The Sun.
London, England, 1854-03-07 00:00:00

THE FINANCIAL STATEMENT.

The house having resolved itself into a committee of
ways and means,

The CHANCELLOR of the EXCHEQUER, on pro-
ceeding to lay before the committee the state of the finances
of the country said—With reference, sir, to the gravity of
the circumstances in which the country is at present placed,
it has been the opinion of her Majesty's Government that
they would best discharge their duty to this house by sub-
mitting to the committee at this unusually early period of
the session the financial statement for the year, and an ex•
planation of those measures which they think it requisite
to adopt in order to meet the exigencies of the public ser-
vice.. If, air, in any other respect my position is one far
less agreeable than that which I had the honour to occupy
upon the last occasion, at least lean promiso the committee
that it will not be necessary for me to make the same ex-
travagant demand upon their patience to-night which for-
merly it was my misfortune to do. (Hear, hear.) But
her Majesty's Government have thought that it was wise
to take this early period of submitting these questions to
the committee—first of all, because in that manner we
most fully recognise the title of the House of Commons to
be made aware of the views of the Government with refer-
ence to the mode of meeting an unusually large expendi-
ture ; next, because we believe it well that foreign coun-
tries should see that the earnestness of the nation in the
course upon which it has embarked may be measured by
the promptitude with which it proceeds to supply the
means necessary for carrying out that course ; and lastly,
because it is but fair and just to the people of England,
upon 'whose opinions and convictions the course of her
Majesty's Government must ultimately depend, that they
should be made practically aware that the measures we
have adopted, and are about to adopt, under the gravest
conviction of duty, are measures which must necessarily
entailthe disagreeable consequences of a serious addition to
the public burdens. (Hear.) Now the first part, which is also
the most satisfactory portion of the task which I have to
perform, is that I should submit to the committee, in compa-
rison with the estimates which I made last April, the pre-
sent actual state of the revenue and expenditure of the
country. In speaking, however, of the actual state of the
public income and expenditure, the committee will please
to recollect that we have not yet actually reached the close
of the financial year, and therefore, although the figures
which I shall state to you, including as they do the actual
accounts for about eleven months of the year, may be re-
lied upon as substantially accurate, yet with respect to the
remaining month they are only in the nature of estimates,
and they may not exactly correspond with the accounts,
when they come to be presented before you. On the 18th
of last April I ventured to estimate the income of the
country as follows : —The Customs revenue was taken at
20,080,0001., without, of course, any allowance at that
time for the reduction about to be made. The actual re-
ceipts of the Customs duties, notwithstanding the reduc.
tions which have been made, to which I will presently
more particularly allude, have been 20,600,0001. (Cheers.)
The Excise, which was estimated at 14,640,0104., without
any allowance being made for the repeal of the soap duty
—notwithstanding the repeal of that duty—has realised
the sum of 15,107;0001. (Cheers.) "Stamps" were esti-
mated at 6,700,0001.; and although under that head relief
has been given to the public upon several material points,
still, instead of producing, as was expected, 6,700,0001.,
they have realised 6,960,0001. (Cheers.) The yield under
the head of "'faxes" was estimated at 3,250,000/., it has
produced 3,178,0001. But that difference, small though it
is, does not indicate even that small diminution in tax-
able so bjects.

Mr. DISRAELI—Is that the return for the twelve
months ?

The CHANCELLOR of the EXCHEQUER —llls for the
twelve months, and is made up of eleven months' accounts,
and of one month estimated. That small diminution to
which I have adverted is to be accounted for simply by the
fact that the year which ended April 5, 1853, was the first
year in which the new form of house duty had attained its
full operation, and, in consequence, in respect of that year,
the Exchequer was credited with a considerable amount
of arrears carried over from the former year. For the
present year no such credit is taken, and the apparent de-
ficiency may bo therefore accounted for upon that ground.
The income tax, which was estimated at 5,550,0001., will
realise 5,700,0001. The Post-office revenue, which was
taken at 900,0001., will produce 1,042,0001. (Cheers.)
The income for Crown lands almost exactly corresponds
with the sum estimated. The estimate was 390,0001. ; the
statement I have now to make shows that the receipts un-
der that:hea,d amount to 391,0001. Miscellaneous receipts,
which were taken at 320,0001., have reached 503,0001. ;
and the receipts for old stores, taken at 460,0001. last April,
have amounted to 481,0001. On the 18th of last April I
was asked by the hon. member for Montrose, what saving
to the public revenue would probably arise from the mea-
sures which were then in progress with respect to the re-
duction and conversion of a portion of the debt. I stated
in reply that it was hardly possible to name the sum with
respect to the accounts of the then current year, but that
I thought the saving by the measure might safely, and in
the worst event, be taken at 100,0001. I will not now de-
viate from the general course of my statement, but will
revert to that subject at a later period. (Hear, hear.) I
will now present to you some of the various items of the
estimates as it was made last April, and of the joint ac-
count and estimate for the present year, which I am now
enabled to submit to the committee. The estimated re-
venue last April was 52,990,0001. The accounts which I
now present to you, together with the estimate for the re-
maining month not included in the account, is 54,025,000/.
(cheers); so that there is an improvement upon the
estimate that day of no less than 52,990,0001. (Re-
newed cheers.) Upon the other hand, the expenditure
for which the house provided during the last session
of Parliament has not reached its utmost limit. The
expenditure, as then estimated, reached the amount of
52,183,0001. ; the expenditure for the twelve months,
as I take it now, although it has been materially
swollen by measures connected with pending military
operations, will not, I think, go beyond 51,171,0001. So
that while the income of the year stands at 1,035,0001.
more than that which was estimated, the expenditure
stands at 1,012,0001. less than was anticipated. (Cheers.)
And, so far as we are able to estimate the actual excess of
income over expenditure for the year, which will; however,
only be correctly declared when the account is struck after
the sth of April, I should be disposed to place the overplus
at the present time at 2,854,0001. (Cheers.) But, as the
last year was not an ordinary year, and was one in which
Parliament adopted conclusions of great importance with
respect to a variety of financial measures, I think the com-
mittee will expect of me that I should state to it more par-
ticularly, but at the same time as succinctly as I can, the
results of the most important of these measures. I adverted
just now to the case of the Customs duties. Now, the
total amount of Customs duties which were repealed in
the last session by the House of Commons may be stated in
round numbers at 1,500,0001. Ido not include in that
estimate the reduction of duties which were enacted in the
last session, but which have not yet taken effect, but I
confine myself strictly to those reductions of Customs
duties which took immediate effect, and they, as I have
said, amounted in round numbers to 1,500,0001. The ex-
act amount, after allowing for a sum of 16,0001. of aug-
mentation due to the alteration of the duty on spirits, was
1,408.3001. Now, there have been some circumstances
affecting a portion of the Customs duties so unfavourably,
that I cannot avoid alluding to them, in particular as re-
spec. the case of one branch of the Customs duties,
which is not of first-rate importance, and yet not an in-
considerable revenue is derived from currants. I may say
it is not so much lowered as it has been almost annihi-
lated. That simple article of consumption, as it appears
to us, yielded in 1851-2 a sum of 342,000/. ; in 1852-3 it
yielded 271,000/. ; and in 1853-4 it produced but 113,0001.
The revenue derived from this article is about one-
third what it was three years ago, not owing either to
diminished disposition, or diminished capacity on the
part of the public to consume, but due to the great and
disastrous contraction of the supply in consequence of the
blight which has affected the vine in the East. But al-
though this has been the. case, and although the measure
relating to the tea duty has been brought to an issue under
circumstances far from favourable, still when we look
minutely and exactly at the case of the Customs revenue,
it is found to stand thus :—The reductions of duty, as I
have stated, which took effect in the years 1853.4 were
10483,000/. The receipts from Customs duties ia 1852-3
were 20,396,000/. ; in 1853-4 the receipts from Customs
duties were 20,600,0001„ showing an increase of 201,0001. in
the actual receipts, after a remission of duties to the amount
of 1,483,000/. (Loud cheers.) With respect to the tea
duties I hope the house, notwithstanding the unfavour-
able circumstances which have occurred, and the state of
disturbance which has been prolonged in China—l hope, I
say, the house does not repent of the large and liberal mea-
sure which it adopted last year on the subject. (Hear,
hear.) Last year the house gave assent to an immediate
reduction of the tea duty amounting to 4id. in the pound.
The amount of relief afforded to the consumer by that re-
duction has been not less than 950,0001. I estimated from
the nature of the consumption, and the elasticity which
it was expected the article would show, that the whole
loss to the revenue against the relief of 950,0001. would be
a sum of 366,000/. Now, I think the committee will see
that it is satisfactory that the loss to the revenue is no
greater than that which at the time I es*nated it to be.
I took it at 360,000/. ; the loss which I have now to state
is 375,0001. The committee must boar in mind that an
actual increase has taken Place within the last two years
in the low price teas, which I shallbelb. quite
s o safethait, i
in p
fact,tiu
at not less than from 4d. to Od. per

