solution, fixing the duty at 1s. 5d. was then agreed to, as were other resolutions, fixing the duties on sugar and other customable articles as proposed by the Government for one year only.

The Income Tax Bill, by which the additional 9d. in the pound imposed to meet the exigencies of the war with Russia was remitted, and the original rate of 7d. in the pound imposed for the ensuing financial year, passed the House of Commons without any decided opposition. An attempt, indeed, was made by Sir Fitzroy Kelly, in committee on the Bill, to procure a still further reduction of the impost by substituting 5d. for 7d., but it led to little discussion. The Chancellor of the Exchequer, in opposing the amendment, argued that the supposed contract embodied in the Income Tax Act of 1853 was based upon the assumption of a continuance of peace; but the very foundation of that settlement had been overturned by the war. The motion of Sir Fitzroy Kelly was then negatived, as was also an amendment of Mr. W. Williams for exempting incomes of less than 150l. a-year from the tax.

On the same day that the income tax passed through the ordeal of a Committee, Mr. Gladstone made a last effort to obtain from the House of Commons a recognition of the necessity of a further reduction of the public expenditure. On bringing up the report of the Committee of Supply, the right honourable gentleman moved a resolution that, in order to secure to the country that relief from taxation which it justly expects, it is necessary, in the judgment of this House, to revise and further reduce the expenditure of the State.

The position of the House, he said, was peculiar and unexampled. Strong objections were entertained to the amount of the Estimates, and, had the deliberations of the House not been affected by the prospect of a dissolution, the House would probably have remitted the Estimates to the Government for further reduction. The effect of his motion was not to assert an abstract principle, or to interpose any obstacle to a vote of supply, but to refer back the Estimates to the Government for reduction, or to express an opinion that they should, during the interval before the next Parliament, apply themselves to the examination of the Estimates, with a view to a reduction of expenditure. He made the motion, he said, upon two grounds: first, that there did not appear to be an adequate provision for the exigencies of the year; and, second, that the expenditure of the country had not of late been kept under due control, but had increased to a point which had become embarrassing, and which threatened to become even alarming. He then went into details to show that a deficiency of revenue stared the House in the face, and that the expenditure was too high, comparing the Estimates with those of preceding years. The Military Estimates in 1852 were 16,012,000l., whereas this year they were 20,517,000l., being an increase of 4,500,000. The civil charges, he thought, should be vigilantly watched, and he objected that the vote for education was getting too large, and that the creation of a Vice-President of the Committee of Council on Education had added a new salaried officer, without duties, to discharge slight Parliamentary functions

which would be better lodged in the hands of a Cabinet Minister. It appeared to him, he said, that the administration of the public money was conducted under quite a different set of notions and rules from those of 15 or 20 years ago. He adverted, in particular, to the appointments to the judicial bench pending a commission to inquire into the expediency of reducing the number of judges, citing a letter from the late Mr. Baron Alderson, who was of opinion that 12 judges were sufficient for the Term business.

Mr. W. Williams seconded the motion.

The Chancellor of the Exchequer admitted that there was much in the speech of Mr. Gladstone which deserved consideration, but he declined to follow him item by item. Upon the subject of taxation or revenue, he observed that his plan was limited to the ensuing financial year, and it would be a waste of time to go into an investigation of the revenue and expenditure of succeeding years. He anticipated no deficiency in the ensuing year. As to the expenditure, he did not understand that the House, by voting sums on account, had approved the Estimates; a new Parliament would be competent to examine them. He did not believe that the Estimates, though large, were extravagant, the most energetic efforts having been made by the Government to reduce them. Noticing some of the criticisms of Mr. Gladstone, Sir C. Lewis justified the appointments to the judicial bench, observing that the issue of a commission showed that the Government had not neglected the question; and that, vacancies having occurred before the circuits could

be reconstituted and changes could be made in the law that would enable a smaller number of judges to perform the duties required of the Bench, the Government had no alternative but to fill up those vacancies.

