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CHAPTER II.

FINANCE-The Chancellor of the Exchequer appoints the 6th of February for bringing forward the Budget-Expectation of great financial changes-In consequence of the Minister's illness the Financial Statement is postponed-It is made on the 10th February, and the Commercial Treaty with France produced at the same timeElaborate and comprehensive speech of Mr. Gladstone-Extensive changes in taxation proposed by him-Wine Duties-Paper Duty— Reduction of Tariff-Increase of Income-tax, &c.-Reception of the Budget in the House of Commons-Mr. Du Cane gives notice of an Amendment disapproving of the proposed changes-His motion is postponed to give place to one made by Mr. Disraeli, relative to the proceedings on the Treaty-Speeches of Mr. Disraeli, the Chancellor of the Exchequer, Sir Hugh Cairns, the Attorney-General, Sir F. Kelly, Mr. Bright, Lord John Russell, Mr. Horsman, Lord Palmerston, and other Members—The amendment is negatived by 293 to 230-Debate in the House of Lords on the French Treaty, and financial measures of the Government-Speeches of the Earl of Derby, Earls Grey and Granville, the Duke of Argyll, and Lord Hardwicke— Mr. Du Cane's notice comes on for discussion on the 21st February, and occupies three nights--Speeches of Mr. Baxter, Sir S. Northcote, Mr. Hubbard, Mr. Byng, Sir Francis Baring, Mr. Bright, Mr. Whiteside, Mr. Cardwell, Mr. Osborne, Mr. Thomas Baring, Mr. M. Gibson, Mr. Walpole, the Chancellor of the Exchequer, Mr. Disraeli, and Lord Palmerston-The division results in a majority of 116 in favour of the Government—Address to the Crown in approbation of the Commercial Treaty with France, moved by Mr. Byng in the House of Commons on the 8th of March-Sir Hugh Cairns states some objections to the Treaty-Mr. Horsman moves an amendment, excepting to one of the articles-The Chancellor of the Exchequer vindicates the Treaty-The amendment is supported by only 56 votes against 282, and the Address is carried-Lord Taunton, in the Upper House, moves the concurrence of the Lords in the Address-His SpeechSpeeches of Earl Grey, Lord Wodehouse, Lord Malmesbury, Lord Overstone, the Duke of Argyll, Lord Derby, the Duke of Newcastle, and other Peers-The motion is carried on a division by 68 to 38.

THE
quer had appointed, in the
first instance, a very early day
(February 6th), for the financial

THE Chancellor of the Exche

statement, on which public expectation was anxiously fixed; and it was announced that the Commercial Treaty with France, which

had been recently signed, would be at the same time laid before Parliament, in order that the two matters, which were intimately connected, might be viewed as a whole, and considered together. An obstacle, however, unexpectedly arose, which compelled the postponement of the Budget, and prolonged the suspense of the public for some days. This was the illness of Mr. Gladstone, which, though not of a serious nature, was such as disabled him for so great an effort as a complicated financial statement would exact. This delay caused much general disappointment, and it was feared that it would occasion no small inconconvenience to the commercial world, whose arrangements were suspended on the expected announcements. Happily, Mr. Gladstone's recovery proceeded rapidly, and on the 10th he presented himself in the House of Commons, showing but slight traces of his recent illness. His speech, which was heard with the deepest attention, occupied four hours, and this great effort was accomplished with a vigour and facility which surprised those who had felt anxious as to his physical powers. The great extent of the field over which the statement extended made it inevitably a long one, but it did not exhibit the faults of diffuseness or prolixity, nor exceed those limits of needful explanation which the subject demanded. In order to include the substance of the Ministerial propositions within a moderate space, it will be necessary to condense Mr. Gladstone's statements as much as is consistent with making them intelligible. The right honorable gentleman began his speech by observing that the year 1860 had been marked out

by public expectation as one when taxes might be reduced, because 2,146,000l. of interest on the debt, and the increased duties on sugar and tea, and the income tax would lapse. Then had come the commercial treaty with France. There were, however, disturbing circumstances. The revenue, estimated at

69,460,000l., had yielded 70,570,000l., and but for these circumstances, the expedition to China being among them, there would have been a balance in hand. In the mean time Spain had honoured bills due from her, amounting to 50,0001.