the whole of what we have given away in duty has been
absorbed by the augmentation in the increased cost of the
article. But do not let us suppose that upon that ac-
count the repeal of the duty has been useless to the
consumer. (Hear, hear.) On the contrary, I ven-
ture to say that there never was a time at which it was
more important that you should have removed the
duty. What we are suffering from is not an abstraction of
the duty removed by the trader who comes between the
producer and consumer, but from a real scarcity of supply
owing-to the state of affairs in China. But the effect of
your remission of duty was thi4,' that it drew to England,
le compared with other countries, a much larger propor-
tion of tea, than we should otherwise have had. And if it
be true, as it undoubtedly is, that the public must now
pay very nearly the same price for their tea as they did
two years ago, still, if you had not remitted the duty, -the
public would not only have had to pay that price and the
whole amount of duty besides, but very considerably more.
(Hear, hear.) There is another article upon which the
duty was reduced, with respect to which I think the com-
mittee would like to know the results which have taken
place. I refer to what is known as the New Penny Re-
ceipt'Stamps, not confined, however, to receipts, but like-
wise including drafts. lam happy to say that the results
have been satisfactory beyond my expectations. (Cheers.)
The state of the law previous to the change of the last
year was indeed very defective, and there are still various
points which it' will be my duty to propose to the house to
amend. .For that purpose I hbpe to submit a bill very
shortly which will have the effect of rendering the law
more clear and more consistent than it is at present, and
which will, at the same time, be beneficial to the Exche-
quer. But, with respeet to the alteration of last year, the
case stands thus—when we reduced the stamps chargeable
upon receipts from a scale fluctuating between 3d. and 10s.
to an uniform duty of one penny, the estimated gross loss
for the full year was stated at 155,0001. The one of
that sum I ventured to assume would be recovered even
during the first year, and I therefore only charged my-
relf with a loss of 74,0001. Bnt the change only took
effect on the 10th of October, and thereforei must halve
that amount. Observing the same proportion, I could
only expect, in order to fulfil my estimate, a net loss of
37,0001. under the head of receipt stamps. The law took
effect, as I have said, on the 10th of October, and very
great difficulty was found, notwithstanding the utmost
exertions of the board of revenue department, in supplying
the demand which sprang up from all quarters, and which
bore no proportion to the previous consumption with re-
spect to numbers; because, under the operation of the law
affecting stamp receipts, disobedience had become the rule
and obedience the exception. (Hear.) But with respect to
the new state of things, I am happy to say that obedience
is the rule and disobedience is the exception. (Cheers.) But
notwithstanding the very great reduction made in the
amount of (duty payable from a tariff rangian from
3d. to 10s. to a uniform rate of one penny, for the 6 months
commencing 10th Oct., 1853, and ending sth April, 1854,
instead of a falling off of 37,0001., there has been an im-
provement of 36,0001. (Loud cheers.) The actual receipts
into the Exchequer for the six months ending 10th Oct.,
1852, and sth April, 1853. were 88,8981.; while the actual
receipts for five and the estimated receipts for one month,
making together the six months ending the sth of April,
1851, are 124,637/., showing an excess of 35,7391. (Cheers.)
Now, the committee will likewise wish to know what, 'as
far as I am in's condition to state, has been the result of
the various measures adopted by the house during the last
session for the extension and augmentation of taxes. First
I will allude to that vexed subject—the Irish Income-6,x.
(A laugh.) The collection of the income incometax I should
say has been delayed by a variety of circumstances, and
this collection must alwags be later on the occasion of an
act which causes new assessments to be made, because new
assessments create new appeals. The extension to Ireland
has likewise been in some degree the cause of delay ; and
the extension of the tax downwards to a new class of per-
sona, having incomes of between 1501. and 100/., necessarily
brought forward a great mass of business altogether novel,
and necessarily caused a considerable number of appeals,
in reference to that class with which formerly we had
nothing to do, and thereby had so much postponed the
collection of the tax that at one period during the past
quarter the Exchequer actually received a sum under that
head of income less by 770,0001. than it had received in
the previous quarter. That, however, has . nothing to do
with the productiveness of the tax, it is simply with re-
ference to the duty of collecting; but it goes to account
in some degree for that lowness of the public balances
which has, during the last few weeks, been the subject of
universal remark. The -state of the case with respect to
the Irish income tax is this :—I estimated that tax would
yield for the year 460,0001. after making every deduction,
and speaking only of the net profit to
.the Exchequer, the
result has been as nearly as possible the very figures I have
named, with at the same time a slight alteration upon the
right side of the estimate. The net proceeds of the income
tax for Ireland will be 480,0001. The half of that could
of course only be received during the present year, and
something less than that amount will have been received
by the sth of April. The tax has fully answered the ex-
pectations with which it was proposed to the house.
(Cheers.) . Then with respect to another kind of extension
of the tax downwards in Great Britain to persons with
incomes of from 1501. to 1001. a year, I am ,not yet in a
condition to state, as the assessments have not been clearly
and fully separated from the others, the precise result of
the measure. But I atadn -a condition to state that the
. tax will yield to the Exchequer at least as much as I yen-
- tined to calculate upon obtaining from it, and at the rate
of at least 250,0001. a year. Another measure, with respect
to which I have to give information to the committee, is
the augmentation of the spirit duty in Scotland. The
result of that measure also has to me been perfectly
satisfactory; for though there is an apparent defalca-
tion from the amount of increase which I ventured
to anticipate, this defalcation may fairly be explained
by causes entirely apart from the augmentation of
the tax, and especially apart from any suspicion on
'-the subject of increased illicit distillation. I estimated,
in April, 1853, that the addition to an annual income
from the is. per gallon which was added to the spirit
duty in Scotland would be equal to a sum of 278,0001. on
the year. As I now estimate the produce of that addi- •
tional tax it will be, not 278,0001., but only 209,0001. in the
year. But it will be within the knowledge of all persons
connected with Scotland, and of many who are not so ac-
quainted with the country, that a very strong religious
sentiment has set in—if I may use the expression—against
the great consumption of spirits. (Cheers.) That state of
public opinion led, during the past year, to the enactment
of a restrictive law on the, subject. A bill, not introduced
by the Government, but at the same time not disapproved
of by them, by its restrictive enactments greatly narrowing
the means of selling spirits, led of necessity to a diminu-
tion in the consumption. This diminution in the con-
sumption has so far affected the revenue from spirits in
Scotland that, instead of 278,0001., the amount received
has been only 209,0001. But I have the utmost satisfac-
tion in stating that there is not so much as a breath of sus-
picion that any part of that diminution is connected with
the revival of illicit distillation, (Cheers.) We then come
to a measure regarded as more critical in, its character, viz.
the, augmentation of the spirit duty in Ireland. The result
of that measure has been altogether satisfactory—(cheers)
—and so far has it been from causing any general revival
of illicit distillation, as far as we are yet enabled to judge
from experience of nearly a twelvemonth, on the contrary,
the Excise revenue has even exceeded somewhat the amount
which I then ventured to anticipate. The amount for
which I took credit, as an addition to the income of the
country in consequence of the augmentation of the Irish
spirit duty, was 198,000/. ; the actual increase under the
head of Irish spirits, so far as I am now enabled to state it,
will be not less than 213,000/. (Cheers.) I should also
state that in taking the sum of 213,0001. as the increased
revenue from Irish spirits, I have made allowance for extra
expenditure connected with establishments which it was
thought prudent, under the circumstances, to incur, bat
which expenditure will I trust in future years be found
practicable to diminish. There remains but one otheramong
these retrospective subjects to which I need refer, and on it
I have little to say—it is the item of the succession duty. So
far as regards the ultimate probable yield of that Measure,
I have no reason to depart from the conjectural estimate
which I made last year when bringing forward the subject.
But the effect of the postponements which it was thought
but fair and equitable to allow in the payment of the, tax
has been such as greatly to reduce the new tax in the
course of the year which has expired. In certain cases also
of the legacy duty we relaxed this relief upon points such
as affinity and leaseholds, and the deductions from the
proceeds of the legacy duty under these heads have almost
overtaken all that we have yet reaped from the succession
duty. Even looking forward to next year—from April,
1854, to April, 1855—1 do not venture to anticipate more
than half a million from that tax. With regard to the
ultimate results, I believe they will be very much as I
then ventured to conjecture them. lam bound to say
that all that has occurred under the operations of the law
has convinced me that those very florid and sanguine
views which some gentlemen, when the tax was brought
forward, ventured to submit, promising three millions,
four millions, five millions, and even more net as the pro-
ceeds, are altogether of a visionary character. (Hear.)
That is the state of the case as regards the twelve months
now nearly expired ; and I think the committee will be
of opinion that the whole of the facts combine to show that
the finances of the country are on a sound and solid
_ba_sis.
(Hear, hear, and cheers.) We have now, sir, whichlook tor-
Ward and to frame the estimates for the year com-
mences on the 6th of next April, t mat e s must
of course be framed with a due regardwiektheealtered
cir-
cumstances of the country, to some contraction
eofetersatdtef,
o
to a great augmentation, I grieve
almost every important article of eto say,
of subsistence. Keeping
those important points in view,e
and
me
moderante4aclleortwainanlcey
any large, but at 'the same time
with reference to them, I venture to submit to the com-
mittee the following estimate of the probable revenue of
the year 1854-5 :—I take the Customs duties—and here
p,s well as under other heads, I allow for those reduc-
tions of taxes which will take effect under laws already in
force—I take the Customs at 20,175,0001.; the Excise at
14,595,0001.; the Stamps at 7,090,000/. ; the Taxes at
3,015,000/. • the Income-tax at 6,275,0001. ; the Post-office
at 1,200,0d0/- ;
the Crown lands and land revenues at
259,000/. ; old stores, 420,000/. ;' miscellaneous, 320,0001.
The total sum anticipated for the year 1851-5 will be
53,349,0001. Now, sir, looking forward to the expendi-
ture of the year, I need not tell the committee I enter
upon a detail loss satisfactory than that which I have thus
far given. The first head; however, is one on which there
is a considerable reduction. The charge for the funded
debt for 1854-5 I take only at 27,000,000/. The actual
charge for the 12 months ending the sth' January, 1854,
was 27,570,0001. There is a difference, therefore,' of
570,0001. in favour of the country. (Hear.) The larger
part of that difference—a sum of 312,0001.—is due to the
operation of the act passed by the house in the year 1844,
upon the recommendation of my right hon. friend the
member for the University of Cambridge (Mr. Goulburn);
and of the residue, namely, 258,0001., almost the whole is
due to the liquidation under the act of last year of certain
minor stocks, known as South Sea Stocks and Annuities,
and some other funds. There is not a net saving to that
amount, but that is the amount of diminution on the
charges of the public debt. (Hear.) The charge upon the
unfunded debt I think it wise, under the circumstances of
the country and the money market, to take at an amount
which I trust will be sufficient. I take that estimate at
546,000/. ; the charges on the Consolidated Fund St
2,460,0001.; the army at 6,857,00014 the navy at 7,483,000/.;
the ordnace at 3,847,0001.;
the commissariat at 645,0001.;
the miscellaneous estimates at 1,775,000/4 the militia, the
; same as last year, at 530,0001. • the packet service—the
only estimate -which shows, I dank, a diminution on the

