asked the Under Secretary of State for India, Whether during the present year there will be an examination, similar to that of 1870 and previous years, of candidates for admission to the service of the Government of India as civil engineers; and, whether after the present year there will be any and what mode besides the mode indicated in the revised prospectus of the Cooper's Hill College, of obtaining admission to the service of the Government of India as civil engineers?

In reply, Sir, to my hon. Friend's first Question, I have to say that there will be such an examination. That has been always part of our scheme, and the intention to hold it has been extensively advertised. It will be held in July. In reply to his second Question, I have to say that certain objections to the prospectus of the Civil Engineering College, as it now stands, which have been urged by my hon. Friend have been carefully considered, and it has been decided so to modify our arrangements as to remove any kind of inequality between the conditions under which the College students and outside students shall be admitted to the public service. We propose to allow students who have not studied at Cooper's Hill to present themselves for examination up to the age of 24, and to give them appointments in the Public Works Department in India, of the kind mentioned in the College prospectus, provided they satisfy independent examiners that they come up in all respects to the standard of qualification which will be required from the College students at their final examination, which will be conducted by the same independent examiners. The first of these examinations will be held in 1874, when the first batch of College students passes out of the College. The Government will of course continue to make appointments to the public service of civil engineers of experience and standing from time to time, as the wants of the service may require.

asked the First Lord of the Admiralty, If the total cost of £1,029,920 for the construction of Portland Harbour, as given in the quarterly Return ending 31st March 1870, includes all the expenses of the Convict Labour, together with the Maintenance and Guard for the Convict Establishment at Portland; and, if the Government has ever received any Return contrasting the expense of employing Convict Labour with Free Labour, from the late Mr. Rendel, during the time that Sir Charles Wood, now Viscount Halifax, was at the Admiralty?

said, in reply, that the total cost of Portland Harbour, amounting to £1,029,920, as shown in the Quarterly Return ending the 31st of March, 1870, did not include the cost of maintenance of convicts nor of the guard; it included the cost only of tools and materials, or the difference between the cost of keeping convicts employed and unemployed. No Return was made by Mr. Rendel at the time Lord Halifax was at the Admiralty showing the difference between convict and free labour, but he believed some such statement was shown unofficially to Sir James Graham.

asked the Surveyor General of the Ordnance, If he will specify the various articles necessary for a soldier's equipment which he intends to issue to those Volunteers who take part in the Military movements of the Army in September?

Sir, a Circular will be issued in the course of a few days, specifying the various articles of camp equipment which will be issued to Volunteer regiments or corps which propose to form part of the force to be assembled for a camp of exercise in the autumn.

asked the Secretary of State for War, Whether it is true that, under the proposed scheme of short service enlistments, it is intended to alter the present mode of recruiting and substitute instead Registry Offices all over the Country?

Sir, objection has been taken to the conduct of recruiting at publichouses, and the officers employed have been asked for their opinion as to the substitution of registry offices. I am informed that they are all opposed to any change at present, and repeat that no intoxication results from the present mode of raising recruits.

asked the Secretary of State for War, If Colonel Milward, the Superintendent of the Laboratory Department, Royal Arsenal, Woolwich, did in August last, either by orders from the War Office or on his own responsibility, withdraw the boys from attendance at the school in that department, so that only a few from other departments remained to be educated; and, if so, on what ground; if the War Office Regulation, which provided for all boys under seventeen years of age attending school on two half days in each week was abolished at the same time, after having been in force about fourteen years; whether Colonel Milward, upon remonstrance at such closing, has allowed only about three hundred out of over twelve hundred boys now employed to receive education; and, whether the Secretary of State for War will re-consider the step taken in order that all the boys in the department may be educated?

Sir, no orders were given to Colonel Milward, Superintendent of the Royal Laboratory, from the War Office in August last to withdraw the boys from attendance at the school in the Royal Arsenal. The facts of the matter are as follows:—Colonel Milward reported on the 19th of August, 1870, that in order to be able to meet the increased work on small-arm ammunition he had found it necessary, as a temporary measure, to stop the attendance of the boys at the general school. Colonel Milward's proceedings under the circumstances were approved; but he was directed to use every effort to enable the boys to resume their attendance, and this is being gradually accomplished. There is no War Office Regulation which provides that all boys under 17 years of age should attend school on two half-days in each week. Colonel Milward has shown every desire to enable the boys to attend school, in accordance with the orders he has received, and the attendance now averages 350. For the number who remain eligible to attend, additional masters are required, and steps have been taken to obtain the consent of the Treasury to their appointment.

asked the Secretary of State for the Home Department, Whether it is intended to introduce a Bill during this Session to amend the Habitual Criminals Act?

said, in reply, that such a Bill would be introduced, but in the House of Lords in the first instance, on account of the pressure of Public Business in that House.

asked the First Lord of the Treasury, Whether it is the intention of Her Majesty's Government, in redemption of their pledge of last Session, to propose a Bill this Session for the purpose of making a proper addition to the salaries of the County Court Judges in Ireland for the additional duties imposed on them by the Irish Land Bill?

, in reply, said, he had called for a Return of the additional work imposed on County Court Judges in Ireland consequent upon the administration of the Land Act, and as soon as he had received the Return no time would be lost in making such a proposal to Parliament as would meet the case.

asked the Secretary of State for the Home Department, What information he has received or possesses with respect to the present position of Mr. George Mackey, now a prisoner in Winchester Gaol, the term of whose imprisonment, as originally assigned by Mr. Melville Portal, the Chairman of the Quarter Sessions, has expired; when, and upon what conditions, if any, Mr. George Mackey will be liberated; and, whether the Solicitor for the Treasury, who recently appeared in the Bow Street Police Court to prosecute Mr. Robert Steele upon a charge, analogous to that upon which Mr. George Mackey is imprisoned, has stated a case for the opinion of the Court of Common Pleas, as directed by Sir Thomas Henry, the magistrate; and when, if this has been done, the hearing of this case by the Court of Common Pleas is expected to come on?