Coming to the charges of the current year, Mr. Gladstone said that the estimated funded debt was 26,200,000l., and this would now be reduced by 2,438,000l. The Consolidated Fund, commonly so called, stood at 2,000,000l., exhibiting an increase of 40,000Z. The army and military, including a vote of credit for the Chinese expedition, amounted to 15,800,000l. The navy and packet service to 13,900,000l. The miscellaneous estimates might be taken at 7,500,000l., exhibiting a decrease as compared with the estimates of last year of 325,000l. These and other items made a total of 70,100,000l. He anticipated that the customs of next year would yield 22,700,000l.; the excise duties, 19,170,000l. ; stamps, 8,000,000.; taxes, 3,250,000l. ; income tax (there being one halfyear outstanding), 2,400,000l.; Crown revenue, 280,000l.; miscellaneous, 1,500,000l.; making a total of 60,700,000l.; while the total charge upon it would be 70,100,000l., leaving an apparent deficit of 9,400,000l. The deficit must be met irrespective of remission of taxation. It would

be easy to return to peace duties on tea and sugar, if the House would agree to an income-tax of one shilling in the pound. How should the deficit be met? Were they to stop in the progress of commercial reform? if so, they might stop for ever. High taxation was a reason why they should proceed, not why they should stop. The country was richer than it ever was, and better able to bear the war taxes on tea and sugar; and it had paid an income-tax of 18. 1d. in the pound during the last half year without a murmur. ("No, no!") He meant his observation generally. What did he propose? The Government asked Parliament to renew the tea and sugar duties, as they now stood, for fifteen months. He now came to the commercial treaty with France, which he recommended for adoption to the House. France engaged to reduce the duties on English coal and coke, flax, and pig-iron, in 1861. On the 1st October, 1861, France would reduce duties and take away prohibitions on British productions mentioned, on which there was an ad valorem duty of 30 per cent. There was a provision that the maximum of 30 per cent. should, after the lapse of three years, be reduced to a maximum of 25 per cent. England engaged, with a limited power of exception, to abolish immediately and totally all duties on manufactured goods, to reduce the duty on brandy from 158. to 88. 2d., on wine from 5s. 10d. to 3s.-with power reserved to increase the duty on wine if we raised our duty on spirits. England engaged to charge upon French articles subject to excise the same duties which the manufacturer would be put to in consequence of the changes. The treaty was to be in force for ten years.

Having vindicated the policy of the Government in regard to the treaty, and contended that it was not an abandonment of free-trade, Mr. Gladstone stated generally the results of the treaty. The reduction of the duty on wine, which would afford relief to the consumer, would be 830,000l., entailing a loss of 515,000l. The reduction of the duty on brandy, from 15s. to 8s. 2d., would afford relief to the consumer to the extent of 446,000l., entailing a loss to the revenue of 225,000l. There were other matters on which it was proposed to postpone the remission of the duties for some time-for instance, corks and straw-plaits; but the general result would be, that the relief to the consumer would be 1,737,000l., entailing a loss to the revenue of 1,119,000l. "France is a foreign country, but it is a country divided from England by a narrower channel than that which separates England from Ireland, and there are no two countries to which nature has given such a diversity of soil, products, and character, and there cannot be found on the face of the world two countries so well constituted for carrying on a beneficial and extended commerce. England has gained a great advantage, even if France had done nothing at all, and she has done doubly well, because France has done a great deal." (Loud cheers.)

Entering into the wine question, and discussing it fully, Mr. Glad stone paid a tribute to Mr. Cobden, and passed on to a further change in the Customs, which would entail a loss to the revenue of 910,000l., giving at the same time relief to the consumer of about 1,040,000l. It was proposed to abolish the duty on butter, which yielded 95,000l. a year; on tallow, which yielded

87,000l.; on cheese, which yielded 44,000l.; on oranges and lemons, which yielded 32,000l.; on eggs, which yielded 22,000l.; on nuts, which yielded 11,000l.; and on other articles, yielding altogether 382,000l. Farther to reduce the duties on timber, from 7s. 6d. to 1s. and 2s.; on currants, from 15s. 9d. to 78.; on raisins, from 10s. to 7s. ; on figs, from 10s. to 7s.; and on hops, from 45s. to 14s. He proposed to levy on all goods imported or exported a duty of one penny per package for registration, and on goods in bulk, in accordance with the unit under which they were entered. He calculated that that would produce 300,000l. a year; he proposed also to levy a small rate on certain operations in warehousing, such as removing, packing, mixing, &c. From that measure it was thought 120,000l. a year might be raised. He also proposed 6s. a cwt. on chicory, or any other vegetable matter prepared for mixing with coffee, and upon that point he should ask the Committee to come to a vote that night. He proposed stamps on notes for the sale of colonial and dock warrants. He proposed a license on eating-houses, under whatever name they might be carried on, giving them the permission of selling wine and beer. The duty on these houses would be doubled if they were kept open after twelve o'clock at night. Stamps on various other small articles would be imposed. He proposed, under certain modifications, to reduce the game certificates; also to impose a penny stamp upon all cheques. He should also recommend to the Committee the repeal of the duty on paper, and to abolish the stamp on newspapers.

