The Sun.
London, England, 1858-04-20 00:00:00

THE SUN, LONDON TUESDAY E V ENING, APRIL 2O, 1858

HOUSE OF GOWNlONS.—(YEstrneena.v.)
The SPEAKEI took the chair at 4 o'clock.
PRIVATE BUSINESS.
The following private bi 14 were read a third time and
paised:—:-AberdeanWater, Folkeetone, Water, Liverpool
Exchange, Liskeard and Looe Union Canal CompanY's
Railway; Merthyr Ty,ifil Water, and Selkirk and Gala-
shiels Railway.
The following private bills were real a second time :
Acton's Naturalization Act Amendment and Limerick
and Foynes Bail e ay.
CO ‘IMISSIONS IN THE ARMY.
Mr. LAURIE asked the Secretary for War, whether
the officers of the army ought to be suLjacted to pay-
ment of a tax upon their commissions granted by her
Majesty ?
General PEEL said there was no tax on the commis
elone, but there was a stamp.
NEW MEMBER.
Mr. LEYROY took the oaths and his seat for the 111.i-
vessity of Dublin in the room of the Right Ifor. Joseph
Napier, elevated to the Lord Chancellorship of Ireland.
TELEGRAPH COMMUNICATION FROII
INDIA.
Sir W. FRAZER nave no:ice that he should, on an
early day; call attention to the cl.f active
conveyed from India by the eleootic telegraph, especially
wi h reference to the names of officers and others killed
in action, &c.
REAL PROPERTY COMIISSIONERS.
Mr. HEADLANI asked the Secretary for the Home
Depertmeut whether it was the intention of the Govern-
ment, during this session, to introduce re bill to carry
into effect the recommendations of the Real Pr )perty
Cominiisiont ?
,Mr. WALPOLE said he should take occasion on nu
early day to state the views of the Government thereon,
THE BUDGET.
The house having resolved itself into a committee of
ways and means, Mr. FITZROY in the chair,
Toe CHANCELLOR of the EXCHEQUER roar to
make his financial statement. He sai.l,—Sir, since the
rightehoe. gentleman the member for Radnor explained
in committee the ways and means ha intended to pro-
vide for the service of the year just terminated a very
great change has taken place in the condition of this
country, and I am sorry to say also in the well-beieg of
the people. At the ceeeneneement of the year 1357, and
indeed during all the precedieg sears, our exports had
continually end considerably increased. The nturias of
our exports were favourable—l might say highly favour-
able—and, although a high rate of discount prevailad
generally at that period, it was no obstacle to the com-
mercial enterprise.of the ceuntry. But towards the e nd
of theyear 1857 this prospect of continued prosperity
was clouded and disturbed. The American panic acted
very distressingly upon cur own commercial condition.
At that time there was a monetary and mercantile crisis
—which, whether we look at the number of those wire
failed or the amount for which, they failed, lies not in se-
verity been exceeded in even_ our commercial history.
The minimum rate of discount in the .month of Novena
ber was 10 per cent. That rate prevalledalmost through-
out December. At the very close .eft the year the rat
was 8 per cent. ; at the eed of January 4 per cent. When
1 acceded to office the rate was that which now prevails
—3. per cent. rhe effect of this commercial disturbance
and distress was very great upon the revenue.
It is a
very significant circumstance that at the end of the first
three quarters of the financial year_ viz,, the 31st of
Dec. last—the judicious and temperate eztimeto of my
right hon. predecessor was not even fultided, but strange
to say, during the last quarter of the financial year, from
the 31st of Dec. to the a.cl of March—in the great itcuna
of Custecus, Excise, and Stamps it, was not only fulfilled
but exceeded by (peaking in round numbers)l,soo,ooo/.
am extremely unwiiling on these occasions to trout le
the committee unnecessarily with statistical details, but
I have here a slight memorandum of the effect of
-the monetary crisis upon the income of the country,
which they will perhaps permit me to road. The quarter
Ceding the 31st Dec., 1857, compared with the similar
iMers of the preceding year, shows a total decrease
in Customs, Excise, and Stamps, of 7660006 ; but the
quarter eadiog the 31st March, 1358, shows a very dif-
ferent
Pen_t_resi4thn.l.t compared
year
quart with the corresponding quart er of
thoset reiteems.
A.,*ln
,sinamely, an increase of 1,144,000/. in
ut,),e,iathis topic, perhaps the com-
-"mittee wilt think ems best opportunity to state ih •
,effecie of the.marietary eree our export trade. Ex•
.porte in almost an articlesfeellnpoolf in the last quarter of
_1357. 16 the nine months 30th Septemb r,
ilcedeclittnir exports,
.1857, the increase in the jeclarendpg
preceding
compared with the corresponding
year, was 121 per cent.
_ln the 10 months endingtne 31st
nabe
of October that increase had decreased exactlylr per
cent. Io the 11 months ending the 30th Nov
• exports bad decreased 8 per cent.; and in the 12 months our
ending the 31st December they were 51_1 per cent. below
' those of the preceding year at that period. Although it
is not advisable to load financial statements with static.
tical details, the committee will, I think expect, and deem
it convenient, that I should place before them the general
result of our exports, imports, trade, arid
f,n but aviga'ion.
im-
It is I be-
will, in doing so, avail myself of a brie very
portant statement which I have drawn up. ,
lieve, the only document of the kind with which I reed
trouble the committee. It is a statement of the exports
and imperts of the Uited Kingdom, anof the tona e
of British and foreignn
vessels in different I
yeare. will

. -
take the year 1853—the year before the war—and the
years 1855, 1856, and 1857. The total declared value of
the exports and manufactures of the United Kingdom
in 1853 was, in round numbers, 99,000,000/. In 1 585 the
declared value had sunk to 95,500,000/. ; is 1856 it had
risen to 116,000,000/., and in 1857 it had stillfurther risen
to 122,000,0001. In 1853 the exports of textile fabrics
amounted to 52,000,0001. • in 1855 to 51,000,000/. ;
in 1856 to 59,000,0001. ; and in 1857 to 61,000,000/.
The exportation of metal fabrics in 1853, the year be-
fore the war, amounted to 19,500,0001.
; in 1855 it
o sank
to about 18,000,0001. ; in 1856 it rose to 23,500,
. ;
o
and in 1857 it reached 26,000,0001. The real value of
000 ,00
the total imports into the United IKingdomanindliB 5 n
5 1s85;
in 1856 172,
143,000,000/. ; otton for consump-
0/. ;
187,000,0001. The imports of raw c
t7i4o6n,oao.o7ononotibeds.
;inintll7ss7taor
7b67ef,ooroeo,othoeolwo.r:
in 1856,
to 837,000,0001 be. In
t 01858377 British,oo OOtOolubns .a ;g
e andam ino 1857,
to 9,000,000 tons ; and
n nted
foreign to 6,000,000 tons. In 1855 British tonnage was
still 9,000,000 tons, and foreign remained about
6,000,0001. In 1856 British tonnage reached
11,000,000 tons, and foreign about 7,000,000. In
1857 British tonnage had risen to 11,600,000 tens, and
foreign to 7,400,000. The total amount of tonnage be-
fore the war was 16,380,000 tons, and in the last year
19,072,000 tons. Having placed before the committee
this general view of the condition of the trade and navi-
gation of the country, I will, with their permission, pro-
ceed to what is ,the real business before us to-night,—
namely, to consider our financial position, and to ascer-
tain clearly the charges upon the revenue of the country,
and the means at our command to meet them. Since the
commercial crisis raged wtih a fury which alarmed the
whole kingdom I need scarcely remind the house that
there has been a considerable restoration of confidence,
and there are at this moment many circumstances which
must conduce to the increased prosperity of the country.