,
/
. punt Toted last year, and vriiieh,
sir, a dirnintttia
of B,oool.—st 792,00 M . - And then, it is necessary 1
Ishould etate to the committee some amount . of. money
which, without attempting at the present moment to deter-
mine what shall be its technical designation, or under what
form it shall be voted, I may describe as • a provision for
the extraordinary military expenditure connected'' with
the expedition to the East, (Hear, hear.) It is extremely
difficult to,ferm anything which can be called an ise4imate
of that expenditure.. (Hear, hear.) , I am-hound =to remind
the committee, war is a disturber, as of other things more
serions, so likewise of financial computations and the re-
gularity of financial proceedings. We have thought it
right, in deference to the hottse— that it may well under-
stand the nature of the obligations it is contracting—to
make known at the earliest possible moment what we pro-
pose with reference to provision for the wants of the pub-
lic service ; but it is quite impossible' for us to undertake
to say at this moment that the provision we now propose,
sand which we propose after due deliberation and the best
exercise of our judgment, shall be a provision adequate,
and neither too great nor too small, for the exigencies and
wants of the whole year. (Hear, hear.) It is of necessity,
therefore, an indefinite sum for which we ask, with refe-
rence to the expense of this expedition to the East. On
what principle shall we attempt to calculate that lsum ?
On this principle. That it is .our duty not .to remove the
public expenditure of the country, and especially the war
expenditure, from the control
.of the House of Commons.
(Cheers.) If we were to ask you to place in our hands, as
the proceeds of the taxes of the country, a very large sum
of money to be applied to the purposes of the war, amount-
ing to several millions, you might, justly say, " wait until
the necessity has arisen ; Parliament is not about to sepa-
rate in the month of March ; it is in your power to make
a further proposal in the month of June or July, if the cir-
cumstances of the country and the state of Europe should
then seem to warrant such a proposal." (Hear.) We are about
to act on that principle, and to ask only for such an amount,
'which though it may seem large to some gentlemen we feel
convinced is the smallest by which,' under the most favour-
able circumstances, we can hope to see those gallant forces now
leaving our shores Drought back after the completion, of the •
object for which the are sent. (Cheers.) Taking those
forces at 25,000 men, we propose to ask the conirnittse to
vote a sum of money for the purpose of extraordinary mili-
tary service at the rate of 501. per head, or a Sum of
1,250,000/. (Murmurs of surprise.) Thierting, therefore,
that amount in the estimate of expenditure which I have
ventured to give to the committee, the total amount of es-
timated expenditure, including that sum of 1,250,0001.,
,is
56,189,0001. The estimated revdnue, as I have already
stated to the committee, is 53,349,000/. And therefore there
is a deficiency upon the estimate of revenue. • for the year
'1854-5, as compared with the estimate of expenditure,
amounting to no less than 2,840,0001. That estimated ex-
cess, air, of expenditure above income, does' not represent
the whole cost of the war. Had it not been for the measure
in which we are engaged, and -which we deemed necessary
for the honour and welfare of the country, we should not
"only have been sparepresentinito you that deficiency, but
we should have been in a condition to promise you a surplus
(Cheers.) I will just now state concisely to the committee
how the- account would stand, but for the augtnentation of
the estimates rendered necessary by the demands of the
public service. As compared with the estimate of last year,
the excess, or rather the increase—for the word " excess" is
equivocal—the increase upon the army is 832,0004; the
increase upon the navy, 1,253,0001, ;the increase upon the
Ordnance, 793,0001.; the increase upon the commissariat,
88,0001. : the increase upon the miscellaneous 'is 299,000 i.
There is a small diminution upon' the Packet service of
8,0001., and an increase under the head' of military extra-
ordinary expenses of. 1,050,0001. I stated the cost of
the expedition to the East=-or rather, not the cost,,but the
sum we are about to ask of ,the house en account of the
cost—to be 1,250,0001. Last year there was an expenditure
of 200,0001. on account of the Kafir war. Therefore, the
balance under the head of military extraordinary expenses
is an increase of 1,050,000/. With the small deduc-
ion I have mentioned, that shows a total excess in the
estimates of the present year over last year of 4,307,0001.
The estimate of expenditure which I presented to you in
April, 1853 (and I refer to it now in order to enable the
committee to judge what would have been our position in
the absence of disturbing circumstances), was 52,183,0001.
The estimated revenue which I now look for for the year
1854-5 is 53,349,0001. So that if our expenditure, accord-
ing to estimate, had continued the same as it was twelve
months ago,`instead of a deficiency of 2,840,0001., I should
have been able to present to you a surplus of 1,166,000 L, in
addition to the saving on the fended debt to which I have
already referred, and which I may state in round numbers
at 500,000/. ; so that there would have been, in fact, a fund
to apply to fresh and further remissions of taxes of 1,666,0001.
Adding that surplus which' there would have been, in the
absence of disturbing circumstances, to the deficiency I
now present, the total difference on the account against the
Exchequer amounts to no less than 4,506,0001. Wellethen,
sir, that is the total difference against the Exchequer, and
the total sum for-which we have to provide, without taking
the surplus into account at all, is 2,840,000/. Under these
circumstances it will be for the committee to consider in
what manner this deficiency shall be made up. Now, in
the first place, I trust that the committee will 'not Consent
to make up any portion of this deficiency by interfering with
those reductions of taxation which have acquired the force
of law, although they have not yet taken actual effect.
(Cheers.) The amount of those reductions is considerable.
They reach for the year 1854-5 in round numbers a million
and a half. There is also upon the soap duties, on which
there was a small receipt at the commencement of laskyear,
a loss of 140,0001. And while lam touching on the soap
duties, it may be as well to state to the committee, to show
that reduCtion of establishment does notalways unduly lag
behind reduction of taxation—it may be as well to state
to you, in consequence of the change with respect •to the
soap duties, and in consequence of the change in system
with respect to the post-horse duty, which' the house was
pleased to adopt last year, there has been a reduction on
the establishment of .the Inland Revenue Department,
amounting to no less than 30,0001. a year. It was thought
proper to place a portion of the staff to 'watch the effect of
the spirit duty, but the reduction, distinct from that tem-
