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necessary for the military and naval actual expenditure was £70,837,000, beservice of the year. Nor would he dis- ing a miscalculation of £962,000. It was cuss the question how the finances were plain from these figures, that in those dispensed, so to speak, although he was / two years at least the Chancellor of the very far from saying that there was not i Exchequer underrated the amount of great room for criticism on that point. his expenditure and overrated the amount He believed that there was a great and of his income ; and it was worth attenextraordinary waste in many of the public tion that the points to which these misdepartments of this country. He would, calculations were traceable were, as had however, not now go into those questions ; been predicted, the Chinese indemnity on what he wished to do was to draw atten- the one hand, and the collection of the Extion to the treatment of our financial re. cise on the other. Now, he could undersources by the Government. Now, the first stand a Chancellor of the Exchequer, when and indispensable condition of sound finance he had a surplus, being animated by a love was accuracy of calculation on the part of of peace, and a detestation of war, carrythe financier, and moral certainty on the ing his aversion to war to the reduction of part of those to whom the financial ar- military and naval armaments; but he could rangements applied. Accuracy of calcu- not understand a Chancellor of the Exchelation begot confidence ; confidence begot quer closing his eyes to the risks and nepublic credit, and public credit begot cessities of war, and permitting that love of everything that was great and honour- peace to cover his miscalculations as reable in a nation. Now, could it be garded war. When, in 1854, this country said that the financial operations of the sent out 25,000 troops to defend the Gorernnent were so characterized ? With Turkish empire, he believed that the Go. the highest possible opinion of the ability vernment merely made provision for sendof the right hon. Gentleman the Chan. ing them out to Malta, on the supposicellor of the Exchequer, it was impossible tion that they would be brought back to assign to his calculations a character of again. That was only one of the long aceuracy. He generally commenced the series of miscalculations which, he feared, year with an eloquent speech and a plau. had marked the finance of his right hon. sible surplus ; and he generally concluded Friend ; but it was a type of the whole. the year with a practical deficit, and often In 1860 the same Chancellor of the Exa supplemental budget. Out of the last chequer had the fortune to have to preten years the right hon. Gentleman had side over another military operation. We been for five or six years Chancellor of the sent out thie expedition to China ; and Exchequer ; and, with the exception of what were the words of the Chancellor 1853–in which he admitted that the an- of the Exchequer at that time? II. ticipations of the budget had been realized told the House of Commons that this in a satisfactory manner-there was no expedition went out as the bearer of a single year which was not marked with peaceful remonstrance to China, and in miscalculation as to the relative position accordance with that opinion he asked of income and expenditure. Such had been for the modest Vote of £500,000. But the character of the right hon. Gentleman's at the close of that Session Mr. Glad. administration of the finances of the coun- stone had to come to the House and ask try. Take the year 1860-1:- The Chan- it to extend the Vote by £3,000,000. eellor of the Exchequer estimated the in. This was a matter of expenditure ; but come at £72,308,000; the actual income let them now turn the pages of the was £70,283,000, showing a miscalcula- national ledger, looking still under the tion of £2,025,000. The estimated ex- head of China, and see if the right hon. penditure was £70,100,000, the actual Gentleman had been more successful in expenditure was £72,842,000, showing a his calcnlation of income. Last year he niscalculation of £2,724,000, the income estimated the amount of the Chinese inbeing less than the actual expenditure by demnity at £750,000; in his financial £2,560,000, and only £180,000 above speech of this year he had to reduce it the estimate expenditure. Take the next to £434,000, as the total available reFear, 1861-2. The estimated income was ceipts; and he went on to say, that where£70,283,000. The actual income was as he had anticipated the realization of £69,674,000, being a miscalculation of the indemnity within four or five years, £609,000. On the other hand, the esti- he could not now hope that it would be mated expenditure was £69,875,000; the realized in less than seven or eight years,