The rate of interest is very low ; capital is abundant,
money is cheap, and the price of the principal necessa-
' ries of life and of the chief articles of consumation is
much lower than it was during last year or the pre-
oeding year. I should, not, however, be doing my duty
to the committee if I concealed from them my own con-
viction, founded upon information which has been at
my command, that altoough the general condition of
the country is at this moment sound, and al-
though there has been a restoration of confidence and
there are numerous indications of improvement, that we
are not justified in indulging the belief that there will be
a rapid recurrence of that spirit of speculative enterprise
which has prevailed of late years, and which has un-
doubtedly furnished very beneficial contributions to the
Exchequer. I will now proceed to state the estimated
1
expenditure for the year 18619. The charge for the
funded and unfunded debts I place at 28,400,0001. The
committee will observe that there is an increase upon
that charge to the extent of 150,0001. This has been
occasioned by the liquidation of the 2,000,0001. of Ex-
chequer-bonds last year, by some diminution of the rate
of interest upon Exchequer-bills, and by some opera-
tions of the sinking fund upon the public debt. The
next item of expenditure is that for the permanent charge
on the Consolidated Fund. That is an item which, I am
sorry to say, I have felt it my duty to increase. Last
year the charge wag, I think, 1,7Y0,0001., hut I have
not felt justified this year in placing the amount at less
than 1,900,0001. I have felt it my duty to make an in-
crease in this item in consequence of the compensation
which the house awarded in a moment of almost reckless
liberality to proctors and other officials connected with
the ecclesiastical courts. (Hear, Lear.) The charge for
the army, including the disembodied militia, and reduced
by the amount' stated the other night by my right hon.
friend the Secretary for War, will be 11,750,0001. The
charge for the navy, including the packet service, which
has been reduced by my right hon. friend the First Lord
of the Admiralty by some 300,0001., will be 9,860,000/,
The miscellaneous civil services, which last year
iimenuted to 7,400,0001., are not at this moment ere
tirely settled. There has been cowidsrable difficulty in
getting in these estimates, and in examining and revising
them, bet I have no hesitation in saying that I do not
estimate this item at more than 7,000,0001. for the pre-
sent year. There will, therefore, be a reduction under
this head, as compared with the charge last year, of
400,0001. The committee wilt allow me to make a
few remarks upon this item. There is at all times
a very great cics'eta to reduce the amount of the Civil
Service Estimates, which were f otmerly known as tha
Miscellaneous Estimates. We often find that hon. gen-
tlemen who are' perfeCtly ready to support a con-
siderable expenditure for what are called the great
services, loudly demand that economy should be prac-
tised in the miscellaneous estimates. If, in the vindi-
cation of their estimates, the Government appeal to the
State necessity which requires the maintenance of a
large establishment, they are always told, "There are
the miscellaneous estimates ; that is the item upon
which you ought to economise. If an army must be
maintained upon a great scale—and if the navy—the
national and favourite service—must be kept up, at el!
events the miscellaneous estimates contain some extra-
vagant items which require excision by the financial
knife, and that is the means by which economy must be
practised." Now, although the miscellaneous estimates
are nut yst upon the table, I wish the House to con•
eider the nature of those estimates. No. 3 under that
head is the estimate fur law and justice, and the amount
has increased considerably every year. No. 4 relates to
the subject of education, a question which excites the
deepest interest in this house. That item has ativaeced
in amount, year by year, with a giant's pace. (Hear,
hear.) I don's mean, on an occasion like the present,
to express an opinion one way or the other as to the
policy of this expenditure. My business to-night is to
give the committee clear and cornpl:te information as
to the financial position of the country, but it is ncc-s-
-airy fur me, in illustrating the system of cur expendi-
ture, to call attente Ai to the nature of the ini,cellauecus
estimates. I will take the item for education, I befit se
L at!jwiuse the first vote for that object W 1,3 passed by
the house, about 20 years age', its amount sea not more
than 30,000 i. In 10 years the vote had reached the
sera of 248,000/. Ten years more have passed, and the
xpenditure under this heal, for England and Ireland,
including the schools of art, w li for the present year be
not less than 1,000,0001. sterling. I don't say we have
n A been perfectly right in pursuing the course which ti-e
house has hitherto taken in this re-pc t ; but I think the
house ought clearly t i understand what they are doing.
And don't let it be supposed that the Civil Service E.ti
mates, which have been constantly inci rasing, can he re-
duced in a reckless manner, when under that branch of
ixpenditure there has been a great system gradually de-
\
velopieg itself, which in a very short time will demand
the outlay of a great department. When I saw the
amount which this year would be incurred under the
head of education—when I remembered that regularly
every year there had Lee i a large augmentation in the
votes for that object, I fait it my duty to form some opi-
nion of what would be the future of this growing branch
of our outgoings, and of what means we have of con-
trolling this expenditure, or of ascertaining generally the
relation in which that department would be placed to
the Exchequer of this country. New, alter having ore•
mined the suhject, and giving uo opinion, I beg the com-
eisititeleishtemoebnts,ervt,eu,tupononlythaenxpi,omliseythoart i mhopeeligeeynctilf e
utins
should clearly understand the responsible position they
occupy in reference to this matter, it is my deliberate
conviction that a system is now rapidly developing itself
in this department of war expenditure which shortly wid
arrive at an amount ( f at least 3,000,000/. or 4,000,0001.
Aar! I think the time has come when the Louse should
calmly review the course they are pursuing in this re-
spect, and comprehend the liahiiity they are incurring.
(Cheers.) Sir, the item for the Rev4nue Department is
4,700,0001. The total expenditure for the various (e
partrnents is 63,610,000/. There is a liability for the
Wer Sinking Fund of 1 500,0001, besides 2,000,000/ , f
Exchequer Bonds which mu t be liquidated in the early
part of n; xt month. Thus the total charge for the yesr
,1853 59 is 67,110,0001. I now proceed to estimate the
resources with which we are to meet there liabilities. I
will therefore give our computation of the revenue for
1858-59. The e4imates of my predecessor for the Cue-
toms was 22,350,0001., and the sum paid into the Exchs-
quer was 23,109,0001. Now, in forming an estimate of
the probable return from the Customs fur this year, we
must, in the first place, observe that, although the
amount paid under this bead into the Exchequer was
23,109;000/ , the net receipt of this department for the
year was 23,289,0001., Or, hot to perplex the committee
with odd numbers, 23 XOO,OOOl. That difference be-
tween the net receipt of the Customs and the sum paid
ir.to the Exchequer was occasioned by certain advances
ebish were mainly owing to the changes rendered neces-
sary in consequence of the great revolution decided upon
by this house of ' paying the gross revenue into the Ek-
chequer. Therefore, in calculating what the Custom,
may produce this year, tie must really take as our basis
the actual net receipts, not the amount paid into the
Exchequer, which was lest.ened in its pas;:age thither hy
the sum of 200,0001., fur which that department will not
berrtaeh es liableum ltbeo rf
that
bin
the
xteths huii anotheren:aeicst.etieortdehmuyegsmerlaed:
great buoyancy.
t 1
iclbecolusemao3tyucob.
Ito:
trn.snrtes:),:ii,eeda.ale
rriwnge
panic themanu di
must
also
solashosa
ehr
rot es-
beerythhave
allable to consumption. Capital is abundant,c‘ulir3t nrin):ouanareeyrfecamhveocai-,-
bread between 40 and 50 p_earseveenrt. lower in price than
it was, and of sugar, which
year, we have the prospectw of very high u scarce tat
its cost has fellers considerably—so much, indeed, as
per cwt. In fact, there is a combination of cause=s
at work which, under ordinary eircusestance& would
all stimulate consumptior. We must further remember
that there is one great iefluence calculated to be most
ad vantegeous to. theftEeixcile benefithequer c
Exchequer—viz., that
great the country
remis-
sioneuntry isn
of taxation now
begxiaittiring to
which the house determined upon last
year. NC) doubt, when the revenue rallied at the end
of the last quarter of the past year, that result was to
he attributed in some degree to the restoration of con-
fidence,, and the gradual, even rapid, decline in the
value of mousy. But it is impostilels to shut our eyes
to the confusion that what hasmainly sustaried
stud
r
revenue—what has supported an mad
even stimule
consumption, at a tints when there were great
acon
corn-
merci 1 tli-eurbance and depre,sion, has been the
ti
of that 9,000,C00/. of remitted taxation which was
brought into the pockets cf the people, and brought in
their pockets only towards the end of the year. Because
the committee will recollect that, although the Govern-
ment, influenced by the feeling of the country and the
determination of this house, remitted the 9,000.0501
produced by the war income-tax at the commencemeht
of the year, six months elapsed before the relief could be
fceeonitubtyrythpeaipdubthliec,waowring to the manner in which the
income-tax is collected. Fur the first six months the
91., and it was only at the latter
end of
weree e txahnpede ,yi eenare
when,ee a, tst
hot
ahte
muchsperiod
d edni
disturbance
uh
re a
the
aen all
eot
nha
sni sudmd
depression
sent
pgr
rapes
ss
oswiex-
isted,oel
pourer
of the nation was courted by the public having at their
command this great remission of taxation. And I think
I may say, in Parking, that this is a sufficient vindica-
tion of those who counselled at that time the expediei oy

of reducing the burdens of the country to that amount. ,
Now, we shall reap the great benefit of that measure in 1
our Customs' duties this year. I should net be acting
fairly to the committee if I did not state that, though the
Customs last year produced 23,289,0001., that amount
was swollen by a large amount paid for tea duties in
April, 1857, which belonged to the preceding year, in
consequence of the alteration of those duties. It would
I not be right to omit from our calculation that 400,000/.