Mr. Disraeli protested against a proposal thrown out in the course of the discussion, to refer the Estimates to a Select Committee. Those Estimates were formed on the responsibility of the Government, and it was the duty of the House to hold the Government to that duty.

The last important debate in which financial affairs were under review, was that upon the second reading of the Income Tax Bill, in the House of Lords on the 16th of March. At this time the transactions which will be related in their proper place in the next chapter, had determined the Government, placed under a vote of censure by the House of Commons on account of their policy in China, to dissolve the existing Parliament, and appeal to the country by a general election. The Earl of Derby, as leader of the Conservative body, availed himself of the second reading of the Income Tax Bill to announce the views of his party with reference to the events which had led to the approaching dissolution, to the questions likely to be agitated at the future elections, to the foreign policy of the Ministers, and to the financial measures of the Chancellor of the Exchequer. With reference to the latter, the noble Earl said that he looked with deep anxiety at the present state of the national finances. The Government of 1853 gave a pledge that the income tax should cease in 1860, but that pledge could not be fulfilled unless vigorous mea

sures were adopted. The arrangement of 1853 had been invaded by the addition of 2d. in the pound to the income tax, which, had the arrangement been adhered to, would have stood at 5d. after the 5th of April, 1857. "I regret deeply," said the noble Earl, that which appears to be in principle an invasion of the arrangements laid down in 1853; but with this addition of 2,000,000l. the Chancellor of the Exchequer calculates that in the year 1857-58 he will have a surplus of 500,000l. That calculation of surplus revenue proceeds on the assumption that the expense of the war with Persia will not exceed 250,000l., and also on the further assumption that there will be no extraordinary demand on the resources of the country in the present year. Consequently, no provision is made for that most calamitous war-and, I am afraid, most expensive war-in which we are unhappily involved, by no choice of our own, with China. But upon the impossible assumption that the war with China will cost nothing, and on the improbable assumption that the war with Persia will cost no more than 250,000l., the balance of revenue over expenditure in the present year will give, according to the Chancellor of the Exchequer, a surplus of 500,000l. To make that surplus of 500,000l. you will receive in the present year a half year's amount of the 9d. war income tax, amounting in round numbers to 4,500,000l. That source of revenue will fail you altogether in 1858. Therefore you will have your revenue in 1858, as compared with 1857, diminished in the first place by 4,500,000l. of war income tax. If the law stands without alteration, that revenue will hereafter be diminished by a fall on

the 5th of April next year of income tax from 7d. to 5d., which would make a further reduction of 2,000,000l., or, making allowance for a half year of that 2d. to be collected, it would make the reduction of 1,000,000l. Therefore you would have in the revenue in 1858, as compared with 1857, a deficiency of 5,500,0002. But, in addition, there is a provision that in 1858 there should commence a sinking fund, to provide for the debt raised by the present Chancellor of the Exchequer, which will swell your expenditure in 1858 above 1857 to the amount of nearly 1,500,0001. Therefore, there is a prospect that in 1858 there will be a diminished revenue of 5,500,000l. and an increased expenditure of 1,500,000%., leaving a balance to deficit of nearly 7,000,000l., against which you have to set your surplus of the present year of 500,000l. So you stand at present. You find, by the programme of the Government, that, with no extraordinary expenses, and with war with Persia and China, you have a deficiency in 1858 of 6,500,000l. I will not go so far forward as 1860, when you will recollect that to carry out the plan of 1853 the whole of the remaining income tax is to be sacrificed, which will make a further reduction of 5,000,000l., because there will be some items falling in, such as 1,300,000l. of long annuities; and there will be a cessation of the payments, amounting to 2,000,000l., on account of the Exchequer Bonds. It is sufficient to assume that in consequence of the further falling off of 5,000,000l. of income tax the deficiency would be increased in that year as compared with the preceding years. But you have a permanent deficiency from this