porary arrangement, reaches the considerable sum of
30,0001. a year. (Cheers.) There is a loss upon soaP, which
I may call the residue of the duty on soap, of 140,000/.
The reduction of 4d. per lb. on the duty on tea, which will
take effect on the sth of April next, will cause a loss to the
revenue of 050,000/. The amount of relief given by the
charges on the assessed taxes, which will likewise take
effect on the sth of April, will be 334,000/., and the mea-
sure devised last year by my noble friend the Postmaster-
General, for the purpose of effecting a most beneficial
change in colonial postage, will cost 40,0001. The whole
amount of relief from taxes now in force, which the public
will enjoy between the sth of April, 1854, and the sth of
April, 1855, in consequence of the measures you adopted
last year, and the votes you came to, reaches 1,474,0001.
'Note also, what you recover if you retrace your steps is
1,002,0001.. But, as I have said already, I will not attempt
to argue that question, for I am well persuaded, whatever
other course you may think proper to adopt, you will, not
retrace the steps you entered on last year, so far as the
present measures and the demands of the present exigency
are concerned. (Hear, hear.) I must now express my hope
that the committee, if it is determined not to withdraw
the boons which last year it promised, and which it cannot
withdraw without serious disturbance to trade, and great
discomfort to a multitude of individuals—l must express
my hope that the committee will support the Government
in standing by those branches of public revenue which
exist and are available. We do not think it consistent
with our public duty, in the face of such a state of Europe,
of such circumstances at home and abroad, of such figures
as I have now laid before you, to propose to you to part
with any branch or any sensible part of any branch of ex-
isting public revenue. (Cheers.) Well, then, sir, if money
must be had, is it to be had by increasing duties on other
articles ? If ybu are determined not to repeal the laws of
last year, and likewise determined not to part with any
income now, would it be right, do you think, at the pre-
sent moment to increase the rates of duty on articles of
consumption in the branches of Customs and Excise, or to
replace those duties, or any of those duties, which during
some years you have abolished? I cannot doubt the
answer of the committee will be in the negative. (Loud
cheers.) The answer of the Government is that we ought
not to take that course. (Cheers.) But, at the same time,
while I give that answer on my own behalf and on the
part of my colleagues, with the clearest conviction of its
justice, it is impossible, I think, to put out of vie* the
contingencies which must necessarily attend upon the pro-
longation of the war on which we have now entered. I
cannot, so far as the views of the Government are con-
cerned, hold out to this committee any reasonable expecta-
tion that if, which God forbid ! the struggle we are now
entering upon should be prolonged for years, it would be
in our power to secure toall those articles recently relieved
from duty, permanent continuance of that immunity. I
fear, sir, all we can say with respect to those objects of
indirect taxation, as compared to direct taxation, is that
which the Cyclops said to Ulysses, when he gave the pre-
mise •of this privilege, that he would devour him the last.
(Cheers and laughter.) This is a matter which the com-
mittee cannot put out of view. I speak strongly, and with
the sincerest conviction ; we cannot and do not advise you
to add one farthing to the indirect taxation of the country.
(Cheers.) There is one other proposition to which I antici-
pate the ready assent of the committee. We have entered
on a great struggle ; but wo have entered upon it under
favourable circumstances. We have proposed to you
to make great efforts, and you have nobly and cheerfully
backed our proposition. (Loud cheers.) You have already
by vote added very nearly 40,000 men to the establish-
ments of the country ; and, taking into view the changes
which have actually taken effect in the return of soldiers
from the colonies, and the reductions which might be
made, in the present state of Ireland, in' the amount of
the constabulary force there, but which are not made in
order to render our military forces disposable to the utmost
possible extent, it is not too much to say the virtual ad-
dition to our forces by sea and land, as compared with the
number 12 months ago, nearly reaches 50,000 men. (Loud
cheers.) This, sir, looks like an intention of carrying on
war with vigour. (Renewed cheers.) The wish and hope
of the Government is, that it may be said with regard to
this war—that it may be truly said of the people of Eng-
land—what was not, perhaps, so truly said by a courtier
and great poet, Dryden, of King Charles ll.
" Re without fear a dangerous war pursues,
Which without rashness he began before "
(Cheers.) That, we trust, will be the motto of the people
of England ; and we have the advantage that the senti-
ments of Europe, and, I trust, the might of Europe, are
with us. (Renewed cheers.) These circumstances, although
I am not senguine—although it would be the wildest pre-
sumption in any man to pretend to say, when the ravages
of war have once begun, at what Point they will be stayed
—yet justify us in cherishing the hope that
possibly this
may not be a prolonged struggle. But, as long as that
possibility remains, the committee will agree with me in
thinking it not wise, in the endeavour to supply the wants
Of the Country, to do 'it by a series of measures which
shall worry different classes and different interests, dif-
ferent trades and different industries, disturbing every-
body's calculations and operations, adding 100,0301. to
income here, 900,000/. there, and 300,0001. somewhere
else. (Hear, hear, hear.) I am sure the committee
'will agree with the Government tint is not the course
which the present exigency roquis les. And whatever we
ctloo ,dIo take it
iitth f
am
minimumi hei forg „ranted
btalinactet weo
tarei.a trade and
aennadeia4iouns.r.
try. (Hear.) But there
Is it right
impossible for me to 'pass by without notice.
d aVour to
is ono great question which et i s
that we should ourselves inalse a resolute en
n wealthi innisitti
mwooeutlatliite
bcoliamrgaenslyosf
comingAtrinlklit 1.30 worthy
war,rt
charge
ylao
rro n
.fw
theo u l would et
upon our posterity. (Bear, ean
is, both in this house
power of England, that we should
Il
azecothnovsinecberc.lseinrs,
that at the present moment there
market country,as
loan would be a course- no
re-
sort to the money
and throughout the strong opinion that, to
it may be that the de-
character. (Loud cheers.) Sir,
required by our necessities, and therefore unworthy of ou
Inow about to make upon the committee--God
grantman it ammay be otherwise—but it may prove, it is but t
' first of a series of demands. 1, therefore, do not speak
simply, I frankly own, with respect to
the the present oees-
(Hear.) It is impossible for Government —it i a
sion.
impossible for the house—it is impossible for the count
to give an absolute pledge or to record any immovable re.