paid for tea duties ought really to have been included
in the return for 1856-57. But, taking all these circum-
stances into consideration—taking the amount last year
realized upon Customs, notwithstanding the commercial
crisis, at 23,300,0001. in round numbers—allowing in
my estimate for the present year a diminution in the tea-
duties of about 200,0001.—calculating the produce of
those duties upon the amount which has been and pro-
bably will be consumed by the public—deducting from
that amount 3,500,0001 b. to meet the extraordinary
accession to the Exchequer to which I have referred
—aud remembering also that as far as this article
is concerned, the prospects of the tea trade
are extremely favourable, there having scarcely
been any period at which the supplies were
more promising, I think I am justified in
placing the amount of the Customs at 23,400,0001.,
or 100,0001. more than they yielded last year. I now
come, sir, to the next great source of supply to our re-
venue—the Excise, which is estimated by the right hon.
member for Radnor at 17,000,0001., and which, notwith-
standing all the distress of last year, produced
17,325,0001. This item I have ventured, after the
ereatest consideration, and guided by what I believe to
be the best information, to put at 18,100,000/., the Ex-
cise being subject to all those beneficial influences which
act upon the Customs, and which, like the Customs, has
since the great remission of taxation and the reduction
of the price of money and all other commodities, exhi-
bited the. same elastic and buoyant character. The next
article is Stamps, which were estimated last yeal. at
7,450,0001., and realised 7,416,000/. The stamps are a
branch of our revenue which is acted upon by all the cir-
cumstances
which also influence those departments de-
pending upon the consumption of the country. The state
of she mercantile world acts very quickly upon the reve-
nue arising from stamps. The stamps suffered very much
during the commercial crisis and the period immediately
subsequent to it, and they have shown the same elas-
ticity as the Customs and the Excise. It is also to be
remembered that the succession duty will have contri-
buted much more to the revenue than it kis hitherto,
and therefore I have taken the stamps at 7,550,0001.,
which is exactly the amount fixed by my predecessor in
his statement of last year, when he ventured to make a
prospective estimate of the year in which we now are.
The next item is Land and Assessed Taxes. The esti-
mated revenue from this source was 3,150,0001.,—the
actual produce is 3,152,0001. ; and, considering the
great number of new houses which have been built I
have put it at 3,200,0001. We now come to the Pro-
perty and Income Tar, which falls this year to 5,1. in
the pound. The first half of the year it is at 7d., and
the second half at 5d., and the produce of the tax I have
therefore put gat 6,100,0001., which is the rate at
which it has always been put. The next item is the
Post-office. The estimate for the Post-, ffiee was
3,000,0001., but it has only paid into the Exchequer
2,920,000/. That however, was occasioned by similar
circumstances to those which I have mentioned as
having an influence upon the Customs' revenue. The
Post-office had to advance considerable sums to its de
partinents, which form a sort of fluctuating balance, and
which will not occur in future years. The revenue of
the Post-office, therefore, is not to be measured by its
present produce, 2,920,0001., but I am assured by the
highest authority that I may place it at 3,200,0001. The
next item, the Crown lands, were estimated at 265,0001.,
they produced 277,0001. ; I place them at 270,0001. The
1 last artic'e is the miscellaneous. This was estimated last
year at 1,200 0001. the produce last year was 1,600,0001.,
and I have placed it at 1,300,0001. It would be in my
power to explain ail the items of which this head of
revenue is male up. I only refrain from doing so lest I
should weary the committee, but having gone through
them all carefully I think I may, without the slightest
apprehension, place them at that sum. I have shown
that the expenditure and liabilities of the year amount
to 67,110,0001., and I have estimated our revenue at
63,120,0001. ; there awaits I.IP, therefore, a deficiency to
be made up to the amount of 3,990,0001. I have no in-
formation as to what may have been the expectation of
the committee on this point, though I know from many
quarters and by many means what is the expectation of
the country ; but whether the committee thinks this an
overwhelming or only a vast deficit--it is, at all events,
a deficit which should make us pause and consider the
mode in which to encounter it. Eut I may perhaps be
permitted, before entering on this consideration, to wake
a single observation upon the deficit ; and it is one
which ought to be consolatory to the country. This
deficit, however vast it may be, has not been occasioned
by any felling off in our resources. (Hear.) I don't
kno N ho iv I could place that more clearly before the
committee than by assuming ter a moment—l won't
say that I had the same resources at my command
that my predecessor had, far he had extraordinary
resources at his command—but that there had been
no cessation of any taxes this year which were
in force last year. I would suppo,e for a moment
that there was not that reduction in our revenue which ,
has been occasioned by the income tax fading from 7d.
to 53., and the consequence would be that ear revenue
would be 1,063,0001. greater in amount. The deficit,
then, would be about 3,000,000/., and if we deduct from
that the sum made up by the debt which we have to pay,
amounting to 3,500,0001., it follows that, it we had no
engagements to meet, and if we bad no cessation of
texatien, instead of a deficit we should have a surplus of
500,000/. (Hear, hear) Therefore, in dealing with
, this very grave and serious subj set, it is a source of con-
solation to us that this is a deficit which, notwithstand-
ing the sharp fortunes experienced by the country
during the year, has not been occasioned by any dimi-
nution in our resources. I propose to consider this de-
ficit under two heals. I will consider first, the amount
of deficit which has been occasioned by ouratuderteking
to pay off debt, and in the second place, the amount
which has been caused by a cessation of taxation. I t
appears to me that this will be the simplest and the
itio..t kite]. igible manner of treating the subject. Fee',
thee, with regard to that amount of the c'efien-
-3,500,000/ , which is occasioned by our engagement to
pay off debt. The first item to which I wish to call the
attention of the committee is the IV: r Sinking Fund, to
the amount of 1,500,0001. Tile committee is aware that
irrespective of the War Sinking Fund there is a Gene-
)al Sinking Fund Act which is in operation. Tnirt y
years ago the system of sinking fana that prevailed in
teis county was to allot a cerolin fixed sum, without
any refsrence to the state of the revenue, to the pay-
meet of deb`. In the heat of the great war the House
of Commons pas ed a resolutien, that every year
5,000,0001. " witnout fail"—those were the words, I
believe—should be apportioned to the redemption of
debt ; and that system, the amount reserved being more
or less in amount, but the principle being the same, pre-
vailed until the year 1829 Thai t-yetsin utterly broke
down over and over again. It was false in principle
and most injurious in practice. In 1829 a committee
was appointed to consider the whole investigation.
That coremit:ce investigated the subject with great
asuinen and depth, and it recommended the adoption of
the only sin std principle on which a sinking fond ought
to he based—vx., the application of the surplus revenue
of the country to the liquidation of debt, to be ascer-
tained and apportioned every quarter. In the course
ef the laet year, when loans were incurred, the house
)heught fit to recur to the old system upon e bech Flak-
mg funds were ostahlhshed—viz , allotting a fixed sun),
without any reference to the state of the revenue, to the
liquidation of debt ; and while they recurred to the old
system, with strange inconsistency I think, they did not
eupirsede the new one which in 1829 had been este-
'dialled in its stead, aid which was founded on a toially
different principle. That measure did not pass without
discussion in this house. Objections were raised to it by
1 persons of very great authority. There was a debate . f
some length, and there was a division. At the moment
it appeared to ma that the Government were not much
enamoured of their own plan, or cenfi lent in the policy
which they were recommending. The house thought fit,
mainly influenced I think by one who upon such sub-
jects, if riot indeed upon all subjects, addresses the house
with authority—my hen. friend the member for Hun-
tingdon (Mr. T, Bering) to agree to this revival of the
old principle of the sicking fend. But my. hon. friend
the member for Huntingdon, when he recommended
I that curse, recorienended it for eniicial reasons. He
said, " We are now, or soon shall be, in a time of per-
fect peace, and it is not until we are at perfect peace
that this sinking fund is to come into operation. There-
fere, on the whole, I think it wisest to secure the liqui-
daion i f debt incurred in war during a time of profound
peace." Whether we ars now in a time of pelf .ct peace
I can hardly presume to deoide, lest I might introduce
into this cliscussion, which should of all discussions be
most calm and temperate, elements of angry controversy.
It is very likely that my noble friend the Secretary of
State for Foreign Affairs, might, if I appli?d to him be of
the same opinion as the noble lord the mensLer for Tiver•
ten, and diplomatically assure me that we are not at
war with China. I are not a diplomatist ; I have only
the &large of the finances of the country ; but when I
want to reduce the estimates and look to those of the
navy, for instance, I cannot help feeling that a'though
we are at peace with China that peace has a most war-
like iefluence upon our estimates. (" Hear," and cheers.)
