The Sun.
London, England, 1858-05-04 00:00:00

LONDON, TUESDAY EVENING, MAY 4, 1858.

THE SUN,

and which a short time ago was mentioned on a public
occasion, to the effect that the late Government and my-
self in particular as having charge of the financial de-
partment, had left the national finances in a state of
disorder and uncertainty, and bad bequeathed an in-
heritance of financial difficulty to our successors:. lam
bound to say that the right hon. gentleman opposite
when making his financial statement gave no sanction to
that report, and the numerical statement which he sub-
mitted to the house with respect to last year's finance
-vas quite accurate—so that as regards him I have no
complaint to make. But, sir, lam deisirous to remove
from the mind of any gentleman who may have received
such impressions, any erroneous ideas that may exist on
the subject, and therefore I shall, with the permission of
the house, call attention very briefly to what was the
state of the national finances at the period when we
exchequer,
xloht
emq
uaeyr., beli said
thati d thoaft t thhee
Englishaim of
aw were quitting
he
anellor
ofoffithicee,
lord mayor or the Roman Consul, is generally to get
over difficulties by temporary expedients, and leave
the permanent solution of them to their successors ;
but it was impossible for me to know last year
that the House of Commons would, by a vote
of censure on the late Government, cause my
retirement from office a few weeks previous to
the time for making my annual financial statement.
The state of things that existed I hoped to deal with
myself, and therefore I cannot see what foundation there
was for attributing to me the design of handing over an
inheritance of difficulties to my successor. (Hear.) But
I say further thht I did not leave any difficulty that did
not arise out of the state of the law, and that the
finances for the year were in as satisfactory a state as
could have been expected from the statement I had sub-
mitted. (Hear.) I estimated the expenditure for lest
year at 65,474,0001., and the actual expenditure was
70,378,0001., showing an excess of 4,904,0001. The
excess of revenue over my estimete was 1,416,0001.
and during the year the amount of debt paid off was
3,741,0001. Therefore, with the excess over the esti-
mate, and withithe excess of expenditure over the esti-
mate, and without the large sum paid for the remission
of debt, there was only an excess in the expendi-
ture of the year of 2,000,0001., which two _ millions
were taken by me out of the balances in the exchequer.
But I think I shall be able to satisfy the house that the
state of the balances in the exchequer was satisfactory,
and that the sums found there by the present government
were ample for the purposes of the ensuing year. In April,
1855, the balance in the exchequer was 3,949,0001.
but then in that sum was included a million of ways and
means bills in anticipation of the revenue of the succeed-
ing quarter, which were defrayed out of that quarter, so
that the actual balance in 1855 was 2,949,0001. In 1856
the balance was 5,600,0001. ; in 1857, 8,668,000/., and
on the Ist April last, 6,667,0001., which the house must
see was a sufficient sum for the year. (Hear, hear.) Tne
information I received on leaving offioe was that no de-
ficiency bills bearing interest would be required for the
April dividend, and I now learn that none have been
found necessary. Well, sir, if the expenditure of the
past year, including the payment of debts, was defrayed
by the revenue, and if a sufficient sum was left in bal-
ances at the end of the financial year, the house must, I
think, come to the conclusion that, so far as the finances
were concerned, the late Government left nothing in an
unsatisfactory condition. (Hear, hear.) I now pass on
to the plan of the present Government, and with regard
to that plan I would say that it appears to me, that so
far from the right hon. gentleman opposite being obnoxi-
ous to the charge brought against him on a former oc-
casion of being too adventurous, of departing too far
from the received and established maxims, he has on the
present occasion shown himself almost too prudent, too
cautious, I might almost say timorous.
Serpit huini tutus nimium timidusque procellm.
He has made an arrangement with the view of avoiding
a present difficulty, which I foar may with good reason
be anticipated to create greater difficulty hereafter. In
the first place, he has stated to us that he is agile to pre-
sent a picture of reduced expenditure for the present
year. I will admit that his budget exhibits in one sense
a diminished expenditure, inasmuch as he has been able
—and I rejoice at it—to somewhat diminish the army
and navy estimates of his predecessor. I give the
government al possible credit for that reduction, and no
ono rejoices more at the reduction than I do myself.
But when the government talks of a reduced expenditure
as compared with that of the preceding year, let us see
how that stand. The consolidated fund charge for last
year was 1,777,0001. Iu consequence of the probable
expense of compensating the proctors—an expense, let
me be allowed to say, which was pressed on the late
government by the House of Commons, which was an
expense which solely emanated from the feeling of the
house—in consequence of that item the charge this year
will be 1,900,000/. The estimates last year, except the
supolementary vote for the militia, were : Army,
11,893,0001; this year they are 11,750,0001. Navy
list year 9,172,000/. ; this year 9,860,0001. Civil
estimates last year, 7,895,000/. ; and this year
the right honourable gentermao sets them down at
7,000,000/. So that the total estimates last year were
30,230,0001. ; and this year they are 30,510,0001. ;
showing an increase in the pre sent year of 280,0001.
That increase must be reduced if you add the supple-
mentary vote for the militia—whether it will be required
or not this year. I cannot tell—but leaving out that,
there is an increase this year of 280,0001. This compa-
rison, which is taken from the right hon. gentleman's
own figures, shows that he is not justified in saying that
there will be any reduction in the expenditure of the
pre-ent year, and we do not know yet whether a time
may not arrive for increasing the present estimates.