year to the amount of no less than 6,500,000l. Is not this a circumstance worthy of serious consideration ?" ("Hear, hear!") It was not likely, the noble Earl proceeded to say, that increased productiveness of the taxes would meet that deficiency; new taxes would be objected to by the country, and rigid economy was the only mode by which income and expenditure could be balanced. But reduction could only take place in the army, navy, or miscellaneous estimates, and in dealing with these he should recommend, as a principle, that economy should be combined with efficiency, and the expenditure reduced so as to carry out the compact of 1853. The expenditure, however, would mainly depend on the foreign policy of the Government. "If you determine that that policy shall be one of respect for the independence and for the rights of foreign nations-of studious abstinence from interfering with the purely internal concerns of other countries of an anxiety to avoid by every possible means a language, tone, and temper which shall show you ready to substitute, in case of fancied insult and injury, a tone of menace and braggadocio for that of reason and conciliation-if you are slow to take offence and ready to give reparation, when it is asked for in a friendly spirit-if you do this I have no fear, in the present condition of the world, and with the general feeling that prevails in nearly all foreign nations, that we shall be required to keep up large war establishments in time of peace. But if you proceed upon an opposite policy, and are determined to meddle in the internal concerns of other countries, if you attempt to dictate the tone in which they shall deal with their own subjects, and

interfere with them when the interests of your own subjects are not concerned,—if you threaten, and bully, and use the language of menace to those who, although weak, are too proud to listen to you, when you tell them how to behave towards their own subjects, if you adopt such a course of conduct, I take the liberty to tell your Lordships that you must keep your establishments upon a war footing-that you must be prepared to back up every petty quarrel in which you may be involved, that you must be ready to provide on the shortest notice for a war that may spread over the whole face of the world." (Cheers.)

He re

Earl Granville, in replying to Lord Derby's speech, briefly answered his strictures on the financial measures of the Government :"The first point to which the noble Earl alluded was, as might be expected on the second reading of the Income Tax Bill, the financial system of the Government. gretted, in the first place, that the Government had determined to deal with the income tax instead of referring it to the next House of Commons. I will not say one word as to what the country would have thought if Her Majesty's Government, after pledging themselves to give up the war tax, had availed themselves of the exact terms of the Income Tax Act, and continued to levy the whole of the war tax; but I think that the country could have no desire whatever to be saddled with a war tax until the question could have been settled by the next Parliament. The noble Earl stated that for years he had been confidently hoping and expecting that the income tax would be repealed at the end of a certain period of years; but if he would

just refresh his mind with what he said a few years ago on the subject of Mr. Gladstone's attempt at prospective legislation in connection with the succession duty, he will find that he then said, 'The succession duty is not to be imposed in order that the income tax may be taken off in 1860.' The noble Earl was at that time loth to say when he expected the income tax to be taken off. Whether he is right or wrong in his prophecy, he certainly had not always so much confidence and hope about the expiration of that tax in 1860."

Mr. Disraeli employed in the House of Commons the same topic as Lord Derby had used in the Upper House, laying the blame of our financial extravagance on the "turbulent and aggressive "foreign policy of Lord Palmerston. He hoped that "our constituents," who continually press for a reduction of taxation, would consider how much taxation depends on the management of our external affairs. If the Persian quarrel cost £500,000, and if we had half-adozen of these difficulties in a year

at £500,000 each, how was the remaining 7d. of income tax ever to be taken off? He hoped the country would force the Government to change a policy so burthensome to our finances, and calculated to outrage the feelings of every state brought into connection with

us.

Lord Palmerston replied to Mr. Disraeli. "The right hon. gentleman told us that we were about to meet our constituents, and no doubt his reference to the turbulent and aggressive policy' of Her Majesty's Government was made with a view to the hustings. But I beg to warn the right hon. gentleman that the turbulent and aggressive policy' of the Government will not be a convenient or successful election cry for him or his friends. The people of England are too clear-sighted to be led away by any such declamation as that."

Mr. Gladstone repeated his belief that there was a material connection between the foreign policy of the Government and excessive expenditure and high taxation.