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“unless," Mr. Gladstone said in a man- / prudence, the reserve, and the self-rener characteristic of his whole policy, straint of the right hon. Gentleman's “some arrrangement might be made to speech, which was not to be found in anticipate the payments.' The fact was, any other of his financial statements. In that each year's budget was a budget, the following year, 1854, though it was not of facts and ascertained figures, but a year of war, he estimated for a surplus of imagination. It was perfectly clear of £430,000, and in 1860 for a surplus that the result of such miscalculation of £460,000. That year showed a demust be to destroy that confidence in ficiency of more than £2,500,000. In the budgets of the Finance Minister the year just passed he estimated for a which it was of the utmost importance surplus of £400,000, and the falling-off that the public should possess. For the was still greater, and this year he came last two or three years the budget had down to the miserable, paltry figure of become a mere exhibition of rhetorical £150,000, or, as the noble Earl said, subtlety and skill—a tickling of the ears £180,000. He would ask this Houseby calculations, which on examination were looking at the vast extent of our Empire, found not really worth the paper on which and the various contingencies which with they were written. This not only engen- such an extended dominion must necessaridered mistrust, but set up a spirit of spe- ly be provided against—he would ask their culation and gambling, and, in fact, went Lordships whether a surplus of £150,000 to the roots of public morality. With or £180,000 could be considered either every respect for his right hon. Friend, safe or creditable ? Mr. Gladstone himhe believed that this proceeded from two self admitted that the surplus was only causes, one moral and one financial. The a nominal surplus. But he did more-lie moral deficiency proceded from an over- took credit for it, and told the House of sanguine but most dangerous temperament, Commons that he did not estimate for a which made the intellectual belief the larger surplus, because, if he did, the creature of the moral wish, and which House would have compelled him to ap. led the right hon. Gentleman to over- propriate it against his inclination to the rate income and underrate expenditure. remission of taxation; and he added, " The Starting with self-deception, he ended in only security of the Chancellor of the deceiving others, and turned finance from Exchequer lies in his utter destitution." a matter of hard, dry calculation into a Were these the expressions of a statesquestion of sentiment and conjecture. He man, and were they to be expected believed this proceeded from a great error from the pupil and friend of Sir Robert -the error of the never estimating for Peel ? When a Minister came down to the a surplus ;-he did not say of realizing House of Commons and told them he could a surplus, for except in 1853 the pre- not do that which he considered rightBent Chancellor of the Exchequer had that he dared not keep a surplus, because never had a single shilling surplus ; but if he did the House would compel him to he never estimated for a surplus—he drew appropriate it against his own sense of his calculation so fine as to leave no public policy to the remission of taxamargin, or, as in the present year, one tion—that was language hardly worthy of £150,000. And did it not follow, if of the right hon. Gentleman or of the he so equalized his expenditure and his assembly he was addressing. income, that the slightest unfavourable only been one parallel to this ; that was turn of events in the year must disturb the right hon. Gentleman's conduct when his whole calculation ? No landowner he went down to a commercial town, and, or private gentleman would go upon that addressing the people there, exhorted them insane principle of living up to the utmost to put a pressure on himself to reduce farthing of his income, without taking taxation which he, as a Minister of the into account the chances of a bad har- Crown, on his own responsibility and his vest, failure of rents, losses by fire, or own authority, had recommended the House other vicissitudes that might arise. He of Commons to adopt. might venture to say that Mr. Gladstone He now came to a most important point had uniformly been a Minister of small —the present balance of the national acsurpluses. In 1853 he estimated for a count. How did it stand? They might large surplus of £870,000; and those who take it two ways, either for three years remembered the budget speech of that year – 1859.60, 1860-1, and 1861-2—or they could not fail to be struck with the greater might take the two last years, during which