While such are the prospects with respect to expendi-
ture, let us see what we are to expect in the way of taxa-
tion. The right hon. gentleman's plan is shortly this :
he takes off too millions of taxation, or rather allows it
to expire, and substitutes for it a somewhat precarious
800,000/. I call it precarious, because the 500,0001.
which he expects from Irish spirits is doubtful, and I
doubt very much whether the stamp on cheques will
make up the 800 0001. (Hear, hear.) It is true that
we shall lose only one of these two millions during the
present year; but nevertheless the ultimate loss will be two,
for which he only provides as a suh-ititute a precarious
800,0001. Theri be prnpo es to meet the Exchequer Bonds,
which were to be paid off this year, by creating a new loan,
and to postpone the war sinking fund of one and a half
million. Fir the Exchequer bonds he proposes to issue
two millions at 33 per cent., payable at any time not
exceeding six years ; so that the right hon. gentleman
will have the power of spreading his payments over that
period. He has not stated the mode in which he pro-
poses to proceed with this new loan, but I understand
he has made an arrangement with the B ink of England
for the gross sum. Whether that is the most convenient
course, or whether the pre-ant holders were not entitled
to some consideration and an offer to renew their bonds
on certain terms, is a paint which, no doubt, the right
bon. gentleman has considered, and until we hear his
reasons for the course he ha, t dzen, I ?dull rot press him
further on that point. But it is to be borne in mind that
the problem which the right hon. gentleman professes
to have solved will recur next year. There will be two
millions falling due then, and one million the year fol-
lowing, and therefore, unless he means to enter into a
steady course of borrowing for these bonds, I do not see
how his present budget can be defended, especially as
the loss of the income tax, which is only one million this
year, will be two the next. The next point is the divi-
sion of the sinking fund. I proposed that division deli-
berately and from a conviction Oa: it was the only safe
mode of arrangement. The Exchequer bonds stood on
a totally different footing. They were in the nature of
a permanent debt with a certain period appointed for
their payment, and when the money is due the parties
have to be paid unless they wish to renew. The nature
of a sinking fund is wholly different : that is a compul-
sory arrangement, made beforehand, by which the public
faith shall be kept by the redemption of a certain
amount of the debt annually, The right hon. gentle-
man, however, can perhaps convince himself that by
some self-acting process—by some system of compound
interest, the enormous debt incurred during the French
war may be liquidated I dare say hon. gentle-
men have read the plan proposed by Mr. Pitt for re-
ducing the national debt by a sinking fund, and I need
not remind the house how illusory that plan proved to
be—how every trace of it was swept away from our legis-
lation, and how all that remains of it is an obligation
that when any surplus exists, it shall be applied towards
the reduction of the national debt. (Hear.) If the finan-
cial position of the nation resembled that of a private in-
dividual—that was, if the expenditure had to be regulated
by the income—a sinking fund, such as is provided by
the Act of Parliament, would be a reasonable means of
extinguishing a debt. But that is not the case, The
system that must necessarily be pursued by the nation
in dealing with its finances he fiat, to take the expendi-
ture, and then adapt the income to it. The consequence
is that there is not likely at any time to be any consider-
able surplus applicable to that purpose, and unless the
house is prepared to make it obligatory upon the G. -
veronsent—unless the ways and means are specially pro-
vided year by year to form the sinking fund, we must
make up our minds quietly to submit to the perpetuity of
our present debt, and satisfy our consciences with aunt-
ally paying the interest without reducing the principal.
(Hear.) I need not remand the light hon. gentleman
that in a year when two millions of Exchequer bands fall
due, there would be very great difficulty in discharging
a million and a-half of your sinking fund. (Hear.) But
when the Act of Parliament was passed that difficulty
was not foreseen, and I think under the circumstances
the right hon. gentleman's proposal for postponing •the
sinking fund is reasonable. But what I object to in the
present scheme is that he makes no attempt to pay off
the two millions of Exchequer bonds, either wholly or in
part, and that he postpones the war sicking fund just
as if no obligation existed to pay it. It has been often
said that the national debt of this country is of so gip., -
tic a nature that it is in vain to make any attempt to
pay it. off, and that as the aggregate sum so far tran—
cends the powers of any ,generation to deal with it, we
must be cmtent to submit to what has become an inevit-
able destiny, (Hear) L. tit then' be borne in mind,
that the capital of the debt is but a nominal li=ability,
which the Government of the couo'ry will never be
called upon to discharge—rt stands in the shape of N
certain amount payable as perpetual annuities. But
I would call attention to the fact that if money is bor
rowed at 5 par cent., a equalßurn to the whole capital
is paid off in the shape
f interest
20
years. Where
it
isberrowedatin the course cf
a lower rate—(as is the
case of the national debt of this
takes a longer time to pay off in
icnotuuretsret7 a )--.af coursel
to
t
the total capital. Still within a limited
period
equal
odtineust
be the resu!t, and supposing a debt stands at three and
one-third per cent,, which is the average rate for the ra-
tional debt, you pay every thirty years in interest a sum
equal to the whole amount. I think, however .
ver large the
sum may be, it is not so great tLat some efforts might be
made. (Hear, hear.) I now come to the view t k
„ tql by
the right hon. gentleman as to the national obligation to
reduce arid finally to extinguish the income-tax. I see.