, in reply, said, that Mr. George Mackey was sentenced at the Winchester Quarter Sessions in January last to three months' imprisonment for publishing an obscene pamphlet, and he was also ordered to enter into his own recognizances for £100, and to find sureties for his good behaviour for 12 months. He had neither entered into those recognizances nor found the sureties, and he now remained in prison until he had done so. The Solicitor to the Treasury, who recently appeared at the Bow Street Police Court to prosecute Mr. Robert Steele, upon a charge analogous to that preferred against Mr. Mackey, has sent to Mr. Steele's solicitor a copy of a case directed by Sir Thomas Henry, the magistrate, to be stated for the opinion of the Court of Common Pleas. That case had not yet been returned by Mr. Steele's solicitor; but when it was returned the matter would be proceeded with.

asked the Chief Commissioner of Works, At what period we may hope to have the 6-inch Ordnance Map completed over England which has so long been completed for Ireland and Scotland?

said, in reply, that assuming that the survey was conducted in future in the same manner and under the same conditions as in the past, it would take 14 years to complete the map of England. He regretted that he was not able to make any statement respecting the future mode of proceeding, having no information on the subject.

asked the First Minister, Whether he proposes to take a Morning Sitting to - morrow and again next Tuesday and Friday; and, if so, what compensation he will make to independent Members for the time thus forcibly taken from them? He also asked, as, when the House was counted out the other night by an ex-Minister, there were only four Members of the Government present, what step the right hon. Gentleman intends to take to prevent the recurrence of such an event?

, in reply, said, it was intended to propose that the House should meet on Tuesday and Friday mornings next for Public Business. ["Oh, oh!"] Of course, it was a matter for the judgment of the House; but that was the proposal of the Government. As to the occurrence the other night, he was himself in his place and counted one of the number who unfortunately were not sufficient to make a House. He did not think the hon. Member (Mr. Bentinck) was in his place on that occasion. [Mr. BENTINCK said, it was not his business to be.] It might not be the hon. Member's business; but if the Government were under a distinct obligation in regard to Friday evenings, on Tuesday evenings it was not possible for them under all circumstances to undertake to keep a House. Yet, if the hon. Gentleman would use his influence for next Tuesday evening, and would especially attend himself, the Government would do their best to second his efforts.