Therefor o, the ground upon which my hon. friend the
member for Huntingdon shpportcd the establishment of
that sinking fund—viz., that we were entirely at peace,
or should be so when it came into operation, has not
arisen ; aud knowing that en these subjects my hon.
friend very touch arses with use, taking the plain view
of these affairs in China, I am convinced that, oven with
his view of the case, he never contemplated that the
when,tßn:
tn,t ssan: d
bh :a;
sinking fund should be brought into action at a -time
whetheri7ie peace:a gthr
oea
sinking
cn) rk navaliw ag rf, i
arwen we
ad are fitting our arma-
in
of thelB2Coh,ini
thee.s e wategeneralrte
sinking fund, an desttehr oeofpw:rar_ar
tsti
refer—the
town
ngegfauhanaedvm,e
ewa,3lhtsioc—tho this sawyyheiocaffhr
cl:()sutis eesl l i I'l
afterwards ecrii.}7 a Pr
'd
2,000,0001. of Exchequ.r bends. Nuw, I ask the com-
mittee calmly to consider in what position we are plac-
ing the finances of the country and its commerce, which
is now at a moment of deptessiou, and not able or in-
clined to bear an increase of taxation, by the means of
paying off the debt which we have sanctioned. Last
year you had tie general sinking fund, you had the
speciel sinking fund, you had engagements in the shape
f Exchequer bonds, all acting upon your finances.
There abso!utely was a sum of the national debt re-
deemed by the operation of the general sinking fund,
which you will find in the account upon the table. It
was not a very large amount, but positively there was a
sum (,f the national elOt redeemed by the action of the
general sinking fund. Then you bad the special sinking
fond coming partially into operation to the ex ent of
250,0001. ; then you had 2,000,000/. of Exchequer bonds.
New, let we shrew what is the practical result of these a: e

tificial attempts to pay debt when you have not a revenue
which affords you a natural surplus for the operation.
(Hear, hear.) Here is the account of the public income
and expenditure, from which I will read only one item.
Our expenditure amounted to 70,000,0001., and our in-
come to nearly the same amount ; but although we are
dealing with these immense amounts, you will find there
is an excess of expenditure over income. Our income
amounted last year to 68 millions, and yet our expendi-
ture exceeded that amount by, in round numbers, two
millions and a half; but when I go to the other side of
the balance-sheet and look at the expenditure, I find
there a sum absorbed by the sinking fund, by the redemp-
tion of Exchequer-bonds, and by the liquidation of pub-
lic debt amounting to two millions and a quarter—only
a quarter of a million leas than the excess of expendi-
ture. Well, what follows ?
have It follows that you certainly
have paid off debt, but pm not paid off debt out of
your revenue. (Hear; hear.) You must have paid it out
cf the balances of the Exchequer, and the committee
must feel that that is a system which, though upon one
occasion it might answer, cannot long be continued. The
committee, therefore, must now consider what is the
consequence of brining past and present burdens to act
simultaneously upon the revenue of the year. The only
consequence can be war taxation in time of peace ; and
can you have this war taxation in time of peaee consis-
tently with that commercial prosperity on which you de-
pend, and of which you are often talking I I must there-
fore, ask the committee to consider whether the time
has not come at which, not merely with reference to this
year, but with reference to future ones, and with regard
to those results as to taxation which we wish and are al-
most pledged to accomplish, we must consider the policy
of maintaining this system of artificial sinking funds- In
princiaae I think it highly fallacious and erroneous, and
in its opplication there has been a greater mistake, be-
' cause, independently of the circumstance that you are
maintaining two sinking funds at the present moment on
contrary principles, independently of the consideration
that the old sinking fund is in my mind built upon a sure
foundation and upon sound principles, admitting for a
moment that the war sinking fund is right in prin-
ciple, still I think it wrong in its application, because it
never ought to have been brought into operation until
yen had paid off your Exchequer bonds. (Hear.) This
trip'e action upon your revenue to pay off debt can only
end either in increased taxation or in loans, which for
such an object would be absurd, or in financial embar-
rassment, wTich all of us would desire to avoid. (Hear.)
Now, sir, I ask the committee calmly to consider this
question. You have a deficit, of which 3,500,0001. are
occasioned by engagements to pay off debt. You have
no surplus ; you have no means of meeting these debts
is the present year. How. then, will you meet them ?
Will you raise a loan ? Will you raise a loan to fulfil
engagements to pay debt—part of which consists of am
artificial sinking fund I (Hear.) Could there be more
blundering means of setting your house in order and
squaring your accounts than negotiating a loan to meet
engagements of this kind ! Is it not the last resource of
an individual in distress to raise money in order to pay
debts, and to get deeper in debt in consequence (Hear.)
I cannot suppose that any one in this house would seri-
ouely sanction the idea that we ought to raise a loan to ful-
fil engagement. to pay off debts. (gear) Well then, is
the committe prepared to meet these engagements by tax-
ation I It is very difficult to say how you could raise a
sum of 3,500,000/. by taxes. It israther a perplexing ques-
tion. (A laugh) But suppose you were resolved to do it,
that would not get you out of the difficulty. If you were
to raise by taxes a sum of 3,500,00r1d. to pay these debts
you would still have a deficit of 500,0001. You would
have to make provision for that and also to provide some
surplus. Therefore, if you come to Mica, it is a question
of raising a sum exceeding 4,000,000/, Well, Sir, under
these circumstances, and analysing these claims upon us,
I think the time has arrived, not merely with reference to
the convenience of the moment, but in order to put our
finances for future years in a secure position, when we
ought to come to some determination respecting this
war sinking fund. I would humbly recommend the com•
mittee to terminate that arrangement--(hear, hear)—
either by repealiog the act, waich is, I think, Wks in
principle and injurious in practice, or, at least, by sus-
pending its operation until the other engagements into
which we have entered, viz., these Exchequer bonds, are
provided for. (Hear, hear.) I feel certain that it will be
utterly impossible, with public advantage to maintain the
instrument which now exists by law, to which the wisest
men of all times have expressed an adverse opinion ;
which the labours of a learned and distinguished commit-
tee of this home, in devising a generalsinking fund, have
really superseded ; and which is not needed to maintain
the credit, while, if preserved, it will impair the finances
of the country. Therefore, I shall recommend to the
committee, so far as that 1,500,0001. a-year is concerned,
a course which fir the present certainly shall prevent its
embarrassing the finances of the country. (Hear, and a
laugh.) We have now to deal wth 2,500,000/. of deficit
if the committee sanction the course which I have just
proposed, and I must say that I view the engagement
which we have entered into by those Exchequer-bonds
in a very diff-rent light and spirit from that in which I
view the war sluicing fund. I have been teltoll that there
is the easiest possible way of meeting that deficit, and
that I might propose to fund it ; but if I were to
take that course it would be one which, in my mind,
would be quite urjustifiable, unless, indeed, the country
were in an emergency in which all the principles of
finance must give way to political consideratioes
(flear, hear.) But in the • times in which we find
ouvaves, I think that it would be highly un-
deasirable and improper to contemplate such a course,
seeing that it would be totally contrary to the condi-
tions into which Parliament and the Government entered
when they agreed to issue those terminable securities.
(Hear, hear.) It would be to me, I confess, a source of
the greatest satisfaction to meet, and to meet to the
hour, those engagements ; but there is a great deal to
be considered before we arrive at that conclusion. With
regard to a loan, I inagine there is but one feeling on
both sides of the house—namely, that whatever may be
the deficit, that is the last expedient to which we must
have receursee (Hear, beer ) To Exchequer-bonds,
however, applies the earns difficulty which applies to
the war sinking fund. It they are to be met by a new
tea, it mint be an excessive tax to produce upwards of
2,000,0001.; and when it lies produced than amount,
where are you ? Still in debt. But if we cannot meet
them immediately, I think, at all events, that the corn•
ruittee. will acres that the sprit of the engagements
should he fultilsd—that they should be engagements
which we are resolved to meet out of the revenue of the
country, and that we should guard as much an possible
against their ever becornieg'a permanent addition to the
public debt. (Hear, hear.) Still, seeing the deficiency
that awaits mu even if those engagements are provided
for, and anxious as I should be at once to provide for
them, I kel it my duty, in order to plane the finances of
the country, not merely for this p ar, but for future
years, iu a position which I think will be advantageoue
to the ceuntry, to recommend to the committee to post-
pane fur some period the payment of those Exchequer-
bonds—(" hear,'' and cries of "oh, oh !" from the Op-
position) ; but to consent to arrangements which, eo far
as I can form an opinion, will secure their being pad
out of the revenue of the country, and whA will place
our general finances in such a position that they will
torte no obstacles to those arrangements ehich I think
it would he for the interest of the country to adopt. I
will postpone describing, however, to a future portion
of my remarks—when the time will natirally arrive
that I should touch upon this port:on of the
subject mere particularly—the mode in which I
propose that the arrangements should be annomplished.