fess I have treat difficulty in understanding the theory,
for which the right hon. gentleman contends as to na-
tional engagements of this nature, If I understand him

correctly he holds that an act of parliament that calls
upon us to pay off 2,000,0001. of Exchequer bonds is
not a binding engagement—that enact of parliament that
requires to pay out a million and a half as a sinking fund
is not a binding engagement; but that it is competent
for parliament to take in hand the revision of both those
engagements. When, however, he comes to the remis-
sion of taxation, then he rays the act of parliament is a
national engagement which we are bound to respect. I
would ask the house, in considering this question of na-
tional engagements, to recollect the necessity of balanc-
ing the income from year to year with the expenditure,
and that in a country whose taxes can be so little be pre-
determined, every year that question of balancing the
expenditure with the income must be solved. Now, what
I want to know is, are we to lay it down that all engage-
ments of thi, sort for the remission of taxation are to be
held sacred, while engagements for the payment of debt are
to .be looked upon as absolutely worthless ? I quite agree
that engagements made by act of parliament to discharge
nations! debt are always subject to certain conditions.
I admit that Parliament never can tie up the hands of
its successors, and that it is always open to the house to
reconsider engagements of this kind that it may have
entered into. lam not the advocate of irrevocable and
unchangeable laws—that is a fallacy which has long
since exploded—but if this doctrine of holding to na-
tions' engagements where it is for our immediate con-
venience we should do so, and treating them as valueless
when to fulfil the obligation would tend to our present
inconvenience—if this be the principle on which we are
to act it ought to be declared. (blear.) The right hon.
gentleman, in applying this doctrine to the finances of
the present year, says we are under a sacred engage-
ment to reduce the income tax, and by allowing the law
to take its course to diminish that impost from 7d. to sd.
in the pound. Rut when we are thus called upon to give
effect to a solemn national engagement, perhaps we may
take a more commonplace—a less dieeolving view of the
amount of benefit that will be derived by the taxpayer
from this relief. Now let me ask, what is the extent of
relief which that change will afford I During the war
the income tax was 16d. in the pound—equal to 61. 13s.
4d. per cent. On the return of peace the late Govern-
ment, not acting in obedience merely to popular de-
mands, but in accordance with what they thought the
interests of the country, proposed to take off the war 93.
which was equal to 3/. 15s. per cent. Everybody will
see that that was a substantial relief, and it was felt as
such by every class of incomes, upon whom the high rate
of the war income tax pressed with great severity. The
result was the income tax of last year was 7d. in the
pound, or 2/. 18s. tf. ph cent., which for an income tax
cannot be considered oppressive or severe. Well, the
right hon. gentleman takes off 2d. in the year—one mil-
lion of which only comes into effect this year—he takes
off 16s. 81. per cent., and so reduces the 21. 18e. 4d. to
21. is. ld. per cent., the whole amount cf relief afforded
this year being, however, only B+. 41. per cent. I say
that that is an amount of relief that will scarcely be felt
by those • who pay the income tax. A reduction of
16+. Bd. per cent. is not an amount that would be seuibly
felt by persons of large means, who do not gene-
rely calculate their incomes with such striot accuracy as
for so small a change to make any difference to them, and
on the other hand the persons with limited incomes—
those with 2001. or 3001. a year—the 16+. Bd. per cent.
per annum is so small a sum that it cannot be said to
afford to them any sabstantial relief. (Oh, oh, and
laughter.) Therefore I say that the right hon. gentle-
man, in his arrangement, by not paying the Exchequer
bonds either wholly or in part, but applying the money
to the reduction of the income tax, has violated an im-
portant principle of finance without giving any substan-
tial relief to the taxpayer. (Hear.) There is another
important question involved in the right hon. gentleman's
plan. He denounces the income tax as unjust, and re-
gards it as a national obligation that that tax should
expire in 1860. But we know nothing of what may be
the state of our finances in 1860 ; we do not know whe-
ther our Expenditure will admit of our dispensing with
5,000,000/. of taxes, which is the amount at which the
income tax will stand. Is it probable that there will be
a surplus revenue of 5,000,0001. to enable you to dis-
pense with that act ? (Hear.) There may be some few
'people sanguine enough to suppose that we may be in a
position in the year 1860 to deal with that particular
problem. I hope it may so prove ; but it may turn out
that there is no surplus, and then if it is to be under-
stood that we are bound to abandon this 5,000,0001., the
produce of the income tax, the question will arise what
other source of taxation eon can resort to obtain an equal
sum ? The income tax falls for the most part on the
wealthier portion of the community. (Hear, bear, and
Oh.) It is easy to get up here in an assembly of gen-
tlemen and denounce the income tax in the strong terms
which the right hon. gentleman thought fit to employ.
That is a very easy mode of getting up a cheer; but
before that tax can be abolished, and before you can
substitute for it 5,000,0001. of taxes levied upon the
general consumption of the country—and therefore
taxes affecting all classes of the community--it will be-
come necessary for you to address assembles of a
different character—assemblies of persons who will no
doubt meet together, and which will contain amongst a
large number who do not pay the income tax a very few
who do pay it—as this house contains very few persons
who are exempt amongst a large number who are liable.