Sir, the Bill upon which we are now asked to go into Committee is a Bill which provides the Ways and Means for the present year. It has two remarkable features — first, the Ways and Means which it provides are not the Ways and Means which were proposed in the Budget; and secondly, the Ways and Means which it proposes provide for a deficiency of more than double the amount that was announced in the Budget. These are circumstances which, at any time, would justify comment and would demand explanation. But if these circumstances are intentional, and if they are indicative of a policy, and that a policy not adopted by the House of Commons, and which some believe it would be most dangerous for this country to follow, the House will agree with me that it is the imperative duty of those who entertain such an opinion, before this Bill is proceeded with, to call the serious attention of the House to its character. There have been so many changes in the financial measures of the Government, so many vicissitudes, and so many perplexing incidents relating to them, that it is difficult te realize that only a month has elapsed since the Financial Statement was made by the Chancellor of the Exchequer. On that occasion the right hon. Gentleman had to announce the existence of a deficit, and had at the same time to lay down the principle which, in his opinion, ought to be adopted by the House in order to make good that deficiency. On that occasion, when he made his general statement, and on a subsequent occasion, a few days afterwards, when he again addressed the House, the right hon. Gentleman the Chancellor of the Exche- quer laid down two principles as those by which the Government intended to be guided in their endeavour to make good the deficiency, and those principles, I apprehend, were accepted by the House not only generally but cordially. In laying down those principles the Chancellor of the Exchequer expressed himself as being of opinion, first, that the deficit ought not to be made good solely by means of direct taxation; and secondly, that of all modes of direct taxes, the one to which he should the least willingly have recourse was the income tax; because, as he informed us—and upon such a point who could be a better judge than a Chancellor of the Exchequer?—the income tax was a tax borne with more impatience than any other tax, and one which severely pinched the lower middle classes. I think that those two principles which were to guide the Government in supplying the deficiency were generally accepted, sanctioned, and approved by the House. In order to carry into effect these principles the right hon. Gentleman introduced three measures. He proposed a new indirect tax; he proposed to double an old direct tax, and he proposed to supply the remaining balance of the deficiency by a temporary increase of the income tax. The Committee of Ways and Means voted immediately a Resolution in favour of the new indirect tax. It may be said that a vote on the first night of the consideration of a Budget is one which does not ultimately bind the opinion of the House, and I believe that a correct view. But, in this instance, the policy of the new indirect tax was subsequently questioned, when the proposal of the Government was supported by a large majority of the House. On a subsequent occasion, the general financial policy of the Government was questioned by a political Friend of theirs, and on that occasion again the House decided by a majority in favour of the Government proposals. I think that occurred on Monday, the 24th of April—it is of importance that the dates should be accurately borne in mind; and on Tuesday, the 25th of that month, the Chancellor of the Exchequer came down to this House and announced his abandonment of his new indirect tax; but he gave no reason whatever to the House, that had supported it on more than one occa- sion, for the course he adopted. At the same time he informed the House that on the following Thursday he should proceed to propose a Resolution in favour of doubling the old direct tax—namely, the succession duty. That was on the Tuesday, the 25th of April. On Thursday following, however, Her Majesty's Government announced the withdrawal of their Resolution in favour of doubling the old direct tax, the succession duties, and again no reason whatever was given to the House for the withdrawal of a Resolution in favour of a tax upon which the opinion of the House had not been taken, neither up to the present moment has any reason been given to the House by the Chancellor of the Exchequer, or by anyone of his Colleagues, why that proposition was withdrawn. It is quite true that in the course of the debate some mysterious allusions were made by the hon. Member for the county of Durham (Mr. Pease), which gave the House an inkling that some private communication had been made to Her Majesty's Government on the subject. It was evident from the statement, or rather from the intimation of the hon. Member, that the Government had been embarrassed about their proposition; in fact, it was clear that a pressure had been put upon the Government, and that the Chancellor of the Exchequer had been forced into a corner, although it did not appear that any actual violence had been used. At any rate, it is clear that something had then occurred which has never been communicated to the House. And I beg the House to take notice of that fact, because in surveying our position and the peculiar circumstances in which we now find ourselves placed it is important we should remember that we never have had any reason alleged in this House why Her Majesty's Government withdrew their proposition, and that the only remark made by them on the subject was, that as regarded the doubling of the succession duties, Her Majesty's Government highly approved the suggestion, and intimated to the House that, on a more favourable opportunity, it would again be introduced to their notice. After those two remarkable incidents had occurred, we were informed by Her Majesty's Government that, the Budget having been virtually withdrawn, the deficit for the year, which was described to us as being £2,700,000, was to be supplied entirely by direct taxation, and especially by that particular tax which the highest authority had informed us was a most unpopular tax throughout the country, and one which severely pinched the poor middle classes. Sir, in consequence of this course being taken by the Government, a Bill was read a second time, the object of which was to impose an increased income tax equal in amount to the alleged deficiency in the revenue of the country. That Bill was read a second time, without having been seen by the House. The House agreed to take that course on account of the pressure of public business, and because they received from the right hon. Gentleman the First Minister of the Crown his personal assurance that the Bill in question was a mere form—that it merely put into legislative shape the vote which the Committee of Ways and Means had passed respecting the income tax, and was, in fact, the vote of the Committee of Ways and Means, placed in the shape of a future statute. When this Bill was at last placed in the hands of hon. Members, the House discovered with surprise that the Bill was not a mere form, and that it did not apply solely to the income tax, but to another tax—namely, the house duty also. The attention of the House was called to a circumstance so remarkable—and I must say that since I have been in Parliament I have never heard of a similar instance of a Chancellor of the Exchequer bringing in a Bill respecting a tax on which he had not previously taken a Resolution of the Committee of Ways and Means. However, the attention of the Government was called to this state of affairs, and, after due consideration and inquiry, they felt it to be their duty to withdraw that Bill. They omitted from the Bill all reference to the house duty, and it then assumed the shape in which it is at present before us. The Bill, as it now stands, is not an Income Tax Bill, but a Custom Duties and Income Tax Bill. It proposes Ways and Means for a deficiency more than double the amount of that which was announced in the original Budget. Now, I have brought to the consideration of the House, I trust accurately, the various circumstances which occurred before the Bill took its present form. The Bill, in its present form, not merely proposes Ways and Means, by an income tax, which are to meet the alleged deficit in the Budget of the Chancellor of the Exchequer, but it proposes Ways and Means which are to meet another deficit which will be occasioned by the cessation of the tea duties in the month of August next. I think the House should observe in what a peculiar position this conduct of the Chancellor of the Exchequer places the House with reference to the consideration of their financial policy. If the Chancellor of the Exchequer, when he made his Financial Statement, had forgotten the impending expiry of the tea duty, in was an inadvertence which, to say the least of it, was hardly excusable. If, on the other hand, the conduct of the Chancellor of the Exchequer was intentional, it will lead to very grave conclusions, and will require the notice of this House. I think, indeed, a more serious question could scarcely be brought before the House; for, observe what peculiar relations have been established between the Committee of Ways and Means and the House generally, and the Chancellor of the Exchequer by his conduct in this respect. The Chancellor of the Exchequer, when he made his Financial Statement, did not announce the complete deficit of the year. He omitted to notice the deficit that would be occasioned by the expiring of the tea duties. He took a course which no Chancellor of the Exchequer has yet taken with respect to that matter. No Chancellor of the Exchequer, since the last