Now, Sir, I have considered that part of the detioit
which is occasioned by engagements to pay deb's, arid
which is no doubt mdch the most cansideralee portion of
it. There is next a part of the deficit to ba considered
which, though-not so large in proportion, is cf a clew
meter which moat be regarded in a severer light than
the other, when the deficit is occasioned—no matter
what may have been the original cause—by an absolute
falling off in the revenue. An absolute felling off in
the revenue must be rust by means which viii not only
i supply the deficiency, but will also place the general
iiidition of the revenue in a sound and•satisfactory
..tats. (Hear, bear.) Teat portion of the deficit has
been occasioned by the cessation of a tax—ind that tax
one of a very memorable character—one is which we
cannot brine our minds free from considerations beyond
those of a un rely fiscal and financial character ; and it
certainly appears to me that upon the derision of the
committee with respect to that source of deficit the fu-
ture satisfactory management of the fintlicea of the
country.. will very much depend. (Roar, bear.) The
property and income-tax has long and freqaeritly occu-
pied the consideration of this house. I thins I may say
that it has never ceased to occupy the thoughts and to
interest theteelinga of the country. It is atax the im-
portan e of which is no: to be measured ebeply by its
financial results. Those who pay it do not comider merely
the sums which they y ski to the Exchequsr, but the
mode in ,xhich it is assessed, and the manner in which
it is levied ; so that from the earliest time that it has/
occupie 1 the coneidera ion of Parliament 'o the pre-
sent, social, and political principles have ben involved
in its character and consideration. (Hear, hear.) It
is not necessary for use to remind the ommit ee of
the manner in which this tax has hahtually and
traditionally been &sat ibed is Parliaesent. The
epithets which were applied to it, and in which the
greatest men have been used to cba,racterisi it, are in
the memory, as they have often been upon the lips, of
hon. geialeinan ou both sides of this house ; and that it
is unjust, unequal, and inquisitorial all of ui have felt
and most of us have acknowledged. (Heal.) There
are, I think, two great classes of reasons shy the in•
c one-tax should not form a permanent featare of our
finance. (Cheers.) The first class I may ealldomentie;
the second partake rather cf considerations of an ctei-
nal character. The feeling of the community generally
of the inequality, of the injustice, and of tae odious
nature of this tax, has unfortunately been auctioned
and concurred in by all those statesmen who have felt
the necessity of levying it ; and it has been rep ,ssale
to maintain it for any considerable time, or t. 4 adoet it
:15 a p eenanent feature of our financial eystere without
great acerbity of feeling and much violent controversy
being excited as to its character and its incidence. If
you wish to establish it you have an ericilesscrowd cf
controversies of the mo+t angry character umn these
ameegother points :—Whether there shall be ncognised
a diflereece between property and income in t 3 assess-
ment ; whether, if that difference be not acknowledged,
a difference shall be admitted between precaion3 and
permanent inceinee ; whether there shall be s cifforence
between incomes derived from trade and incomes derived
from professions ; whether the poor man shill be ex-
empted, and what a poor man really is ; whit are in-
comes and what are wages ; who shall be demoted,
where ought the line of exemption to be drawn, and the
convenience of an exemption which shall i xclude all but
these who are called rich. (Hear, hear.) %wee are
some of the entjnete of controversy which were always
raised in this country when an attempt was made to
establish the incorne.t x for any lengthened period.
They have not of late prevailed. But why, letnee ask,
has that been the cane ? It is because in 1853 after a

great agitation throughout the country upon this subject
had taken place, after a committee had sat for two sears
to investigate it, and after all sorts of plans and expedients
devised by every manner of man had been considered in
reference to it, an eminent member of this house brought
forward a great financial scheme in which, acknow-
ledging the impossibility of reconstructing this tax
upon principles of justice, upon principles which could
satisfy the fair demands and expectations of society, he
submitted to the notice of the House a proposition the
effect of which would be to senate its diminution and
final extinction at the end of a certain term of years.
(Hear, hear.) That scheme was brought forward with
consummate ability, and, having been supported in the
House cf Commons by an overwhelming majority,
created the conviction in the public mind that in its
spirit the arrangement would be carried into effect, and
that the financial policy which was in 1853 propounded
with one which both Parliament and the country had
cordially embraced and sanctioned. (Cheers.) I do
not wish to overstate the case. To do so would not be
my interest, as it certainly is not my inclination. I
shall not say that a solemn compact was entered into
at the time to which I allude between Parliament and
the country upon this subject, which would be regarded
as independent of all circumstances and events. That
is a proposition which it would be wild and idle to
assume and absurd to attempt to uphold. There were,
however, arrangements cordially entered into, and in
the same spirit understood, and Which the country ex-
pected would be religiously fulfilled if the interposition
of extraordinary circumstances did not render their
fulfilment impossible. (Hear, hear.) Well, circum-
stances of that character did take place. A great
national emergency occurred. And what, let me ask,
in that hour did that people do who bad previously
murmured at the injustice of the principle upon which
the income-tax was established I When the safety of
the country was endangered, when her honour and her
best interests were at stake, what did they do who
before the arrangement of the right hon. gentleman
the member for the University of Oxford was brought
forward—an arrangement which they had cordially
accepted—ha'i complained of the unequal mode in
which this tax was levied upon the various classes
of the community,—what. I repeat, did they do
when the scheme which that right hon. gentleman
devised was not only arrested in its progress, but
made the source .from which the power of England
flowed forth to support the honour and interests of the
country ? Did they murmur ? (Cheers.) Not for an in-
s'ant. (Heart) On the contrary, everybody did hie
utmost to prove to England and to the world that there
was no burden to which our people would hesitate to
c.stribute at a moment of national emergency ; the
income tax was raised to a very large amount, and during,
the period to which I refer, when the country clearly un-
derstood that it was absolutely necessary the income tax
should continue to be levied, not a voice was raised
against its imposition. (Cheers.) It was not until pease
had been secured that the nation ealled for a remission
of the war taxation in this particular. When that great
object was happily attained we heard again the expres-
sion of its expectation that the arrangement of 1853
would be carried into effect. (Hear.) There can be no
doubt that the breaking out of the war caused a consider-
able difference in our position as compared with that in
which we stood at the period at which the arrangement
was originally introduced. (Hear.) The temperate
charge on our debt becaeie liable to encumbrances, such
for instance, as those Exchequer bonds, which must be
m.t, and. which constitute impedimeats in the way of
adhering to the arrangement of 1853, which could not
well be foreseen. Th se, however, are circumstances
which a sensible people will not fail to accept as furnish-
ing good grounds for delay in the diminution of extinc-
tion of the income-tax. (Hear.) They do not, how-
ever, constitute sufficiently strong reasons why the coun-
try should be prepared to regard the arrangement of
1653 as one which may now be looked upon as a scheme
at once visionary and fantastic. (Cheers.) I cannot
help feeling, then, that, looking to those domestic con-
siderations which undoubtedly prevail—namely, that
the very principle of the tax is one which creates pub-
lic disaffection, and is calculated to irritate the public
mind—it is highly inexpedient that it should form a
permanent feature of our financial system. (Cheers.)
I may now be permitted to advert to other grounds
which, although they may netlso generally influ-
ence public opinion as those which I have just men-
tioned, yet are, I think, well deserving of our considera-
tion in dealing with this important question. Tney
embrace considerations arising out of the occurrence of
some extraordinary emergency, and are of a political
nature. Is it not of the highest importance, I would
ask, that the Sovereign of this country should, notwith-
standing the immense revenue which is annually raised
to support the vast establishments of the country, be
enabled, with the concurrence of her Parliament, to touch
at any moment, as it were by a spring, a source of revenue
which in an hour of great emergency would yield
20,000,0001. or 25,00'),0001. sterling—a sum equal to
those' large loans which foreign potentates raise at a ruin-
ous rate of interest, and one of which almost exhausts
the resources of their subjects—without causing a mur-
mur to rise to the lips of a single person in her dominions
(Cheers.) That, I maintain, is a reason drawn from politi-
cal sources why we should concur with the right hon.
gen'leuian the member for the University of Oxford in
the proposition he has advocated in the language more
unequivocal than any other statesman in this house--
that the income-tax should not be allowed to constitute
a permanent feature of our financial system. (Hear,
hear.) But, although that may be my opinion, and
although I cannot but think it is the opinion of the
great majority of the House of Commove,—although
there are grounds of the highest political expediency
which seem to me to render it desirable that the arrange-
ment of 1853 should be carried out in spirit, if not in the
letter, in is still undoubtedly possible that the country,
anxious as it may be to witness the realisation of its
expectations in that respect, and having the utmost cm-
fidence that Parliament is really and in all sincerity dis-
posed to meet its wishes upon the point, still may not be
unprepared, knowing that a deficiency in the revenue
exists, to sabmit to the burden in connexion with the
income-tax which it bore last year. ("Hear, hear," and
laughter.) The people of England may say--" A very
great deficit lies before us. It is not, after all, half so
great as we thought it would be some time ago. If
we submit to an income-tax at the same rate as that of
last year we shall get rid of this deficit, and we must
trust to the future." (Laughter.) Now, that is a view of
the case which it le my duty to place before the house.
