eight months does not lead us to suppose But the Committee should bear in mind that the revenue will flow into the Exche- that, although an additional tax to that quer exactly in the manner and from the amount is put on, the whole sum of sources that were anticipated. The Go- £1,450,000 will not come into the Exchevernment expect there will be a falling-off quer within the present financial year. in the Excise, in Income Tax, and in The sum which it is reckoned can be colMiscellaneous Revenue; and, on the other lected and paid in within this period is hand, a gain upon Customs, Stamps, and £840,000, leaving the balance to the Post Office. Taking one head of re- brought to account after the close of this venue with another we anticipate, without year. Therefore, all the Government has additional taxation, very nearly the same to depend upon this year towards the examount of income as was estimated when penses of the war is the £200,000 surplus the Financial Statement was made in April. which I have named, and the £840,000 to On the other hand-of course, putting out be raised by means of the addition to the of consideration for the present the Abys- income tax-if the Committee assent to sinian expedition-we have been able to the proposal-which will leave £960,000 check the expenditure, which will be rather to be provided for in other ways. Well, below the estimate. In round numbers we the Chancellor of the Exchequer has, of anticipate about £100,000 less of income course, given great consideration to the and about the same saving of expenditure. probable state of the balances at the close The Committee may recollect that the of the year. And here I may, perhaps, be surplus estimated on the 4th of July was permitted to refer to what the balances £246,000; but in the course of the Ses- amounted to at the beginning of the year, sion there were certain alterations in the and then to show how, if we take from Estimates, and the result at the end of the them this sum of £960,000, our balances Session was that, making allowance for all would stand at the close of the financial the variations which took place-a diminu- year. On the 1st of April, 1867, the balances tion in some items and an increase in were £7,294,000. Supposing the propoothers the estimated surplus was reduced sition which I now make on behalf of the to £205,000. Under these circumstances, Government to be assented to, the excess of I think that even my hon. and learned expenditure over revenue-taking into acFriend the Member for Tiverton (Mr. count the cost of the Abyssinian expedition Denman) will recognise the wisdom of on the one side and the £840,000 of addicontinuing the attorney's certificate duty, tional income tax on the other-will be and the House will feel a satisfaction in £960,000. Then there is also an estimated having followed the advice of those who, excess of payments over receipts, other being responsible for the finances of the than revenue expenditure and receipts, country, resisted the repeal of that tax. of £684,000, making a total to be deducted That being the case, I think, putting Abys- from the balances of £1,640,000. Desinia out of the question, we have some ducting this sum of £1,640,000 from reason at this moment, as I have said, to £7,294,000, which we estimate we shall expect a surplus-speaking in round num- have as the amount of our balances on the bers, for I do not pretend to go into par- 31st of March, 1868, there remains a sum ticulars-of about £200,000 at the end of of £5,654,000. This is, indeed, not a very the year. Of course, that surplus will be strong balance. I will, however, call to the available as far as it goes for the expendi- recollection of the Committee the state of ture of £2,000,000, which has been voted the balances in some previous years. In for the Abyssinian expedition, leaving a 1862 the balance on the 31st of March was sum of £1,800,000 to be provided in other £5,289,000, and on the 31st of March, ways. The Committee will, no doubt, be 1866, it was £5,851,000, which is within anxious to know in what way the Govern- very little of the sum now proposed to be ment propose to provide for that expendi- left as a balance. But then it should also ture. Not to keep the Committee long in be remembered that, though we shall suspense, I will say that they propose to leave the balance upon this estimate at lay on an additional 1d. of income tax £5,654,000, we shall have coming into the during this financial year. The Committee Exchequer after the close of this financial is, no doubt, aware that an additional 1d. year on account of income tax levied in on the year's assessment will bring in respect of the current year £610,000, and something under £1,500,000-or, to take therefore the balance will be recouped to a prudent estimate, about £1,450,000. that extent out of the Ways and Means

