amount expended within the last few years on small arms or in heavy artillery. But there must come a period when that expenditure may be reduced, and beneficially livered in the House of Commons by the right hon. Baronet the Secretary of State for War, and afterwards published as a pamphlet. I find it there stated, with regard to small arms, that the number of small arms manufactured is 1,066,000; that the number issued to the army, militia, and volunteers is 500,000; to the Indian Government, 186,000-making a total issue of 686,000. The right hon. Gentleman went on to say that there are in store, at home and abroad, 359,000. The annual issue, for the purpose of arming our forces, was something like 100,000 a year. We have, therefore, in store at the present moment three and a half years' consumption, supposing we were continuing to do that which is now accomplished been perfectly certain the House of Commons would not have granted it. I make a present of all the credit that is due to the noble Earl and his colleagues for that act of discretion. Well, then, if it be im-reduced. I hold in my hand a speech depossible, or a matter of the greatest difficulty, and most objectionable, to increase the weight of those few taxes which still remain, more especially recollecting the large measure of taxation which ought to be gradually and as speedily as possible reduced, if not abolished-if there is no prospect of an increase of taxation, I say frankly that much as I condemn the abolition of some of these taxes for which the noble Duke claims so much credit-and, once abolished, it is hopeless to look for the renewal of those taxes, those legitimate sources of permanent unobjectionable revenue, that have been cut off from us in any of our future difficulties by the act of the present Government-if you can neither add to our existing taxes nor renew those I think improvidently and un--namely, to new-arm the whole force. I wisely cut off, what remains but that you must submit to a permanent state of chronic deficit, leading to ultimate bankruptcy, or that you must firmly, deliberately, and resolutely apply your minds to the only other mode by which revenue and expenditure may be equalized-namely, that of wise, temperate, judicious, and economical retrenchment? I need not repeat that I will be a party to no measures by which such reductions shall take place in our expenditure as shall weaken the security and credit of the country. I am not in a position, not possessing official information, nor is it my duty to point out to the Government modes in which retrenchment may be effected; but I must confess I have a very strong impression that, without in the slightest degree overlooking our naval or military efficiency, we are at the present moment spending more largely, suddenly, and to a greater extent than is required by the existing circumstances of the world at large, or by our own state of relative preparation. I may be perfectly wrong, and it may be that Her Majesty's Government have no alternative but to proceed on the enormous scale of expenditure which they are carrying on at this moment. I admit for the last few years it has been absolutely necessary to have large Estimates. I admit it was a wise measure which armed our army, our militia, and volunteers with the best weapon we had at our disposal; and I do not at all complain of the large admit that the country is under great obligation to Sir William Armstrong, and I consider it a matter of great congratulation that I was a Member of the Government which in the first instance secured the benefit of Sir William Armstrong's services, and thereby effected an incalculable improvement on our former artillery. But in the same speech I find that we began by manufacturing 100 heavy guns a year, and that a proposal was made to increase the number to 160 or 200. That, perhaps, might be a proper provision at the beginning. But now I find there is in the Estimates a sum of £521,000 for Armstrong guns, for which sum 1,489 guns will have been produced in the course of the year. Of these 681 are to be 100pounders, and 340 are to be 40-pounders. The Secretary for War went on to stato that the same number of guns will be produced for the sum he purposes to appropriate next year; that is to say, that whereas we have expended £521,000 this year for the creation of 1,490 heavy Armstrong guns, it is in contemplation to expend a similar sum for the same number of guns in the next year. My Lords, I confess that looks, to my mind, like a very large and unnecessary expenditure, which might be spread over a very considerable number of years; for I do not apprehend that our present exigencies are so great as to require so large immediate outlay, more especially as, having these heavy and small arms, it was stated by the Secretary for War that a great doubt exists whether there noble Earl said that his observations may not be another species of arm-namely, should be prospective; he did not keep Mr. Whitworth's, both heavy and light, that pledge; but, at the same time, that which may not be more advantageous than is clearly the important matter for your the Armstrong guns; and the consequence Lordships to consider. The question is of that will be that we must either be left not what was done by the late Government with an inferior arm or else incur the whole in 1858, or what was done by Mr. Gladexpense over again, and have to re-arm stone in 1859-the real question is, what the whole of the army, and find the vast are your financial prospects at present? amount of arms already in store perfectly I own I have been a good deal surprised, useless. Now, do