That is a consideration I would press upon the notice of
the house, before they take a step which may have the
effect in a future year of fettering their deliberations,
and prevent their taking that course which they may
then judge to be most conducive to the interests of the
country. I would call attention for a moment to a brief
comparison founded upon the right hon. gentleman's
own figures for the present. year of the
direct tax.: ion of .the country—with a view of seeing
whethet it is really advisable that we should pledge our-
selves to the abolition of the income tax. According to
the right hon. gentleman's statement, the produce of the
customs and excise, which form the great bulk of our
indirect taxation, will be 41,500,000/. This is the
amount of our indirect taxation. Let us now lock to
the direct taxation, and see how very small is its com-
parative amount, and that after all that has been said
about raising a large part of our revenues by direct
taxation from the more opulent classes. Tne customs
and excise produce 41,500,0001. ; the land tax,
1,200,000/. ; the assessed taxes, 2,000,0001 ; the income tax at the reduced rate, 5,000,000/. ; nicking to-
gether 8,200,000/. &Hedy spesking that is the total
of our direct taxation, and if you take from that the
whole of the income tax, all that will remain is
3,200,000/, There is another class of taxes which I class
with direct taxation, though they differ in some respects
from the preceding. The-u are stamps, probate duty,
and succession duty, amounting to 7,550,0001. Then
there is the revenue from postage, which in some
respects partakes of the character of a direct tax, though
it is in Het payment of service rendered—that is calcu-
lated by the tight bon, gentleman at 3,200,000/ , making
together 10,750,0001. But, adding this total to the
re.her, they do not equal one-half the amount of the in-
direct taxes. (Hear,.) Well, sir, under tussle circum-
stances, I confess it seems to me that the house ought
not to come to a distinct pledge with regard to the
period at which either the income tax, or any other tax,
shall cease. Ido not wish to beunderstoeda+ expressing
any opinion against the cessation of the income tax at
any time when the interest of the country shall permit
its abolition, lam ne advocate for the income tax All
I desire is that when the time arrives for discussing that
suhjsct we shall be free to deal with it, and not find our-
selves tied up by a deolaration of the right hon. gentle-
man's by which the house is to bo held bound. (Hear.)
I for one refuse to allow my judgment to be interfered
with and fettered by the declaration of the right hon.
gentleman; and wish to hold myself perfsc ly free in fu-
ture years to exsrcise my own judgment upon questions
affecting the revenue and expenditure of the country at
he time ; and I hope the house will join with me in re-
fusing to be bound by any test of that sort which may be
thought to have been imposed upon them. (Hear, hear.)
The question cf the probable remission of the income
tax must depend upon the view which the house might
take of what should be the amount of the public expen-
' diture. It is for the house to rtgulate that expenditure,
and I must here remark that whatever proposition the
government may bring forward at the commencement of
the session far the different public establishments, when
the estimates have been once adopted by the house they
cease to be the estimates of the government, bat become
the votes of the house, and it is in vain fur hon. gentle-
man t a get up and attempt to separate their responsi•
Wit), from the responsibility of ministers. It is the House
of Commons that passes the votes, and nothing can be
more unjust to the right hon. gentlemen opposite (the
government) than to hold them responsible for the ex-
penditure involved in the estimates atter they have been
voted by the house. It is with the house that the re-
sponsibility ultimately rests, and whether before in-
quiry or after inquiry they sansaien the expenditure it
,s n-t competent for them afterwards to blame the go-
vernment. (Hear, hear.) Well, sir, having had the ex•
perience during the last few years which is gained by
sitting en the opposite bench, and having the respou-
sibi ity of balancing the revenue and expenditure of
the country, I feel bound to say that I have witnessed
with some surprise that in the present state of
parties—in the absence of any strong feeling, of any
great public demand out of doors—in the absence of any
compact party organisation in Parliament, it is the Go-
vernment that has become the greatadvocate of economy,
and the different sections of the house that have taken
upon tiler:selves te be the advocates of increased expen-
diture. lam bound to say that the great pressure now
brought to bear on the Government is not, as formerly,
for the diminution of expenditure, but comes from vari-
ous quarters, and is in its nature personal and sectional,
and is directed to an increase cf expenditure. (Hear.)
It is a pressure which it is very difficult for any Govern-
ment to resist; and the house will never become fully
conscious of its responsibility in this respect until the
problem is solved of equalising revenue and expenditure.
What the house is too much pledged to in the present
circumstances of the country is the increase of expendi-
ture, and at the same ti•ee the reduction of taxation.
