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cellor of the Exchequer were anticipated with more interest than any other Parliamentary event, not, however, that even in this direction much uncertainty was felt, or any novel propositions expected even from so bold and inventive a financier as Mr. Gladstone. The financial situation was such as to afford little scope for variety or experiment. The active measures of the last few years had well nigh exhausted the operations of free trade; duties on imports had been diminished in number and lowered in amount, till there remained scarcely any room for further progress in that direction. Excise duties had been brought down to an equally narrow compass. A very few articles remained upon which any fiscal experiment could be attempted. The department of direct taxation, however, still remained an open field for the operations of the financier. The Income Tax, now become an annually renewed impost, constituted, so long as it should last, a perpetual problem for the Chancellor of the Exchequer; not, indeed, that its removal was regarded as being within the category of possibilities, but the modification of its rate and scale was year by year a matter of speculation and debate. The rates of duty had, in fact, varied within the last few years between the extreme limits of 5d. and 14d. in the pound, and the amount of the percentage had come to be regarded in the light of a sliding scale, to be adjusted according to the current demands of the public expenditure, or, as it were, a rate-in-aid to make good the shortcomings of the other branches of revenue.

Before the Budget was announced, the public were made aware, both by the Quarterly Revenue Returns, and subsequently by the reductions proposed in the Army and Navy Estimates, that there was likely to be a considerable surplus of income over expenditure. The disposal of this surplus was, as usual, a matter of much and various conjecture, but those who considered the financial history of recent sessions, and the tendency of Parliamentary opinion, had not much difficulty in forming a judgment as to the quarters in which remissions were to be expected. The Tea Duties and the Income Tax appeared to these persons to offer greater inducement to the Chancellor of the Exchequer to operate upon them, than any other branch of the revenue. The policy of lowering the former, one of the highest duties now remaining, had been already sanctioned, and to some extent acted upon by Parliament, though the full relief intended for the consumer had been postponed to the exigencies of war and other expenditure. In addition to this fact, it was not an immaterial recommendation to the reduction of the Tea duty, that the opinion of the Conservative party in favour of that step had been pronounced in a marked manner in the session of 1861, when, as an alternative to Mr. Gladstone's proposed repeal of the excise on paper, a resolution in favour of reducing the duty on tea was moved by a leading member of that party, and received the support of a large section

of the House of Commons. For this reason, as well as upon general grounds of financial policy, a further remission of this duty appeared to be a highly probable operation on the part of Mr. Gladstone. If, in addition to this, the state of the revenue should be such as to afford any further boon to the tax payer, it was in the direction of the Income Tax that public expectation pointed. The rate of that impost was, at present, such as to occasion a large measure of that discontent which this tax constantly generates, and there were, as was well known, cogent reasons which should make Mr. Gladstone especially desirous to diminish, though it was not possible for him wholly to remove, this fiscal burthen.

Under such circumstances, the leading propositions of the Financial Statement, which was made on the 16th of April, occasioned no surprise, and appeared likely to excite very little opposition. The prospect of cheapened tea and of an Income Tax reduced to Sir R. Peel's original rate of 7d. in the pound, was welcomed throughout the country with much satisfaction. There were, however, some other features in the Budget which gave rise to more variety of sentiment and afforded matter of controversy to the opponents of the Government in the House of Commons.

The general survey of the financial and commercial condition of the kingdom which Mr. Gladstone took in laying his plans before the House afforded, beyond all question, abundant grounds for congratulation. That in spite of many adverse circumstances and heavy drawbacks, such as the American Civil War, the extensive stoppage of manufactures at home, and the serious falling off of agricultural production in Ireland, the revenue should still exhibit buoyancy, and the returns of our foreign commerce should still be favourable, was a result which the most sanguine could scarcely have ventured to anticipate, and which afforded ample proofs of the soundness of our industrial and commercial system. Upon this part of the case Mr. Gladstone's statement was peculiarly interesting:

"The account of receipt and expenditure for the last year which we have now to invite you to consider is, I think, a remarkable and hopeful account. But in order to judge whether it is really, and how far, remarkable and hopeful, it is absolutely necessary to have regard to the specialties in the state of the country. I do not now refer simply to the fact that the harvests have now for a series of three years been in no instance equal to an average yield; but I refer to two causes, both special in their character. There is, in the first place, the condition of the Lancashire cotton manufacture. Towards that Lancashire to which up to this time every Englishman has referred, if not with pride, yet with satisfaction and thankfulness, as among the most remarkable, or perhaps the very most remarkable of all the

symbols that could be presented of the power, the progress, and the prosperity of England-towards that Lancashire we feel now more warmly and more thankfully than ever in regard to every moral aspect of its condition. The lessons which within the last twelve months have been conveyed, if in one aspect they have been painful, and even bitter, yet in other aspects, and in those, too, which more intimately and permanently relate to the condition and prospects of the country, have been lessons such as I will venture to say none of us could have hoped to learn. For, however sanguine may have been the anticipations entertained as to the enduring power and pluck of the English people, I do not think that any one could have estimated that power of endurance, that patience, that true magnanimity in humble life, at a point as high as we now see that it has actually reached. But, Sir, with respect to the material condition of Lancashire, no doubt for the time the tale we have to tell is a melancholy one. It was my duty, so menacing did we regard the state of the case twelve months ago, to state frankly to the Committee, in presenting the Estimates of the year, that we had before us a deficiency in the supply of the material of labour in Lancashire of so alarming a character that if it continued throughout the year we could not presume to say that our estimates would be justified by the result; that the case was so serious that it was useless for us at that time to pretend to ask the House to make such provisions as might be adequate to the calamities which were impending over us; and that consequently we thought it best to wait for the teaching of experience, and to meet the evil when it arose. Now, the anticipations of that evil were founded on the supposition that the scarcity would continue at the point which it had then reached; but what has been the fact? The scarcity has not only continued at that point, but, unhappily, it has proceeded much further. The price of cotton, which I quoted to the Committee last year as having been in the spring of 1861-the price of those which are commonly taken as the average descriptions of American cotton-viz., the Upland and the New Orleans, which in the spring of 1861 had been between 7d. and 8d. per pound, had risen at the time at which I spoke to between 13d. and 14d. per pound. And that was the state of things which we regarded as so formidable to the revenue of the country. But in the course of the last autumn that high price was nearly doubled; and at this very moment, as I find from the latest quotations, the price of the cotton required to carry on our manufactories, and which usually sells at 6d. or 7d. per pound, has risen to 24d. and 25d. per pound. So that the calamity which has befallen Lancashire, viewed in its material and commercial aspects, has not only continued at the point it then reached, but has become far more severe. It has attained, undoubtedly, a degree of most afflicting stringency; and the partial and temporary mitigations