not let me be misunder- although I have heard something of it out stood. What I say is this:-When you of doors, at the gloomy predictions of noble are in doubt as to having the best possible Lords, and at the very lively apprehensions invention, it is most important that you which they seem to entertain as to the should not overload your stores, at a vast state of our finance. The noble Earl who expense of money, with a profusion of spoke first on that side of the House (the stores, which may ultimately be found to Earl of Carnarvon), and who I quite admit be of an inferior character, and be super- made a very able speech, was not only seded by some new invention. As I afflicted with alarm, but spoke of the moral said before, I do not presume to say in delinquencies-I think, of the failure in what direction the Government can effect morality—which had been exhibited in the economy. I should be sorry even to take present system of finance. upon myself to call upon your Lordships to affirm categorically that reduction is capable of being effected consistently with the circumstances of the times. My firm belief is that that is the case, but I do not possess that knowledge that would induce me to ask your Lordships to come to such a categorical decision."moral delinquency," but he did express But, I say that the Government have before them the simple choice of two alternatives. Additional taxation is impossible. Renewal of taxation is almost equally impossible. It is impossible to continue in the present alarming and serious condition of our finances; and the only alternative to which they must, and I trust will look, is an unsparing, judicious, and at the same time a perfectly safe reduction of the public expenditure. THE EARL OF CARNARVON disclaimed having used the expression attributed to him by the noble Earl. EARL RUSSELL: The noble Earl used the word "morality." What he feared for was the morality of the country. Certainly he did not use the precise phrase his apprehensions for the morality of the country if the Chancellor of the Exchequer should be allowed to pursue his present course. My noble Friend who spoke from the cross benches (Lord Overstone) was exceedingly alarmed at the present state of our finance, and my noble Friend who is now on the cross bench (Earl Grey) was hardly less alarmed. But I cannot avoid asking, what are the symptoms of a country getting into a state of financial embarrassment and political decay? Those symptoms are, I conceive, that the Government goes on with an increasing ex EARL RUSSELL: My Lords, I am very glad that, on this occasion at least, we shall not have to enter on the question of the privileges of the two Houses of Par-penditure and a declining revenue; that it liament. The noble Earl (the Earl of Derby) says that the House of Commons have the right to include all the supplies of the year in one Bill, and that your Lordships might, if you pleased, reject that Bill. There can be no doubt respecting these two positions. The noble Earl thinks the Commons have not done wisely in putting £22,000,000 of revenue in one Bill. I differ from him in that opinion. If the House of Commons had sent up the taxes piecemeal, and your Lordships had rejceted some and accepted others, there would have been complete confusion in the financial arrangements of the year. The is constantly contracting new debts, and must therefore eventually bring on a financial crisis. What is the case in which we stand at present? The Chancellor of the Exchequer has proposed Estimates for this year which are greatly below those of previous years. They are £1,800,000 below those of last year, and I think £3,500,000, or nearly so, below those of 1860. Therefore you have not an increasing expenditure, as is constantly repeated. We are for ever hearing the phrase, "The expenditure is constantly increasing-where is this to end? If you increase your expenditure every year, what will you arrive at?" has been to a great extent the cause of I heard his state Whereas, it was, in fact, a diminishing | as long as they have enough to do to proexpenditure. Then, with regard to the vide for the demands of the year. That state of your revenue. You have a revenue which is fully equal to the demands that are made upon it. My right hon. Friend the Chancellor of the Exchequer has of late years remitted some taxes, and you have heard something of the effect of those remissions; but, at the same time, he imposed other taxes; and the balance between taxes remitted and taxes imposed is £1,090,000 a year, I think, in favour of taxes imposed. There is another security. If you have on one hand a diminishing expenditure, you have on the other an increasing revenue. But that is not all. Are the revenues of the country falling? So far from that, the average of increase of revenue of late years from old sources, from established taxes, has amounted to no less than £900,000 a year. Therefore, in order to meet that with which I shall have to deal presently, a deficit of £3,500,000 in the two past years-[A noble LORD: Five millions]-I state it at £3,500,000, which I hold to be far more accurate, you have £1,950,000 of increased revenue. No one can doubt, that if even you do not reduce your expenditure much below the present rate, yet with an increase of nearly £2,000,000 of revenue per annum, you will soon be in a state in which you can more than pay off all the debt which has been created. So that, so far from the present state of our finance justifying the gloomy ap-ing what the noble Earl said about retroprehensions which have been entertained, spection, this debate has turned very