(Hear.) That is a process which of course cannot go on
very long, unl-ss you hive recourse to the ruinous sys-
tem of peace leans. I admit the right hon. gentlernae the
(Mance dor of the Exchequer has not hinted at any such
course ; but tutees the house is prepared to have recourse
to a system of peace loans, increased expenditure and
reduced taxation cannot go on very long together. When
I urge that the pressure in the house was in the direction
f increased expenditure, I only do justice to those ger,-
!lumen who are the authors of that pressure when I tay,
that it is very rarely that it is made without a view to
ol,j,ct, of a publc and ussful nature. The desire for the
improvement of each branch of the public service which
thee connected with it entertain, and the desire for the
attainment of some particular object of a public character
which each Person has in view, naturally induces him to
seek the largest grants fur that puapose. How fie qgessiy
do we hear in this house suggestions for improving the
contrition of the sold;er—the improvement of barrack ac-
commodation—and what numerous plansare brought for-
;
ward for the benefit of thearmy and the extension of our'
military force, all of them involving a large increase to
the public expenditure. lam aware that those suggee-

. ~:~L 0

tieing and proposals are none of them dictated by personal
motives, bui entirely from a sense of what is required
for the public interest. Similar plans are brought fate
ward as respects the navy. Then we have suggestions
for promoting :education, for encouraging seience and
art, for improvements in our public edifices, for making
electric telegraphs by land and by sea—in short, time
would not suffice for me to enumerate the different pro-
jects which are urged upon the Government from time
time to time, and which in some instances they are com-
pelled to adopt, and which necessarily add materially
to the aggregate of the public expenditure. If this
system is to go on, anl the Gevernment are to be
charged with backwardness, and with being influenced
by a niggardly spirit it they venture to interpose an
obstacle on the ground of expense, and the hous e as
bas been stated on some occasions, decline to support
the Government in resisting such demands—then it
will bs impossible to make those reductions in taxation
which the right hon. gentleman opposite speaks of as
necessary. (Hear.) The same rule applies in regard to
those rues of Colonial and Indian policy which are ad-
vocated by many gentlemen in and out of this hon=e. If
we are to extend cur armies in those dependencies—if
we are to go on enlarging our empire, and wherever
there are a few British merchants we are to send ships to
protect them—in the event of any dispute between them
and the natives—and if we are to maintain nearer home
that spirit of foreign policy which the house has recently
shown so strong an inclination to support—(oh, oh, and
bear, hear)—if we are to be perpetually menacing our
neighbours, and if at the extremity of the world we are
always to be prepared with fleets and armies to afford
protection to British interests, it will be in vain for Go-
vernment to attempt to reduce expenditure to that point
which will admit of the abandonment of an im-
portant source of revenue. (Hear, hear.) I did not
intend to trouble the house at such length, but before I
sit down I would again urge the house to con'ent itself
with a settlement of the financial affairs of the present
year. Hon. members can scarcely forget the experience
of the previous year, when, after the estimates were
prepared, the Indian revolt broke out with such intensity
as threatened to reverse all our calculations. (Hear,
hear.) I believe that the assurances which, at the close
of the session, were given by my right hon. friend (Mr.
V. Smith) with regard to the pressure upon our finances
caused by those Indian disturbances, have been realised
(hear, hear)—but we gave those assurances with great
reserve and great mistrust in our own judgment, and
without any certainty that they would be justified by
the result. Had events taken another turn it might
have been our duty to have called Parliament together
in the course of the autumn or early in the winter, to
have laid before them the increased estimates, and asked
their assfstance in making far greater military prepara-
tions than those we have been compelled to resort to.
With our enormous empire, and the extent to which the
energy and enterprise of Englishmen is carried, and the
extent to which that enterprise is protected and en-
couraged, it is quite impossible at the beginning of any
year to say with confidence what will be the limit of the
expenditure even of that year, much less what may be
the state of things two or three years hence. There-
fore I trust the house will not enter into any prospeo-
tive engagements with respect to the taxation of future
years. (Hear, bear.) Ido not ask them to keep up a
particular tax, but merely to abstain from entering into
any rash obligation, and to leave themselves, when the
proper time arrives, free to exercise their discretion in
dealing with the question according to the circumstances
as they then exist. (Cheers.)
Mr. GLADSTONE thought it would have been more
for the convenience of the house if there bad been some
notice of the discussion of this question. He entirely
concurred in the endeavours of his right hon. friend to
draw attention to certain serious consequences of the
practice now unfortunately on the increase, of view-
ing the house, not as a curb upon expenditure, but
on the contrary, of bringing its influence to bear as a
stimulus to increased expenditure. But when censure
was thrown on the house, he must say, as one of those
whose duty it had often been officially to resist motions
for an increase of expenditure, that Governmects were
not without blame in the matter, as they sometimes
offered to the attacks cf this house a feeble resistance
which scarcely carried with it the air of seriousness, and
they had thus permitted the house to usurp the functions
of the executive. The right hoc, gentleman n, ticed a
rumour that the state of the finances was not satisfac-
tory. As to let year, he (Mr. Gladstone) hat hoped
that they had had enough of the subject ; but while he
did not think it was convenient to discuss any matter in
that house on the grounds of rumour—(hear)—he must
point out that the state of the finances was not a matter
of rumour, bat a matter of figures, and he for one ad-
hered to the opinion that it was anything but satisfac-
tory. (Hear.) In speaking of the reduction of the debt,
the right hon. gentleman had included the 1,100,0001.
F r the redemption of the Sound Dues, It was a mis-
take to call that a reduc ion of debt, It was a payment
of a charge arising in the course of the year, and the
money was borrowed from the expenses of the war. To
call that a reduction of debt was to use a form of lan-
guage calculated to mishad. These were matters of fact
which there was no occasion to enhance or exaggerate,
and which it could be no great advantage to discuss.
When his right hon. friend said, "Don't let us make
these engagement binding and unconditional," he (Mr.