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which have arisen-and, thank God! they have arisen-during the last few weeks, do not, I am afraid, warrant us in entertaining any sanguine hopes for the immediate future. And yet it is with, I may almost presume to say, the wealthiest portions of the country, and with perhaps the very wealthiest portion of its labouring population, in that condition of prostration and stagnation, that the balancesheet which I am about to present to the Committee has been arrived at. The other special cause of depression is one which has been little mentioned in the House, but it is one which I think the Committee will agree with me I should not be justified in altogether overlooking, it is the state of Ireland, and I very much doubt whether the British public has been awakened to the depression which during the last few years has befallen that portion of the United Kingdom. That depression is no doubt partly balanced by the favourable condition of the linen manufacture, and is not concentrated and driven to an extremity at a local point, like the distress in Lancashire. It is diffused over the surface of the country, its extent is as broad as the agricultural area, and it is exclusively connected with the failure of the crops. But it will be a matter of peculiar interest to the Committee to receive the information which Her Majesty's Government have received with regard to the extent of the failure in Ireland of late years. Her Majesty's Government have caused statements to be carefully drawn up, as far as they are able, to exhibit the facts of the case, and I need hardly remind English and Scotch members that with respect to Ireland they have the peculiar aid of a very highly organized and elaborate system of agricultural statistics carried on by public authority. I shall avoid all details; it is enough for me to present a single statement, only endeavouring to convey to the Committee a clear view of the basis on which it is founded. The statement refers to the crops of the last three years, 1860, 1861, and 1862, and the standard of comparison is with the crops of the preceding four years, from 1856 to 1859. Up to 1859 we have the consolation of believing that the state of Ireland was one of steady and even of remarkable progress. In 1859 that progress was materially checked, but still the four years I take as representing what I may call the normal or average condition of Irish agricultural wealth are from 1856 to 1860. The mode of estimating has been this: the three principal crops are taken-the oats, wheat, and potato crops-and then an attempt is made to estimate the value of the residue of the principal agricultural products of the ground by ascertaining the number of the head of stock, valuing them at the prices which are known to have ruled during the period, and assuming that one-third of the total value of the stock of the country represented the annual return of stock. That may be perfectly correct, or slightly incorrect, but at any rate it seems quite sufficient for the purpose of comparison. Now the amount of these four items-the oats, wheat, potato crop,

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and one-third of the actual value of the live stock-was, from 1856 to 1860, on an average, 39,437,0007. per annum. 1860-61 it fell to 34,893,000l., a decrease of 4,550,000. 1861-62 it fell to 29,077,000l., a decrease of 10,360,000l. 1862-63, low as was the previous point, it descended yet lower, and fell to 27,327,000l. from an average of 39,437,000l., showing a decrease of somewhat above 12,000,000l., nearly one-third of the total value of the estimated agricultural products on the principal items or constituents of agricultural wealth, and not very far short of the full amount of the established annual valuation of the country, which is 13,400,0007. Now that was a very remarkable state of circumstances in Ireland, and I may mention, as a fact, that in all cases, the first effect of pressure on the labouring classes is to tell on the consumption of strong liquors. It was no wonder that under these circumstances the consumption of spirits, which in Ireland was in 1861-62 2,463,000 gallons, fell in 1862-63 to 2,292,000 gallons, a decrease of 171,000 gallons. Now the operation of these two special cases, the one in Lancashire and the other in Ireland, must certainly be to deprive the revenue of the country of a very large amount which under other circumstances it would have received. It is not for me to estimate that amount; but it is quite essential that we should bear circumstances of so unusual a character in mind when we form our judgment on the actual revenue and expenditure of the country during the year just expired."

Mr. Gladstone then proceeded to compare the estimated amount of the expenditure of the last year with the actual amount. The estimated amount had been 70,108,000l., the actual expenditure was 69,302,0007.-less than the estimate by 806,000. The estimated revenue was 70,050,0007., the actual produce was 70,603,000Z., showing an excess of 563,000.-not a large excess if considered absolutely, but very large if considered in relation to the actual circumstances of depression before adverted to. The Customs exhibited, after all remissions of duties, and notwithstanding all adverse circumstances, an increase of 484,0007., and the income tax an excess of 467,000l. over the estimate. On the other hand, the Excise showed a deficiency, as compared with the estimate, of somewhat over a million, which was due to the two articles of malt and spirits—the representatives, as they might be considered, of the distress weighing upon the labouring classes. A comparison of the revenue of the last year with that of the year preceding would also show a satisfactory result. Making some deductions which were necessary to the fairness of the comparison, Mr. Gladstone stated that the total revenue for the year 1861-2 might be taken at 66,985,000l., for the year 1862-3, 67,790,0007., showing an increase of 805,0007., not a large amount in itself, but such as he could never have ventured to anticipate twelve months before, had he been aware of the severe distress which was to continue, and to be aggravated, in Lancashire and in Ireland. Mr. Gladstone then stated the estimated amount of expenditure and revenue for the

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