How should the deficiencies be supplied? As he had before re

marked, a shilling income-tax would do it at once. Remissions had been proposed giving four millions of relief, and there were deficiencies of nearly nine and a half millions. Against that they proposed to take up the credit now allowed in the payment of the malt duties, and to impose an income-tax of 10d. in the pound over 150l. a year, and 7d. in the pound under 150l. Three-quarters of that amount would be collected this year. Mr. Gladstone then proceeded to make a general recapitulation of the measures proposed by him.

"Let me now bring into one view the alterations which I have stated in detail, and in doing so I must endeavour to bring clearly before the mind of the Committee three separate sums-1st, the entire amount of the remission or relief to the consumers by the adoption of the plans we propose; 2nd, the amount of loss to the revenue which they will entail; 3rd, the amount of compensation which will be derived from the changes in the tariff which we recommend for the adoption of the Committee. The Customs' duties under this treaty with France will give relief to the consumers of a sum of 1,737,000l. and a loss to the revenue of 1,190,000l. By the supplemental Customs plan we shall give relief to the consumers of 1,039,000l., and there will be a loss to the revenue of 910,000l.; total relief to the consumers, 2,771,000l.; total loss to the revenue, 2,100,0007.

"In the Inland Revenue Department there will be a relief on paper of 1,000,000l.; on hops, 105,000l.; and on game certificates, 50,000l.; making in all, 1,155,000l.; and a total loss to the revenue of 990,000l. There will thus be a total relief to the consumers in the Customs and Inland Revenue De

partments of 3,931,000., and a loss to the revenue of 3,090,000l. The amount of compensation by means of increased consumption may be estimated at 841,0007., and there will be a further compensation by new charges and savings on establishments of 982,000l., being a total of 1,823,000l. Taking this computation, there will be a net loss to the revenue for 1860-61 of 2,108,000l. I will not enter now more fully into the question of relief to the consumers, but I believe that the effect of the tariff in 1861-62 will be to enrich the revenue to a much greater extent than, perhaps, many anticipate. I will now state in a few words the effect of those changes in accomplishing that most desired consummation of all reformers-a simplification of the Customs' tariff of the country. The number of articles subject to Customs' duties in 1842 was 1052; in 1845, 1163 articles, for I must remind the House that the first operation of the reform of the tariff was to multiply the number of articles, in consequence of an increase of the headings under which they were specified. In 1853, the number of articles was 460; in 1859, 419. After the changes now proposed are adopted, without allowing for a few sub-divisions, such as the specification of two or three classes of sugar, the whole number of articles remaining on the tariff will be 48. There are three classes, including fifteen articles, such as sugar, tea, tobacco, wine, coffee, timber, raisins, &c., which are in reality the only articles that will be retained on the tariff for purposes of revenue. Besides those fifteen articles, there are twentynine which, though yielding revenue, are only retained on special

grounds. Thus five articles are retained on account of countervailing duties on domestic articles, and twenty-four on account of their resemblance to one or other of the fifteen articles I have adverted to. We could not, for example, admit eau de Cologne free of duty, while there is a duty on brandy. It thus follows that your Customs' revenue will be derived substantially from fifteen articles. That is a result which I hope Custom-house reformers will be of opinion justifies the changes we have made. There will be a relief from indirect taxation of about 4.000,0002. Out of that, 1,000,000l. remitted on the paper duty will go directly to stimulate the demand for rural labour; 1,800,000l., or the greater part of 2,000,000l., under the French Treaty will in every instance strike at differential duties, and will be the means of removing from the tariff its greatest, perhaps its only remaining deformities. There will be on the British tariff, after the adoption of these changes, nothing whatever in the nature of protective or differential duties, unless you apply that name to the small charges which will be levied upon timber and corn, which amount in general, perhaps, to about three per cent. With that limited exception you will have a final disappearance of all protective and differential duties, and the consumer will know that every shilling he pays will go to the revenue, and not to the domestic as against the foreign producer."

Mr. Gladstone concluded his speech in these terms:-"In conclusion, I may say that I feel a hope which amounts to a persuasion that this House, whatever may happen, will not shrink from its

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