arrangement with respect to the tea duties, by which they were made an annual tax, has made a Financial Statement without either computing the deficiency occasioned by the expiring of those duties among his elements of deficiency—if deficiency unfortunately fell to his lot—or without, on the night of making his statement, laying Resolutions, of which he had given due notice, on the Table of the House, exhibiting to the Committee of Ways and Means the various modes, among which would be the levying of the duty upon tea, with which he would meet the deficiency. When the right hon. Gentleman the First Minister was Chancellor of the Exchequer he never omitted that duty. I had to bring forward a Budget in 1867, and I moved Budget Resolutions upon tea duty, so that there should be no mistake. Of course, in my state- ment I noticed the expiry of the tea duties, and I informed the Committee of Ways and Means that I assumed in my calculations that they would consent to their renewal. The same course was followed by my right hon. Friend the Member for North Northamptonshire (Mr. Hunt), who is, I fear, absent tonight, and the same course was adopted in 1868. Now, see what a position the House of Commons, or rather the Committee of Ways and Means, would have been in, if the Chancellor of the Exchequer had laid his complete deficiency before the House, and made the House acquainted with the entire Ways and Means that we had to vote to meet it. The House would have seen, in the first instance, that there was not only one indirect tax—and that a new one—for them to consider, but they would have seen in the Ways and Means that there were two indirect taxes for them to consider, and then they would have had an opportunity of the application of the principles on which the Budget was founded. They would have come to the consideration of our financial position impressed by these two principles—first, that the deficiency was not to be supplied by direct taxation only; and, secondly, that in the application of direct taxation to meet that deficiency, above all, we should, as lightly as possible, trench upon the resources of the income tax. With these two opinions of the Government before them—with that definite policy to guide them, I may say—the House would then have considered the two indirect taxes before them, and it would have been open to them to have come to a conclusion very different from the conclusion to which they were ultimately driven, and which was to adopt a policy, in order to meet the deficiency, exactly contrary to the course which had been recommended by the Government themselves only a week before, and which the House was, I might almost say, entrapped into adopting, because the Government had given up their new indirect tax, although the House had supported them in it, and had kept from the House the fact that it was their duty, and that they would be called upon necessarily, in the course of time, to consider the incidence of another indirect tax, which was about to expire. Now, it appears to me that the conduct of the Chancellor of the Exchequer, as to the withdrawal of his original measures, requires explanation. We must recollect that a Chancellor of the Exchequer is a Minister who, of all others, has an opportunity of bringing forward measures completely matured. He has a long period of gestation—a period that is allotted to the nobler animals. He has the whole year to deliberate on the measures which he had to propose to the House. They are not lightly devised; they are not lightly adopted; and they are not to be lightly abandoned, and certainly not without an explanation to the House. Now, I say that the House, by the course which the Chancellor of the Exchequer took, was driven into a position in which they were forced, against the original advice of the Government, and avowedly against the general convictions of the House, to supply the deficit of the year in a manner which they all of them disputed, and to which every authority on finance had ever been opposed. This is a Bill to levy a very heavy income tax, and to renew the duties on tea. Let me first say a word upon the income tax. It is a subject which most of us understand, which most feel the sting of; but, at the same time, one inexhaustible in its interest. The income tax is a tax which is noted for the facilities with which it is collected, and the affluent and abundant results it procures to the Treasury. It may be said also that such a feature in our financial system is a source of great power to this country, adding considerably to the substantial credit which this country enjoys, while the fact of its existence, it is well known, influences and regulates the conduct of foreign Powers. They know very well that England, if necessary, can engage in war and carry on a campaign without loans by the power which she possesses of appealing to the income tax; and that if this tax now, at a moment of great emergency, were raised to the amount which it arrived at in the time of Mr. Pitt, or even of Lord Liverpool, we should have a tax in our financial system which alone can produce a sum, without distressing the nation, of £25,000,000. These are the great features in favour of the income tax. Against the tax it must be said that it is unequal and unjust in its incidence; and, what is more, there is no financial genius in the world that can remove that in- equality and that injustice. It has been tried in the person of the First Lord of the Treasury. No man was ever more sensible of the inequality and injustice of this tax than the right hon. Gentleman; no one has denounced them in language more fervent; and no one has confessed more completely that all his attempts to remove this serious objection to the tax were baffled. Therefore, he said—and many of us remember his saying the words—"There is only one mode by which we can terminate its inequality and injustice, and that is by terminating the tax itself." And the right hon. Gentleman brought forward his proposal to that effect, which will always, I think, confer on him the greatest honour. This is a tax, therefore, that one can resort to on a great emergency. When the country is in danger; when its fame and honour, and its dearest interests are concerned, the great body of the population does not trouble itself about the exact incidence of the tax; everybody is prepared to make sacrifices, and in the national excitement that then exists, the objections to an income tax cease to influence a Minister. But a tax so unequal and unjust as that should, I think, be resorted to only in cases of emergency; it should not be an habitual part of our financial system, severely pinching as it does, according to the Chancellor of the Exchequer, the poorer middle class. The tax is also most inquisitorial, and upon that ground, too, it is odious to the country. Now, Sir, that is the tax a great increase of which we have been obliged to have recourse to, in consequence of the alleged deficiency in our Revenue, and in consequence of the manner in which that alleged deficiency was brought before us. Let me say one word now about the tea duty. It is of the utmost importance that the House should possess correct impressions of the duties that are levied upon the great articles of consumption, because we have had of late some strange and alarming doctrines respecting finance expressed from the Treasury bench. We were told the other night that it was not to be concealed from the House that it was no longer possible to increase any duty that was levied on any great article of consumption, and the House was consequently led to believe that there was no other alternative but to try fur- ther the resources of that income tax which was described by the best judge of the question as the most intolerable and unpopular of taxes, and which pinches so severely those poorer classes who have such claims on the consideration of the House of Commons. Now, what is the history of the tea duty? I think the House will find that it is advisable that upon this subject they should have some distinct idea before them. It is only 18 years since the time when the tea duties were first attempted to be dealt with. The duty on a pound of tea was then 2s. 2d.; it was even a trifle more, for there happened to be then a blundering arrangement of levying 5 per cent upon our imports, which made the duty a little more than 2s. 2d. The tea duties were first attempted to be dealt with by the Government of Lord Derby in 1852. We proposed a considerable reduction, that reduction to go on for two or three years, and, finally, to take the shape of 1s. on the pound. It was not permitted us to carry these measures into play; but the right hon. Gentleman who succeeded me in the post which I then occupied adopted our measure for dealing with the tea duties, and though his scheme was, I think, preferable to my own — I fairly say that, for he had great advantages in having an abundant surplus—still, in the main, the principles on which he dealt with the tea duties were almost identical with those I brought before the House; and he contemplated ultimately fixing the duty on tea at 1s. on the pound. Well, the Crimean War and other circumstances interfered with the arrangement which the then Chancellor of the Exchequer, the present Prime Minister, made, both with respect to the tea duties and the income tax. But still afterwards, when he returned to power, and the opportunity arose, he pursued the same policy; and so recently as 1863 he had the satisfaction of reducing the tea duty, which then was 1s. 5d. on the pound, to 1s. But I beg the House to observe the language of the right hon. Gentleman—I do not quote his words in order to taunt him in any respect, but merely because in this way may be given the most precise expression of the invaluable opinion of the highest authority on the subject. The right hon. Gentleman said—

