The Sun.
London, England, 1867-04-05 00:00:00

two hours. It was commenced by_Mr. CANDLISH, who
warmly eulogised the simplicity and good sense of the
financial scheme, and particularly the proposal to reduce
the marine insurance duties.

Mr. LAING, without committing himself unreservedly,
doubted whether it were not wiser to leave the money to
fructify in the pockets of the people, than to apply it to the
reduction of debt, particularly as we had by no means ar-
rived at the millennium of having no bad taxes left.
Sir G. BOWYER also preferred the reduction of taxa-
tion to the reduction of debt, insisting that Mr. Disraeli's
proposal was but a sinking fund in disguise ; and
Mr. HUBBARD, whilo approving the proposal to reduce
the marine insurance, took the same view as to the impo-
Rey of reducing the debt at the present moment, and gave
notice that he should move a resolution to defer any such
project until the fire insurance duties were repealed.
Mr. GLADSTONE, in rising to respond to many calls,
said —Although it is a general rule in this house that those
members who have the advantage of hearing the proposi-
tions of the Chancellor of the Exchequer shall postpone
their declaration of any final judgment in regard to them,
there are two reasons which make me desirous to address
you on the present occasion. One of them is that the simple
character of the statement submitted by the right hon.
gentleman makes it easier than under many circumstances
it might have been to appreciate the character of his pro-
posals ; and the second is that he has referred so pointedly
to a portion of the scheme which it was my duty to submit
last year that it is only fair I should give him at once the
opinion I have formed on the proposal he now makes. On
the retrospective part of the proposal I shall be very brief,
but I will venture to refer to one or two other points upon
which the right hon. gentleman may be in a condition to
give us further information. He did not enter into any
detail with respect to the sources from which the great re-
venue in the Customs and Excise has proceeded, but I con-
fess I should have been very glad if the right hon. gentle-
man had given us particulars which I feel could not have
failed to be full of interest. The case of the Excise is a
remarkable one, and well deserves the special attention of
the house. I think the right hon. gentleman stated that
£900,000 is the amount of the augmentation that has taken
place in the revenue from Excise over and above the
estimate I submitted last year. These figures are
among the most extraordinary that were over sub-
mitted to the House of Commons. In particular on
account of the singularlyNnfavourable character which

the season last year assumed
.at a most critical moment
with regard to the yield, and eslixcially with regard to the
quality of the barley harvest, upon which( commonly it has
in former times been the custom to depend to the extent
of half a million or a million of money. To judge from
the gross figures before us, and such fragmentary informa-
tion as has reached me, I am under the impression that,
notwithstanding the extremely unfavourable character of
the weather last August and September, which seemed in a
great degree in many parts of the country not so much to
damage as almost to destroy the barley for malting pur-
poses, we have as large, or a larger, revenue than in any
former year. If so, that is a circumstance of very great
importance ; because it seems to show that the consuming
power of the community, even in regard to this, as the
right hon. gentleman considers it, rather persecuted article,
is such that beer must be brewed whether the barley har-
vest be good or not, and that the brewers, by the supply
partly open to them of foreign barley, of which a consi-
derable portion is of very fine quality, and sugar and other
materials used in beer, have produced a duty not less than
former years produced with a good harvest. This removes
an element of great and perplexing uncertainty. I pre-
sume there must have been a very considerable increase in
the revenue from spirits, and that the working of the pre-
sent high duty may be judged satisfactory. The annual
receipts from stamps have fallen short of the estimate I
submitted twelve months ago; and I should be glad to
know to what items that is to be attributed.

The CHANCELLOR of the EXCHEQUER—The total
is only X 30,000.

Mr. GLADSTONE—That is true ; but of late years the
revenue from stamps has exhibited remarkable elasticity.
I should like to know tho actual result of the financial
operations with regard to fire insurance. My hon. friend
who has just sat down clings to the idea that the reduction
of the fire insurance duty would in a great degree be com-
pensated by the augmentation of insurances.

Mr. HUBBARD—I never said such a thing in my life,
(Laughter.)

