the general cost of the operation would cause an apparent annual loss of some 330,000l. Next he discussed the circumstances under which the charge for the debt had been fixed at 28,000,000l., pointing out that the Sinking Fund was kept up by the income-tax payers; and, if it were to be permanently maintained, it must be at an endurable point; and concluding finally to reduce the fixed charge to 26,000,000l., the net result of which would be to give a relief of about 1,700,000l. annually. Out of the surplus thus created he proposed, first of all, to reduce the income-tax by a penny, which would cost a round sum of 1,560,000l. Under this head the farmers would be allowed the option of paying on their profits instead of on their rents. Next he explained the relief proposed to be given in assistance of local taxation, premising that the Government still hoped to bring in a measure for the establishment of a system of local government. But in the interim a sum equal to the total amount of the carriage-tax was to be handed over to the local authorities, 245,000l. for England and 35,000l. for Scotland; and in addition to this 50,000l. would be given to Ireland for the promotion of arterial drainage. For the special benefit of the working-classes, he proposed to reduce the tobacco duty from 3s. 6d. per lb. to 3s. 2d., at a cost to the revenue of 600,000l., whilst a slight modification of the duties on marine insurance would remove some restrictions on the rich trading classes. The general result showed a balance of revenue over expenditure of 975,000l., further increased by 100,000l. from stamps and 1,704,000l. from the reduction of debt charges, making the sum 2,779,000l. This surplus Mr. Goschen disdisposed of by a reduction of 600,000l. on the tobacco duty, 1,560,000l. of income-tax, 280,000l. in aid of local taxation in England and Scotland, and 50,000l. in aid of arterial drainage in Ireland-in all a relief of 2,490,000l.; leaving an estimated surplus of 289,000l.

In the conversation rather than discussion which followed, Sir William Harcourt thought the financial condition of the country to be healthy, and that it suffered more from increase of expenditure than from diminution of revenue. He repudiated, however, the notion that any reduction was to be expected in the cost of the Civil Service, but insisted that it was in naval and military expenditure great savings could be effected. With regard to the application of the surplus, his chief regret was that none of it had been applied to improve the condition of the old coinage.

Lord R. Churchill, touching upon the currency question, which he also regretted had not been dealt with by the Chancellor of the Exchequer, suggested that the only way to deal with light gold, without throwing a burden on the taxpayer or penalising the last holder, was to abolish the half-sovereign and re-arrange the bank-note issue. Turning to the Chancellor of the

Exchequer's statement, he complimented him on his action in regard to the Egyptian expenditure, to which he attributed the surplus of last year, but maintained that the estimated surplus for the coming year was due to reductions which he had made or had recommended. He regretted that Mr. Goschen had said nothing on the subject of economy, and, canvassing his suggestion as to the retrenchment in the Civil Service, admitted that a small saving might be effected, especially in the votes for the Education and Science and Art Departments, but insisted that it was in the great spending departments of the army and navy that more economy was required. He enlarged upon the immense gross annual increase in naval and military expenditure which had been incurred since 1883, and argued that if that expenditure were maintained it should be thrown upon the general body of the taxpayers. He strongly objected to the proposed interference with the National Debt, which, he contended, was out of accord with all sound financial principles; and he protested against the contribution to the local rates, which he considered altogether destructive to economy.

On a subsequent evening (April 25) Mr. Gladstone resumed the debate by observing that, so far from this being the "humdrum Budget" premised, it would be a very memorable one as far as the principles involved were concerned. Proceeding to review the main features, he referred first of all to the local subventions, to which he repeated his well-known objectionstheir extravagance, their tendency to weaken the momentum in favour of local government reform, and the transfer of charges borne now by property to taxes contributed in a great measure by labour. As to the local debt, he objected to the creation of a new debt, and recommended that it should be added to one of the old debts. He did not object to the reduction of a penny in the income-tax, but he maintained that it ought to be done by reduction of expenditure and not by taking two millions from the Sinking Fund. This proposal, he said, was contrary to all sound financial principles, and, as he argued in an elaborate review of the various Sinking Funds from the time of Sir R. Walpole to Sir S. Northcote, was wanting in courage and consistency, and reduced the provision for the debt to a lower point than it had ever stood at before.