"We are of opinion that the revenue from tea should at present be granted only until the 1st of August, 1864. It may be important to consider during the next Session, or at an earlier date, whether, according to the practice which formerly prevailed, some one important branch of revenue should in future be voted only from year to year."

And so on. And then the right hon. Gentleman says—

"This proposal will not have any disturbing effect on trade, for it is thoroughly understood by the trade, and by the country, that when the tea duty shall be reduced to 1s. per pound, the reduction will be, so far as we may presume to look forward into the future, a final measure."—[3 Hansard, clxx. 228–9.]

Now, that was the policy of the right hon. Gentleman with respect to tea, so recently as 1863; and it was also his original scheme that when the duty upon tea was 1s. a-pound it was to be a final measure. Now, in the next year, 1864, the right hon. Gentleman found himself in an embarrassing position—he had one of the largest surpluses that a Minister ever had to deal with; he had a surplus of £4,000,000. What was to be done with this? A surplus of £4,000,000! Our excellent friends, who always believe that the malt tax is going to be reduced or abolished, naturally thought that their time was come. They had meetings and they had deputations, and they fancied that they had made a great impression upon the then Chancellor of the Exchequer. The then Chancellor of the Exchequer even admitted to them that he would consider the question. The Budget came on in 1864, when the right hon. Gentleman had to deal with this surplus of £4,000,000. The area of change, in consequence of his versatile, and vigorous financial measures, for several years past was necessarily limited. The country party thought that the malt tax must be reduced or abolished, because there was no other article with which the Chancellor of the Exchequer could deal; but the right hon. Gentleman made a speech, in which he said that he had gravely and entirely considered their case, and the course which he intended to pursue was to reduce the tea duties from 1s. a-pound to 6d. a-pound. Now, that is the history of the tea duty. It brings me down to 1864, and from that period the duty upon tea has been 6d. The reduction from 1s. to 6d. has not been justified by the event. There was a considerable increase in the consumption of tea as long as there was a gradual reduction in the duty ending in 1s., which both the right hon. Gentleman and myself and others had always conceived to be the most practicable and profitable settlement of the question; but the increase of consumption since 1864 has, I think, not justified the further reduction, for at this moment the amount of tea duty may be roughly stated at less than £3,000,000 sterling. Now, I have placed the facts with regard to the income tax and the tea duties before the House. I am not now giving any opinion whether it was expedient when the Budget was introduced to supply any deficiency by means of the tea duties. It is not necessary to give any opinion on that point at present. But what I want to show to the House is this—that from the manner in which the Chancellor of the Exchequer introduced his Ways and Means to the Committee, the House never had an opportunity of forming an opinion upon that subject. It was impressed upon the House that the deficiency ought not to be supplied merely by direct taxation, and, of all modes of direct taxation, as little as possible by the income tax. Yet the only indirect tax, a new one, that was in the Ways and Means, was withdrawn without a reason by the Chancellor of the Exchequer, and he never placed before the Committee of Ways and Means, as all preceding Chancellors of the Exchequer had, the important fact for their consideration, that the tea duties would expire in August, and that they must be prepared, in some way or other, to supply the deficiency. Now, Sir, I will meet this question in what I believe to be a fair spirit. I will admit to the Chancellor of the Exchequer that, if there had been some extraordinary exigency, if it was necessary that a considerable sum should be raised for a particular purpose, and that it should be contributed by the annual revenue of the country, it might be a grave question whether, for such an object, you should what they call "disturb trade"—that is to say, make a difference in the amount of duty on articles of general consumption, merely for the purpose of supplying a want of the year. I think that that would be an unwise course. But while I say that, I would impress upon the House that they must not be carried away by vague phrases about "disturbing trade." Society is as much disturbed by increasing, and largely increasing, a highly unpopular tax. A tax which "severely pinches the poorer middle class," a tax which is "unequal in its incidence," "unfair in its assessment," and "inquisitorial in its character," a tax of that kind may be far more injurious to society than merely an alteration of duty on an article of general consumption, which may occasion inconvenience to a commercial class. But there are other considerations at this moment for the House, which they cannot and must not avoid, with respect to this subject of direct and indirect taxation. The country is involved in a vague, indefinite, and unfathomable military expenditure. It is impossible to conceal that fact. However various may be the opinions of hon. Gentlemen on both sides of the House as to the policy or the impolicy of the course which the Government may be taking upon this matter, no impartial mind can conceal from itself that, as far as expenditure for military purposes is concerned, the prospect is vague, indefinite, and, I say again, unfathomable. I will not offer to the House any estimates upon the subject. We have had estimates for three months, and they have varied from £8,000,000 to £40,000,000. As a rule, I take the figures of my opponents, and I think I can then safely draw some conclusion for my guidance; but the House cannot forget that the Government have acknowledged that next year we must provide for their scheme of abolishing purchase a sum of not less than £1,200,000. But let the House observe that this estimate was made before the restrictions on retirement were withdrawn, a step which has only recently been announced. It is impossible to suppose that the withdrawal of those restrictions on retirement will not eventuate in a much larger expenditure than £1,200,000. If we decide upon so singular a process as that lately described by a Cabinet Minister as "buying back the English Army from the English officers"—though I will not believe we have decided upon it until the Bill receives the sanction of Her Majesty—I cannot agree that the money required for such a purpose ought to be supplied from the accruing revenue of the year. But, irrespective of this vague amount of expenditure for military purposes, there are other sources of expenditure for which we must be prepared if this principle of meeting all extraordinary expenditure out of the income of the year is to be persisted in. We shall have to consider the Treaty of Washington. I will not express any opinion respecting that Treaty until I have it in my hands, for in all these things so much depends upon the language that I deprecate rash and premature discussion upon the general policy of that Treaty. But there are things to which it is impossible we should shut our eyes, because all are agreed upon them. One is that there are in this Treaty provisions for arbitration upon claims which, if conceded—and to a certain degree under any circumstances they must be conceded—will lead again to a great expenditure. According to this precedent of the abolition of purchase, we should have to supply that from the accruing revenue of the year. Then what prospect is there of getting rid of this increased income tax? It is not, therefore, a question of the convenience of the year. You have to consider whether, if not for perpetual, at least for permanent purposes, you are to supply these deficiencies, and accruing deficiencies, by having recourse to direct taxation of a peculiarly unjust and odious character, instead of considering some of these articles of general consumption, the character of which I have shown you by re-calling these statistical anecdotes connected with the tea duties. There is another grave reason why the House should consider the course recommended by the Government at this moment. We had a question asked the other night of the Chancellor of the Exchequer as to the comparative incidence of direct and indirect taxation. I do not know whether that was what is called "an arranged question;" but, whether it was arranged or not, there never was an opportunity more felicitously availed of than that by the Chancellor of the Exchequer, for he rose and delivered a lecture upon the comparative incidence of direct and indirect taxation upon the taxpayers by our financial system. I will quote his figures without a comment. According to the figures of the Chancellor of the