tiolUtion that theleipirieses Of the war shat be borne by ad-
ditions to taxes • but yet it is•poseible for us to do this—
to lay down a set rule upon the matter, and to determine
that so long as those burdens are compatible with the prin-
ciple, and so long as the supply necessary for the service of
the year can be raised within the year, for so long not to
resort to any loan. (Loud cheers.) I wish emphatically
to dwell upon this subject, because we are only upon the
threshold of a war, and because I feel this that if any
smill amount of inconvenience were to induce us to deviate
from the course I have just presumed to state, we should
not be acting worthily of ourselves and of our country.
Sir, the reasons against resorting to the money market—
the reasons against charging these expenses upon posterity,
are too many and too great to allow us to follow that
course. (Hear.) Ido not lay down laws for other coun-
tries. There is no country which has played so deeply at
this dangerous game as England has done—(hear)—there
is no country which has mortgaged the industry of future
generations to so fearful an amount. (Hear, hear.) If I
am told that there are conveniences, and no doubt there
are 500 conveniences, in having Three per Cent. Stock, I
into which men can buy and out of which they can sell,
grant there are such, but I think you have ample scope for
all these conveniences as long as you have 750,000,0001. of
Consols. (Hear, hear.) Sir, as there are economicalrea
sons, so there are moral reasons, both of which, trust,
will induce this country, and induce this house, as long as
it is possible to maintain the policy—the sound and honest
policy—of raising the supplies necessary for the expendi-
ture of the year. (Hear, hear.) It may be very well for
other States to act differently. It is not for us to lay clown
rules for them. Take, for instance, the example of Arne-
ricr—America without debt—America with a standing
surplus—nothing could be more unusual—nothing could
be more intelligible than the way in Which, when she
annexes portions of territory at the cost of a war, she
raises a loan to defray the expenses of that war, because,
according to every rational principle of calculation, she
knows what she has to deal with. She does not enter into
English politics and calculation. She reckons upon her
expenditure exceeding her means for two or three years,
but she knows that it will be overtaken by the standing
surplus of her income above her expenditure ; and, con-
sequently, she avoids, and very wisely avoids, disturbing
her system of taxation with reference to the cost of such
war. *(Hear.) Take, for instance, our great and powerful
neighbour, France. The debt of France, although it is
considerable, is not to be compared for a moment to the
debt of England. Indeed, lam sorry to say, such is our
sad pre-eminence in respect to public debt, that I believe
we far exceed, not only any one country, but all the coun-
tries of the world put together, in the amount of our debt.
(Hear, hear.) Any man who has had to do with the
administration of the finances of the country, must
feel how many there are—how many grievous bur-
dens you are compelled to keep upon the people,
because of the demands of the enormous; almost over-
powering maw of our debt—how many good works you are
obliged to defer—how you are obliged to narrow, and pare,
and cut dow the assistance you are desirous of offering to
civilised and honest pursuits, because of the immense and
crushing weight of this great, prominent, and standing
debt. (Hear, hear.) Sir, we should incur a great and
serious responsibility were we voluntarily to add to the
amount of that debt, and I am convinced that the com-
mittee is not prepared at the present time to make an ad-
dition to that burden, and I trust they will not be prepared
at any time to take a course so fatal to the interests of the
country, (Loud cheers.) Sir, the principle has been sup-
ported by political economists of the greatest reputation.
These are the words of Mr. Mill :—" If capital taken in
loans is abstracted from funds either engaged in production
or destined to he employed in it, their diversion from that
purpose is equivalent to taking the amount from the wages
of the labouring classes." And no doubt, without at all
endeavouring to entangle the house in abstract arguments
of political economy, there is much truth in the allega-
tions of those who say that if you raise war supplies by
new taxes, you make each man take his share for himself
out of his income from his expenditure ; but if, on the
contrary, you go into the marketfor a loan, you act directly
and to the full extent upon that portion of capital which is
immediately available for the promotion of trade. In the
one case, you get a large porti in of what you want out of
a man's comforts ; in the other case, you go directly to that
fountain-head where money is supplied, upon which in a
great degree the activity of trade and the cheapness of pro-
ductions must depend. But, sir, in a less scientific point
of view, I beg the committee to listen to what Mr.
M`Ctillocl says on this important subject in his work on
texation. He discusses the immense waste that attends
upon all borrowed expenditure, and inquires into the best
mode of meeting that calamity. He says :—" There
are no means whatever by which the profusion and
waste occasioned by a war can be counteracted, except by
the industry and economy of individuals ; and to make
these virtues be practised, individuals should be made
fully sensible of the influence of war expenditure over their
own private fortunes. The radical defect of the borrow-
ing system consists in its deceiving the public on this
point, and in its making no sudden encroachments on their
comforts. Its approaches are gradual and almost unper-
ceived. It requires only small immediate sacrifices, but it
never relinquishes what it has once gained, while the ne-
cessity for fresh sacrifices, arising from their own ambi-
tion, injustice, and folly, as well as from those of their
neighbours, continues as great as ever. Such a system is
essentially delusive and treacherous. It occasions the im-
position of tax after tax, hardly one of which is ever again
repealed, so that before the public are awakened from
their trance, and made aware of their actual condition,
their property and industry are probably encumbered with
a much larger permanent interest on account of the inte-
rest of the public debt than would have been required had
they submitted to it at once, to defray the expenses of the
war." Sir, I confess that that reason is perfectly satisfac-
tory, and that, irrespective of other considerations, it is
perfectly true to say of the system of raising funds neces-
sary for wars by loans, that it practises wholesale syste-
matic continued deception upon the people—(hear)—that
they don't really know what they are doing. (Hear.)
What is desirable is that they should know the price they
are called upon to pay for the benefits they expect, or the
sacrifices they think fit to make in order that that which
they do they may do on intelligent and reasonable grounds,
not deluding themselves at the cost of a charge on pos-
terity. (Cheers.) Sir, I do not hesitate to say that it
seems to me, that if the political reasons are strong for the
adoption of that policy, not less strong are the moral rea-
sons. (Hear.) The expenses of a war are the moral check
which it has pleased the Almighty to impose upon the am-
bition and the lust of conquest that are inherent in so many
nations. (Hoar.) There is pomp and circumstance, there is
glory and excitement about war, whi.di, notwithstanding
the miseries it entails, invests it with charms in the eyes of
the community, and tends to blind men to those evils to a
fearful and dangerous degree. The necessity of meeting
from year to year the expenditure which it entails is a sa-
lutary and a wholesome check, making them feel what they
are about, and making them measure the cost of the bene
fit upon which they may calculate. It is by these means
that they may be led and brought to address themselves to
a war policy as rational and intelligent beings, and may be
induced to keep their eye well fixed both upon the neces-
sity of the war into which they enter awl their desire to
realise the first and earliest prospects of an honourable
peace. (Cheers.) Well, sir, having stated under their
various heads what it is the Government cannot recom-
mend the committee to do, and what it is we feel convinced
the committee will not do, there cannot, I think, be much
doubt remaining on the mind of any man as to that—(hear,
and :aug,hter)—as to that which the Government will pro-
pose, nor, I think, as to that to which the committee will
agree. Sir, when in the month of April last, in discussing
the subject of the income tax, I referred to th immense
results which directly and indirectly it had achieved at
that time—to the immense direct addition which it male
to the resources of the exchequer, and' o the indirect and
collateral effect which it seems to have had in invigorating
the whole of our financial system—and when I ventured tob
state to the committee that this was the great engine
which you must look to use in the event of European ne-
cessities, I had not a shade of serious apprehension as to
the earliness of the period at which I was to call upon the
committee to give) effect to those views. But it is true that
you have here a mighty engine—an engine which you may
use to an extent almost equal—l will not say almost equal,
. but to an extent equal to a great part of what any war can
demand, and an engine which is well equal, and more than
equal to the issue to which we now propose to apply it. Sir,
the estimated receipts from the income tax at the present
rate for the next year I have taken at 6,275,0001. In that
anus is included a small amount of arrears, properly
belonging to the present year—perhaps from 100,0001. to
150,0001.—but which will not have been levied before the
sth of April, and which we hope to overtake in the next
year. The proposal which the Government will make has
in view the repairing the deficiency upon the income, as
compared with the expenditure, according to my estimate
amounting to 2,840,0001., and likewise of providing that
moderate margin which, upon the estimates, it is the wis-
dom as well as the pleasure of this house usually to provide.
I propose, air, on the part of her Majesty's Government,
that we should increase the income-tax by one-half, and
should levy the whole addition .for and in respect of the
first moiety of the year—in other words, that we should
double the income-tax for half a year. (Sensation.) Now,
sir, it may be thought that our more obvious course of
proceeding would have been to raise the rate of income-
tax by a smaller amount for the whole year. But I have
stated to the committee that in the circumstances in which
we now stand it is impossible fot us to form a reasonable
estimate of what will be the total cost of the warlike ope-
rations, upon the scale on which they are now contemplated,
in case of their being prolonged throughout the year. I
wish the committee distinctly to understand that we can-
not guarantee that the funds for which we now ask will
euffice to carry on the active operations of war during
twelve months, and, therefore, not being able to look for-
ward to so long a period, we have thought it best to pro-
pose that the addition which it is now intended to make to
the charge should be an addition to be levied off the income
of the country, in respect only of the first portion of the
Teas. The effect of that scheme will be as follows :—ln
the first place, that it is the only measure by which it will
be in our power to raise the whole addition within the
Tom- The committee will please to bear in mind that the
levYing of direct taxation is always six or nine months in
arretr of the pen'od to which the tax applies. When you
enact Si). in
you have creased duty upon spirits, from the moment
voted the duty the tax takes effect, and
perhaps within a week or a fortnight, or a few weeks at
any rate, the Proceeds are in the Exchequer. But
when you enact an -
use
begins to b 3 increase of the income-tax, that in-
6thaorfeable for a period, which period
commences on the
il,and there
cannot
be
any
money levied under the
authority of such a vote of yours
until the quarter between the 10th of October and the sth
of January. It
is therefore only by laying the increase of
the tax upon the first moiety of the year that we can pos-
levy it within the year. But, sir ot the l
sibly
reason. I have stated to you that we think it our dutonty
levy upon the space I have mentioned, and to leave thee
question unprejudiced as to the further augmentation of
taxes, in case the war expenditure should unhappily
quire it. If, therefore, I were now to re"
propose to double
the income tax for th whole year—to raise the rate of in-
come tax for the whole year—l must necessarildoeef
two things, either of which would be highly
us , objectionable.very
If the Government asked you to give
large in.
which
other
in-
crease of the income tax for the whole year, then we Should
ask for a legal authority to levy an amount of money
it is possible we may never require. But if, on the
band, we ask von to levy the income tax for the whole
year, but to giVe us an amount only sufficient to cover the
present deficiency, then we should be in the difficulty that
we might very probably be compelled to come to you again,
and ask you again to alter the vote of the income tax in
respect of the first moiety of the year, which you have
already altered once. Therefore, sir, the course which I
recommend is much the simplest course ; it is a course
which will give the fullest effect to the principle of levying
the tax within the year, and will at the seine time roost
fully preserve the control of the House of Commons, that
the proposal which I make should take the form which I
have given it, namely, the form of doubling the income tax
for the half-year. The form of the enactment would be very
simple—that the rate of income tax (I am not using the
the technical language of the resolution), come tax granted by the orit of act
that the rate of -
"1 be raised from Td. toauth
10Ad. in thethe
poun of last
d, and thatsesawn
the
whole of the moiety so added:to the tax shall be b 0 leviable