Gladstone) could not help feeling how strongly the
warning applied to the right hon. gentleman's own en-
gagement to pay off under the name of Sinking Fund
one million and a half per annum. It was true that Mr.
pew., -,.1.1m fainutiB Would
be his best title to the approbation of posterity, bad been
abandoned, but there was much more to be said for that
project as invented by Mr. Pitt, than as now revived.
If the theory was one which would not bear the test of
practice, at least Mr. Pitt had never seen it fail. But
whet was to be said of those who having seen it fail, and
having heard every eminent man give te,tirnony against
it, bad three years ago constituted it afresh ? (Hear.)
How had it operated ? Why, this year the want
amounted to 250,0001., and the Minister of the Crown
told them it was impossible to fulfil the engagement.
The right hon. gentleman did not appear to have suffi•
cient confidence in his own plan to go to a division.
(Hear, and a laugh.) He was sorry to hear the right hon.
gentleman say that the only means of reducing the debt
was by the means he suggested ' • for there was no doubt
that the debt had been reduced very considerably dur-
ing the last 30 years. Did he think that the system
which he designated as alone practicable would pay off
half as much in a similar period ? He hoped the matter
would be brought to a fair issue. (Hear, bear.) The
house ought to have an opinion one way or other. If the
precut system was to last, let them declare it by taking
some positive step. If they considered that it wa' bad,
let therp bane done with it altogether. If 1,500,0001. a
year was to be paid in this manner, of course the fund-
balder had a great interest to keep up that system. The
objections originally raised when this arrangement was
proposed gained fresh strength so long as it wa, con-
tinued, but not allowed to become efficacious. (Hear.)
They were bound to pay off 1,500 000/ Was there any
possible condition of affairs in which the income being
sufficient all but that amount, the Chancellor of the Ex-
chequer would come down to the house arid ask for an
increase of 1,500,000/. to eay off the debt ? Would any
conceivable Chancellor of the Exchequer do so ? (A
Would the right hon. gentleman do to himself if
he ef the Exchequer when that state of
thingsgh.) were
uc
shObtaidaeriiiSer? (Hear, and laughter.) He had not
dens justice to the ordinary sinking fund, as in most
years there was, under fair circumstances, a surplus, the
application of which tended much to reduce the debt,
It appeared to him that the Chancellor of the Exchequer
was under no engagement as to the Exchequer Bonds ;
except to reimburse the holders there was no obligation
to pay it this year. He proceeded to review the c,rcum-
stances under which they were made redeemable in 1858.
They were put out as redeemable in this year as the most
convenient mode for the ehigencies of the time, but that
was not intended as a promise that they should be paid
this year. As respected theinconae tax the right horn gen-
tleman had over-seated the doctrine of covenant or com-
pact as alleged by those who were in favour of the reduc-
tion. No person thought that the house was absolutely
pledged to the extinction of the income tax in 1860.
The doctrine of his right hon. friend was not that the
income tax was a great instrument of taxation, which
might be properly continued for great objects of public
policy,
but that it was a convenient part of the ordinary
financial system of the country—(hear. hear)—but that
was not the ground on which they obtained the income
tax from the people in 1842, when it was enacted ; in
1845, when it was re-enacted ; and in 1853, when it was
extended to Ireland, and carried down to a lower class,
(Hear, hear.) A directly opposite language was held,
and Parliament and the country were told that they
were asked to pay an income tax because it was a con-
venient portion of the ordinary resources of the country, '
but because certain great ends of policy were to be at-
tained by it. (Hear.) First, an active reconstruction
of our commercial and financial system; and, secondly,
the maintenance of the honour and interests of the coun-
try in an European war. (Hear.) Beth objects had
been attained, and if they were going to change the in-
come tax from a special tax to as ordinary tax, to be
applied to the common expenditure of the country, it
ought not to be done in the dark. It ought to be web
understood. And before making it such, the country
ought to have an opportunity of giving its verdict whe-
ther or not it would pay taxation on that footing or not.
(Hear, hear.) The income tax was first put on twelve or
thirteen years since, and hart been kept up, to a certain
extent, for the benefisial remission of taxation ; but that
was not the case now, and he asked them what had been
the history of the paper duties, the wine duties, and
marine insurance duties of late years. (Hear.) The pro-
cess of remission of taxation had been completely ar-
rested,
and without saying one word about its resump-
tion they talked of the continuance of the income tax,
because it was a convenient mode of taxation. (Hear.)
Not only bad the changes for which the tax was imposed
been stopped, viz., for benefitting the consumer and the
general body of the people, but they had begun to travel
in an oppo its direction--(hear)—by the reimposition of a
duty on sugar of 10s. per cwt. and of Is. per pound on tea.
His right hon. friend the member fur Radnor had
favoured the house with an immense number of figures
to show that a great extent of indirect taxation bad been
retnitt-d, but he had omitted to state that two million,
were last year added to the permanent taxation. (Hear.)
It was right, he thought, the house and the country
should have a clear ureters and ng upon the subject, and
if the latter were of opinion that the income tax should
be permanent, by all means let it be paid ; and be was
bound to say that he did not think the house had shown
that degree of person:al seiffshness as a body to the in

come tax, ought to txpo.:le it to censure from the course
it might purue in reference to it. There were many oh-
jectfotis, however, to the income tax being made a per-
manent tax. One of them was a moral objection—(hear)
—and he expressed his belief that it did more to corrupt
and demoralise, not from the accident of its levy, or the
fault of those who levied it, but from the essential .nature
of the tax itself—(hear)—and the other objection was,

that so long as it was a permanent tax so long it would
be vain to talk of economy and effective reduction in
expenditure, from its being so productive a source, and
an engine so convenient and easy to levy. (Hear, hear.)
