85,000l. From the new duties imposed he had expected to receive, at first, 900,000l., an amount ultimately reduced to 590,000l., and he showed the result in the returns of the Customs and Excise. The Customs, which had been estimated at 23,430,000l., had actually produced only 23,305,000l.,-a difference of 125,000l., arising principally from the fact that the operation of the changes in the Customs had been affected by the diminution of consumption, owing to causes to which he had previously adverted. The result of the change in the duties on wine, which, of all other Custom duties, was the most difficult to make, and the slowest in working out a result, was, however, he observed, the only one of the changes which had escaped the unfavourable circumstances of the year. The loss on the wine duties (that was, the relief to the consumer,) he had calculated at 830,000l., whereas the actual loss had been only 493,000l. He expressed his conviction that this change would be effectual for its main object; that the inconveniences were few compared with the advantages attending it. The Excise duties had been estimated at 21,361,000l.; the actual amount was 19,435,000l., showing a difference of 1,926,000 This difference arose on three articles-namely, hops, on which there had been a deficiency of 300,000l.; malt, 800,000l.; and spirits, 900,000l. These deficiencies represented the real sources of the failure of the Excise duties. With regard to the spirit duties, the main cause of the failure was the material reduction which had taken place

on duty-paid stocks, but he was convinced that the experiment was likely to be successful in a fiscal point of view, as well as useful in a moral aspect; it had not led to the evil of illicit distillation. After stating the balances in the Exchequer, and the application of 1,000,000l. to the payment of Exchequer bonds, and of a portion of a second 1,000,000l., which he had been allowed at the close of last Session to borrow, which had made an addition of 461,000l. to the debt, Mr. Gladstone reviewed the existing condition of our finances, compared with the year 1853, pointing out what he characterized as the enormous and inordinate growth of the expenditure, and suggesting that there was some relation between this increase of expenditure and the diminished elasticity of the revenue. He then adverted to the effects of the Commercial Treaty with France, and to the general improvement of our import trade. Dividing the imports into three classes,-first, those untouched by the legislation of 1860; second, those on which taxation had been reduced; and, third, those the duties on which had been repealed, he showed that while the amount of the first class had been nearly stationary, the imports in the second class had increased 17 per cent., and those in the third 48 per cent. He proceeded then to give an estimate of the finances of the year 1861-62. The total expenditure for the year he estimated at 69,900,000l., or, in round numbers, 70,000,000l. The revenue, including the duplication of the duty on chicory, certain alterations and modifications of the

condition as satisfactory; declared that the spirit of the nation had not declined; and that if there was any danger it lay in our recent tendency to unbounded excess in expenditure. There had been a tendency to break down all limits. It was not only a pecuniary waste, but a great political and moral evil, which stole on, unseen and unfelt, until it reached an overwhelming magnitude. Deprecating rash reductions, he hoped they would grapple with public expenditure. For my own part, I say that if this country will but steadily and constantly show herself as wise in the use of her treasure as she is unequalled in the production of her wealth and moderate in the exercise of her strength, then we may well believe that England will, for many generations yet to come, continue to hold her fore inost position among the nations of the world."

A desultory discussion ensued. Sir Stafford Northcote maintained that his party were right in the last year when they declared that the Budget did not make sufficient provision for the wants of the country. Mr. Dodson urged the importance of repealing the hop duty. Mr. Hadfield wished to relieve fire insurance. Mr. Ball desired a relief for malt. Mr. Glyn ap proved generally of the proposed measures. Mr. Cave thought that a reduction of the duties on tea and sugar would be preferable. Mr. B. Osborne congratulated Mr. Gladstone on his skill and courage in combining the remission of the paper duty with the penny of income-tax. Mr. Bentinck complained that nothing was done for the agri

cultural interest. Lord Robert Cecil took exception to Mr. Gladstone's remarks on the excessive public expenditure. He said that a Chancellor of the Exchequer was bound to protest in the Cabinet, and if he cannot carry his views, to resign. If he did not do so, he was bound not to discredit the estimates. After some remarks from Mr. Gladstone, the further discussion was postponed.

The motion for going into a Committee of Ways and Means on the propositions of the Budget was made on the 22nd of April, but it led to long and animated debates, which were continued for several nights by adjournment. It was evident that much resistance would be made by the Conservative party to some parts of the Chancellor of the Exchequer's financial scheme, and especially to the remission of the paper duty, which was objected to on several grounds by the leading members of the party. The opposition was commenced in an able and temperate speech by