The Earl of Carnarvon

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Mr. Gladstone had been wholly and solely putting the charge for fortifications—wheresponsible for national finances. He would ther it were £2,000,000 or £10,000,000 take it both ways. In 1859-60 Mr. Glad--to the public debt of the country; but stone inherited the financial arrangements if they viewed it, as any man of sense of his predecessor, and no great alteration must do, in reference to the improvements was made; and the result was that that in mechanism, to the changes in the art year he had a surplus of £1,587,000. In of attack and defence that were taking the following year 1860-1, there was a place every day-the appliances of war deficiency of about £2,558,000,-a defi- that were constantly changing—he would ciency which would have been greater had be a sanguine Minister indeed who would not their Lordships stepped in and pre- venture to calculate that the two or vented it by refusing to agree to the re-three millions, whichever it might be, peal of the paper duty. In 1861-2, as would be the first and last expenditure. it was, they had, mainly through the re- To this total, therefore, they ought to add peal of the paper duty, a deficiency of this £970,000, which would bring the £1,164,000, to which must be added deficit up to £8,470,000. Had the Go£278,000, excess of expenditure since vernment paid off the debt it engaged to ascertained, which brought up the de- pay in November, 1860—that debt of ficiency to about £1,400,000. Review- £2,000,000 bonds to which the right hon. ing thus the three years they had a total | Gentleman, above all others, was pledged deficit of £4,000,000; but it was fair - they would have this moment-ljut they to deduct the surplus of 1859-60. De had charged it on a future year instead ducting, therefore, £1,587,000 from the an excess of expenditure over income of £4,000,000, there was left a net deficiency £10,670,000. But how had they been able of £2,413,000. But this was not all. to tide over these things ? First, by allowThe right hon. Gentleman had anticipated ing the Chancellor of the Exchequer to dip the national resources ; the malt credit to his hand into the Eschequer and draw the amount of £1,972,000 was called in, out £2,684,000 from the Exchequer baan additional income tax of £2,000,000 lances. The noble Earl (Earl Granville) was imposed, and five quarters' tax was said those balances were not much less crowded into four quarters of the year. than they had been for the last thirty Then, £500,000 of the Spanish debt was years ; but the noble Earl forgot that tho received, and that, too, which properly was income and expenditure of the country capital

, was applied in the most singular liad changed very considerably during that way to current expenditure. If, then, period, and they were, therefore, not to those anticipated resources, amounting to look to what was the casc thirty years ago £4,472,000, were added to the deficit of to guide them as to the balances to bo £2,413,000 which he had before men- retained in the Eschequer under existing tioned, there would be a total excess of ex. circumstances. But the loss of three mil. penditure over revenue for those three years lions of balance took away from the Goof £6,885,000. If, on the other hand, they vernment a useful reserve, which they might took the last two years, during which Mr. fall back upon in any crisis arising. As it Gladstone had been wholly and solely re

was, the Government was dependent on sponsible for the finances of the country, the Bank, and in the event of a monetary excluding the benefit of the surplus left crisis the State would be placed in a posibin by the preceding Government, there tion of a great embarrassment. The next was a deficit of £4,000,000. They had means adopted to meet the difficulties in anticipated resources besides to the ex. which the Government found then selves tent of £3,500,000; so that, instead of involved, was the appropriation of £881,000 £6,800,000, the total excess of expendi- repayments. What were the repayments ? ture over income was £7,500,000.

But Money which had been advanced by the lic would point out to their Lordships that State for public purposes. But the Stato there should have been charged to the ex- had

borrowed the money in order to penditure £970,000 for fortifications. It make the advances, and therefore, when was very well for the Government to treat the repayments were appropriated to get that as a separate charge, and to justify it rid of the difficulties of the jcar, to defray is a mere addition to the permanent debt

. current expenditure, they were actually If, indeed, the construction of the forts living on borrowed money, and taking that could be regarded as an outlay made once which ought to have been applied to the for all, there would be some reason for extinction of the debt of the country.