It was, therefore, in consequence of his belief that our
scale of expenditure admitted of considerable reduction
that he was of opinion the tax should come to a speedy
termination. (Hear, hear.) He thought the house were
justified in entertaining the expectation that the right
honourable baronet the member for Radnor would have
told the house in the course of his remarks what he
would have done if he had been the Chancellor
of the Exchequer. (Hear, and laughter.) He, however,
went very near it, but he did not quite come up to the
work—(laughter)—but he (Mr. Gladstone) thought some-
thing material was to be extracted from what he did
say, viz., that the reduction last year of the war income
tax was the deliberate act of the late Government, and
was not surrendered under paltry pressure. (Hear.) He
was extremely glad to hear the statement repeated, be-
cause it was one that had been impugned in various
quarters by one hon. gentleman, a member of the late
Government, in his addiess to his, constituents in the
autumn, who, when challenged 'IV hie constituents why
the army and the establishments the country were not
in a better state when the mutiny broke out, answered
" How could we have them in a better state, when the
House of Commons, Mr. Disraeli, and others, would not
allow us to keep up the war income tax. (Hear, and
laughter.) His right hon. friend had now put an extin-
guisher on all those rumours, and it could now be no
longer said that the extinction of the war income tax was
a proceeding extorted from the late Government by the
Parliament. But what would the right hon. gentleman
have done if he had now been in office? It appears to
me if he had raised the income tax ls. 9d., he would
not have reduced the Exchequer bonds, but have kept
up the sinking fund ; but if the income tax bad been
raised by him to 10d. in the pound, he (Mr. Glad-
stone) doubted if there would have been a surplus.
He, however, adhered to his opinion, that it was
the duty of a Minister and Parliament to have a
clear surplus, and to keep in view that the only time to
pay off a debt was in a time of peace. He did not think
the Chancellor of the Exchequer was justly charge-
able for failing to liquidate the Exchequer bonds, for
which he had not been supplied with a single farthing,
and still less ought the charge 'de/Rifest him to proceed
from those who had induced the house to raise and ex-
pend for other purposes the money applicable for their
reduc ion. (Hear.)
Mr. CARD WELL admitted that dm Chancellor of
the Exchequer was perfectly justified in postponing the
war sinking fund. He further admitted that Govern-
ment were not bound to pay off the Exchequer bonds,
but he doubted whether the course proposed with regard
to them was a prudent one. Their-, payment was post-
poned till a titan when we shall have lost the amount of
the income tax. Would they then be able to meet it ?
They were laying the foundation for future Chancellors
of the Exchequer to reimpose the income tax, for if they
did not pay these bonds out of that tax 'hey would have
to pay it out of new taxes, checking the prosperity and
.injuring the resources of the country.
Mr. T. BARING defended the much-abused sinking-
fund, which was the honest wish to pay debts and not
to saddle them on posterity. The Charicellor of the Ex-
chequer had necessarily courted popularity by remitting
taxes and leaving the debt to take care of itself. Unless
the diminution of the debt was Made obligatory it would
depend upon the conduct of Government how we dealt
with it in times of financial ease. As to the question
between direct and indirect taxation, the wisest course
was to divide taxation between the two, so as to check
consumption and embarrass employment.
Mr. BRIGHT—I wish to make a few observations
upon the subject under discussion. I did not hear the
whole of this debate, but what I did hear of it is of that
confused character which one might have expected from
the dilemma in which we are placed. (Hear.) One
side of the house casts the blame of placing us in our
present position upon the other ; but the truth of the
matter is, that we have been spending a great deal too
much, and the difficulty is how to raise money to meet
the demands which have in consequence arisen. (Hear.)
There is e contest between the rich and the poor, and,
as is generally the case in this country, the poor go to
the wall. (Cries of "No, I should be very glad
if I could agree with the gentleiiien who cry "No ;" but
when you maintain a large ando permanent tax upon
articles of import which are mliedtop with the comfort
of every cottager's family in the kingdom, and you re-
duce a description of tax almost touching nobody who
has less than 1001. a year, I cannot help thinking that
people out of doors who read this debate will come to the
same conclusion as that at which I have arrived. The
fact is, we are endeavouring to do that which is impos-
sible—trying to render a' Very effeevy taxation easily
borne. (Hear, bear.) Such eihtskiAtion never was and
never will be easily endured. e-War, hear.) You mustshift it from one shoulder to-finottCrteh The rich arid the
powerful will do all in their power to shift the burden from
themselves, and it will rest, as in this country is the case,
mainly upon the great masses of the population, whose
incomes are small, but whose consumption of taxed ar-
ticles is in consequence of their numbers very consider.
