years, and I know I shall be sup-
ported in the view which I take by all the authorities con-
cerned in the working of the tax when I say it—that
the real sore place in the working of the tax is to be found
in the weight with which it presses on incomes ranging be-
tween £IOO and £2OO per annum. I am myself, I may say.
the confidential recipient of the sorrows and grievances of
the taxpayers of the country. There is scarcely a morning
which does not bring me complaints of the pressure of the
income tax, and I believe I am stating the case moderately
when I inform the committee that 19 out of 20 of those com-
plaints come from persons having incomes between £IOO and
£2OO a year. One thing which makes the tax especially gall-
ing to that class is this, that there is no portion of the in-
comes of the country—and this is my fixed opinion—on
which the tax is more ;accurately and fully levied than it is
upon the lower class of incomes. The concerns of those
who possess only these smaller incomes are more transpa-
rent than those of their richer fellow-countrymen; every
neighbour can see through them ; they live in glass houses,
and deception, if they were disposed to deceive, is for them
almost entirely impossible. They pay the tax fully and
rigidly, while they say a good many above them do not in
that respect follow their example. (Hear.) '[hen comes
another difficulty in the case. There is a very large portion
of the labouring classes—and until the distress in Lanca-
shire there was a much larger portion—in whose case the
aggregate income of a single family amounts to more than
£IOO per annum, but in whose case we could not touch the
family with the tax because the income of the father at the
head of it did not amount to £IOO. It was felt quite impos-
sible to institute an inquisitorial investigation into the little
earnings of the rest of the family. That, too, is a reason for
dealing gently with incomes between £IOO and £l5O per
annum. What we find to be the two pinching points in the
operation of the tax are where it falls upon incomes of £IOO
a year and a little o eer, and £l5O a year and a little over that
amount also. The proposal of the Government is this,—
and it will in my opinion go far to meet what we think to
be, I do say the strict and rigid justice of the case,
because mathematical justice is hardly applicable to this
subject, and in principle there is no injustice in calling upon
any man who is able to pay income• tax to dc so, but that
kind of equitable justice which it is the desire of Parlia-
ment to administer with a due regard to public prudence
and policy, and that degree of pressure which is practically
brought to bear on flesh on blood in matters of taxation.
We say,retain incomes of 1100 a year as the point at which a
man will become taxable; fix upon incomes of £2OO as the
point at which he may be brought under the full sweeep of
the tax; remove the distinction at £l5O altogether, abolish
the double rate, have only one rate, but allow every taxable
person whose income ranges between £IOO and £2OO a year
to make a deduction of £6O from his taxable income. The
effect of that will be to get rid almost entirely of those sore
points in the operation of the tax to which I have alluded.
In order to illustrate the change which is proposed, I will
state what would be the effect of it on various incomes,
taking the tax at its present rates of 9d. and 6d. ~ On
an income of £IOO the tax is now £2 10s, under the new sys-
tem it would £1 10s. On an income of £125 it would be £2
Bs. 9d, instead of £3 2s. 6d, as at present ; on an income of
£l5O, £3 7s. 6d, instead £5 12s. 6d; and on an income of
£175, £4 6s. 3d, instead of £6 lls. 3d. (Hear, hear.) Those
who entertain very strong objections to the income-tax may,
perhaps, think it would be better to retain all its inequali-
ties. I have, however, always felt, and I continue to feel,
the force of these objections ; but at the same time I think
it is our duty to remove, wherever it is practicable, those
inequalities which produce great public discontent. I speak
the opinion of all who are practically conversant with the
working of this branch of the revenue when I say that the
adoption of this proposal will be a great, I may almost say
an immeasurable boon to those classes whom it concerns.
(Hear, hear.) Now, sir, we have got the pickaxe into the
fabric of the surplus, and having disloged one or two bricks,
we shall find it very easy to bring the whole of it to the
ground. The subject which I have now to bring under the
consideration of the committee is that which I had better call
the tea or sugar rather than the tea and sugar duties.
It is very clear, in the first place, that the ques-
tion of what we loosely but intelligently call the war
duties on tea and sugar occunies a front place among
those questions which have at the present time to be dealt
with by Parliament. (Hear, hear.) In the second place, it
is, I believe, the view of Parliament, as it is also of Govern-
ment, that in a case where we are happily able to offer a
reduction of taxation, regard should be had both to the de-
scriptions of direct and indirect taxation. Now, it is quite
impossible for us to make an effectual change with respect
to the tea and sugar duties. The cost would be too great of
reducing the tea duty to Is., and the sugar duties to the
point at which they stood before the Russian war. It ap-
pears to us perfectly clear that, whatever we do, we ought
not to divide the remission into two or more parts, but
rather to choose one of two subjects. (Hear, hear.) It will
be much better, as it seems to us, to make such an altera-
tion as will give a sensible stimulus to trade, consumption,
and revenue, than to dole out and divide into minute pro-
po'tions the relief which it is in our power to bestow.
(Hear.) Therefore it comes to be a question between tea
and sugar, and it is, I suppose, the first time in the history
of mankind that these two articles have been placed in hos
tile competition with each other. (A. laugh.) Nature
seems to have ordained an intimate alliance between them,
which has been satisfactory to the experience of us all, and
I am very sorry it falls to my lot to propose a severance
even in appearance. It is obvious, however, that if you
confer a boon on the one it immediately overflows on the
other, because the old combination in their use makes it per-
fectly certain that if you reduce the duty on sugar you will
produce an increased consumption of tea, and if you reduce
the duty on tea you will have a larger demand for sugar.
(Hear.) There is no difficulty in either case in regard to
the stocks, because we have an abundance of both. Sugar
is for the moment the cheaper of the two, but its cheapness
depends on the continuance of a great calamity to mankind—
the war in America. 1 he arguments in favour of a reduction
of the duty on sugar appear to me to be these—first, that
the duty nine years ago was actually lower than it is now,
while the tea duty never has been in point of fact lower
then at present ; and second, that the trade in sugar is larger
and more important than that in tea. The arguments for
tea will readily suggest themselves to the minds of hon.
members. There are some secondary considerations, but
these cannot decide the case. Our pecuniary relations with
China, our military establishments there, oar interest in
developing the commerce of that country, are, no doubt, im-
portant national considerations, but can hardly be allowed
to turn the scale in a question like this. There is, however,
a negative argument for tea which is of some importance,
and which is derived from the state of certain proceedings
with regard to sugar. The subject of sugar is one of great
complexity in its practical application, more especially in
regard to the drawbacks allowed on refined sugar when ex-
ported from the country where it has undergone manufac-
ture. On the proposition of the French Government, most
of the countries which possess an important sugar refining
trade have agreed to send representatives to Paris to con-
sider the detailed regulations now in force on the subject.
Hitherto each country has been accustomed to allege
against the others that what are called drawbacks are really
bounties. It is of great importance to the European trade
in this cardinal article that a common understanding should
be arrived at. Nothing will be done in the course of the in-
quiries in Paris to bind the judgment of the Executive Go-
vernment, much less of the House of Commons ; but if
legislation on sugar were postponed we should approach the
consideration of the details with advantage when we have
before us the results of this comprehensive and minute in-
quiry. (Hear, hear.) Perhaps the most important argu•
ment for tea as bearing immediately on the case is that the
present duty on tea is much higher than the corresponding
duty on sugar. (Hear, hear.) I will take not the prices
of tea or sugar at this moment, but the ordinary averages.
s considerationgreatest question
importance jn. s
The duty on tea is more than 100 per cent., while the duty
onto
rsbeuleigaeforftihstthsonly equal to about a half of the value of the
article. In a
appeared t i(cae
teiena
(Hear,
the, the
hearovernmen. G
re daoi
rsv. t)erri
nb
Bumtyei onnat
reduction of duty we can much more considerably lower
the price of tea than of sugar. The price of a hundred
weight of sugar, duty paid is, on an average, about 355.
If we take off 3s. to reduce the duty to a minimum, it
brings the price to 325., which is a reduction of about
8 per cent. On the other hand, the price of a pound
of tea is 35., and if we take oft 5d,, that reduces it to
2s. 7d,, or about 14 per cent. It will, therefore, be obvious
to the committee that we have reason to anticipate a more
considerable and buoyant effect from the reduction of the
intentiondu duty on
the
Governmento n sugar.
(li
to eapr,rohpeoasre.) to the
nce'
it is the
committee
to reduce the duty on tea to Is, per lb. (Cheers.) We also
propose that the reduction shall take effect immediately
after the resolution has been adopted by the house. In
point of form there is no necessity for a resolution, but one
will be submitted, because that is the simplest mode of ob-
taining the judgment of the house. We intend to take the
re•olution on Thursday week, and to report it on Friday.
We are of opinion that the tea duties should be granted
onlystthae aye
year
i hunen
g fnehAr sugaruatg
questionu sa
ht
e,
ya
ul
poßfab6
rep:
ei. I l
reduced
nr lni mustt
noexannual,
nott
unpresumeduty
it t
yii t n
hopes no:
that it will be considered togerum ether
ewith the duty on
it is most convenient to renew the tea duty only until the
period I have named. The committee will understand that