in respect of the year in the first half-year. (Hear.) Sir,
I will now state the effect of that proposed addition to the
income tax. As I have before stated, irrespective of any
change in the law, the income tax from April, 1854, to
April, 1855, would yield the sum of 6,275,0001. The moiety
of that sum of 6,275,0001. would be 3,137,5001. But, then,
in the case of the income tax, the expenses of colle lion vary
inversely as in the case of indirect taxes. In the case of the in-
, come tax, if you increase the tax you diminish the percent-
age of the cost of collection. The sources of supply are not
dimished ; the assessments are the same; the taxpayers
are the same. Some part of the expenses of raising the
tax being defrayed by percentage, there would be a certain
augmentation in those expenses ; but, upon the whole, the
effect is, that by adding a moiety to the tax you add some-
what more than a moiety to the amount actually raised.
The proceeds of the tax ; as I have taken it, would amount
' to 3,307,0001. If you add that sum to the 6,275,0001. which
I have already estimated as the proceeds of the tax under
present mode, you will find that it gives for the whole pro-
duce of the tax, from April, 1854, to April, 1855, the sum
of 9,582,0001. Now, sir, it is a very simple matter to rectify
the general balance of income and expenditure. As I
• stated before, the income for the year 1854-55 I estimated
at 53,349,0001. I now propose to augment that income by
an addition to the income tax which will yield 3,307,000/.,
so that the total income of the country, if it should please
the committee and the house to adopt that proposal, will
be 56,656,000/. The expenditure on the other hand, as
estimated, stands at 56,189,0001. So that there will be,
by way of provision for the services f the year, a sum
amounting to the whole estimated expenditure, and like-
wise a small surplus of 467,0001. (Cheers.) Sir, I have
stated to the committee that the Government are not of
opinion that it would be compatible with their duty to
propose, under the present circumstances of the country, to
surrender or sensibly to imdair any branch of the revenue.
(Cheers.) There are various subjects that have been dis-
cussed, and in which portions of the public or the entire
public may feel a deep interest, and some of which it would
have been my pleasure and satisfaction to have submitted to
this committee, had the circumstances of the country per-
mitted me to take such a course. But, as matters now stand,
we feel it our duty to hold by the revenue as it at present
exists. (Cheers.) Butthere is one change which is a mat-
ter of interest to the commercial community, and to which
it is right that I should advert, because it is a change which
while it may afford upon the whole, I trust not an incon-
siderable relief to those, or some of those, whom it affects,
yet it will not, I think, be attended with loss to the Ex-
chequer. I refer to the case of stamps which are charge.
able upon bills of exchange. (Hear, hear.) I need not
detail to the•committee the state of the law with regard to
that very important subject. It has been placed clearly
before the public in consequence of one or more cases which
have recently been brought before the courts. Suffice it to
say that it is most unsatisfactory, and demands the adop-
tion of some altered provision. At present, for whatever
reason, we have thought fit to charge bills of exchange
drawn at home with a stamp duty, and to exempt all bills
which are drawn abroad. Although they come into this
country—alth)ugh they are negotiated in this country—
although they act as instruments of credit and circulate in
this country—yet they circulate free of stamp duty. This
is not the policy of all other States. France has aoplied—
and, so far as I can discern, has rationally applied—a uni-
form system of stamp to all bills of exchange, whether they
are home drawn or whether they are foreign drawn. But
this is not by any means an abstract question. As the
matter now stands, we have reason to believe that the law
is evaded, and that the Exchequer is defrauded by dishonest
persons, who, when drawing bills at home for purely do-
mestic purposes, take those bills abroad, and thereby escape
the stamp duty. (Hear, hear.) But the evil that is sus-
, twined by the Exchequer is a very small part of the mis-
chief. The serious part of it is this—that those bills get
into circulation—that they are discounted by one person
and another, and thus pass from hand to hand. They come
into circulation with foreign ("aims and foreign places printed
upon them, and get into the hands of persons who caunot,pos-
sibly know anything of their origin, and these persons, if
they have occasion to sue the acceptor of such bills, nd
that in law the security is good for nothing. It is impos-
sible to leave the law in such a state as that without seri-
ously impairing the tone of credit in the great mercantile
circles of the country. There is another reason why it
is most desirable to alter this law, and that is the extreme
inequality and the extreme impolicy of the present stamp
duties on bills of exchange. The law is constructed upon
the principle of laying upon small bills of exchange an al-
most prohibitory amount of duty, whilst upon bills of
large amounts it lays a duty that is scarcely sensible at all ;
so that, while persons who deal with large sums of money
scarcely feel the bill stamp, the person who uses capital in
very small amounts is almost entirely precluded from the
use of this convenient machinery for credit. A. bill of the
amount of less than 201.—a bill of between 51. and 201.—is
liable to pay a stamp duty of is. Gd., and, supposing it to
be a bill for 121.105., and its duration to be for two months,
that amounts to the rate of 12s. per cent. for tho two month's,
or 31. 12s. 6d. per cent. per annum. The effect of the bill
stamp upon bills of that amount is about double the rate
of interest that a person must pay for the money. If he
pays at the rate of 3'. 12s. 6d. for the stamp, and 3or 4
per cent. for the money, he is using money that costs him
6or 7 per cent. (Hear, hear.) As you move upwards the
burden becomes less, but it is a serious burden ; it is a
burden of more than 1 per cent. per annum until you pass
bills of 1001. each. That is hardly reconcileable with jus-
tice to those whose credit may be perfectly good, whose
business may be as sound as that of the wealthiest house
in London, and as prudently conducted as that of any
banker or capitalist in the country, yet who feel them-
selves precluded from availing themselves of those most
valuable resources. I propose, therefore, to adopt an ad
valorem scale in lieu of the present scale, at the rate of 3d.
for each 251. or is. for each 1001. upon short bills, and 4d.
for 251., or ls. 4d. for 1001. upon long bills. I propose to
carry that scale with varying intervals (the whole detail of
which will be laid before the committee in a short resolu-