We have a deficit in our revenue not occasioned by our
engagements to pay a debt, but by a cessation of taxes,
which deficit must be made goo 1 by taxation, and which
would be converted into a surplus if the committee
should think proper to continue the income-tax for ano-
ther Tear at the sa-ne rate as e,t yesr. (Hear.) The
committee may take that ceursle, and take it, tem with
the sincere intention of carrying the scheme of the right
hon. nentletnaii the member for the University of Oxford
itno effect. But there are other considerations which
ought to influence our decisions with respect to this
question. The country has behaved extremely well dur-
ing the last five years in ma tees of tex ttien. (Cheers.)
At no period of English history has so much public spirit
been exhibited upon the part of the community in that
particular, and I think that is as much as one ought to
expect. There is no doubt that this country general ly
has this question of the income-tax greatly at heart. It
has for a long time clung to the belief that, notwith-
standing the adverse circumstances which have taken
place, there has existed upon the part of Parliament a
sincere intention to ditniuidi and eventually to extin-
gulch this tax, and I cannot bht fed that if I were to
ask you to take a course which would look like break-
ing your promise with the nation in that rsspeca and to
Reek to get out of our difficulty by again passing a law
which would do away with that remission which took
place last year, 1 should be calling upon you to adopt a
policy which would be but too well calculated to sour
the public mind. (Hear, hear, and cheers.) The re-
sult of such a p :liey would be that when a great ein r-
aeney again arose, you would not be then in a position
to appeal to the country with the same success, or to
expect to have your appeal met with the same cordial
response which upon a recent occasion awaited the
:Minister who had feel d of the national
finances. (Hear.) I feel therefore bound to announce
it as the deliberate opinion of her Majesty's Government
that the deficit in the revenue which I have t rought
, under your notice ought not to be supplied by proposing
an iecrease its the income-tax. (Cheers.) But if the
income-tax is not to lee disturbed—if the income-tax for
this year is only to give u 3 the reduced rate of sJ.—and
we propose that course—the house miait feel that it is
absolutely necessary to support the revenue of the coun-
try by toe imposition of new texas. (Sensation, and
some cries of Hew.) I know that I may be told by
some gentlemen that you can obtain the relief you want
by a reduction of expenditure. (Hear, hear, from Mr.
Williams and several other hon. inemb..re.) Allow me
to say that reduction of expenditure is not a task that
can be undertaken in haste and heat. It requires time—
deep, protracted, and minute investigation—and though
it might be very easy t o effect certain reductions, which
night be very popular in the house f e- the moment, yet
urilsss they are well considered and founded on :nature
investigation and apple knowledge, they woul f only
lead to a swift and fatal reaction to expenditure. (Hear-)
Now, we 'nave made some reductions in expenditure.
We have made red ucions which could be made with
safety, and in amount not contemptible. Allow me to
say that in meeting the difficult financial position we
have had to encounter a reduction in expenditure of
800,0001., which we have made this year,is an item not
to be despised. (Hear, hear.) But let me impress on
the committee that which I have presumed to say on
previous occasions—reduction depends on polny. It is
quite a sill idea to suppose that a body of men, though
the may be Ministers can meet in a room and suddenly
alter the establishments of the country. The establish•
monis of the country are adapted to the policy which the
country pursues, and if you pursue a policy, and Fano-
lion a policy, which 'made to invasion, to costly arma-
rminte, and consequently to expenditure, you cannot ex-
pect, because there is a change of Ministers, that you
can deal with that expenditure, unless you deal with
that policy. (Hear, hear.) Rainy sound reduction is
the effect of fine and thoughtful management, and is
not in a few hasty weeks to be concocted in order to
obtain popular applause. (if ear, bear.) I say, there-
fore, that it was utterly impossible fen us to deal wish
the expenditure of the country during the period in
which we have had the responeiole position of Ministers.
We have succeeded to arrangements, which we must
manage an best we cm ; and, therefore, now that there
i-is deficit in the revenue, you must not, unmindful of
the not inconsiderable reduction safely and honourably
effected by us, say that we ought to have made le hoc-
tions. (Hear, hear.)
When we have opportunity and
time we can submit the establishments of this couutty to
such severe revision as they may require, and with fa-
vourable: circumstances, effect considerable retrauch-
inents in these establishments. (Hear, hear.) But it
;weld be worse than mockery to pretend that In are
able to do so all of a moment. (Hear, hear.) the
ungracious office of selecting a new tax, I am at least

somewhat upheld by the consolatory conviction that
every person who may be called on to pay it will either
directly or indirectly feel the benefit of the considerable
remission of taxation which occurs this year by the fall
in the rate of the income-tax. (A slight laugh.) When
we remember what the country expected, I hope the
committee will not forget, in the consideration which
they may give to my proposition, that we start with the
with the fact that by the operation of the law the com-
munity are already entitled to, and soon will - enjoy, a
considerable diminution of that tax so peculiarly odious
to the people, and that benefit the country will not
measure simply by the amount of the remission, but will
also accept it as an earnest that the policy of 1853 will
be culled out. (Hear, hear.) The mode in which
I would attempt to supply the deficiency is by asking the
house to agree to a proposition which appears to me as
reasonable and wise. I would aekthem to agree to equalise
the duty on spirits. (Hear, and laughter.) The committee
will recollect that we have been legislating on this sub-
ject now for several years. We have, consequently, great
experience to guide us as to the course we should adopt
I and the results we may obtain. I think it was in 1853
that the duties on English, Scotch, and Irish spirits
I were raised. They were raised considerably, with great
benefit to the Exchequer, with increased consumption,
and without the slightest appearance of illicit distillation.
They were, I believe, in the following years increased
with the same result. In 1855 the right hon. gentleman
the member for Radnor equalised the duties on English
and Scotch spirits. Well, that was a step taken with
some apprehension, but what was the consequence I
Great advantage to the revenue, increased consumption,
no appearance of illicit distillation ; and, stranger than
all, the greatest benefit was experienced by the scotch,
whose duties were raised. (Laughter.) That may appear
a paradox • but it is a dry fact, and is accounted for in a
moment, because, by tie raising of the duty, they were
freed from a most embarrassing and ruinous restriction,
and teed the full enjoyment of the markets of England.
(He; r We have much experience, I say again, to guide
tie Since 1855 the duties on spirits have been raised,
having been equalised between England and Scotland,
while a differential duty still remains in favour of Ire-
land. The duties have again been raised, and the results
have been equally satisfactory. I have taken some pains
to obtain the beat information on the subject, and from
what I hear there is not the slightest appearance of
illicit distillation. Look at the position of Ireland. At
this moment the only differential duty that remains be-
tween Ireland and Great Britain is the differential duty
on spirits. lam sure that my Irish friends, who are
always demanding justice for Ireland—(laughter)—and
who define that justice to consist in an identity of insti-
tutions, of rights, and of duties—(renewed laughter)—
cannot on reflection consider the position in which they
are placed by this differential duty on spirits with any
other but feelings of indignant humiliation. (Great
laughter.) I remember once, who" I was at Bristol,
a ship came in from Ireland, and, to my great
surprise, I saw it boarded instantly by Custom-house
offieere, and the crew treated just the same as a parcel of
foreigners. ;The vessel was searched to see if there were
any Irish spirits in the hold, which, if it had come in
undetected, would have paid a duty of 6e. 2d. instead of
Bs. Was that a position for " high-spit ited" Irishmen to
be placed in t (Laughter.) How much better will it be
for the Irish to have the command cf the English market
—lhear)--and not only of the English but of the British
market. How much better for them to enter into active
competition with English and with Scotch spirits, and,
instead of confining themselves to the supply of a mere
provincial demand, to make the most of those admirable
inventions which I am told the French now prefer even
to their own brandy. (Hear, and a laugh.) How much
better for them to pour their spirits into this country,
and through this country into the continent, and thus
give a great stimulus to the trade. (Hear.) Sir, I cannot
help feeling that this is a tax of which the committee ge-
nerally will approve ; and I trust that I shall experience
no opposition on the part of my Irish friends, and tbat
not a single murmur will be called forth by my proposal.