if the proposal to reduce the duty on tea to Is. is adopted, it
will be a final measure as far as we can presume to look for-
ward into the future. The financial result of the change will
betas follows :—ln 1862-3 we consumed 77,500,00011 a. of tea,
which paid £5,497,00e; in 1863-4 if we went on without any
change in the law we should estimate for a consumption of
79,636,0001 b., which would yield £5,640,000. The loss of
sd. per lb. on that amount would be £1,659,000. We think,
however, we may venture to reckon upon an increased con-
sumption in the first year of 6,000,0001 b , producing
£300,000, and in that case the loss would be only £1,359,000.
We, therefore, reckoa on a net loss on the Budget Estimate
of £1,300,000. This is not a case in which ocular demon-
stration is at all necessary, hut my hon. friend the mem-
ber for Lancaster, mistrusting, I suppose, the intelligence
of the committee, has been good enough, at the close of his
long campaign as a leader of the movement for the reduc-
tion of the tea duty, to for ward to me two small parcels, one
labelled "a pennyworth of tea at 15.," and the other "a
pennyworth of tea at Is. 5d." (A laugh.) The matter is
one of considerable importance, because it sometimes
happens, when duties of this kind are reduced, that a por-
tion of the profits goes into the pockets of the dealer; but
my hon. friend, a man of the highest character and honour,
possessing the confidence of the whole mercantile world,
especiaby of the East India and China trade, has pledged
himself to me personally that in every case the man who
buys a pennyworth of tea under the new duty shall have
the same increase over what he would have bought under
the old duty, as is represented by the large packet which I
hold in my right hand, compared with the small packet
which I hold in my left hand. (Hear, and laughter) It will
be recollected that the estimate of receipts from the income
tax for 1863-4, taking the tax at 95. in the pound, was that
the tax would produce in the course of the financial year
£10,500,000. A reduction of the tax to 7d. would cause a
diminution in the year's receipts of £2,350,000, or £1,175,000
for each penny of the 9d. That would be the loss upon the
tax for the whole year, but the whole of the loss would not
be felt in the present year. A careful estimate made by the
Board of Inland Revenue shows that the loss in the present
year would be £1,600,000, and that a further sum of £70,000
would stand over till 1864.5. Then there is also the plan
which I recently submitted to the committee for the relief
of minor incomes. For an entire year the loss from that
source would be £400,000; for the actual financial year we
take it at £300,000. It therefore follows that you may re-
duce the income tax 2d. in the pound for the whole com-
munity, and you may likewise adopt a further plan of relief
for minor incomes, at a cost to the revenue in the present
year of £1,900,000, with a further prospective charge of
£850,000, Here, in passing, I cannot refrain from calling
the attention of the committee to a subject of considerable
interest, and reiterating an opinion which I ventured to ex-
press in a former session, but which was received with
some not unnatural scepticism—the opinioa, namely, that
the change by which we take up three-quarters of the
income tax in the year in lieu of only one-half as be-
fore, is a change of the greatest and most beneficial im-
portance. When we took only one-half in the year the
effect was this—we legislated under the pressure of great
necessity and only got half of what we wanted, while, on
the other hand, when we repealed the tax or remitted a
portion of it one-half of the whole remission went, not into
the year for which we were making provision, but into the
year beyond, as to the peculiar necessities of which we were
entirely ignorant. We have unw by, means of the change
just mentioned got the income tax much more in hand, but
I suppose it is necessary that we should always be one full
quarter in arrear. It is necessary, I mean, in England.
Our Scotch friends ate in a more happy position, because
they collect the whole of the tax within the year. We
cannot do so in England, but we have devised means for
levying three quarters, which enables us to make our finan-
cial arrangements with more certainty and success, and
with more immediate reference to the necessities of the
State, than before. (Hear.) As the system of collection
now stands, £1,900,000 out of,a total loss of £2,750,000 will
come upon the present year, but only £1,483,000 out of the
whole effect of the changes we are proposing would have
come upon the present year if the plan had been continued
of levying two instead of three quarters of the tax within
the year. (Hear.) I shall now, with the permission of the
committee, put together the various remissions, so as to
bring them under one view. The relief upon the small
charges— that is, the loss for the year—will be £143,000.
The relief to minor incomes will be £300,000. The re-
lief to the consumers of tea will be £1,666,000, but the loss
to the revenue for the year will be only £1,300,000. The
loss for the year from a reduction of 2d. in the general rate
of the income tax will be £1,600,000. The total loss for
the year will be £3,343,000. But I wish to call particular
attention to the fact that a further loss of £898,000, nearly
the whole of it due to the income tax, but some of it to the
small charges, will fall upon the financial year 1864-5. We
incur a loss for the present year of £3,343,000; but we ask
the house to give its legislative sanction to changes which
between the present year and the next will bring about a
loss of £4,241,000. When I add to that total loss to the
State the further relief which the consumer will derive
from a part of the duty on tea being made up by increase
consumption, it appears that the whole amount
of remission of taxation which you are to-night
asked to take into consideration is £4,601,000. (Hear.)
The I.l7cral 1-..0r.r.h,5. Oa I ,t.kod kn khc nenm
