The Sun.
London, England, 1859-07-22 00:00:00

THE BUDGET.

Mr. DISRAELI— Sir, before you leave the chair I wish
to make a few observations on the present financial condi-
tion of the country, which it will probably be more conve-
nient for me to offer now than when we are in committee.
It is scarcely necessary for me to advert to the conduct of
our finances by the late Government, or to the condition in
which they left them, because the right hon. gentleman the
Chancellor of the Exchequer has noticed generally what
took place under the late Administration with respect to
our finances, and he spoke of their conduct in so fair a
spirit that I am not disposed in 'any way to question his
description, being quite sure that if in one very important
particular he conveyed an erroneous impression to the
house he did so merely through inadvertence. I may, how-
ever, remind the house that when we acceded to office,
and it became my duty on the part of the Government to
state the position in which we found our finances, and the
ways and means which we proposed to meet them, the
country had scarcely recovered from one of the severest
monetary and in some degree commercialconvulsions which

it ever had experienced. (Hear, hear.) Indeed, if we take
the amount of commercial disaster as the test of the gra-
vity of the crisis, what happened nearly two years ago was
without exception the worst state of depression which the
commercial classes of this country have passed through in
our time. It was under those circumstances that I was
called upon to state the condition of our finances, and to
propose the ways and means to this house at the early part
of the year 1858. The house will recollect that on that
occasion there was a deficit, if I remember right, of about
four millions which we had to encounter. That deficit was
met by a proposition on the part of the late Government
that we should put an end to the fictitious sinking-
fund which had been instituted, and that we should
not pay off two millions of Exchequer Bonds which
were becoming due. The sinking-fund and the Ex-
chequer Bonds formed the greater portion of the deficit
which we had to face. And it was the opinion of the Go-
vernment that it was not expedient, perhaps under any cir-
cumstance, but especially at a moment when the commer-
cial classes were suffering in the manner to which I have
referred, to make any great increase in the taxation of the
country, in order to pay off incumbrances and to reduce debt.
Well, it was, I think I may say, the unanimous opinion of
Parliament that we took a right course on that occasion.
It was the opinion of Parliament, the country at that
moment being in a state of considerable distress, that we
should riot think of laying on £4,000,000 of new taxes to
support an artificial sinking fund, and to pay off £2,000,000
of Exchequer Bonds for the sake of reducing the public debt
to that amount. It is not necessary for me to vindicate the
course we took upon that occasion. That course has not
been impugned in this house or in the country ; on the
contrary, it has been unanimously approved—(hear, hear)—
and all the attacks that have been made upon it have been
made out of doors, and I have no doubt in the same spirit,
and probably by the sane machinery, with which attacks
have been made upon other portions of the policy of the
late Government which time has already vindicated.
(Hear, hear.) The deficiency of £4,000,000, to a certain but
much smaller degree, would have been increased by a re-
duction of the income-tax from 7d. to sd. That reduction
had been provided for by law, and in the course of the year
it would have effected a reduction of revenue to the extent
of £1,000,000. The Government were of opinion that it
would be most unwise to interfere with that natural and
legal reduction of the income-tax. They thought that there
were social and political reasons which ought to influence
them in that decision, as well as fiscal and financial ones.
It appeared to them to be a matter of the greatest import•
mice that the general understanding which prevailed
between Parliament and the country, that the income-tax
was to be gradually reduced, and at a certain period to ter-
minate, should be observed in spirit at least if not in letter,
and that we could not count upon the country rallying
round the Government upon an emergency if, upon the
first occasion, it found the Ministry anxious to relieve
themselves from the engagement which had been entered
into with respect to the income-tax. Our policy upon this
point was almost unanimously approved by the house and
the country ; and although there may have been some who
thought that, under all the circumstances, it was toe
hazardous a course to take, I think I may appeal to the re-
sult
of the management of the finances under the late Ad-
ministration, as showing that totally irrespective of social
and political considerations—looking only to financial con-
siderations—it was a course perfectly justifiable, and, in
fact, ultimately very beneficial. (Hear, hear.) It was
supposed then, by the late Government, that they would
have to encounter in the year 1859-60, in consequence of the
policy which they recommended Parliament to adopt, a
deficiency of probably not less than £3,500,000, viz.,
£2,000,000 of Exchequer Bonds, a loss of £1,000,000 in the
shape of the second half of the reduction of the income-tax
from 7d. to 5d., and deficits amounting on the whole to
about £500,000. Let me ask now, have the expectations
held out by the late Government with respect to the re-
sources of the country been realized by the event ? We
paid the £2,000,000 of Exchequer Bonds out of the balances
in the Exchequer, and I may say here that the Chancellor
of the Exchequer seemed to labour under a mistake when
he assumed the other night that it was not the intention of
the late Government to pay the Exchequer Bonds out of the
balances, and that if we had,done so it was in consequence
of the political and Parliamentary disturbances which
ended in the recent dissolution. That is not the case. It
was always the intention of the late Government to pay
those £2,000,000 of Exchequer Bonds out of the balances.
They found the balances in a strong state, and they in-
creased their strength by calling upon the Bank for that
£1,000,000 which otherwise they would not have demanded,
and which they were authorised to raise under a financial
arrangement which the house sanctioned in 1858-9. Had
we not contemplated paying the Exchequer Bonds out of
the balances we should not have called upon the Bank to
pay us the second moiety of that loan, but should have
allowed that £1,000,000 of public debt to be extinguished.
But we called for, that second £1,000,000 in order that we
might meet these £2,000,000 of Exchequer Bonds, and that
we should wit be under the necessity of continuing them or
postponing their payment. (Hear, hear.) How then, were
were we to meet a deficiency of £3,500,000 consistingmainly
of £2,000,000 of Exchequer Bonds and a reduction of in-
come-tax to the extent of £1,000,000 ? We anticipated that
we would meet it by a surplus revenue—by an excess of in-
come over expenditure. I estimated the revenue at a sum
something like, but slightly under in round numbers,