Mr. GLADSTONE—My hon. friend anticipated an in-
crease of £lOO,OOO in consequence of the reduction of the
duty; therefore, in his life, and within a very recent por-
tion of his life, he has said a thing which I perhaps too
strongly described, but which did intimate an expectation
of a very considerable increase as a consequence of the re-
duction of the duty. It would be important and inte-
resting if the right hon. gentleman would give us the
exact effect of the reduction during the last two or three
years. So long as 1 had a knowledge of the circumstances
there was no reason to suppose it could be considerably
replaced, when you distinguish the increase due to reduc-
tion from the regular annual progressive increase which
tho wealth of the country necessarily produ •es. The
right hon. gentleman has presented a most favourable
statement of the financial resources of the country. One
of the most remarkable results of th 3 groat change in our
commercial legislation has been the vast increase of finan-
cial operations. The favourable peculiarity of the present
epoch seems to be that whereas in former times a commer-
cial panic or pressure produced a diminution of the con-
suming power of the country, and consequently of the
revenue, during the past two years pressure and panic do
not appear to have left the smallest trace upon the consum-
ing power of the country or upon the revenue. That is a
circumstance which should lead us to go forward in the
path upon which we have for so many years been proceed-
ing. I do not contemplate with satisfaction the heavy
augmentation of the estimates of the present year. The
supply services twelve months ago were £38,205,000. The
present estimates aro £40,234,000, representing an increase
of £2,029,000. On such an occasion as this that cannot bo
duly analysed. It shall be far from me to endeavour
to impart any political aspect to the question—(hear
hear)—but I do not think the general circumstances of the
country warrant this very serious increase. (Hear, hear.)
On many points it is impossible to question these charges
without joining issue in the most serious manner with her
Majesty's Government, and at this moment there are poli-
tical issues of such gravity pending that every man must
desire not to multiply but to reduce the points upon which
any portion of the house may be in conflict with the ad-
visers of the Crown. (Hear, hear.) I am disposed to
examine more slightly into these particulars than I should
be under ordinary circumstances. Some of these charges
have reference to circumstances of great importance, and I
are among them items upon which a
to a diminished demand. For the
ds ventureeusai t
no hmo
may
ye t
lhe e ra
de
present it is not necessary to go beyond these general
ass to consider the mode in which
proposes to deal with the othbeserrvigahtitonhso,
na. ngdenlt
Ipeman
sur-
plus at his command. It appears to be.£1,206,000. Nearly
the whole of it would have been applied during 1867-8 to
the liquidation of debt had the plan of last year taken effect.
The Act passed early in the year, on which it has not been
in the power of the right hon. gentleman to proceed in its
full extent, would, during 1867-8, have applied about
£150,000 to the liquidation of debt in the form of termi-
nable annuities ; and the greater measure which was pend-
ing when we quitted office, and which the right hon. gen-
tleman found himself,in consequence of augmented charge,
obliged to drop, would have entailed for 1867-8 a charge of
about £1,000,000. I must depart from the order of the
light hon. gentleman's speech, and deal first with the pro-
position to reduce the marine assurance duties. Undoubt-
edly there is a large number of imposts it is impossible to
survey without a strong desire to diminish or altogether
remove them. I cannot object to what is said to this effect
as to licence duties. Duties upon locomotion are duties
upon the whole raw material of labour—(hear, hear)—
because the movement of the industrial population from
place to place is part of the cost of production. (Hear,
haar.) I am no admirer of the principle of fire insurance
duties, and all I plead for is, that in dealing with that part
of it which relates to buildings we should recollect how
closely it is associated with property, and have in view the
possibility of obtaining from property, in some less objec-
tionable form, a fair substitute for it. (Hear.) The cases
referred to by my hon.friend the member forßrighton have
not aroused in my mind so much emotion as in his. If we
are to be guided by appearances alone, nothing can be
more absurd than the number of trumpery articles that still
remain on the duty list. That on comfits is one of these.
But these duties are to be considered as outworks and de-
fences of the revenue, and if the duty on comfits were
abolished the effect would be an enormous increase in their
importation, and they would be used instead of sugar.
(Laughter). Whether the right hon. gentleman has made
the best choice among many claims I will not now under-
take to determine; but it may be safely said that a great
deal is due to the initiative of the Government and the
superior means they have of determining upon a selection,
and that this duty urgently needs reform. (Hear.) I shall,
therefore, net enter into any controversy, but shall assent
to the measure proposed. Tho right hon. gentleman pro-
poses to retain a surplus of £216,000, and I hope the house
will not countenance any invasion on that moderato
surplus. (Ifear, hear.) Tho hon. member for Brighton
says I systeinati,:ally underrated the revenue of the coun-
try. (Hear.) If he will go back to the period when there
was a greater pressure than now on our resources, he will
find I was charged with systematically over-estimating the
product of various branches of the revenue. (Hear.) A
very salutary practice of paying great respect to the opi-
nions, judgments, and experience of gentlemen at the head
of the revenue department prevails in estimating revenue.
(Hear.) It is not wise for a Chancellor of the Exchequer
to take too much into his own hands the business of esti-
mating revenue. (Rear, hear.) You must proceed on fixed
rules, which cannot be well apprehended or applied with-
out a very great regard to those opinions. (Hear, hear.)
I believe the right hon. gentleman to have been guided by
just and sound principles ; and it would not be wise on our
part, with imperfect information, to question those esti-
mates for the purpose of throwing him into an apparent
deficiency. (Hear.) I now come to the measure by which
the right hon. gentleman proposes to dispose of the money
at his disposal—the measure for a fresh investment in the
terminable annuities, founded by Sir G. C. Lewis, which
come to an end in 1885. I think he has exercised hero