mittee in giving an estimate of income for the present year
must be corrected as follows :—For the Customs, instead of
£54,180,000, it will be necessary to take £22,737,000; for the
income-tax, instead of £10,500,000, it will be necessary to
take £8,625,000 ; and there is an addition to other branches
of inland revenue amounting to £58,000. The surplus before
the deductions, but including the various minor changes by
which we propose to raise additional sums of money, was
£3,874,000, and hence, the loss by remission being £3,343,000,
there is a remaining surplus of £531,000. With that surplus
we do not propose to part—(hear)—and we trust, for many
reasons, the Committee will give us its support in resisting
any efforts, however well meant, to diminish it. (Hear.)
Looking to the state of the country, the scale of our expen-
diture, and the condilion of the world, her Majesty's Go-
vernment feel it would be inconsistent with their duty to
propose to the Committee the retention of a less surplus
than this, and they confidently and earnestly appeal to the
Committee for the support which I have asked against any
attempt to wrench it out of their hands. With respect to
our plan as a whole, it is not, at any rate, one which pi e-
tends to originality. The public had anticipated in themain
the proposals we were about to make. That has not been
owing to premature disclosures, but to the state of the facts.
The state of the facts, the bearing of the public interests,
and what had taken place in former years, distinctly indi-
cated within certain limits what should be the course of
Government, if it sought to do justice to the country, or to
obtain the favour of the House of Commons. With regard
to the tea duty, for example, in addition to other reasons
which weighed with us, one was the position which had been
given to the question in a previous discussion in this house.
In 1860 it was the claim of the tea duty which her Majesty's
Government thought themselves b elnd to weigh carefully
against the claim of the duty on paper, and it was the claim
of the tea duty which in 1861 hon. gentlemen sitting op-
posite
deemed it their duty, as the strongest claim which
could be made, to offer in opposition a) the claim of
the duty on paper. If there is to be a claim of owner-
ship in tee principal parts of this proposal, it belongs,
perhaps, to those who first published them to the world,
and I am not aware to whom it could be given with
greater credit—for the Government are not disposed to
contest the point of honour—than to my right hon. friend
the member for Cambridge, who last year proposed a
motion which certainly came to an untimely or even a vio-
lent death at the moment, but which has reappeared, 1
trust, under happier circumstances, and which has formed
the basis of a plan of the Government, Sir, it is no motive
of dissuasion to us vita respect to any financial proposals
that they should have already found favour in other quar-
ters. If we felt bound in regard to any former plan to fight
resolutely for our own proposals, and against those of others,
it has been from a sense of public duty. But if the time
arrives when we are enabled, compatibly with and in obee
dience to our public duty, to submit to the house plans which
have beenalready declared to be the favourite plans of others,
we, so far from being deterred on that account from making
those proposals, are the better pleased to think that it is in
our power, as we hope it may be, to unite the general senti-
ment of the house, and to secure its approbation, without
distinction of section or party, to measures for the relief of
the country. (Hear.) This is the state of the case with re-
spect to these plans. But before sitting down I will refer,
if the house will permit me, to what 1 said in a former part
of my speech, and also venture to submit a few facts which
appear to me to be full of interest. Sir, in commencing my
statement I had to make, and I frankly made, the admission
that the state of tension to which our finances had been
placed for the last four years had been raised to a somewhat
higher degree in consequence of the remission of duties
which we proposed in 1860. Now, as we are passing out, I
trust, of that exceptional period, I wish to state exactly to
to the house two things—first of all, what has been the
general state of our account during the last four years, con-
sidered as one account ; and, secondly, I wish respectfully
to present to the house the facts which I think—without in
the slightest degree desiring to impugn the opinions or con-
duct of others—demonstrate that we were justified, notwith-
standing the amount of the expenditure and the calls upon
the public purse, in asking the house on a former occasion
not to desist from the prosecution of the great work of
commercial reform. First, as regards the account of the
country for the last four years, I will
place it in a form
which I trust will be intelligible to every one, and will be
comprised in but a few words. I take the revenue and ex-
penditure on this principle—first of all, I charge against the
account everything in the nature of special resource, and I
also credit it with special repayments made towards the re-
duction of the public debt. Taking the income and expen-
diture of the last four years together, there is a balance of
deficit amounting to £1,061,000. The expense of fortifica-
tions in the same period has been £2,070,000. The malt
credits and other s ums taken up which did not belong to
those years were £2,472,000. But the sums paid away
during those years to meet charges belonging to former
years, particularly the drawbacks on duties abolished, which
were repayments of revenue received in former years, and
the charges for former wars, have been £1,292,000. So that
the balance of special receipts during those tour years is
£1,180,000. The repayments of advances during the four
years, in excess over the advances made, have been
£2,375,000; and the net decrease of the balance has been
£526,000. Ani b 0 the total slim which we have used up