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He did not think the noble Lord would of his noble Friend the Earl of Derby, question that view of the case, as it was by which £2,000,000 Exchequer bonds the policy which had been recognised had been paid off. He could not thereby successive Chancellors of the Ex- fore allow the Chancellor of the Exche. chequer. When Sir Charles Wood was quer to take credit for that reduction. Chancellor of the Excliequer he distinctly Well, then, it came to this—that the relaid down that these repayments should duction effected by Her Majesty's Gogo to the extinction of the debt. Lastly, vernment amounted only to £1,151,000 on Mr. Gladstone's own showing, a new -a sum very different from £3,500,000 debt to the amount of £461,000 was or £4,000,000. And what was the procreated in 1860 ; and that, together with cess by which this modified and greatly the items before mentioned, made a attenuated reduction was effected ? Simtotal of £4,026,000, which was exactly ply by the conversion of stock into anequal to the £4,000,000 deficit which nuities. For that surely Mr. Gladstone had accrued during the last three years. deserved no particular commendation. It The answer contained in those figures was a common banking operation. It was to the question how so large a deficit merely the acceptance of an increased could have arisen, involved, he thought, burden for a time, in order to put an end a very severe condemnation of the policy to the obligation at a future time. He of the Government. For it came to had, therefore, to a certain extent disposed this, that they had created a deficiency, of the alleged reduction of debt effected and they had met it by what he would within the last three years. But if the calnot call a misappropriation, but by mis- culation was taken on the two last years, duapplication ; by borrowing; by anticipat- ring which Mr. Gladstone was wholly and ing resources ; by postponing the pay- solely responsible, the result would be oven ment of the debt; by creating debt; by less favourable. On the 31st of March, living on borrowed money, and by convert 1860, the total debt was £802,190,000. ing capital to the purposes of ordinary On the 31st of March, 1862, it was expenditure. And when, lastly, were all | £800,757,000, so that there was an apthese improvident shifts and spendthrift parent reduction of £1,433,000. Against expedients liad recourse to? At a time this, however, was to be set £1,170,000 when, of all others, there was the smallest for fortifications, and £461,000 increase justification—at a time when the taxes of debt, bringing up the whole amount on tea, on sugar, and on income were to £1,631,000, and therefore showing at a high rate ; when £2,000,000 of Ex- an incrense of £300,000 instead of any chequer Bonds were to be redeemed, and no diminution in the public debt. But, again, one was more pledged than Mr. Gladstone the amount of the debt might be measured to redeem then, and with the falling-in of not merely by its amount, but by its the Long Annuities that pledge might have annual charge. The charge of the debt been redeemed.

in March, 1859, was £28, 179,000, from He would now reply to two points which which the Long Annuities were to be the noble Earl (Earl Granville) urged. deducted - £2,147,000, leaving the real The noble Earl brought forward arguments charge at £26,032,000. The charge, howpurely financial. He said, in the first ever, in March, 1862, was £26,043,000, place, they had effected a reduction of Icaving an increase of £11,000 against debt, and in the next, that they were Mr. Gladstone, instead of a reduction, effecting a reduction of expenditure. He If their Lordships took the second arguwould first deal with the alleged reduction of ment of the noble Earl, they would debt. How did the fact stand ? In 1859 find that he compared the estimated exthe total public debt was £805,078,000 ; penditure of the present year with the in 1862 it was £800,757,000—showing a actual expenditure of last year. But was supposed reduction of £4,321,000; but this a fair method of dealing with the from that, by the arguments of Her Ma- question ? If the noble Earl compared jesty's Government, they had to deduct the estimated expenditure of one year, let for fortifications £1,170,000 — making a it be with the estimated expenditure of total reduction of debt of £3,151,000. another. But the noble Earl was followBut there was a further deduction which ing in Mr. Gladstone's modo of reasoning, le made from this reduction. Their Lord- Mr. Gladstone compared the estimated ships would not have forgotten the finan- expenditure of 1862-3 with the actual cial arrangements of the Government expenditure of 1861-2. It was quite