tion in a few days) upwards to 5,0001. Ido not know that
it would be worth while to carry it further. I propose to
abolish altogether the distinction which now exists between
home drawn and foreign drawn bills, and to make them
bear precisely the same rate of stamp. I propose for the
convenience of the community—and a very great conveni-
ence I believe it will be—not to adopt the system which is
in force in some foreign countries of impressing stamps,
the effect of which is that the holder of the bil., before he
can use it, is obliged to carry it to a public office, where
he must have it stamped. Instead of taking him to the
public office, I propose to take the public office to him, by
permitting, and, indeed, requiring him to use that very
simple invention of adhesive stamps which people will
keep by them, so that there will be uo obstruction what-

ever to the course of trade from the adoption of this sys-
tem. (Hear.) A very important point with regard to the
convenience of the large class whom this proposition will
affect is, that the time which is occupied in the prepara-
tion of the dies for these purposes is always considerable,
more especially as it is no, within the comp Once of the
revenue department, with whom the matter rests, to make
these dies until it can be done under full legal authority.
Every exertion will be made to expedite the process, but I
do not expect that the proposed change of the law with re-
spect to the stamps upon bills of exchange will take effect
until the sth of July of the present year. If it can be
effected at an earlier date, with such notice to the parties
as can make it convenient, it shall be; but, as I am at
present advised, lam doubtful whether it can be accom-
plished previous to the date which I have mentioned. I
will just briefly state how this will affect this branch of
the revenue. The revenue for the year ending April 5,
1853, from stamps upon bills of exchange, was 555,00 i/.
As nearly as we can tell, the average rate of the present
duty, although it is most unequallfdisposed, is ls. 61 per
cent. We propos,: to equalise it at the rate of ls. The
general effect of this change will be to lower the rate of
duty upon all bills of exchange for less than 1001., and to
raise it somewhat upon amounts above 1001. Estimating
then, the future income at the rate of Is. instead of Is. 61
per cent., that 1 gives a revenue of 434,0001. But, ne
doubt the effect of this law, as it will make the system ap-
plicable to small amounts of money to which it has hitherto
been almost entirely inapplicable, will be to brine a good
deal of capital into action in this form which has 'hitherto
lain dormant. I therefore anticipate a considerable addi-
tion to the revenue from the use of a larger nue-ber of
stamps upon bills of exchange for small amounts. From
that source I estimate an increase of 60,0001.; and I allow
also 50,0001. for the proceeds of the stamp upon foreign
bills of exchange. Those sums added together will give a
total revenue of 514,000/ , which, with the trifling excep-
tion of 11,0001., will be equal to the revenue at present de-
rived from that source. (Hear.) Now, there is only one
other subject on which it is necessary for me to trouble
the committee, and it is one which does not require me,
fortunately, to trouble theni at anylength. I shall lay upon
the table to-night a resolution having reference to the in-
come tax, and intended to give effect to the proposal which
I have stated • but I have also given notice upon the votes
that I intended to ask the House of Commons to night for
is vote of 1,750,0001. of Exchequer-bills. That vote will
require from me a few words of explanation. The com-
mittee are aware that the balances in the Exchequer are
low at the present moment. I must confess that I do not
think that that is an unfortunate circumstance, taken in
conjunction with the occurrences that are going on and
the demands that are made upon us. (Hear.) lam afraid,
if there had been 4,000,0001. or 5,000,0001. in the Exche-
quer over and above what was required for the public ser-
vice, that there might have been a strong temptation to
say, "We will raise money by taxes for the war expendi-
ture when it is wanted ; but here are these balances lying
perfectly idle, let us apply them in the first place." Whe-
ther that temptation would have been a strong one or a
'
weak one, it has been removed (a laugh) • and at present
the balances are in such a condition that although we
could have gone on perfectly well, supposing that no ex-
traordinary demands had been made upon us for military
expenditure, yet, in consequence of them, they would re-
quire somewhat to be replenished. I stated to the com-
mittee that I should ask for an addition to the income of
the country amply sufficient to cover the deficiency which
I have estimated ; but I also stated that we should not
realise any part of that addition to the revenue -until to-
wards Christmas, while, upon the other hand, a large por-
tion of the expenditure which we have to provide must
be met in the first or in the following quarter. I have,
therefore, thought it prudent, and I believe the committee
will have little doubt that it is prudent, to ask for power,
to be exercised in case of need, to make a moderate
issue of Exchequer bills. At the same time it is very im-
portant to remove all misapprehension upon this subject,
because there is a natural jealousy of additions to the
unfunded debt, and I must confess that, were it compa-
tible with other matters, I should have thought it a great
object of sound financial policy to have effected a reduc-
tion in that debt. (Hear, hear.) I and, therefore, parti-
cularly desirous that the committee should understand
when authority has been given for raising the 1,750,0001.
by Exchequer-bills, which I have now asked for, that it is
an authority which will only be exercised to such an extent
as may be found convenient to the public service. I do not
expect that it will be necessary to exercise it to the full
extent, though I think it probable that it will be neces-
sary to exercise it in part. But if it should be exercised
to the full extent, and if every farthing which I am now
asking for authority to issue, shoull be issued in conse-
quence, I wish the committee to understand that the un-
funded debt, after the fall exercise of that authority, will
only stand at the point at which it stood twelve months
ago. (Hear, hear.) At that period the unfunded debt
amounted in round numbers to 17,740,0001. At the present
moment it is in round numbers 16,000,0001., large pur-
chases of Exchequer-bills having been effected from va-
rious sources, chiefly by.the National Debt Commissioners,
during the last year, and the sum of 400,010/. having been
exchanged for permanent Exchequer-bonds. That being
so, ',simply propose to take power to All up the margin
which I have already created, and I will make, in no case,
any addition, except perhaps to the extent of 10,000/ or
20,000/. to the amount of the unfunded debt, in conse-
quence of the measure which I now propose. I do not
think, sir, that the committee have any reason to be dis-
satisfied with the state of the public credit, as indicated
by tho condition of the unfunded debt. It is quite true
that it has been found necessary to make a great increase
in the rate of interest upon Exchequer-bills. (Hear.) The
rate of interest upon Exchequer-bills is at present two-
pence a-day, or in round numbers 3 per cent- per annun2' •
Thiti time lazt year, or a liter than that; it was
only one peony a-day, or I,i per cent. per annum,

It has been doubled in the interval, owing to the great
pressure in the money-market ; but that has not been con-
fined to this country, the very same thing having taken
place in France. In that country the short-dated Bons de
Tre,sor, which correspond to our Exchequer-bills,'which were
then 1i per cent.,cent., are now 3 per and the long-dated,
which were then 3 per cent., are now 5i per cent. These
Exchequer-bills, which I am now asking the committee to
authorise the Government to issue, are in reality what the
other Exchequer-bills falsely purport to be—that is to say,
they are supply Exchequer-bills. The mass of unfunded
debt still passes by the name of "Supply Exchequer-bills,"
though it has ceased practically to have any relation to
supply at all, and in fact constitutes a debt which is per-
manent in itself, but the obligation of which is renewable
from year to year. When you confer, under the regular
sessional act, authority to raise so many millions by Ex-
chequer-bills, you do it with the view of replacing them as
they become due by other Exchequer-bills. But these are
Exchequer-bills of quite a different class. These are to be
raised simply in anticipation of supplies, for which you will
have given authority, and when the supplies come in these
Exchequer-bills will be paid off out of those supplies so
realised, and no more will be heard of them. (Hear.) That
is the case with respect to the Exchequer-bills; but they
are connected with a subject to which I adverted at the
commencement of my remarks, and upon which some infor-
mation is due from me to the committee—l mean that the
committee ought to know the position of the public finances
with relation to the abortive operations (for they were
abortive in reference to the main purpose for which they
were undertaken) which were attempted last year upon the
debt and public balances. The committee are aware that
the commutation of stocks which it was proposed to effect
succeeded only to an insignificant extent, the whole amount
of the new securities created being about 3,500,0001. in con-
sequence of the commutation. Of the minor stocks, which
were to be compulsorily paid off unless commuted under the
act of last session, 8,000,0001. have been or will be presented
for payment ; and the public balances, which, as I said, are
now low, whereas 12 months ago they were high, have been
employed in paying off those minor stocks, and will be em-
ployed in paying off what remains to be liquidated of them
upon the sth of April, together with supplying what is
necessary for a very useful operation—namely, the liquida-
tion of a debt which had been charged some time before
upon the land revenues of the Crown. It is not possible for
me to give to the committee a precise and accurate state-
ment of the cost or saving connected with these operations.
I can give you the saving, but I cannot precisely give you
the set-offs against that saving. The saving stands as fol-
lows :

Annual diminution of charge by stocks
paid off in January, 1851 £186,000
Ditto, by stock to be paid off in April
next
Ditto, by liquidation of debt charged
upon the Land Revenues 27,000
Minor charges extinguished 9,000