much I hold that it is a state of finance which upon what has been done in former years. may cause anxiety, because the expen- The noble Earl seemed possessed with the diture is very large, and the revenue is notion that the country is going to ruin, very large, but that there is in it no-in consequence of the measures which have thing to cause the least gloom or appre- been adopted in former years; and the hension as to the future. Then comes the Chancellor of the Exchequer has been question raised by my noble Friend on the charged with having taken the course of cross-bench (Earl Grey)-Ought you, un- a spendthrift-it has been said, "So reckder these circumstances, to have during re- less has been the course which you have cent years provided a considerable increase been pursuing, that you have taken the of revenue? My noble Friend says that malt credits." What were the malt creyou ought to have taken security against a dits? The malt credits were sums due by deficit. I ask, how is that security to be certain persons to the State on account of provided? In 1819 the House of Commons taxes, and what Mr. Gladstone did was to voted that there ought to be £5,000,000 say to those persons, Pay up what you of surplus for the purpose of providing a owe." When a private person incurs an sinking fund. But that did not go on for expenditure of £1,000, and has a debtor many years. Nor was it unreasonable or who owes him £1,000, it does not seem to unnatural that that should be so; because him to be at all a spendthrift course to say, I cannot think it unwise that the country" I will go to my debtor and obtain from and the House of Commons will not agree him the means of making this payment.' to provide a large sum for the purpose But on the part of the Chancellor of the of a sinking fund, or to pay off past debts, Exchequer such a course seems to be 66 ex thought utterly reckless. No doubt, mea- vernment had given instructions to the Earl sures have been adopted by the Go- of Elgin to go up the Peiho. He went up. vernment which have led to an increase of He overcame the little resistance that was debt; but the circumstances which have made, and signed the treaty of Tien-tsin. occurred during these years have been un- A question afterwards arose with regard precedented, and such as could not have to the ratification of the treaty. The noble been foreseen. The first event which oc- Earl opposite and his Government were of curred was the China war. The noble Earl opinion that an imposing force should be opposite (the Earl of Derby) had given sent to the mouth of the Peiho to accomthose extraordinary orders to the com- pany Mr. Bruce, who was afterwards to mander of our fleet in China, that he was go peaceably up that river. I have always to go to the mouth of the Peiho with an thought those were very imprudent direcimposing force. He did not tell him to tions, but it was not our business to critigo in a peaceable manner; he did not tell cise them when the task devolved upon us him to make war; but he placed him in of defending the honour of the country; that extraordinary position that he could and till this moment I have never hardly avoid fighting, without submitting pressed any censure upon them. With to an imputation upon the gallantry of the regard to another great head of expendiofficers and men whom he commanded. ture during the course of the past year, I Four days after we came into office, those am sure every one would have blamed the extraordinary orders produced the conflict Government if it had not sent sufficient at the Peiho, with a loss of between four force to Canada at the time when hostilihundred and five hundred men, killed and ties might have broken out, though nowounded, in that unfortunate and ill- body could very well have foreseen that an managed expedition. We had to provide American captain would have acted, as his for extraordinary measures, in order to own Government thought, in so outrageous vindicate the honour of the country, and and indefensible a manner as the comsecure peace with China. Is there any mander of the ship that boarded the Trent. one who will blame us for having taken These are things that would defeat any that course? Is there any one who will calculations, and the Chancellor of the Exblame the Chancellor of the Exchequer for chequer, I think, would have come with a not having foreseen exactly what result very ill grace before the House of Comthose extraordinary, and I think most un- mons if he had said, as my noble Friend wise, orders of the late Government would on the cross benches seemed to think he produce? I think it was impossible that ought to have done-The state of Europe any budget should have been framed with is very much perplexed, a war is going on a foresight of such consequences. Then in America, and no man can say what may it happened last year, long after my right be the consequences; give me £2,000,000 hon. Friend had produced his budget, that of taxes in order that I may be able to an occurrence took place which made it meet any emergency. The House of Comnecessary for the Government to send mons might say-Produce the evidence of forces to Canada, to take care of Her danger, show us something which requires Majesty's possessions there. Would any this increase of taxation; but, till that is one have thought the Government blame- done, we will not give to your vague apless if they had declined to take that prehensions of danger taxes which will course? diminish the resources of the people. My noble Friend on the cross benches (Lord Overstone) said something with regard to our commercial interests, and wished to take