II exclude altogether Ireland, because Ireland was not taxed -
in 1812, and would, therefore, disturb the computation. I
~lso exclude Inm:tied below Al5O for the same reason. The
income tax, at 7d. in the pound in 1842, attaching to Great
Britain only, and only to incomes above Xl6O I was assessed
upon an amount of income reaching £156,000,000. Upon
the very same area, with the same limitations, in 1861 the
amount of assessed income was £221,000;000, and I am not
aware that there has been any change in the machinery of
the tax, or any improv went in the powers of levying the
tax, as compared with the powers of escaping it, that will in
any way account for the difference. The difference amounts
to no less than £65.000,000 of annual income, or two-
sevenths of the whole annual taxable income of the country
in the area described. That is a most remarkable result, but
there is a feature of that result which, when carefully ex-
amined, is yet more remarkable, and that is the accelerated
rate of increase in the last 3 ear. I again invite the attention
of the committee for two minutes. I compare the two periods
before 1853 and since 1853, when the basis was altered. In ten
years from 1842 to 1852 inclusive, the t .xable income of the
count' y, as nearly as we can; make out, increased by 6 per
cent ; but in 8 years, from 1853 to 1861, the income of the
country again increased from the basis taken by 20 per cent.
That is a fact so strange es to be almost incredible. [Sir S.
Northcote.—lt is Australia.] Australia I Oh, no; the
right hon. gentleman is lost in the depths of heresy on that
point. If I may presume to suggest a cause, I would sug-
gest two—first of all the enormous, constant, rapid develop-
ment of mechanical power, saving human labour, and the
extension of machinery; but that has been in operation for
the last 100 years, extending on all hands the economy of
labour ; the real and new cause that has been in opc etion
has been the legislation of Parliament setting free the in-
dustry and intelligence of the British people. (Hear.) That
is the state of the case as regards the wealth of this country.
I must say for one, I should look almost with apprehension
and with pain upon this intoxicating augmentation of wealth
and power if it were my belief that it was confined to the
classes who are in easy circumstances. This takes no cog-
nizance at all of the condition of the labouring population.
The augmentation I have described, and which is founded,
I think, upon accurate returns, is an augmentation entirely
confined to the classes possessed of property, Now, the
augmentation of capital is of indirect benefit to the labourer,
because it cheapens the commodity which in the business of
production comes into direct competition with labour.
(Hear.) But we have this profound, and, I must say, in-
estimab'e consolation, that while the rich have been growing
richer the poor have been growing less poor. Whether the
extremes of poverty are less extreme than they were I do not
presume to say, but the average condition of the British la-
bourer, we have the happiness to know, has improved during
the last 20 years in a degree which we know to be extraordi
nary, and which we may almost pronounce to be unexampled
in the history of any country and of any age. (Cheers.) That
is a result upon which we are entitled to look with the greatest
satisfaction and with the greatest happiness, because, after
all, let us recollect that when we speak of the expenditure
of Governments we speak of that which is taken out of
the earnings of the people, and there is hardly any country
and hardly any period in which these earnings have ex-
tended to give to the labouring community a sufficiency,
much less a general abundance, even of the prime necessa-
ries of food, of clothing, and of fuel. And if we have been
enabled by proceedings of ours, taking within these walls, to
raise the standard of comfort, and to diminish the fearful
gap which existed half a century ago between the absolute
necessities of the labouring man and his means of supplying
them, we have accomplished a work for which the name of
the Parliaments of this time will be blessed through all ages.
(Cheers.) Many years ago, Sir Robert Peel referred with
the greatest authority to the devouring character of the naval
and military establishments maintained by the Governments
throughout Europe. I am afraid that since the time in which
he spoke the evil has grown much more intense than it was,
for in no quarter have those establishments diminished, but
in almost every quarter they have increased, and financial