63,000

Total saving £285,000
But then, in consequence of the large drain upon the pub-
lic balances, it has been necessary to apply as a sinking
fund money, otherwise available to the purchase of stock,
to a considerable extent towards the redemption of the de-
ficiency. 2,300,000/. has already been applied in that
manner, and a further sum will be so applied. As a set-
off, therefore, against the saving which I have shown, I
take the saving which would have been effected by apply-
ing the sinking fund to the purchase of stock, up to the
sth of April, 1854. It is difficult for me to say to what
that saving would have amounted ; but, as far as the appli-
cation of those surpluses has at present gone, or can now
he foreseen, it would amount to about 102,000/. I think
it is possible that it may be necessary to make a further
similar application to the extent of from 1,500,0001. to
00,000/. ; and, if so, I ought to acid 50,0001. to the
100,0001. as a set-off against the saving by the extinction
of stocks. If, therefore, I take it at 152,0001., that will
leave a total net and permanent saving, in consequence of
the employment of the public balances, under the act of
last year, of 133,000/. per annum. (Hear.) I stated last
year, that however unfavourable the circumstances might
be, the process could not leave less profit than a permanent
saving of 100,0001, As far as lam able to correct the esti-
mate to• the present time, I should place it at about
130,0301. The proposals which I have made, involving
some considerations of policy, and requiring a, good deal
of reference to details, have led me into a statement
of considerable length, but the committee will at once
apprehend that it is capable of being summed up in a
very few words. The amount, in effect, to these two
propositions ; setting aside the collateral subject of bill
stamp, and such other subjects, which are, however,
of great importance to various classes—suchfor example as
the question with respect to the rofining of sugar, upon
which I propose to declare the intentions of Government
upon some day after Easter—setting aside those secondary
and collateral points, I propose simply that you should in
the first place, agree to double the first half-yearly payment
of the income-tax in respect of the year 1854-55, and that
you should make provision for the interval which must
elapse, before the tax can be absolutely levied, by the issue
of Exchequer-bills, .v hich issue of Exchequer-bills is to be
within the amount of 1,750,0001., and which Exchequer-
bills, if istued, will be paid off out of the growing produce
of the revenue. Sir, we have sought in these propositions
to discharge the obligations which, as we thought attached
to us as a Government. We have sought to make a com-
petent provision for the immediate exigencies of the coun-
try, and for carrying on the operations which are in pros-
pect with vigour. We have sought, also, to leave to the
House of Commons the fullest possible control over the
public expenditure ; and we have placed ourselves in such
a position, that if the operations of war should be pro-
longed, it will be necessary ferns again to come to you and
ask you further to enlarge the resources of the Exchequer.
Sir, if that necessity shall arise, we shall again appear
before you with the same confidence with which we now
make our demands ; and we are satisfied that it will be the
. .

opinion of Parliament that, in thus proposing a measure
which is adequate for the needs whichhave been made the
subject of reasonable calculation, and inleaving to a future
period of the session any recurrence to you that may be re-
quisite for further needs then emerging, we have taken the
course which is most in accordance with our own position
and duties as the Ministers of a -constitutional country,
which is most for the interests of the people of this country
and which, we are satisfied, will not tend to any forfeiture
of the confidence or approval of the House of Commons. I
propose to move at present the resolution with respect to
the Exchequer-bills; and, with respect to the income tax
resolution, I propose that the Committee of sVays and
Means should meet again on Monday next. (Cheers.)
The resolution that 1,750,0101. Exchequer-bills be voted
having been read by the CHAIRMAN,
Mr. BALL was understood to ask whether the proposal
with respect to the income tax would not operate Very un•
fairly in the case of a person whose income might be larger
at the beginning of the year, when the tax would be high,
than at the close of the year, when it would be low?
The CHANCELLOR of the EXCHEQUER said he was
not sure whether the hon. member was precisely aware of
the manner in which the income tax-was levied. Where
there was an assessment every assessment was annual, but
the levy was in two moieties- The assessment remained

precisely as it was, and it would be levied upon precisel;
the same basis as at present • but it would be 10j(1. upon
the year instead of 7(1. and ft would be 7d. upon the first
half-year instead of 331 i. The 104(1. would not be paid in
two moieties of 54d., but there would be one payment of
7d., and another of 31d.
Mr. HUME expressed his general satisfaction at the
statement which had been made by the Chancellor of the
Exchequer, which should operate as a great encouragement
to those who had advocated the reduction of indirect taxa-
tion. When he heard the right hon. gentleman refer to
Mills, he had hoped that ho was going to propose that all
real property, down to the lowest amount, should be rated
and charged to the income tax, and that incomes from other
sources, down to as low as 501. or 601. a year, slimed be
brought within the scope of the tax. With regard to the
war iu which this country was about to engage, he ob-
served that, before it had been possible for the house to
consider the expenses and evils of such a war, numerous
resolutions were passed by the mass of the community and
by corporate bodies, calling upon Government to go to war.
Those who had been so ready and willing to urge the pro-
secution of war should now be called upon to bear a por-
tion of the expenses, many of them being at present ex-
empt. Adverting to the insurance duty, he stated that the
property at present insured throughout the country did not
amount to a third of that which would be insured were the
duty taken off or materially reduced. He had hoped that
the duty would have been so lowered as to have enabled the
mechanic to insure his tools against loss from fire. The
present charge for effectiug an insurance was ls. 6d., which
together with a Crown duty of 35., was much more than "the
working man could afford to pay. Without touching upon
the question of the reduction of the paper any other duties,
he most strongly urged the necessity for the modification
of the insurance duty.
Sir H. WILLOUGHBY was desirous of asking the
Chancellor of the Exchequer whether the national debt had
been increased from the sth of January, 1853, to the sth
of January, 1854, and whether any new Three per Cent.
Stock had been created ? The question was not an idle
one, because a paper now upon the table of the house
showed that fresh stock to the amount of 383,0001. had
been created in the month of May, and during the autumn
of last year. It appeared that the commissioners for re-
ducing the national debt had authorised a sum of money
belonging to the savings banks, and amounting to
1,200,001., to be invested in the Exchequer Bills at a
time when the right hon. gentleman (the Chancellor of the
Exchequer) had most unwisely, as he (Sir. H. Willoughby)
thought, reduced the interest. A clause in an act of Par-
liament passed in the reign of William IV., gave power to
the commissioners for reducing the national debt to con-
vert money from Exchequer Bills into stock, and vice versa;
and, if it were true that in the year 1853, 1,274,0001. of
Three per Cant. Stock had been created, he could not see
the use of granting any more Exchequer Bills. He con-
curred in the remarks of the Chancellor of the Exchequer
with reference to the sad pre-eminence of this country in
debt ; but he professed that he did not understand why a
debt should be created without the knowledge of the
house. If our debt was to be increased, it should be in-
creased directly, and not by indirect mea He had
thought that the right hon. gentleman the me.; .er for the
University of Cambridge (Mr. Goulburn), who had been
Chancellor of the Exchequer in a former year, had put an
end to the system of which he (Sir H. Willoughby) now
complained, and he remembered that, at the time he re-
ferred to, the right hon. gentleman (Mr. Goulburn) pointed
out the immense evils that resulted to the savings banks
from the adoption of the system. (Hear, hear.)
Mr. W.WILLIAMSgave the Chancellor of the Exchequer '
every credit for the means he had suggested for raising the
necessary surplus for carrying on the impending war, and
remarked that the course pursued by the right hon. gentle-
man was much different to that pursued by Mr. Pitt at the
commencement of the last war. In the latter case the levy-
ing of taxes for the purpose of carrying on the war wee
postponed for between four and five years, and the conse-
quence was that between 100,000,0001. and 200,000,0001.
were added to the national debt which the peaple of the
present (lay and their posterity had to pay. In.the year
1797, before the war taxes were laid on, 34,000,0001. were
borrowed, though only 17,000,0001. were actually received.
He (Mr. Williams) should not have risen to address the
house now, had not the right hon. gentleman (the Chan-
cellor of the Exchequer) in a very pointed manner referred
to an estimate ho (Mr. Williams) had submitted to the
house last session, in bringing forward a motion to extend
the probate and legacy duty to real property. The esti-
mate of the right hon. gentleman far exceeded that which
he (Mr. Williams) had laid before the house.

The CHANCELLOR of th 3 EXCHEQUER was under-
stood to state that he had not referred to the hon. member
for Lambeth.

Mr. WILLIAMS said, the right hon. gentleman had
promised last session to extend the legacy duty to tithes,
and he (Mr. Williams) expected that proposition .would
have been carried into effect now. He had also understood
the right hon. gentleman to propose to extend 114nolrobate
duty to 'real property ; and, had those two pogift-- been
brought forward now as a part of the budget, he believed
nearly all the increase proposed in the income tax might
have been dispensed with. In the absence, however, of
extended legacy and probate duties, he highly approved
the course pursued-by the right hon. gentleman in raising,
the addition required n the revenue by an irlOreaee Of the