provided for this year. In referring to the lected, and paid for and in respect of such prostate of the balances, I should have re-perty, profits, or gains, either by assessment or marked that the Government are assuming Duties (that is to say): Upon any assessment otherwise, the following additional Rates and that we shall renew the £1,700,000 Ex-made on the annual value or amount of any prochequer Bonds, which they took power to perty, profits, or gains (except property, profits, renew in the Budget of April. At present and gains chargeable under Schedule (B),) the adwe have paid off £700,000 of these bonds, ditional Rate or Duty of one penny for every but we have made arrangements for the twenty shillings of the annual value or amount of all such property, profits, and gains respectively; renewal of these bonds next month, and we and for and in respect of the occupation of lands, contemplate the renewal of the remaining tenements, hereditaments, and heritages charge£1,000,000, which are payable next able under Schedule (B), the additional Rate or March. There is a sum of £672,000, Duty of one halfpenny in England, and of threeeighths of a penny in Scotland and Ireland rewhich is available during the quarter, on spectively, for every twenty shillings of the annual account of Sinking Fund, and we have value thereof; and such additional Rates and made use of that in repayment of tempo- Duties respectively shall be collected and paid rary advances from the Bank. We intend with, and over and above, the second moiety of to avail ourselves of similar resources Provided always, That, where any dividends, inthe Duties assessed or charged for the said year: next quarter, which will give a sum of terest, or other profits or gains becoming due or £228,000. That sum is taken into account payable half-yearly are assessed or charged halfin estimating the balances which we antici- yearly with the Rate or Duty under the said Act pate. In considering whether we might chapter 23, there shall be charged upon the first of the thirtieth year of Her Majesty's reign, safely leave that sum of £960,000, which assessment or charge which shall be hereafter I have before mentioned to be provided for made on such dividends, interest, profits, and out of the balances, we have taken the gains, the additional Rate or Duty of two pence opinion of those most competent to advise for every twenty shillings of the half yearly us, and the Government have come to the amount thereof; and where any profits or gains becoming due or payable quarterly are assessed conclusion that it will be perfectly safe to or charged quarterly with the Rate or Duty under leave the balances in that state. It has the said Act, there shall be charged upon the first been objected by some persons that the two quarterly assessments or charges respectively expenditure for this war ought not to be which shall be hereafter made on such last-menwholly provided for out of income tax, but Duty of two pence for every twenty shillings of tioned profits and gains, the additional Rate or that those who contributed to the public the quarterly amount of such last-mentioned protaxation otherwise ought to be made to fits and gains; and the said additional Rates and bear their share. Supposing that objection Duties charged in such half-yearly and quarterly to be made, I will reply that the balances paid with and over and above the Rates and Duassessments respectively shall be collected and in the Exchequer are made up of the ties assessed or charged therein respectively under general revenue of the country; and there- the said Act. fore in that sense it may be said that the Government are providing for the war in a way which will throw the burden not only on the income taxpayer, but also on those who contribute to the other taxes of the State. I have endeavoured to be as concise as possible in my statement, and I now propose to put into the hands of the Chairman the Resolution which will lay an additional 1d. of income tax on the year

1867-8.

MR. GLADSTONE: I think, Sir, we all concur with the hon. Gentleman who has just sat down in lamenting the absence of the Chancellor of the Exchequer, on account of the annoyance it must cause him to be absolutely disqualified from performing one of his most appropriate and important duties; but in every other respect I am sure we have no reason to complain of the manner in which the place of the right hon. Gentleman has been supplied. The hon. Gentleman opposite has given us a perfectly clear statement of the condition of things on which we are called upon to act. He has placed the House in a position to pass judgment upon it, and I must at once say that, as far as I am concerned, I propose to deviate from the ordinary rule observed on such occasions, because at this period of the year there

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, in addition to the Rates and Duties granted by the Act passed in the 30th year of Iler Majesty's reign, chapter 23, for one year, commencing on the 6th day of April, one thousand eight-hundred and sixty-seven, for and in respect of all property, profits, and gains mentioned and described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on profits arising from property, professions, would, I think, be a practical difficulty in trades, and offices, there shall be charged, col-inducing us to postpone our opinions. It is

better, therefore, to say at once what we as such must be expected to be followed think on the subject. The usual rule in by other quarters exhibiting a decline more Committee of Ways and Means is that the pronounced because people naturally, House should adjourn its judgment, and not before actually restricting their mode of only does it do so, but it is the practice of subsistence, exhaust not only their actual hon. Members generally to refrain from de- means, but their credit likewise. The livering positive opinions. I have no doubt process is therefore a rather slow one, that it is the intention of the hon. Gentle- and the decline only makes its appearman to allow the Resolution to stand over for ance some little time after the pressure a while before taking an absolute Vote upon which produces it. The principle adopted it; but, inasmuch as, so far as I am con- by the Government, as stated by the cerned, I see no difficulty about the mat- hon. Gentleman, involves, I think, more ter, I proceed to deliver an opinion. One than is completely satisfied by the proword only about what the hon. Gentleman position he makes. I do not wish to has said with respect to the state of the hold him to the literal terms of his staterevenue and expenditure of the country. ment; but he said the Government had I do not now mean the amount which the come to the conclusion that the burden expenditure has reached, or the addition which is to come upon the year should be made to it in the course of the year, be- met from the resources of the year exclucause I do not think this a proper and con- sively. Now, that is a very good principle, venient time for entering upon that matter. and had we been at the commencement of But, as respects the condition of the re- the financial year, it would have been devenue itself, I am bound to say that though sirable to apply it without any mitigation absolutely it is not a satisfactory condition, or qualification. At a period, however, so yet relatively to the circumstances we have late as this, when we are about to enter on been passing through it is better than we the ninth month of the financial year, there could at any former period have expected. is undoubtedly much difficulty in bringing I do not quite agree with the hon. Gentle the principle into application. Without man as to the cause of the present decline looking, therefore, too rigidly at the terms in the most important branches of the re- of that statement, the question we have to venue. He attributes that decline to the consider is whether, upon the whole, the financial crisis of last year; but obviously proposal of the Government is a judicious the effects of that crisis were most intense one. Now, I quite agree with the hon. in the period which immediately followed Gentleman that it would have been most it, and in that period we had not a bad, objectionable to provide for the expenditure but on the whole a good revenue. I have now contemplated by a loan; but differing, no doubt that the circumstances, perfectly perhaps, from some of my hon. Friends, I unavoidable, under which people have had am of opinion that it would have been still to pay such very high prices for provisions, more objectionable to postpone the proand especially the exceedingly elevated vision to the Budget of next year. Of all rates they have now to pay for bread, con- financial errors there is none so seductive, stitute the main cause why they are unable none so plausible, and therefore none so to expend the usual amount upon excise- dangerous, as making a short postponement able commodities. The contraction of em- of the provision for your expenditure. That ployment which has taken place, as far as course was adopted by the House in 1839. I have any means of estimating it, is a In that year, with a falling revenue, a much smaller contraction than that which large amount of a considerable branch of we had to encounter during what was the revenue was more than hazarded-it called the cotton famine in Lancashire; was almost entirely surrendered-for a yet, we being then happily favoured with purpose perhaps the most beneficial ever moderate prices of provisions, especially of contemplated in any of our administrative bread, the revenue continued to prosper. reforms, but under circumstances deplorLooking, however, at facts as they are, my ably ill-adapted for a trial of the experiment. surprise, I confess, has only been that the I mean the Post Office revenue. decline in the revenue has not appeared sooner. It was quite evident on the 1st of October, when the quarter's revenue was announced, that a too sanguine view was revenue should accrue, which was certain taken of it by the public journals. It plainly marked a beginning of decline, and