during the four years, in order to meet the public expendie
ture, has been £7,212,000. And having referred to the state
of the balances, I may here saY that it is my intention to
submit to the house resolutions for paying off the halllion of
Exchequer Bonds which will fall due in May ; and that not
in the least degree upon the supposition that there is any
special obligation connected with that particular descrip
tion of debt, but simply because I think it will be a con •
venient operation. It is also my intention, lam bound to
say, viewing the state of the country, and especially of
Lancashire, to ask the house for power to re-borrow that
money in case of need during the year, but without any
serious expectation at present of being called upon to exer-
cise it. Well, £7,212,000 is the sum that was used up in
the course of those four years for extraordinary expendi-
ture. On the other side we have redeemed out of the
balances an amount of debt equal to £1,883,000, and out
of expenditure in the form of terminable annuities the
amount redeemed, or rather paid towards redemption, has
been £5,501,000. The total amount of money, therefore,
taken out of the income of those four years for the redemp-
tion of debt has been £7,384,000, against the sum which the
same four years have had applied to their own uses, though
not derived from the taxation of the country—namely,
e 7,212,000 ; or, in point of fact, the two sides of the account
are as nearly as possible balanced. During those four years,
it is fair to bear in mind, we had to defray extraordinary
charges from the resources of the year, arising from two
principal causes. We had ;,o meet a 000,000 of direct war
expenditure, chiefly for China—an account which, as far as
I am aware, has never before in our financial history been
borne out of the resources of the year. 'We likewise had to
meet heavy expenses for the reconstruction or transforma-
tion of our naval and military departments; and, according
to the best computation we can frame, we have had on that
account to spend £8,0J0,000 more, making a total sum of
£16,000,000 during the four years paid away for those pur-
poses. But, sir, the house will, I think, expect that I should
make a statement to them—after the varied experience of
that period—upon the condition of one or two branches of
our trade. And certainly a portion at least of the facts to
which I hava to call their attention appears to ene to de-
serve all the attention that can be given to them. The re •
peal of the paper duty is a measure of which it is very diffi-
cult to trace the effects witn prevaion. In point of fact, it is
only by a very slow process that the consequence of repeal-
ing an Excise duty is usually developed. In the case of
glass, soap, and other articles, it has been so, and I have no
reason to suppose it will be otherwise in regard to paper.
But it is remarkable that although the diminution of the
export trade in cotton had necessarily led to a great decrease
in the consumption of paper connected with that trade, which
is extremely large, yet we have the evidence of a very large
increase in the consumption of paper in this country. There
is enough, I think, entirely to justify the faith with which
those who urged the repeal of that duty have looked for-
ward to its probable results. I for one am surprised, I con-
fess, at the amount of foreign paper imported into this
kingdom. Our imports of foreign paper of all descriptions
in 1856 were 15,767 cwt. In 1862 they were 193,639 cwt.
Those imports form very nearly 20 per cent. of what the
manufacture was in the days of the Excise duty. But what
is most satisfactory is, that together with this vast increase
in the imports of foreign paper there certainly has been a
considerable increase in the manufacture of British paper,
We have no power, as the house is well aware, of following
minutely the amount of paper that is made ; but
we are able to do two things. We can first of all follow
carefully the amount of British paper which is exported,
and next we can register and record the amount of the
materials brought into the country for the manufacture of
paper. The amount of British paper of all kinds that was
exported in 1858 was 115,491 cwt. In 1862, the first year
of the repeal of the duty, the amount exported was 149,326
cwt., showing an increase of 34,000 cwt. A word as to the
import of rags—and 1 trust the committee will not grudge
a moment for this point—(hear, hear)—because it is really
tragical, it is shwa funereal, to revert to the dark anticipa-