(A laugh.) If, however, there is a murmur ainung any
of them I would ask them in the most cordial spirit—
(laughter)—to consider, first, the position of the Chan-
cellor of the Exchequer—(hear, and a laugh)—and, next,
to bear in mind with what pride and satisfaction they
will return to their native country when they are able to
tell their constituents that that income tax with which
they were visited—not by me I may observe (they will
remember that) but which somehow or other, by means
I never could penetrate, was unexpectedly fastened upon
their necks—has been shaken to. its °ennui ; that that
real badge of their yoke has been nearly got rid of ; that
they have given a fatal blow to it. (Laughter.) In the
recollection of these cheerful circumstances they wi.l, I
hope, find ample compensation for any atnoyance which
they might otherwhe experience. (Hera.) The commit-
tee will therefore, I trust, sanction my proposition to
equalise the spirit duties ; and that will 'give to the Ex-
chequer the sum of at least 500,000/ , which is the
amount of he deficit. (Hear.) I am much obliged to the
committee for bearing with me while I have submitted
to them this somewhat lengthened statement—(cheers)
—but I am sure they will remember that my position is
not one of ordinary difficulty, because I have been
obliged by process of analysis to operate upon a large
deficit, .and, of course, to touch upon many circum-
stances. The committee will now consider that if the
course which I humbly recommend be adopted the de-
ficit has disappeared. We have put an end to the war
sinking fund, or postponed its operation to the happy
day when the Exchequer-bonds shall be paid out of our
revenue ; we have agreed to an arrangement with re-
ference to our Exchequer-binde, and prevented them
from forming any obstacle in the way of placing our
financial system in order ; and, lastly, by the proposal
to equalise the duties on serifs we have entirely got
rid of the deact. But I deem it advisable, besides, that
we should add something to the revenue in the shape of
surplus. (Hear.) I shall not press much upon upou
the resources of the country or the patience of the
house in this respect, because the state of our balance
is very satisfactory, and because a very large and un-
usual amount will be ad.led to them in the course of
this year. Nay, if I had chosen to avail myself of it,
a sum of 400,0001. might fairly be brought into the re
venue of the year. I have thought it best, however,
not to bolster up the finances, and I have felt that on
the whole the house would rather see the case under
than over•stated. But the East India Company, who
owed to the State 1,500,0001., have already paid
1,100,0001. of that sum towards the reduction of the
war expenditure of this year. This amount was lent
out e f revenue, and it was agreed that it should be paid
in revenue. There is yet 400,0001., therefore, which,
strictly speaking, might fairly be taken credit for in the
Budget ; but I thought it best on the whole to make
an unvarnished statement to the house. Nevertheless,
that 400.0001. will at all events be paid into the Exchequer
Lien there is a balance upon repayments over advances
this year rf probably not less than 600,090/. There are
moneys to be paid both on account cf the interest and
the sinking fund cf
,the Sardinian loan. There
are, too, other items, so that a very large sum will be
paid into our balancer, which, as the committee will
have observed from the balance-sheet, were themselves
at the end of the year iu a satisfactory position. This,
therefore, being the state of the balances of the Ex-
chequer ; remembering (which is really the fact) that in
the estimate of revenue which I have placed before the
committee I have most scrupulously refrained from in-
dulging in any but the most moderate expectat one ;
feeling, indeed, that if I had adopted the sanguine views
which many persons in autla‘rity would have satictionedf
I might have ventured on a more cheerful statement ;
looking, moreover, at the great efforts which the coun-
try has wade; I should not have thought it necessary
under all these circumstances to trouble the committee
much on this suSj •ct of a surplus. But such a surplus
I believe ought to be provided, even though it be a small
ono ; and, confident in the resources of the revenue, I
think a small one should under the circumstances suffice.
Now, so far as I can form an opinion on the subject
from conversation with men of business, there is no mode
of t ixetion more popular than the application of stamps
to various articles of commerce. (Hear, hear.) No oce
feels the burden ; it is a mode of taxation which on the
whole occasions less annoy ance than any other, and I
think in fact it is rather popular. (Laughter.) The
penny p istage system fret brought taxation by means
of stamps into fashi n. People like to tea vast results
acc implished by slight means. I therefore propose that
whenever we draw a check we should place a penny
stamp upon it. (Cheers.) I am assured by one who,
upon such a subject, mu t be considered the highest
authority, and who has very c anp!etely mastered this
question, that I may count on a stun of not less than
3Q0,0001. front this source. (Hear ) Of course, there
tnay be objsetions to the tax, but every man who draws
a scheck must remember that he has now to pay
an income-tax of only P. instead of 7d., and
obtaining as he does a remission of the income-tax,
and seeing the foundation of its future extinction laid,
he must feel that under the circumstances some sacrifice
must be made. (Cheers.) I hope, therefore, the
committee will agree with me that this is a mode of
taxation, if it can be called such, which they 'will not
refuse to sanction. (Hear, hear.) Considering the
p aition of the Exchequer at this moment, I am not
prepared to ask the committee to impose any other
taxes. I wcul'l ask them, however, to permit me fur a
moment to remind them of what may be the position of
this country in the year following the present, for, al-
though we hear many taunts about " prospective finatice,"
I think that any person in the office which I now have
the honour to occupy would be greatly wanting in duty
if he brought for ward any proposition without having
x-rcised some foresight in regard to it, and weighed in
some manner its influence upon our future prospects.
Now let us see, if the arrangements which I have pro-
p ered are agreed to by the committee, what will be our
prospect.; in the year following this. You will have
again a loss on the incoree-tax, as compared with your
present revenue, of 1,000,0001. ; and assuming that all
things remain the same, and that your revenue and ex•
peediture ate exactly what they are now, you will have
a less in 1859-60 of 1,000,0001. in your income-tax
whole 2.000,000/. of Excheriner bonds will become due,
You will have this 3,000,0001. reducadliT bat saytulie a
thatmoutit
of surplus which I. may obtain tide y, ar
you have to meet 3,000,000/. of dt Lit. Now, I put it
to the committes-13 that a prospect which ought to
alarm us ? Can we entertain a doubt but that with fair
commercial prosperity, with a fair revival of trade in this
country,- the resources of our revenue, aided by well-
considered and wise retrenchments, will be sufficient
under these circumstances to inset our engagements, to
pay these bonds, and to encounter that diminution of
income-tax. (Rear, hear.) Weil, if you do that,—and
feel confident that you will be able should no dis-
aster against which human provision is unavailing
overtake the country,—in what position shall we
stand in that famous 1800 which has been the pivot
of modern finance ? There are certainly 2,000,0001. of
bonds due in that year ; but you will have annuities to
the amount of something like 2,150,0001. per annum ex-
piring at a time when I hope and believe you will pos-
sess a large, a bounding surplus of revenue ; and you
will be able, if not to thu letter, at least in spirit, to ac-

complish the plan of the right hon. gentleman. It is for
that reason—in order that we may act fairly, candidly,
and sincerely towards the country on this question, in
order that the wise arrangements of the right hon. gen-
tleman may be assented to, and that that great policy—
fo: a great policy with regard to the income-tax I be-
lieve it to be—should be accomplished, that I shall pro-
pose not to encumber 1860 or 1861 with the bonds
which at present we cannot meet, but I shall propose
that in 1862 and 1863 1,000,00.0/. should be apportioned
to each year. (Hear, hear.) When that is done I have no
doubt the policy of 1853 will be carried into effect. e
(Hear, hear.) I now submit these propositions to the
candid consideration of the committee. When they re-
collect the expectations of the country as to the revenue,
and the fact that at the end of last year, and indeed so
late as the period at which I assumed office, the esti-
mated deficiency was not less than 6,500,000/., I hope
they will not be dissatisfied with the information that
by the rallying of the revenue during the last quarter,
and by judicious retrenchment, the immense deficit that
so long brooded over the spirit and depressed the energy
of the country has been dissipated, notwithstanding the
reduction of an impost most odious to the people, in a
manner which guarantees an entire accomplishment of
the right hon. gentleman the member for the University
of Oxford. This result will, I think, be satisfactory to
the country as well as to the committee ; and I trust
that these propositions will not only receive the candid
consideration of the committee, but obtain, after due
thought and discussion, the cordial acceptance of the
country. (Loud cheers, in the midst of which the right
hon. gentleman resumed his seat.)
The MIA IRMAN having put the first resolution, the
effect of which was that the duty on Irish spirits should
be assimilated to that on English and Scotch spirits,
Mr. GROGAN said he thought the committee could
not but admire the ability and clearness of the Chancel
for of the Exchequer's statement. (Cheer?) His state=
meat as to the deficit no doubt seemed to alarm them,
but they must feel he had conferred a substantial benefit
on the country by adhering to the arrangement of 1353, .
and thus insuring the extinction of the income tax in
1860. (Hear.) The committee would not feel surprised
at an Irish member's objection to one of the right hone
gentleman's propositions, viz., that as to Irish spirits.
