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85,0001. From the new duties on duty-paid stocks, but he was imposed he had expected to re- convinced that the experiment ceive, at first, 900,0001., an was likely to be successful in a amount ultimately reduced to fiscal point of view, as well as 690,0001., and he showed the useful in a moral aspect; it result in the returns of the Cus- had not led to the evil of illicit toms and Excise. The Customs, distillation. After stating the which had been estimated at balances in the Exchequer, and 23,430,0001., had actually pro- the application of 1,000,0001. to duced only 23,305,0001., - a differ the payment of Exchequer bonds, ence of 125,0001., arising princi- and of a portion of a second pally from the fact that the 1,000,0001., which he had been operation of the changes in the allowed at the close of last SesCustoms had been affected by sion to borrow, which had made the diminution of consumption, an addition of 461,000. to the owing to causes to which he had debt, Mr. Gladstone reviewed previously adverted. The result the existing condition of our of the change in the duties on finances, compared with the year wine,—which, of all other Custom 1853, pointing out what he chaduties, was the most difficult to racterized as the enormous and make, and the slowest in working inordinate growth of the expendiout a result, — was, however, he ture, and suggesting that there observed, the only one of the was some relation between this changes which had escaped the increase of expenditure and the unfavourable circumstances of diminished elasticity of the rethe year. The loss on the wine venue. He then adverted to the duties (that was, the relief to the effects of the Commercial Treaty consumer,) he had calculated at with France, and to the general 830,0001., whereas the actual loss improvement of our import trade. had been only 493,0001. He ex- Dividing the imports into three pressed his conviction that this classes,—first, those untouched change would be effectual for its by the legislation of 1860: second, main object; that the incon- those on which taxation had been veniences were few compared reduced; and, third, those the with the advantages attending it. duties on which had been reThe Excise duties had been pealed,-he showed that while estimated at 21,361,0001.; the the amount of the first class had actual amount was 19,435,0001., been nearly stationary, the im. showing a difference of 1,926,0001. ports in the second class had inThis difference arose on three creased 17 per cent., and those articles — namely, hops, on which in the third 483 per cent. He there had been a deficiency of proceeded then to give an esti300,0001. ; malt, 800,0001. ; and mate of the finances of the year spirits, 900,0001. These defi- 1861-62. The total expenditure ciencies represented the real for the year he estimated at sources of the failure of the Ex- 69,900,0001., or, in round numcise duties. With regard to the bers, 70,000,0001. The revenue, spirit duties, the main cause of including the duplication of the the failure was the material re- duty on chicory, certain alteraduction which had taken place tions and modifications of the
stamp duties, and the duties on ld. of the income tax, reducing the licenses, and 750,0001. which he 10d. to 9d. and the 7d. to 6d., expected to receive from China, would cost for three-quarters of a he estimated at 71,823,0001., as- year 850,0001. With respect to the suming the continuance of the tea paper duty, the Government be. and sugar duties and an income. lieved that, happily, the time had tax. This sum, he remarked, arrived when this question might was the largest estimate of re- be entertained without the revival venue ever proposed to the coun. of the painful discussions of last try. Comparing it with the esti. year. Considering the yet unmated expenditure of 69,900,0001., redeemed pledge under a resolu. there would appear an estimated tion of the House, the difficulties surplus of 1.923,000l. ; and he attending the existing law, the then stated how the Government declaration of the department proposed to dispose of this ba- which collected the tax, and that lance, remarking that it was not the proposal for its repeal had & balance they possessed; the received the sanction of a large income tax had actually expired, majority of the House last year. and the tea and sugar duties the Government believed that would soon expire, and they had this proposal would receive the to ask the House to renew these approval of the Committee. The taxes in order to adjust the ex- financial result for the year would penditure with the revenue. The be as follows : The balance of Government, he said, had come revenue would be 1,923,000l. to the conclusion that they could The Id. taken off the income-tax not expect to be allowed to keep in would reduce the amount of the hand this surplus revenue, and tax by 850,0001.; the repeal of they proposed to apply a portion to the paper duty would occasion a the remission of taxation by the net loss in the year of 665.0001., reduction of the tenth penny of making together 1,515,0001.; so the income tax and the repeal of that there would still remain a the paper duty. With reference moderate surplus of 408,0001. to the comparative merits of With respect to the minor charges direct and indirect taxation, he on trading operations, of which observed that Parliament had not complaints had been made, the committed itself to a condemna- Exchequer was not in a condition of the latter : it had not de- tion at present to surrender the cided to root up, but to prune sum they amounted to. He prothe tree. He would not alto posed to re-enact the tea and gether abandon the hope of sugar duties for one year, and he getting rid of the income-tax explained the form of proceeding altogether, but he considered this by which it was intended to bring a question of expenditure. If the several questions before the the country was content to be House by a series of resolutions, governed at a cost of 60,000,0001., one as to the income-tax, another he did not see why the tax might for the continuance of the tea and not be dispensed with ; but if sugar duties, and a third for the there was to be an expenditure repeal of the paper duty. of 70,000,0001.. there must be an In conclusion, Mr. Gladstone income-tax. The remission of spoke of the general financial
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. imost 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 approved 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 necessary, 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 Wol. 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. Mr. Dodson saw no reason 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 commenupon the financial speech of the Chancellor of the Exchequer, whom he accused of carrying the principles 9f 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 con
fine 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 regardin 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.