Lions once entertained as to the total banishment almost of
thlt valuable article from the markets of this country. In
1856 the import of rags for making paper into this country
was 10,287 tons, In 1860 it had risen largely—viz ,to
16,154 tons. lam bound to say that that increase in 1860
was due in a very great degree to the anticipations enter-
tained till the month of June that the duty would be con-
tinued. However, in 1862, the first year of the repeal of the
paper duty, the import of rags rose again to 23,943 tons.

(Hear, hear.) What has taken place during the past year
with respect to the paper trade ? It is no discredit at all to
the British papermakers, but it is a very marked and in-
structive sign of the operation of excise duties in a manu-
facture of this kind, into which science is introduced, that
we should compare the the fate of the British papermaker
in his own country, in the late International Exhibition,
with the fate of his foreign rival. The British papermaker
at that Exhibition was on his own ground; the foreigner
had to come here ; and it is natural to suppose that the
British manufacture was more fully represented than the
foreign. At any rate, what was the state of facts in regard
to the medals and honourable mentions, delivered, I pre-
sume, by a competent and impartial jury ? Eight medals, I
believe, were awarded to British papermakers, 16 to French
papermakers, and 15 to Prussians. That appears to me
to be a significant and important fact with respect to the
nporation of amiss duties and restrictions Ln a manufac-
ture giving scope for the application of science. As re-
spects the article of wine, there has been a small increase
of £30,000, satisfactory as far as regards revenue, and
in quantity of 109,000 gallons. French wine hassomewhat
diminished, which was quite to be expected after the very
large increase that took place in former years. Portuguese
wine has also diminished. The great increase during the
last year has been in Spanish wines, amounting to 290,000
gallons. (Hear, ht. ar.) One word with regard to what will
be viewed with painful interest, our trade with the United
States, because of its importance to the country, and the
effect produced on it by the secondary action of those cala-
mities from which the continent of North America suffers so

frightfully; and also with regard to our trade with France,
because this is the first time when it could be said that it has
been a whole year at work. The export of British goods to
the United States in 1859 was £22,553,000; in 1862 it was
£14,398,000, showing a decrease of £8,154,000. The export
of foreign and colonial goods to the United States had in
the meantime increased. They were in 1859 £1,864,000, in
1862 they were £4,052,000, an increase of £2,188,000, but
nearly the whole of that increase was represented by the
article of cotton wool, taken from this country to the United
States, which was no less than £1,721,000. The case of our
trade with France is very different. In 1859, the last year
before the treaty, the export of British commodities to
France was £4,754,000; in 1860, when the treaty was in
very prrtial operation indeed, the exports were £5,250,000;
in 1861, when the treaty took effect, towards the close of
the year, they rose to £7,145,000, without including the
article of corn, which made a further increase ; but as it was
entirely due to the casualty of a bad harvest in France,
whereas it was a, great supply from foreign markets to this
country, it would disturb the calculation if I took that into
account. The exports rose to £7,145,000, showing an in-

crease of £2,391,000, and in 1862, with the treaty in opera-

tion all the year, again rose to £9,210,000, showing an in-

crease or £4,456,000; in point of tact, doubling their amount
before the treaty. That does not set forth the whole of the
advantage, because in foreign and colonial produce the
augmentation was yet more remarkable; for I need not
remind the committee that the foreign and colonial pro-
duce that we send to France we have ourselves obtained by
exchange for British produce, so that increase in the
export of foreign and colonial produce is effectively an
increase in the export of British manufactures.
The foreign and colonial produce sent to France in 1859 was
£4,800,000, and 1862, £12,614,000. The total amount of