credit for some predictions which he formerly uttered. But I can assure him that the facts which he states never occurred. My noble Friend seems to imagine that the French Government were anxious to establish a system of free trade, that they would have at once diminished the duties on our manufactures without any treaty. Now, I have heard from persons in official as well as unofficial stations that the Emperor of the French would THE EARL OF DERBY: Did I rightly understand the noble Earl to say that it was we who ordered an imposing demonstration to be made at the mouth of the Peiho? The noble Earl is much mistaken. It was our predecessors; and when we came into office, we found the expedition at the mouth of the Peiho. THE EARL OF MALMESBURY: I must deny that my instructions to Mr. Bruce were such as were likely to lead to a collision with the Chinese. EARL RUSSELL: The Earl of Elgin had gone up the Peiho. The former Go right hon. Gentleman the late Chancellor of the Exchequer is the organ in the other House, something more definite than the observations which he has delivered tonight. He says it is impossible for him to judge, from want of information, whether the defence and security of the country require that amount of military force which is now kept on foot; and yet he is perfectly sure that there may be some reduction effected in those armaments. He does not know what the requirements of the country are; he does not know what amount of force has actually been furnished, but yet he feels sure that some reduction may be made. have been quite unable to make such a Hear, hear!] Well, that may be so. change. The sagacity and knowledge of But I think the House requires from commercial principles possessed by the the leader of the great party of which the Emperor of the French enabled him to see that it would be a great advantage to France if the duties on English produce and English manufactures could be reduced. But the protected interests were so strong in France that they would have defeated any attempts that could have been made by means of a legislative decree. He therefore resorted to the course of a treaty with this country, and the Ambassador of the French and Mr. Cobden, who was sent to France, stated their belief, that if we made great reductions in the wine duties, and also certain other reductions, we might obtain the admission of our manufactures into France, but otherwise we should totally fail in that object. That was done, and the results of the treaty have been stated by my noble Friend. I believe Mr. Cobden, who went to negotiate that treaty, and who per-ment, and therefore that I should be sorry suaded the French Government to reduce the duties from 30 per cent to 20, 15, and in some cases 10 per cent, is entitled to the gratitude of this country for uniting the two nations by those commercial bonds which tend so much to their mutual benefit. The noble Earl who spoke last (the Earl of Derby) touched on a topic which he thought it necessary to introduce, and on which I confess, after hearing his explanation, my doubts are much greater than ever. I had understood, with some of my noble Friends, that there had been a question of "bloated armaments." THE EARL OF DERBY: I beg to say that I did not introduce the subject; it was introduced and enlarged upon by both the noble Dukes opposite. EARL RUSSELL: The noble Earl is quite right; the subject was introduced by the noble Duke, and in following him he gave an explanation of what the term was intended to convey. But I was about to state that, as I understood, the phrase of bloated armaments applied to this country; and. that according to the argument, those bloated armaments were to be traced to the foreign policy of this country, which had made those armaments a necessity. We had only to change our foreign policy and we entirely got rid of the necessity for keeping them up. "Bloated armaments!" Why there is condemnation in the very phrase. The noble Earl now changes the argument, and says the phrase applied to other countries. [The Earl of DERBY: THE EARL OF DERBY: I beg the noble Earl will not misrepresent my argument. I said I had not the information which would enable me to form a judg to call on your Lordships to affirm categorically that there was room for retrenchment, my own firm impression being that there is room for retrenchment, though I am unable to point to the exact items capable of reduction. EARL RUSSELL: If the noble Earl has not information sufficient to form an opinion, why should he entertain an impression that the Estimates are excessive? Why should he not rather think that they are just in accordance with the requirements of the country, for he admits the necessity of providing adequately for its defence? It does, I confess, appear to me as if the noble Earl, not choosing to commit himself to a definite affirmation that reduction can be practised, yet wishes to hold out to those who are firmly convinced that great reductions can be made a shadowy hope that he would be the man to carry them into effect. I must, however, advert shortly to an assertion which I understood to be made elsewhere, though the noble Earl has not touched upon it to-night-namely, that it is our foreign policy which imposes the necessity for large Estimates upon the country. As the person in the first place responsible for that policy, I should feel it a very great charge and a heavy accusation, if I had done anything as the organ of the Govern ment to make it necessary that the people should bear burdens from which otherwise they would be exempt. But I am con. viuced that the policy which the present |