Lord R. Churchill, in supplementing his former remarks, greatly doubted the policy of making a large reduction on indirect taxation, and, in view of the promised local government measure, deprecated the proposed grant in aid of the local rate. Enlarging on the necessity of economy, he challenged the Chancellor of the Exchequer to say that retrenchment was impossible, having regard to the increase in the Army and Navy Estimates during the last three or four years, and much regretted that the Government had fallen a victim to the temptation-which every previous Chancellor of the Exchequer had resisted-of laying

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hands on the Sinking Fund in order to propose a popular reduction of taxation.

The Chancellor of the Exchequer, in reply to the various criticisms, pointed out that the reduction of the tobacco duty was proposed because the imposition of the additional 4d. had not only failed to increase the revenue, but had resulted in the production of an inferior article. As regarded the relief of the local rates, no new principle had been started, and as the Government were prepared to introduce a measure of local government the proposal was only in the nature of temporary relief, and no harm would result from the grant of it. As to the reduction of the income-tax, he denied that it would encourage extravagance, and maintained that it was from penury rather than from wealth that the tax was principally derived. This he illustrated by showing that no fewer than 438,000 persons paid income-tax on incomes under 400l. a year, and those persons, he thought, would scarcely approve of the tax being kept at 8d. simply for the purpose of maintaining the financial morality of the country. The reduction of the National Debt depended mainly on this tax, and though the reduction of the debt in 1874 was at the rate of only three millions a year, Mr. Gladstone, he reminded the House, had proposed to get rid of the income-tax altogether. On the subject of economy he endorsed the views of Lord R. Churchill, but, in reply to his suggestion that naval and military expenditure should be reduced, he was convinced that the country would not be satisfied unless the army and navy were maintained in a thorough state of efficiency.

After a desultory conversation, prolonged throughout the evening, the Budget resolutions were agreed to without amendment.

Whilst the House of Commons had spent nearly the whole of the time between its meeting and the Easter Recess in discussing the Address and the new Closure rule, the House of Lords had been dealing with various questions for which legislation was pressing. The range of such questions had year by year become more restricted in view of the unwillingness of the Commons to consider measures which had not originated in their own House. Even in bills, such as those relating to legal reform, on which the Peers were eminently qualified to speak with authority, the Commons on more than one occasion had rendered the labours of the Upper House fruitless by a refusal to discuss measures sent down from it. The present session formed no exception to the general rule. The Lunacy Acts Amendment Bill, for which the pressing need had been admitted for some years, shared the fate which had attended all similar efforts. Introduced by the Lord Chancellor (January 31) at the beginning of the session, its general scope was discussed and approved on its second reading (February 7), and after three nights' careful debate in Com

mittee it was read a third time (March 17) and sent to the Commons, where after remaining for some months on the orders for its second reading it was discharged (August 1) without a word of discussion. A like fate attended the Appellate Jurisdiction Bill presented by the Lord Chancellor (February 4), the Church Patronage Bill of the Archbishop of Canterbury (February 18), the Glebe Lands Bill of Viscount Cross (February 8), the Tithe Rent Charge Bill of Lord Salisbury (March 25) and the Copyhold Enfranchisement Bill of Lord Hobhouse (February 3), as well as the Railway and Canal Traffic Bill introduced by Lord Stanley of Preston (February 28) and the Electric Lighting Act Amendment Bill introduced by Lord Thurlow (January 31). Scarcely any of these presented considerations of a party nature, whilst all dealt with matters in urgent need of treatment, but not one. of them was even explained to or seriously urged upon the attention of the House of Commons, and of the proceedings of the Lords before Easter, scarcely a vestige was to be traced on the Statute Book at the close of the session.