again a very sound discretion in detaching himself from
the secondary portion of the measure of last year. It is
very probable that if I had been able to proceed with the
measure of last year the same result would have happened.
Parliament is entitled to say, "Don't take it too much and
too long out of our rule. Come back when you are pre-
pared to propose a further application of income to the re-
duction of debt. But don't ask too much at a time." The
right hon. gentleman's course has been wise, and his mea-
sure is just and sound. A large portion of the objections
taken last year and to-night proceed upon want of minute
and accurate acquaintance with the subject. The hon.
member for the Wick Burghs, whose speeches are of the
greatest advantage upon such questions, contrasts two
systems—one, the diminishing of debt; the other, leaving
the money to fructify for the benefit of the nation through
the reductiqn of taxes. It appears to me that it is not just
or true. There is no fructification of money for the public
advantage more direct and complete than in the reduction
of the debt. The money is not exported. It finds its way
into the money market of London, and that is the point
from which all stores and resources of loanable capital find
their way most directly and effectively to the business of
cheapening production and stimulating energy. It is a
fallacy to suppose the question lies between the diminution
of the debt and allowing your capital to fructify. There is
no more sure method of procuring the immediate and pro-
fitable application of capital. That proposition may be modi-
fied whore a country has a national debt held mainly by
foreign creditors; but the overwhelming proportion of
our debt is held by Englishmen, and the money will take
effect in London.

Sir G. BOWYER: But why reduce the debt at all?
Mr. GLADSTONE : It may be broadly laid down that
the application of public funds to the reduction of debt
is profitable, not merely politically, but as giving stability
to commercial operations. I deny that this measure in-
volves the principle of a sinking fund. I can hardly at-
tempt to justify that denial at this moment, for it would
require a long and minute defence. But the principle is
we have not only an exchequer account to manage, but a
great banking account. Under no circumstances, except
those of a general war, would both be in deficit at the
same time. Without that there cannot be any loss from
the operation of the measure proposed. The essential
point to be kept in view is that off your banking account
you have a heavy and uniform surplus, on the continuance
of which you may pretty confidently reckon. You are
always looking for investments for it from year to year ;
and the annuities give you the opportunity for invest-
ment. The profit is your own, and the investment is
just so much for the benefit of the State as any other
portion of the expenditure. The observations of the hon.
member for Dundalk open another very wide question.
It may be sufficient for the present purpose to stand on
this basis—that the reduction of the debt has been recog-
nised in this country as a principle of public policy at
every period since our debt began to bo created, except
at those unfortunate periods when we were obliged to go
on extending it. Now, a principle so recognised has
something to say for itself independently of the abstract
argument, and I may assume that the House of Com-
mons does not intend to reserve that policy. Now,
let us see how that policy has of late years
been acted upon. From 1834 an increasing sum was
applied to the reduction of the debt by means
of terminable annuities until 1859. In the latter year the
terminable annuities fell in, t.nd the amount thus applied
in reduction of debt was largely diminished. Now the
dead weight falls in during the present year, and if that
sum was not applied to the reduction of debt, this would
almost amount to the abandonment of the policy so long
established, and to a determination that we will adopt no
means to reduce the debt except from the casual surpluses
of annual income. Now I for one am not prepared to act
on that principle. Let us not be ashamed to look across
the Atlantic for a good example, and render a just tribute
of admiration to the courage and forethought with which
the American people are bearing a burden of taxation
which, both in amount and in kind, renders their conduct
a marval, because they think that the secret of future
power lies in the reduction of their debt. The highest
point reached by the American debt was on the 31st Aug.,
1865, when it was $2,757,000,000. On the 30th June, 1866,
it had declined to $2,650,000,000; on the 31st October,
1866, to $2,551,000,060 ; and on the Ist of January, 1867,
to $2,547,000,000. The total decrease of debt from the
31st August, 1865, to the let January, 1867, was
$214,500,000, or nearly £43,000,000, taken out of the taxa-
tion of the country. When I see such facts as this, lam
infinitely more impressed by the character of that people,
and with the formidable nature of the conflict which we or
any other should have to wage if we entered into one with
them, than if, instead of employing their resources in this
way, they vainly imagined that the secret of security lay
in maintaining huge armaments in time of peace. I believe
they have judged rightly as to the true basis of national
power, and that it lies iu husbanding your resources in
time of peace, that you may be able to expend them freely
in times of emergency. I cherish the hope that the mag-
nificent example sot by the American people will have an
effect, not only in England, but in Europe, and that it will
shame the people into abandoning the suicidal policy of
wastlug the money raised from the thrift of the people
in what, if not an idle parade, is a source of
danger. These are the feelings of hearty and spon-
taneous admiration with which I cannot help contem-
plating the policy pursued by America as to her debt.
1 shall very cordially support the propositions of the Chan-
cellor of the Exchequer. I confess that I think that if this
year, when we are about to cease to pay nearly £600,000 of
dead weight, no reduction took place in our debt, it would
have amounted to a dereliction of duty. I think the right
hon. gentleman deserves praise for resisting the temptation
to earn a little popularity by some slight reduction of tax-
ation, and that the course which he has taken is calculated
to conduce to the public welfare. (Cheers.)
The superior claims of the malt tax to reduction were
preferred by Mr. Read, Mr. J. More, and Mr. Urquhart ;
but Col. Barttelot pointed out that with so small a surplus
it was impossible to deal sensibly with that tax. Mr. Den-
man advocated the abolition of the attorneys' certificate
duty, Mr. Marsh and Mr. Green the licence duties, Mr.
White the small customs' duties, and Mr. Ayrton the me-
tropolitan hackney carriages.
A general approval of the budget was expressed by Sir
F. Crossley, Mr. Miienna, and Col. Sykes, who joined
with Mr. White in complaining of the increaso of the ex-
penditure. After some remarks from Mr. Fawcett, who,
though favourable to the reduction of debt, disapproved
the anodes operandi, and from Mr. M'Laren, the formal re-
solutions moved by the Chancellor of the Exchequer were
agreed to.
The second reading of the Tenants' Improvement (Ire-
land) Bill was moved by Lord Naas, but, objection being
taken by Mr. Osborne (supported by several Irish mem-
untilbors) to proceeding with it, the debate was adjourned
April 29.
The Bankruptcy Bill was read a second time, under an
arrangement by which the debate is to be taken on going
into committee.
The Canada Loan Bill passed through committee.
Several hours were occupied in the consideration of the
Court of Chancery (Ireland) Bill in committee.
Some other business was disposed of, and the house ad-
journed at 20 minutes to 1 o'clock.