Exchequer we raise by indirect taxation £42,744,000; by direct taxation, £18,165,000; and by what he described as "neutral" taxa- tion, £9,305,000. What is the natural and irresistible influence of those figures? It is that the policy of the Government is, and ought to be, to levy direct taxation. If there is such inequality in the incidence of the two classes of taxation, if the burden is so unequally divided between them, it not only ought to be the policy, but it is the duty of the Government, whenever there is a deficiency, and whenever there is any demand upon them beyond the supply of revenue, to raise increased resources by direct taxation. [Mr. WHITE: Hear, hear!] Hear, hear! The hon. Gentleman the Member for Brighton always agrees with me. It not only would be the policy, but, I maintain, it would be the inevitable duty of the Government, if they carry all those measures which they have indicated to us, to double the succession duties; they ought to terminate that claim of consanguinity which still prevails; and they ought to levy taxes upon the farmer's horse and the farmer's cart. That is irresistible if only £18,000,000 of direct taxation are levied in this country, and £42,744,000 of indirect taxation. But are these figures to be depended upon? It is of the utmost importance that we should have clear information upon this subject. I can understand a Chancellor of the Exchequer, with these figures in his pocket, his daily study and his nightly meditation, bringing forward financial measures such as these on which I have to comment to-night. Are these figures correct? The whole policy of this country depends upon their accuracy. I have taken the figures of the Chancellor of the Exchequer; and I would say, before I come to graver considerations, that I think there are two corrections of those figures, the justice of which the House would approve, and which would hardly be denied by the Chancellor of the Exchequer himself. The right hon. Gentleman has classed the Post Office and Telegraph revenues together amongst the neutral taxation. That makes a difference of £2,500,000, on the ground that we pay only for the service that is afforded us. That principle is perfectly true and just as far as it goes, but no further. The moment the service is paid for all the net revenue of the Post Office must figure as direct taxation. Is that a slight amount? In that way £2,500,000 is extracted from the pockets of the people, and that amount ought to be subtracted from the neutral taxation and added to the direct. The figures then would stand thus—indirect taxation, £42,744,000; direct, £20,619,000; and neutral, £6,851,000. But there is another item that ought to be added, but which the Chancellor of the Exchequer omitted. He has not inserted in his estimate of direct taxation the £3,000,000 which are to be raised by the Bill before us. That would make the indirect taxation £42,774,000, and the direct £23,719,000. And now let me recall this circumstance to the House, having rectified, as I believe, on sound principles, the figures which the Chancellor of the Exchequer gave us—let me remind the House that the public Revenue of this country is not merely an Imperial Revenue, but that it is raised in a great degree by local means, a public revenue being raised in this country by those means which in all other countries is raised by Imperial taxation. The local taxation of the United Kingdom amounts to £36,000,000 per annum. [The CHANCELLOR of the EXCHEQUER: That includes loans.] Yes; and I shall allow for that. I would deduct £8,000,000 for the interest on the money which has been advanced, not for public, but simply for local purposes, and if you add the £28,000,000 remaining to the direct taxation of the country—and it is just as much direct taxation as the income tax, and is expended for purposes as public and Imperial — how does the case stand? You have direct taxation £42,744,000, and indirect taxation £52,000,000. There is thus a large margin left, and having deducted the £8,000,000, you may deduct more if you choose; but there is at all events, I think, an end of the case of the Chancellor of the Exchequer, which was the foundation of his financial policy, which alone could justify the measures you will be asked to pass now in Committee, and which, no doubt, is the origin of those financial views which the right hon. Gentleman and others of his Colleagues have on more than one occasion communicated to the House. This state of affairs is one which requires our serious consideration. It is a most unfortunate circumstance that the Chancellor of the Exchequer did not, when he brought forward his Budget, tell us what the complete deficit was which we had to encounter, and that we had not all our Ways and Means placed before us, so that we might have had the opportunity of considering whether, dealing with indirect taxation, it might not have been in our power to relieve those poorer members of the middle class whose burden will be so much increased by the scheme before the House. It is well to bear in mind who those persons are who are so described. They are numerous. They are the class of this country whose decorous life contributes to our civilization as much as the refinement of an aristocracy; but whose decorous life is essentially a life of struggle. We have Papers on the Table which throw some light on the means of that class. We have no Returns, unfortunately, of contributors of all classes to the income tax; but those which relate to the contributors to Schedule D are most significant. There are 400,000 of those contributors, and the vast majority of them are assessed on incomes not exceeding £300 a-year; 330,000 are, I believe, assessed on incomes not exceeding that amount, and nearly 230,000 on incomes under £200 a-year. Now, these are persons whose lives are essentially lives of struggle, although from their domestic virtues and their industry there is among them an appearance of order and even of refinement which ought to be encouraged. It is very easy to look upon the income tax as a tax which affects the rich; but it is essentially a tax which affects the poor. If you analyze these lists, although it will be seen that the wealthy contribute according to their means, and that the amount which they contribute is very large, yet when you come to the number of the contributors you will find how many of them even in other classes have not greater incomes than those who are assessed at £300 a-year. Take a farmer, for instance, with 200 or 300 acres of land. If he gets 10 per cent on £2,000 invested in his farm, he will receive £200 a-year. Now, to commence the year with these classes by levying on them at once the whole of their income tax in accordance with a recent arrangement has greatly aggravated the burden which they are called upon to bear. The House, I am afraid, does not sufficiently appreciate the inconvenience which is caused by a tax which may be borne for a temporary object, but which, when it is made part of a system—and I think, after what I have said, I am justified in looking upon it in that light — renders the prospect before the taxpayers of this country extremely gloomy. If we have before us an increasing and unavoidable expenditure for such objects as the abolition of purchase, and the satisfaction of claims such as those discussed at Washington; and if, as the Government state, the time is past when we are to think of raising duties on articles of general consumption, then it seems to me that a very severe pressure will be put upon a most meritorious class. I do not say this as an enemy of direct taxation. I have always maintained that direct taxation must form a due proportion of our financial system. I think it does form a due proportion, and I would resist any attempt to diminish its fair share of the national burden, which the figures I have quoted show it bears. It is for the House, however, to say whether they will sanction the course which the Government proposes for our adoption. The question is one on which it will ultimately be forced to express it opinion. The country when it clearly comprehends that the Government are laying down a system of raising the Revenue for the future mainly by direct taxation will, I cannot help believing, support its representatives in resistance to such a policy. It is a policy which has not the support of the House itself, or of the majority on either side. The House of Commons wholly disapproves the course taken by the Government in meeting a deficiency by direct taxation, and especially by this form of direct taxation. That it is a sound policy is not the real opinion even of the Government. It was not, at all events, their opinion three weeks ago. I maintain that if the Chancellor of the Exchequer had acted frankly towards us—if he had done what all other Chancellors of the Exchequer have done, placed before the Committee of Ways and Means a full and complete view of our financial position and our real deficiency, the House would never have consented to take the course which, in my opinion, it unfortunately adopted.