deficits have become almost the rule in every country.
(Hear, hear.) Great efforts have been made in France to
retrieve them ; but, although we know that great energy
and talent have been used with that object, it remains yet to
be seen to what extent those efforts will be successful. Italy,
with her fortunes and her destinies yet hanging in the
balance, is, unhappily accumulating debt from year to year
at the present moment with a rapidity which must make her
best and fastest friends tremble. (Hear, hear.) That is what

we see going on abroad. I observe that M. Fould, in a recent
address to the Senate, speaks in terms of deprecation of
what he calls expenditure of emulation, and he expresses a
hope that such an expenditure is likely to be diminished.
(Hear.) I am sure it is easy for every right-minded man
most fervently to re-echo that prayer. (Rear.) It is impos-
sible to deny the relation which exists between the general
expenditure and between the defensive and military expen-
diture of the different countries of Europe. Of course it
has been the duty of her Majesty's Government, in forming
their estimates of expenditure, to consider first the honour,
the interests, and the security of the country, and along
with that honour, with those interests, and with that secu-
rity, the deliberate judgment given by the House of Com-
mons in the course of the last Session of Parliament. But
subject to those considerations 1 trust I may alko say on my
own part and on that of my colleagues, after reading the
eloquent denunciations of the Finance Minister of France,
that we have additional satisfaction in submitting a plan
which contemplates not an inconsiderable diminution in
the burdens of the people if we may hope that that diminu-
tion will be accepted in other lands, and be construed there
as a friendly acceptance of a friendly challenge—(loud
cheers)—if we may hope that what we propose, and what
Parliament shall accept, will become an innocent but power-
ful provocative to similar proceedings and similar tenden-
cies in other countries. (Cheers.) It will be an additional
satisfaction to us over and above the benefit which, as we
trust, the British people will derive from an alleviation of
their burdens, if we may hope that we are contributing to
strengthen tendencies which may exist elsewhere on behalf

exports to France, which in 1859 was £9,561,000, had in
1862 gone up to £21,824,000. (Hear, hear.) In fact, while
we had a decrease in the total trade to the United States of
£6,618,000, that decrease was a great deal more than made
up by the increase in the trade to France, for the augmenta-
tion was £12,265,000. The effects of the cotton famine on
our general trade of course it is impossible for us to miti-
gate, so far as I know, by legislation; and I took the oppor-
tunity in 1861 of showing the immense stimulus that had

of peace, of order, and of civilisation, and that we are assist-
ing, in however humble a degree, to allay unhappy jealou-
sies and to produce a better and more solid harmony among
the great civilised nations of the world. (The right hon.
gentleman concluded, amid loud cheers, by proposing the
first resolution for the increase of the duty on chicory.)
Mr. WHITE expressed the strongest satisfaction with
the admirable budget announced by the right hon. gentle-
man. It was satisfactory to feel that they had one states-
man, at all events, in power who consistently carried into
effect when in office the proposals which he advocated when
in opposition. He thought the income tax a very good one,
but people would never be made to understand that there
was not inequality in the mode in which it was levied. He
believed that the working classes still paid an undue pro-
portion of the public burdens. In conclusion the hon. gen-
tleman thanked the Chancellor of the Exchequer for the
wise and beneficent policy he had adopted.
Lord R. MONTAGU complained that the whole scope
of the Chancellor of the Exchequer's policy was to lighten
the taxes on the rich, and not to touch those which pressed
upon the poor.

Mr. CRAWFORD on the other hand declared, speaking

ing in behalf of a great mercantile community, that he was

prepared to express perfect concurrence in the financial ar-
rangements of the right hon. gentleman. He approved Of
the distinction which had been drawn between tea and sugar,
the more especially as any increase in the consumption of
tea led to a still larger increase in the consumption of sugar
and also of the abolition of the petty charges in commerce.
Mr. VANCE urged that the tax on spirits was retained
at so high a point, that illicit distillation was the conse-
quence. He hoped that the Chancellor of the Exchequer
would take the subject into consideration.
Mr. SCULLY complained that, instead of diminishing,

even then been produced to the total trade of the country
by the reduction of Customs duties in the former year, and

the right hon. gentleman proposed to increase the taxation
of Ireland, Such a thing had never before occurred in any
country as that which had taken place in Ireland, namely,
to have upwards of two millions of her people cut off since
1847. Ho was frequently asked in Ireland why the Go-
vernment did not encourage some remunerative system of
emigration, so as to remove the unfortunate people of that
country where they could obtain some return for their la-
bour. There were three ways by which assistance could

be given to Ireland, namely, by arterial drainage, by a
judicious system of emigration, and by giving encourage-