The speeches outside Parliament in so far as they relate to the attitude of the Liberal Unionists-the most important question of the moment--have been already noticed in the preceding chapter. In spite of the zeal and ability with which their leaders defended their position, the results of the by-elections showed that it was either not understood or not appreciated by the constituencies. The fortunes of the Gladstonian Liberals which, in England at least, had fallen very low at the close of the previous year had recovered in a marked way before Easter. Their successes at Liverpool, Burnley, and in Derbyshire had shown how strong was the attachment of the Liberals to their party in districts made up of electors of every class. Mr. Gladstone moreover, in view of the prospects of a new Coercion Bill, and the difficulties inherent in an Irish Land Bill, was justified in looking forward with satisfaction to the outcome of the next few months. If the Unionists, disheartened by the defeat of their candidates in urban and provincial constituencies, could be detached from their Conservative allies by their dislike to punitive or coercive legislation, the chances of the overthrow of Lord Salisbury's Ministry were not far from realisation. It was therefore the object of the principal Gladstonian Liberals, both inside and outside Parliament, to address themselves rather to their quondam associates than to the difficulties of the situation which had arisen in Ireland. It was therefore left to the Conservatives to place before the nation the difficulties with which the Ministry had to grapple. Lord Salisbury, in speaking to the members of the National Conservative Club (March 5) at Willis's Rooms, boldly faced the matter. All the politics of the moment, he said, were summarised in the word "Ireland," and the object of their opponents was to make it appear that the position occupied by the Ministry was one they had made for themselves, and from which

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they could by their own choice escape. This might be possible in a despotic State, but in a constitutional country it was necessary to walk strictly within the limits of the law, and if that law was not suitable to the circumstances of the case, Ministers of their own authority could not alter it. "The machinery of your social government," Lord Salisbury went on to say, "which would go on well in England, has broken down in Ireland in one essential and vital point. The great object of society is that wrong should be redressed and that crime should be punished. But wrongs can only be redressed and crime can only be punished by the action of the law, and its action in Ireland is paralysed, and has broken down in an essential point, because Irish jurymen, or a sufficient number of them, do not sympathise with the law, and will not give their aid in carrying it out."

Referring to the reasons why Ireland was so discontented, Lord Salisbury denied that the question of nationality had very much to do with it. Directly the Irish Nationalists left Westminster, they dropped the national cry altogether, and spoke only of the land question; and Lord Salisbury maintained that it was really the land question, and not the question of nationality, which made Ireland so unmanageable. In Greece, in Italy, in the Tyrol, in France, in Belgium, during the agitations for national freedom, it would have been impossible to carry the country with the agitators by "preaching a wholesale system of fraudulent bankruptcy." Yet that was the course which the Irish agitators found most effective. Remedial measures of no light importance were possible in Ireland, but they could not be applied till the law had been strengthened and enforced. "Legislative relief, instead of tending to quiet, will only aggravate the disorder, so long as it is believed that more agitation can wring more measures of the same kind out of the legislature of this country."

In Lord Salisbury's eyes what was necessary was "for the country to take to heart that this is no common task on which they are engaged. It is altogether outside their experience of politics. It is not a question of this party or that; it is not a question of the career of statesmen or the fate of parties. These are infinitely small matters compared with the vast issues with which we are engaged. We are engaged upon a struggle on the issue of which depends whether our existence as a great empire is to continue or not, and we must address ourselves to that conflict with the qualities required for a conflict of that kind. There are institutions, there are sentiments, which are fit for a period of repose such as this country has generally enjoyed; there are sentiments and laws which are necessary for a period of struggle. We have entered upon a period of struggle. Our national fault is that too much softness has crept into our counsels; and we imagine that great national dangers can be conjured by a plentiful administration of platitudes and rose