The right hon. Gentleman has practised on me something like a prac- tical joke, because when, as the House will remember, he the other night gave, in a most monitory and minatory manner, notice that he was going to call attention to my conduct I really felt considerable anxiety. I understood then that the right hon. Gentleman proposed to enter into the merits of the whole of the transactions which have occupied our attention this Session, with regard to finance and Army expenditure. Judge, then, how great must have been my relief when I found him exhausting the whole of his energy and eloquence on a few very small technicalities. The first point in the right hon. Gentleman's speech to which I wish to advert is that in which he said that as the house duty was to be collected in a different manner we ought to have based our proposal on a Resolution. The matter is now of very little consequence, because, to prevent any discussion with respect to it, we withdrew the Bill; but even in this small technicality the right hon. Gentleman was not accurate, for I am told that what was required was not a Resolution, but merely an Order of the House. The right hon. Gentleman has also charged me with a piece of concealment and disingenuousness, because, he says, that in stating my deficiency as being £2,713,000 I did not add to it, as I ought to have done, the tea duties, which last year amounted to £3,235,000. I may observe, in passing, that the right hon. Gentleman was in error when he told the House that the measure of my right hon. Friend beside me (Mr. Gladstone) with respect to those duties had no effect, for they increased last year alone by £592,000. The right hon. Gentleman, of course, is perfectly aware—though he did not think it worth while to tell the House—what is the true history of the tea duties. There was a dispute between this House and the House of Lords upon a matter of privilege, and as a measure of precaution since that time the tea duty has been collected as an annual duty to be renewed every year—not that it was intended to tamper with or touch the duty every year—but as a sort of precaution that this House might not, in a matter of that kind, be placed in the power of the House of Lords. We have looked through the different Budgets while the right hon. Gentleman was speaking, and we find that in 1862, when my right hon. Friend was Chancellor of the Exchequer, he did allude to the tea duty; but since then it seems not to have been the practice to allude to it at all. [Mr. DISRAELI: It was included in the Resolutions upon the Table.] Of course it must be included in the Resolutions upon the Table, and it was included this year; but the difficulty I got into was that the Customs had overlooked it, and had not sent in the Resolution. [Opposition cheers.] That is the fact. I was not aware that it was news to hon. Gentlemen opposite, or I might not have been so frank in volunteering the information. In fact, it is renewed every year; but it has not been the practice, as I am informed, to mention it in the Financial Statements, and, indeed, to do so would merely be unnecessarily confusing the matter. We have really other matters now to deal with to which our minds may well be applied without unnecessarily wasting time on such trivial subjects. If the right hon. Gentleman is right in what he says, he entirely proves my case. He charges the Government with having laid the whole weight of the new burden on direct taxation, and having done nothing with regard to indirect taxation. If his statement is correct, he has put himself out of court, because if he chooses to consider the tea duty entirely a new tax, the effect will be that while we are putting the 2d. income tax on as a direct tax, we are putting a much larger sum upon indirect taxation in the shape of tea duty. So that I am doing entirely what the right hon. Gentleman would do, on his own showing. Though I dispute it altogether, it is a very good argument, at least as an answer to him. The right hon. Gentleman speaks of our gloomy prospects for the future. Of course, every hon. Gentleman may deal with the future as he pleases; but there is one item on the right hon. Gentleman's account against which I must respectfully enter my protest. He has already in his mind's eye a large sum to be awarded against us under the Treaty of Washington; but I ask the right hon. Gentleman whether he had not, before speaking so confidently on the subject, better wait until that sum is awarded? Then as to my statement as to the respective amounts of direct and indirect taxation. I assure the right hon. Gentleman and the House that there was no collusion between the hon. Member for Derby (Mr. M. T. Bass) and myself in reference to the question which was put to me; and it appears to me that the whole subject resolves itself into a question about words. The House will remember that I was cautious, and did not attempt to say how much there was of direct or indirect taxation, because there are no terms so ambiguous as direct and indirect taxation, or which are understood in so many different senses; but I explained the sense in which I used the terms, and any hon. Gentleman who does not think that I gave a correct definition of direct and indirect taxation may make a calculation for himself. I only attempted to show how, under a certain definition of the terms, the taxes might be arranged. Other hon. Gentlemen may divide the taxes differently, and I do not pretend to assert that my arrangement is absolutely perfect; but I think it desirable, in making an explanation on points such as these, to define the sense in which the terms are used. When I made the statement in question I certainly fell into an error in charging the £500,000 raised on railways to direct taxation, for that sum, according to my definition that an indirect tax implies that the person who pays it has some means of recovering it from the community, ought to be charged on indirect taxation. I am told by the First Lord of the Admiralty that a correction ought to be administered to the statement of the right hon. Gentleman with regard to rates, and that £20,000,000 would be nearer the mark than £36,000,000 when the proper deductions had been made. [Mr. DISRAELI: I spoke of the amount to be added to direct taxation.] I am informed that some of it is not taxation at all, but property and other things of a miscellaneous nature, all of which are to be found in my right hon. Friend's Report. I think I have disposed, as far as it is necessary for the purposes of this debate, of all the subjects to which the right hon. Gentleman has alluded, except one, and that is the most important. Even that, however, is of the most shadowy nature. The right hon. Gentleman makes a charge against the Government of this kind. He says that we brought forward a system of taxation to meet what we thought the deficit, and he says that we divided it into three parts—namely, taxes on articles of consumption, taxes on realized property, and the income tax. He says that after having spoken strongly in favour of our taxes upon articles of consumption, we withdrew those taxes successively, one on one day, and one on another, and that he considers our conduct utterly inexplicable, and wants to know why we did not go on with those taxes. This is just one instance of the artificial and technical way in which the right hon. Gentleman treats this question. Now I am a plain, outspoken person, and do not deal in these reservations. When I know a thing very well, I do not pretend that I do not know it, and ask my audience to join with me in the pretence. It is quite true, as I said in arguing in favour of the Budget, that I had struggled hard to avoid the twopenny income tax, and for the reason which the right hon. Gentleman gives — namely, because it does pinch the lower-middle class. It is perfectly true that the Government thought it better to divide the taxation in the manner we did, and to place a tax on articles of consumption to which everyone would contribute a little, and no one much; we being of opinion that a tax on commodities is paid by the consumer and not by the producer. We thought that the income tax might be called on to bear a part of the expenditure, which was of a transitory nature; and we thought that, the income tax being justly objected to as falling heavily upon professional and precarious incomes, it was reasonable to accompany it with some other tax, not of a heavy nature, upon realized property. But why should the right hon. Gentleman beat about the bush and ask why the Government did not go on with the measures they proposed? Every Member of the House knows why we did not go on with them. We found that the proposals were distasteful to the House, and that the House did not approve of them, and as the House is the master and judge in these matters, we deemed it our duty to withdraw these measures and endeavour to substitute others of which the House would approve. Had we not in some way or another provided for the expenditure, of course we should have had to abandon our plan of Army reform, to which we attach the greatest importance; and for the sake of which we have made, as the House must be aware, a very heavy sacrifice. Therefore, we were not going to act like petu- lant children, and, because the House did not approve of part of our measures, amounting to £800,000 of the taxation, we were not going to throw everything into confusion because we could not have altogether our own way. We should have much preferred what we originally proposed; but the House thought differently from us, and we had to consider what the House would accept to meet this transitional expenditure. We selected a plan in which it has happily turned out that we fairly divined the feelings of the House, and acted in the manner which they prefer. Such being the case, what is the use of the right hon. Gentleman standing up and saying—"When you obtained a majority why did you not go on? How inexplicable is your conduct! Why did you not explain the motives which actuated you?" The reason is as plain as daylight. Like sensible people, we did not attempt to do what was beyond our power. We ascertained what was the feeling of the House, and we endeavoured to conform to that feeling. That is all that I think it necessary to say upon this subject. I am quite sure it will be much better for the House to accept the proposal for a large increase of the income tax than to allow the measure of Army reform to fail for want of the means to carry it out; and we adopted it as the best method that was open to us under the circumstances, as practical men, anxious to do the best we could for the country. At any rate, I think I may say it was much better than the proposal suggested by the right hon. Gentleman the other night, but which he has not thought fit to repeat now. Though he is shocked at the incidence of the income tax, he himself suggested these three proposals—first, that we should abandon the attempt to get rid of purchase, which he himself was the means of inducing the House to agree to the principle of—and thus save £600,000. Secondly, that we should impose a penny income tax to meet £1,500,000 more; and thirdly, that we should get the remainder—£900,000—somehow or other—and he said the Chancellor of the Exchequer must be a poor hand at his business who could not find that amount somehow or other. It is quite easy for the Chancellor of the Exchequer to find money if he can persuade the House to adopt his views and go with him in his method of finding it; but he must be a much more clever Chancellor of the Exchequer even than the right hon. Gentleman opposite, who can find money by taxes which the House is determined not to impose. I think, upon the whole, we have not done so much worse than the proposition of the right hon. Gentleman, which would really have been to abdicate our functions altogether, and which would have left £900,000 to be provided for "in some way or other." We have another instance of the kind in the right hon. Gentleman's conduct with regard to the Abyssinian War. He had the same opportunity that he has suggested to us, and if it was so very desirable that we should have an exact balance between direct and indirect taxes, why did he not in 1867, instead of putting on the very thing he regards now with such horror—an additional 2d. on the income tax—take one half out of the tea duty, the other half out of the income tax? The truth is, Sir, this is little better than trifling. I hope the House will, without further delay, go into Committee on this substantive measure. I am only sorry that I should have been obliged in what I considered to be the discharge of my duty to delay the House so long.