now in 1863 I am able to point to results operated by the

ment to public works, especially railways. If these enor•

mous taxes were to be levied on the country, he wished to
arrangements made by France, under the able management
of my hon. friend the member for Rochdale—(cheers)—and have the working classes benefited by them.'
I confidently put it to the committee to justify her Majesty's Mr. POWEL L regretted one omission in the speech of
Government in the opinion they entertain that it was a the Chancellor of the Exchequer, namely, no announce-
matter of vital consequence that we should endeavour to ap- ment of an intention to reduce the duty en fire insurance.
•
ply to the trade and industry of the country that stimulus He wished also to know whether his scheme or taxing cha
which we believed and knew would be given through the rities applied to endowed schools and grammar schools. If
medium of judicious reduction and abolition. It is quite so, he trusted that when the masters' salaries were paid out
true that in 1860 we were obliged to have an additional ld. of the balances they would not be called upon to lay in-
of income tax because of these reductions, but I think it come tax twice over.
was worth having that additional ld. when we consider that Col. BARTELOTT hoped another year would not be
the effect of that legislation has been that in this period of allowed to pass over without the right hon. gentleman
severe trial to the industry of the country, not millions only, dealing with the malt tax with a view to its reduction.
but tens of millions of that industry, have in all probabi- Sir F. CROSSLEY concurred generally with the scheme
lily been put in motion, and kept in motion owing to the which had been proposed, and expressed a hope that dur-
i legislation then adopted. (Hear, hear.) If the house will ing peace an attempt would be made to reduce the national
bear with me one moment longer—(hear)—l will draw debt by paying off interminable annuities.
their attention to a statement that will, I think, at once in- Mr. P. A. TAYLOR gave his hearty thanks to the
terest and surprise them. The income tax has now been in Chancellor of the Exchequer for the alteration of the tea
operation for 19 years. It was imposed partly with a view duties. He regretted, however that he had not adopted
to supply a deficiency, but in a great degree with a view to the same policy with regard to sugar.' With respect to the
developing the trade and industry of the country, and income tax, be thought the country had a right that it
thereby bringing about an increase in the wealth and corn- should be either abolished or made permanent and equit-
fort of all classes of the community. After 19 years, and a able.
succession of different assessments, we are now in a condi- Sir H. WILLOUGHBY had heard with great pleasure
tion to form some judgment as to the additions that have that there was a bona fide surplus of £3,874,000. He did
been made to the means and resources of the country. I not in any way quarrel with the mode in which the right
have made it my study to examine the subject with as much hon. gentleman proposed to dispose of that surplus, as to
precision and rigour as I could. The statement I will which it was much to be regretted that the house had no
submit may be capable of being further sifted in such a further information than that which they had heard from
manner as to modify in a greater or less degree its results, the Chancellor of the Exchequer himself. He cordially
I don't prf tend it is infallible ; lam sure it is remarkable; joined in the wonderment excited by the right hon. gentle-
I believe it is correct,—at least no pains have been spared tot man's statement of the increase in the expenditure during
make it so. In order to be as accurate as possible I don't the last four years; but had the right hon. gentleman gone
compare the entire income-tax of 1862 with that of 1843, but , further back, and instituted a comparison between the ex-
I compare the income-tax minus that portion of it which penditure of 20 years ago and the expenditure of the present
only represents public taxation, because it is quite plain if day, the wonderment would have been infinitely greater.
we have several millions added to the income in England (Hear') It was as clear as the sun at noonday that the ex-
from public establishments that does not represent additions penditure had been carried to an extent utterly unjustifiable
to the real wealth of the country. Therefore, take ache • in the present condition of the country. However, it was too
dole Aas representing property, railways, mines, &c. ; B late as regarded the present year to effect any reduction,
as representing farming profits; D as representing corn- but in another year they must begin earlier, and let the de-
merce and professions ; and so much of E as belongs to mend for reduced expenditure anticipate the den and for
private establishments that is the basis or area of taxation, reduced taxation, In conclusion, the hon. baronet expressed

his strong conviction that when the balance came to be ad-
justed the Imperial Treasury would be found indebted to a
much larger extent to the Indian Treasury than the Indian
Treasury was to the Imperial Treasury; and that, as the
only means of getting rid of the confusion which prevailed
with respect to the accounts between the two Administra-
Vone, they must entirely separate Indian from British
finance.

Mr. P. URQUHART reminded the committee that the
Chancellor of the Exchequer had taken no account of the
ordinary increase which, in years uninfluenced by disturb-
ing causes, arose in the receipts of the customs and excise,
which could not be set down as less than £BOO,OOO. But
taking that into account, it was quite clear that a sutplus
for the present 3 ear might fairly be calculated upon, and
that as the past financial operati ns of the Chancellor of the
Exchequer, although carried out under the most unpropi-
tious circumstances, had fully ju•tified the confidence of his
supporters, so wou'd his arrangements for the future equally
merit their adhesion and the approval of the country. The
reduction of the tea duties he regarded as a great boon to
the labouring classes in Ireland.

Mr. LINDSAY, while expressing his approval of the
budget as a whole, warned the Chancellor of the Exchequer
that be would find the mercantile interests most dissatisfied
with his intention not to Interfere with the present soale of
sugar duties

The resolutions embodying the proposals with respect to
chicory were then put from the chair, and a bill was ordered
to be introduced on the subject.
The chairman then left the chair, and the house resumed.