Naval and Military Intelligence.

The First Lord of the Admiralty will hold a levee
on Friday, the 12th inst., at 2 o'clock, at the Admi-
ralty, Whitehall.
On Wednesday the Right Hon. H. T. L. Corry,
M.P., First Lord of the Admiralty, paid his first
official visit to Chatham, for the purpose of inspect-
ing the dockyard and naval establishments at the
port, together with the works in progress for the
enlargement and extension of the dockyard. The
members of the Board of Admiralty who accom-
panied the Senior Lord were Mr. C. Ducane, M.P.,
civil Lord, Rear-Admiral R. S. Robinson, Control-
ler of the Navy ; Major A. Clarke, Royal Engi-
neers, Director of Admiralty Works ; and Capt. T.
Brandretb, private secretary. Their Lordships
reached the dockyard shortly before 12 o'clock, and
were received by Capt. W. H. Stewart, C. 8., super-
intendent of the establishment, Mr. P. Thornton,
principal master shipbuilder ; Mr. Baker, chief en-
gineer, Major C. Pasley, Royal Engineers, director
of dockyard works, and other officials. Their
Lordships very shortly after their arrival proceeded
on a visit of inspection to the ironclad ships and
other vessels now building. The absence of the
hands at dinner enabled them to make an uninter-
rupted inspection of the ironclad ships now being
rapidly constructed at Chatham, and their Lord-
ships accordingly spent nearly au hour iu their visit
to the Hercules, broadside iron frigate, and the
Monarch ironclad ship, which is intended to com-
bine the turret and broadside principle in the same
vessel. Although both vessels are intended to be
completed by about the same period, the Hercules
is at present the more forward of the two, her
central battery being already plated with four
tiers of the 9-inch and 6-inch armour-plates,
while a considerable portion of the fore and aft
armour-plating has been bolted to her sides. The
upper, main, and lower deck iron beams are also
fixed, and a portion of the iron deck plating laid.
Until within the last few weeks the mechanics em-
ployed on this ship have been working extra hours,
but an order received from the Admiralty has
directed that the ordinary working hours of theyard
should not be exceeded, and the progress, therefore,
since the order has been acted upon, is less marked.
On several occasions, however, the quantity of ma-
terial worked into the vessel has exceeded 100 tons
weekly, and for some time past has averaged be-
tween GO tons and 70 tons per week. After spend-
ing some time in going over the Hercules, their