The

course taken was this-The House brought the penny postage into immediate operation, and it resolved that if a loss of

to be the case, provision should be made for it the next year. I certainly feel

T

complaint, and I do not know that the Go-Government should think it necessary at vernment under the circumstances could such a moment to increase the Income Tax. have acted better or more prudently. No The falling off of that tax showed that it sound principle is violated, no practical was already higher than the present condirisk is incurred, and I believe the good tion of the country justified. He did not sense of the public will be infinitely better know whether there was any remedy for satisfied by meeting a manly demand for the mistake that had been made, and some immediate extension of taxation to- whether there was any possibility of making wards the expenses of this war than it use of that surplus revenue of £800,000 would have been if the Government had appropriated by Act of Parliament for the unfortunately been induced to resort to reduction of the National Debt. Whether any expedient less direct and less calculated that Act could now be conveniently repealed in the end to maintain the strength of he would not undertake to say; but he the credit and resources of the country. must express his deep regret that the Chancellor of the Exchequer had upon this subject adopted the policy of his predeces sor, and that he had disposed, perhaps irretrievably, of a surplus which he now required for the service of the country, and for want of which he was compelled to add to a tax already sufficiently vexatious and burdensome to large classes in this country.

SIR GEORGE BOWYER said, he had to remind the Committee that last year there was a surplus of £800,000, and the Government might have reduced taxation to that amount, or kept that surplus for any contingency that might arise, and which had actually occurred. But the Government took a third course. The Chancellor of the Exchequer, taking a leaf out of his predecessor's book, threw away that surplus for the sake of effecting a trifling and prospective reduction of the National Debt. Several hon. Members, and himself among the number, urged that this was, in effect, a proposal to revive that objectionable scheme, a sinking fund. They contended that when the right hon. Gentleman had money in hand for which he had no other use, it might properly be applied to the reduction of the Debt. He argued that the plan of the Government was worse than the old sinking fund, because that might have been given up at any moment, whereas their present plan could lead to nothing. He warned the House that perhaps next year we might have a war, and he asked why the balance should not be allowed to remain for future years in case the Government wanted the money. The Chancellor of the Exchequer could not be brought to agree to this view; but what had occurred showed that he and others were not far wrong. The Government irretrievably gave away that surplus, and now proposed to raise between £800,000 and £900,000 by an addition to the Income Tax of the present year. He maintained that this was a very objectionable thing, and more so now than it would have been some years ago, because the country had gone through a period of financial distress which was not yet over. The falling off of the Excise and Income Tax showed the distress that now weighed upon large classes of the community, and it was infinitely to be lamented that the

MR. LAING said, that the question before the Committee was very simple, and there was no reason why hon. Members should not at once express an opinion and decide upon it. The practical question at the present moment was whether there was to be an addition to the Income Tax of 1d. or 2d. in the pound in the present year. There was a deficiency of £1,800,000, and the alternative lay between throwing over the provision for this amount until next year's Budget, or meeting half the amount by an increase of Id. in the Income Tax on the present year as proposed by the Government, or meeting the. whole by an addition of 2d. to the Income Tax. He agreed in the general principle that it was desirable in a matter of this kind to meet the expenditure of the year by the revenue of the year; but upon the whole, and under the circumstances, he was satisfied to accept the proposal of the Government. It was evident that if the war were to continue, the Chancellor of the Exchequer might be driven to the necessity of increasing the Income Tax by 2d. in the pound, if not more. In that case there would be a strong demand that the whole burden of the war should not fall upon the upper and middle classes, but that the rest of the community should contribute towards it by increased indirect taxation. It was desirable to postpone this alternative as long as possible, because it was highly inexpedient to make slight and temporary additions to the indirect taxation of the country. In dealing with articles