Mr. T. Baring, who observed that it was most desirable at the present moment that the House and the country should perfectly understand our financial position, and that it was neither satisfactory nor safe to meet a deficiency by expedients which were practically an increase of the national debt, asked whether it was wise to remit taxation when the remission would not make the taxation reproductive by means of increased consumption, and when the taxes could not be reimposed when once removed. If there was any time when prudence in dealing with our finances was especially neces

sary, looking at the future, now, he thought, was the time, when even over-caution was a virtue. The Chancellor of the Exchequer had taken credit in his estimate of the year's revenue for a payment of 750,000l. from China; but would it not be wise to await the actual payment of that sum, the delay of which would at once convert the estimated surplus into a deficiency? He urged the House to pause in the removal of any duty which would not give an impulse to the revenue, unless there was a great reduction of the expenditure. Yet the Chancellor of the Exchequer, besides throwing off a penny of the incometax, proposed to repeal the paper duty. If, as he had told them, he could dispense with 2,000,000l., the next consideration was how taxation could be so remitted that the remission, while it improved the prospects of the revenue, would stimulate trade and increase the comforts of the people, which would be the effect of a reduction of 5d. per lb. in the duty upon tea. If he (Mr. Baring) was asked to say whether the Budget was safe, politic, or even honest to the country, he should be obliged to answer in the negative.

Mr. Baxter, in reply to Mr. Baring, defended the Budget, which, he maintained, was based upon moderate and reasonable calculations; indeed, competent persons, he said, were of opinion that the Chancellor of the Exchequer had under-estimated the revenue for 1861-62. He thought, however, that the expenditure ought to be greatly, though gradually diminished.

Lord Robert Montagu and Mr. Stanhope disputed the existence VOL. CIII.

of a real surplus as claimed by the Chancellor of the Exchequer. They strongly opposed the repeal of the paper duty, and contended that a reduction of the tea and sugar duties would be more beneficial to the community.

reason

Mr. Dodson saw no why he should distrust the calculations of the Chancellor of the Exchequer for the current year, those of last year having turned out remarkably correct. Mr. Baring had suggested that the receipt of the 750,000l. from China was uncertain, but he (Mr. Dodson) thought it was as safe a portion of the revenue as any. With regard to the disposal of the surplus, he was not inclined to quarrel with the repeal of the paper duty, which would be a great benefit, but the question was one for consideration in the Committee.

Mr. Baillie contended that dependence could not be placed upon the surplus of 1,900,000l. claimed by the Chancellor of the Exchequer, which was made out, he said, by a process analogous to the raising of money to pay off debts. He objected to the repeal of the paper duty, which would not benefit the community, which the great body of manufacturers did not want, and which would be an advantage only to one small but powerful class-the proprietors of the penny newspapers.

Mr. W. Ewart approved the repeal of the paper duty, observing that when excise duties were taken off, the aggregate amount of that branch of the revenue increased. He insisted that it would be a commercial benefit and a literary benefit, and that it would heal the dissensions be[E]

tween the two Houses of Parliament. The Budget was, in his opinion, a wise and sensible one. Mr. Norris and Mr. Black urged the expediency and safety of taking off the paper duty. The former stated on behalf of the paper makers that they were prepared to consent to the removal of the tax; and the latter urged that the public, who now paid a great deal more than the Exchequer gained by the duty, would be much benefited by the repeal.

Mr. R. Long and Mr. Longfield strongly opposed the propositions of the Government.

Mr. Bentinck, representing the doctrines of the Protectionist party, made a running commentary upon the financial speech of the Chancellor of the Exchequer, whom he accused of carrying the principles of Free Trade to an extravagant length. He observed that it had not been shown that the great mass of the people would be benefited by the repeal of the paper duty, whereas the remission of the war duty on sugar would be a positive boon to the poor. He asked what those who called themselves the friends of the people were about; why they were prepared to support the financial arrangements of the Chancellor of the Exchequer? He could conceive but two possible objects for this part of the Budget; one was, to reclaim the wavering allegiance of a certain portion of the supporters of the Government; the other was, to defy, he would not say insult, the other branch of the Legislature. He denied that there was any surplus, but if it was real, it would not be possible for the Chancellor of the Exchequer in another year to fall back

upon any resource but a large increase of the income-tax.

Sir Joseph Paxton cordially supported the repeal of the paper duty.

Sir S. Northcote observed that the Budget had its political side and its financial side; the discussion had turned on the latter, and to that side he should confine himself. He concurred with Mr. Stanhope that there was no real surplus; that, taking the revenue as it stood without the reimposition of duties, there was a large deficiency to be dealt with. He proceeded to establish this position by a minute examination of the financial speech and of the accounts laid before the House, and contended that we had added to our debt last year 1,257,000l., besides a large reduction of the balances in the Exchequer. Before revenue was thrown away, the House, he observed, ought to know what the balances were, which at this time should be strong; and other matters, both of expenditure and revenue, required a strict scrutiny. He entered into calculations regarding the finances for 1862-63, which, he argued, would leave a deficiency of revenue to the amount probably of 900,000l. In the conditions of our trade (many branches of which, he said, showed a marked decline), and in the state of foreign affairs, there might be reasons for a provisional Budget like the present; but this was not a time for introducing into it the surrender of a large amount of revenue, and he urged the House not to commit itself irrevocably to such a proposition, since it must contemplate the possibility of further demands.