The Earl of Carnarvon

true that the actual expenditure of 1861-pressive and unjust in its character. It 62 was £70,838,000, and the estimated was unjust, not only from the money that expenditure of 1862-3 was put down it extracted from the pockets of the rateat £69,120,000, being a decrease of payers, but because this “gigantic engine £1,718,000. But if their Lordships com- for great national purposes '-as the inpared the estimated expenditure of 1861. come tax had been described by the Chan62, £69,875,000, with the estimated excellor of the Exchequer-must be either penditure of 1862-3, 269,120,000, they large and exceptional in its character, or would find the decrease only £755,000 permanent in its duration and moderate in - & very different

sum from a sup. its amount. But in the financial policy of posed decrease of £1,718,000. But even the right hon. Gentleman the income tax granting a decrease of £2,000,000 in combined both disadvantages ; for while it expenditure had been effected by the was becoming larger and larger in its Government during the last two years, amount, it was becoming more and more against that must be put the deficit of permanent in its duration. Every mistake upwards of £8,000,000, to which he had of policy brought with it its own retribualready referred. Their Lordships had tion, but the penalty was never greater this consolation with other Chancellors of than upon a mistake of fiscal policy. He the Exchequer, that however tortuous their believed that in every age fiscal revolutions policy might be, the Legislature usually were the precursors of social and political knew the object they had in view. But revolutions ; while, on the other hand, a the only thing certain about the policy of well-ordered finance was the fountain of the right hon. Gentlemap was, that it was every blessing that a country could enjoy, exactly the inverse and the contradictory of and that upon this public life and morality the language be had used in former years. depended. He was a great admirer of Who had been so strong an opponent as the character and abilities of his right the present Chancellor of the Exchequer hon. Friend, but he could not be blind to of the war duties on tea and sugar ? Who the terrible evils of his financial policy. bad so strongly condemned loans in time He would, in conclusion, most earnestly of peace as the Minister who had post- implore their Lordships, as one branch poned the payment of the debt to another of the Legislature, to review the preyear, and had appropriated the Exchequer sent state of our finance with sensitive balances? Who had so bitterly denounced scrupulousness, and, it was their the income tax as a permanent source of bounden duty and right to do, to watch revenue as the Minister who had increased it with the utmost jealousy a system so successively from 5d. to 9d., 10d. and 13d.? new and so dangerous as that on which In these conflicting principles he confessed Parliament was now entering, but to he could not see one spot on which the which he hoped and believed the Legiscountry could rest with security. In these lature was not yet wholly and irre

vocably . mark in view, and that was the income tax, The Duke of NEWCASTLE: My to which, as the only resource for the na. Lords, the noble Earl has delivered a tional credit of the country in any national speech of remarkable ability and great emergency, the country was rapidly drift- clearness and lucidity of expression ; but ing. It was like that fabled mountain, to so far as this Bill is concerned, it was which we were gradually being brought so modified by qualifications and reservanearer, until the moment was approaching tions, that very little need be said in anwhen every bolt and bar was coming out, swer, if the noble Earl had not entered and when the ship must inevitably collapse into that elaborate and personal attack and fall to pieces. The fiscal policy of the upon the Chancellor of the Exchequer present Government seemed to him the which characterized the greater portion of more dangerous, because, whereas formerly his speech. Perhaps, as a much older there existed many sources of taxation, col. man than the noble Earl, I may veuture lected from many quarters, and affecting to suggest to him, that when he applies numerous classes, yet crushing none, and the powers which he possesses to the expanding with the growth and prosperity examination of financial questions, he of the country, there was now substituted should avoid any attempt at ambitious for this system one iron and despotic rule, oratory, and should rather give a most which in the very nature of things must careful consideration to the truth and acbe unequal, and which was generally op-curacy of those figures on which alone we


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