(Laughter.) He had that presented a petition signed
by upwards of 4,000 of the inhabitants of Dublin, com-
plaining of the ruinous effects of the present war impost
on Irish whisky, one of the chief articles of Irish. mann-
f !eture, and praying for its reduction. What must be
the feeling of the petitioners when they learnt that not
only was that impost not to be reduced to its amount
before the late war, but further increased ? The statement
of the right hon. gentleman showed there was no neces-
sity for that increase of taxation. He had congratulated
the committee on the fact that an increase of the impost
had not been followed by an increase of illicit distillation;
but the peculiar circumstances of Ireland daring the last
two or three years prevented such a result. The right
hon. gentleman might rest assured that illicit distillation
would revive in full force as soon as the Irish crop be-
came favourable to it ; and that the gain to the revenue
from the proposed increase of duty would be more than
counterbalanced by the expense which endeavours to re-
press it would entail.
Sir H. WILLOUGHBY observed that the Chancellor
of the Exchequer had omitted the estimated expenses of
the Chinese war. He apprehended that as the expendi-
ture last year was estimated by the late Chancellor of the
Exchequer at 65,474,0001., but proved to be 70,000,0001.,
so the expenditure this year would be considerably more
than the estimate of the present Chancellor of the Ex-
chequer. He therefore wished to know whether it -
was not probable that the expenditure on account of
the army and navy this year would, as was the case
last year, exceed the estimates by some millions I It
was, of course, impossible for any Chancellorof the Ex-
chequer to estimate accurately in respect of contingen-
cies ; but on that very account the committee ought not
to rely on the right hon. gentleman's estimate of the ex-
penditure of this year. Ho most cordially approved his
proposition as to the income-tax, but begged to remind
him of the great injustice to which the holders of the
annuities that would expire in 1860 were subjected.
That class of public creditors paid 17 times more tax than
the holders of perpetual salinities. He wished to know
wheeler there were no outstanding debts which would
be included in the expenditure of the present year.
Mr. DEASY said that as the propositi n of the
Chancellor of the Exchequer would affect a most im-
port ant branch of Irish trade, and involve consequences
of groat importance in a social point of view, he hoped
the right hon. gentleman would not call for a decision on
the question at once. He (Mr. Deasy) feared the measure
proposed by the right hon. gentleman would lead to the
increase of illicit distillation in Ireland, and he hoped the
resolution would be postponed, at all events until Friday.
Sir C. LEWIS—In the very lucid statement which
the right hon. gentleman has made to the committee he
has adverted principally to the finances of the current
year, commencing in April last, but he also made some
partial allusion to the finance of the preceding year. His
statements, so far as they related to numerical facts, ap-
peared to me to be strictly correct, but some observa-
tions which he made in the nature of comment upon the
character of last year's expenditure I cannot allow to
pass without explanation. In arguing upon the question
of a war sinking fund the right hon. gentleman adverted
to the expenditure of last year, as proving that the epee
raticn of such a sinking fund was fallacious,—that there
was a deficit of 2,000,0001. upon the expenditure of last
year, anti the payments for the liquidation of Exchequer-
bonds to the extent of 2,000,0001. having been taken out
of the balances of the preceding year could not be consi-
dered as a redemption of debt out of the revenues of last
year. Now, I wish to call the attention of the committee
to the payments whistle were made out of the revenue of
last year in the nature of the redemption of debt, beyond
the 2,000,000/. of Exchequer Bonds. Out of the re-
venue of last eearthere were redeemed in the nature of
debt 2,000,000/. of Exchequer Bonds, and there were
also Exchequer Bills paid off in money to the amount of
288,6001. I. am not able to state wire• her these bills have
been reissued, but, so far as my knowledge extends., they
have not, and therefore their payment would be a re-
demption of debt. There was also the war sinking fund
of last year to the amount of 250,0001. ; there was a
sinking fund under the operation of the Act of Parfia-
ment, r.f 77,8621. ; and there was a payment of
1,1252061. for the redemption of Sound Duea, which
was in the nature of the payment of debt, inasmuch ,
as if it had net been defrayed from the revenues
of the year the amount must have been borrowed. That
amount was not included in the estimates laid before the
house at an early period of the session. The total of theme
sums it. 3,741,6681., which was paid last year in the na-
ture of the redemption of debt. The committee will
bear these facts in mind before they come to the conclu-
sion that there was anything fallacious or deceptive in
the redemption of debt last year. The amounts I have
mentioned were not the only sums paid last year out of
tee revenue, in additionto the estimate which I submitted
to the house at the beginning of the session. We paid,
sides', 635,0001. for the Persian expedition, 40,000/.
for the dowry of the Princess Royal, and a supplemen-
tary vote of 500,040/. for the militia. Now, all these
charges, in addition to the estimates I laid upon the
taale at the commencement of the session, were dis-
charged from the revenue of the year, with the excep-
tion of 2,000,0001. taken out of the balance of the pre-
ceding year, and I will state why I thought it a per-
fectly legitimate operation to diminish the balances to
that extent. On the 31st cf March:lBs7, the balances in
the Exchequer amounted to 8,668,0001., a HUM which was
unnecessarily large. On the 31st of March this year the
balances in the Exchequer amounted to 6,657,0001-,
which, as the right hon. gentleman has said with
great truth and candour must be considered a large sum
to be retained in the Exchequer. But out of the revenue
of last year many payments were made which were unex-
pected when the estimate of expenditure was submitted
by me to the house, and which were rendered necessary
by the Indian mutiny, and by the consequent increase of
expenditure for the army and navy. When these facts are
taken into consideration the committee will, I think,
come to the conclusion that there was nothing fallacious
or deceptive in the operations for the redemption of debt.,
last year. I shall not trouble the committee at any length
with regard to the plan of financial arrangements for the
curt eut year which has been submitted to them by the
Chancellor of the Exchequer. I will merely state that
I certainly concur with the right hon. gentleman in think•
ing that there is a fundamental distinction between a de'
ficnency of revenue caused by current expenditure, and
such a deficiency caused by operations in former ywl"
fur the redemption of debt. I reserve any observations
with regard to the war sinking fund of 1,500,0001 tent;
the right bon, gentleman brings is his measure. I m
the opinion I formerly expressed that some arrangement
of this nature ie expe tient to provide for the regular re-
demption of debt, f r if we trust merely to the operations
of the a x.sting Sinking Fund Act there is no security for
the regular reduction of debt, and if we are to redeeoz
any considerable amount it is necessary to impose a dis-
tinct obligation for the redemption of a certain sum-
When the Loan Act was passed it was impossible to fore-
see how long the war would continue, and I fully admit
that when we are called upon bylaw t tredeem 2,000,000/.
Exchequer.bonds, and there is a heavy expenditure for
military and naval purposes, it can scarcely be expected
t hat we should impose fresh taxes to meet the war sinking'
fund of 1,500,000/. The right hon. gentleman has said
with regard to the Exchequer-bonds, that be propose/
simply to postpone them, but he must be aware that they
do not admit cf postponement. They fall due on a certain
day, and there is no provision for the payment of these
bonds unless the right hon. gentleman takes a vote ill
Committee of Supply. What the right hon..gentlennso,
calls postponement is, therefore, in fact, the creation 01
another lean. (Hear, hear.) He can only pay off thew;
Exchquer bonds by borrowing, and therefore, inetead
of postponement, the proposal of the right hon. gentle'
man will lead to the incurring of another unfunded debt,
to the extent <f 2,000,0001. for a certain number 0!
yearn With respect to the equalisation of the spirit
duties in Iceland and Great Britain, I can quite confirm
the accuracy of what the house seemed to regard as
paradoxical statement on the part of the Chancellor p,!
the Exchequer—that great incidental advantages vino
restric
accrue to the Irish spirit manufacturers from the freedom
of interc terse and the abolition of rill fi,cal
rbe:eland e
inconvenient
nGi :neat tt
oßritain.
sh Acolnthsouumgehrsittorng;
d:iat ya
will derive great incidental benefit from the equalisatief:
upon spirits, the Irish spirit trade
r ght hon. gentleman has laid before the committees;
naob
ftootddwuoetuei
duties.
additional
perfectly fair proposition which tb
and I trust that be will not consent to any
fer a postponement of the resolution—(near, hear)
inasmuch inasmuch as any delay in a matter' of teis sort v/0011
afford an opportun'ty for taking spirits out of bond, T.
thereby snake a, considerable ditaintnion in the revenue
applicatia
weich the Exchequer would receive during the press t
year. (Hear, hear.) Therefore, if the committee are lua
come to a cerdueion upon the subject, I would etroetq.
advise them to come to that conclusion to-night, eattua
out agreeing to defer the question till some future day
Wear, bear.) I would also take the present opportu.
of impressing upon the right hon. gentleman and the