able. It has been said that much of the difficulty in which
we find ourselves in reference to this question of taxation
is to be attributed to our foreign policy. (Hear.) I concur
in that opinion. We are pursuing a foreign policy which
every man among us condemn in so far as it has been
acted upon by a past generetion—(bear, hear)—and
which will receive at the hands of a future generation an
equal share of condemnation. Allusion has been made to
the combative spirit which has been raised among the
people of this country ; but whenever that spirit has been
raised there have always been statesmen ready to take
advantage of it for the purpose of placing themselves upon
that (the Treasury) bench, or, iLakeady there, to main-
tain their position upon it. •
.Wfittere had two wars since
the particular time to which3.oi:eht hon. gentleman
has referred, eon of which wweetregun, was carried on,
and was ended without, so far as laetiow, one single word
of information being given to this house--(hear, hear)—
and, more, I believe that war Was brought to au end a
the time it was because the Minister stood in some
fear on account of a memorable debate and division
which had taken place in this house in connection
with another war. That war the house condemned
—the Chinese war and the Minister thought
that perhaps he might be trespassing too much on the
patience and credulity of the country, and therefore he
huddled up one war at least, that he might have only
the other to manage with the-country and Parliament.
But that Chinese war the House of Commons bas con-
demned, and that condemnation has never been reversed.
(Hear, hear.) It stands upon our records now; and
although, from circumstances which few men will look
back to with satisfaction, a Parliament was returned
apparently to reverse that senteece, yet no man, Minister
or member, has dared to ask that Parliament to reverse
that sentence. (Oh, oh 1) Let the hon, gentlemen who
cry "Oh !" try to do it. (fh.ar.) We do not know now
whether wseare at war with Miele or not. I understand
that a celebrated individualeilAtiya of that country, has
been taken prisoner acid is now in India. Is he a Pri-
soner of war, or has he been taken away merely as a
curiosity ? (Laughter.) Ido not know what the Govern-
ment of Lord Derby is doing as to that question They
at least are not responsible for entering upon that war
—(hear, hear)—but they will make themselves respon-
sible if they delay one single hour to bring it to a con-
clusion. We are in that country, to my mind, as I
solemnly believe, making the English name hateful, and
making the spread of our civilisation and our religion
utterly impossible in that portion of the earth. We
have no object, for every man admits we can't have ter-
ritory. We gain nothing but trade. Trade surely will
be better carried on with a nation with whom we are at
peace than with one with whom we have fraudulently
and upon false pretences plunged into war. There is
one other point c inflected with our expenditure to which
I wish' to refer. I never yet have seen a Minister since
I have sat in this house who emeltany real attempt to
diminish the expenditure of the country. To take one
case. Ido not know the .44 amount of the navy
estimates, but I know they are some millions in excess
of what was voted a few years ago. I suppose my
bon. friend the member for Lambeth (Mr. W. ‘Villiatas)
could tell me to a sixpence--(laughter)—fur I believe
these vast estimates weigh upon his mind, and
discourage him precisely as they do me. Now, no
country has a fleet that can measure itself vt,te that of
this oountly except France. Does anybody who site
there (pointing to the back Opposition benches) deny that
the fleet of Russic cannot compare with ours ? Au-trig
and Prussia have no fleets at all of any consequence.
' The United States have one ship of the line and a few
frigates, bvt not one ship of war in 10 compared with our
navy. I should like to know why it is necessary thatthis
country shoule maintain many hundred vessels of war of
all saes, when there is no other country which has a
fleet to oppose to us, ixeept that country which is our
nearest neighbour and closest ally, and which, we are
told, is only anxious to be on terms of amity with us ?
Hon. gentlemen may t link the amity of nations is not
always to be relied upon, and although I do net doubt
in the least the desire of the Eniperor of the French t i be
upon terms ef friendship with this country, yet I never
had myself the slightest sympathy for that alliance which
has existed between France and England. Amity with
all nations, justice and courtesy to all, but intimate and
political alliances with none. Tbat is my policy, and I
believe it is the only policy in these matters whichf cars
Minister lead to good. If you ask the French
iahe o Marine
why his estimates are so large, what w you
He will tell you be is building great ships, which he be-
lieves will never be of the least use, because England ie
building great ships, which every sensible Englishman
also knows will not be of the slightest use. He will say,
France has almost bo colonies, very little foreign com-
merce as compared whh this country, teat France has
no pretension whatever to a great nevy ixcept her near-
nesse to England, and the policy E gland in alwah
maintaining an enormous nave. Supposing that a mi is..
er if this country, darieg,to grappl - with this queeti• n
were to say to the Ithirperer of the French, instead cf
squab's-Flag about the Ste z Canal, or, I will not say be-
traying, bet differing from him upon the question of the
Denuhian Principalities, or nog ,tinting about some let -
tee matter the decision of which sitter way will Lot
affect any man iu England —suppose, instead of that, a
Mini. rcv re to say, " Why are we thus always plae-
ing at beggaring one another- with millions spent upon
our navies, while our populations are suffusing merely
that we may hold our fists in each ther's face ?" I
ask the house in all seriousness, wool i it not be bet-
ter, instead of eo.eg en for the next five yeare, as we
have for the last five years, building vast ships, which
a'l good men hope will never be used, and which all
:tensible inen know are not heceseery for the purposes
of our security—would it not be better to ask the
French Government, "Is it not passible to relieve your
Exchequer and our Exchequer, to relieve your p eeple
ane eel' people from tie pressure of this vast taxatiw ,
welch we art constaralY compelled to wring from them ?''
Why not try some such course as that ? You have a
million of paupers in England and Wales, you have
others in Scotland and Ireland, you have colonies be-