said, he did not think the House would be content to let this question rest on a mere tu quoque bandied between the two Front Benches. When the Budget was first introduced he ventured to make some observations upon it; but he should not have done so if he had not thought that the principle on which it was founded were both unjust and dangerous. The Chancellor of the Exchequer had said, with considerable truth, that the right hon. Gentleman the Member for Buckinghamshire knew perfectly well why the Government had abandoned their first Budget. They had abandoned it because the House had decided against it. That, no doubt, was true; but he went on to say—and this was the point to which he wished particularly to direct attention—that the House had approved the present Budget for an additional 2d. to the income tax, and had shown this by their vote. Now, he distinctly asserted that if the Government had given them an opportunity of expressing a free, unbiassed opinion upon it, the House would not have approved that proposal. The Government had a majority; but it was perfectly notorious how they obtained that majority. Members were obliged to sacrifice their financial principles to a political exigency. Hon. Members, friends of his, came to him and said—"We know it is unjust to throw the whole of the additional and exceptional expenditure on one class, the minority in the country, but the Ballot Bill and the Army Bill remain to be considered, the Government have advanced far enough in their concessions, and if they are defeated they will resign or dissolve." That was the way in which this Budget had been carried. He should not mind challenging the opinion of the House upon this point if the Prime Minister would get up and say the result should not affect the question either of resignation or dissolution. He objected to this Budget on two distinct grounds. He said it was unjust, financially considered, and the principles it contained were fraught with the greatest peril to the future of this country. What was the justification for throwing the whole additional expenditure on the income tax? The only justification was that avowed by the hon. Member for Waterford (Mr. Osborne), when he said that the minority in the country had demanded this additional expenditure, and therefore it was fair that they should be charged with it in the shape of income tax. If that argument were pushed what was the dilemma in which it would land the Government? If they accepted this argument they had betrayed the confidence of the country; they did not represent the majority of the country; they did not do what the majority wished, but they had endeavoured to carry out the wishes of the minority. If, on the other hand, the cry had not come from the minority but from the majority—if the demand for this expenditure had proceeded from the whole nation—the Government, in sanctioning it, were bound in all justice to make the whole nation more or less contribute to it. But it was said it was fair to throw the whole of this additional expenditure on direct taxation. Now, the figures of the Chancellor of the Exchequer as to the relation between direct and indirect taxation were perfectly fallacious, because he left out of consideration the £20,000,000, £25,000,000, or £30,000,000 mentioned by the right hon. Member for Buckinghamshire which were contributed in the shape of local taxation, and which undoubtedly fell on the payers of income tax. But there was another argument — the time for raising the question of adjustment had gone by, for what had they done? During the last two or three years there had been a surplus; then was the time for those now pressing the policy of readjustment to say the balance between direct and indirect taxation was unequal; it was not fair to reduce direct and indirect taxation contemporaneously; but until the balance was adjusted every farthing should go to the reduction of indirect taxation. When there was a surplus they reduced direct and indirect taxation together; but when there was a deficiency the Government laid down the doctrine that it was impossible to re-impose any indirect taxation, and the whole additional burden must be thrown on direct taxation. This implied great injustice to the minority, on whom direct taxation fell. If the House did not protest seriously and solemnly against the doctrine which the Budget contained — that all exceptional expenditure should be thrown on the income tax, they would encourage the democracy in every town to demand money from the Government which would be called exceptional expenditure. £1,000,000 or £2,000,000 would be asked for State emigration. And how could the demand be resisted when the expenditure was thrown entirely on the minority? Then, again, an assembly of working men might call out—contrary to all the principles of political economy—and when he had the opportunity he did not hesitate to say that such a proposal was contrary to all those principles—that work to the unemployed should be supplied by the Government. What was the most stringent argument that could be advanced against such a proposal? Why, that it would require £2,000,000, £3,000,000, or £4,000,000, which meant an additional tax on tea, on tobacco, on beer. But how could this lesson be enforced when the Government said that all this additional expenditure was to be thrown on the income tax? Supposing at the beginning of the present Session, when the Secretary of State for War had submitted his extravagant War Estimates to the Prime Minister, the right hon. Gentleman had had to face this contingency, and had said—"You call upon me to spend £3,000,000 more than ordinary; you must, according to the principles which I have enunciated, pay this sum partly from direct and partly from indirect taxation. Popular Minister as I am, I cannot and will not ask the House of Commons to re-impose taxes upon the necessaries of life; revise your Estimates and reduce the expenditure." If he had said that, one of the most effectual guarantees would have been given for economy. If the Government had remained faithful to their principles that additional expenditure should be partly provided by direct and partly by indirect taxation, they should not now have had to deplore such waste and extravagance. This view of the case was all the more important because at the present moment every State in Europe was spending far more money than it could afford. We were now entering into a wicked rivalry in arms. Seeing that we were this year spending £3,000,000 more than we spent last year, Prussia would say—"We cannot reduce our armaments;" and the same bad example would influence embarrassed Italy, involved Austria, together with France and Turkey. Thus British extravagance would induce other countries in Europe to run more rapidly upon the road to ruin. If ever there was a time when it was of importance that this House should cheek extravagance and practise economy it was now, when Europe was piling up such a debt as had never before existed. But the financial policy of the Government tended fatally to relax the checks upon economy. He had received numerous letters from clerks and others, with incomes of from £150 to £200 a-year, upon whom the increased income tax would fall most heavily. No persons were carrying on so severe a struggle in life as they were. They had to maintain a respectable position; upon them fell the whole concentrated force of local taxation; the clerk, who was making every effort to insure his life and maintain a wife and children, had not a single shilling to spare; yet the House was asked to impose upon him an additional income tax which he could not help paying. This was one important distinction between direct and indirect taxation. If you increased the price of beer, sugar, or some other luxury, a man by increased thrift might avoid the tax, but he must pay a direct impost. Thus direct taxation was a tax upon prudence. Ministers were asking the House to lay down the doctrine that in all time to come all exceptional expenditure should be borne by income tax payers without any attempt to adjust the enormous inequalities of that tax. They were going still to lay the same tax upon fixed and upon fluctuating incomes. Unjust as such a system appeared before, it would be doubly unjust now that the amount of the income tax no longer remained permanent; but whenever an extra million or two was wanted it was obtained by increasing this tax. He ventured to say, in conclusion, that no words which would fall from him could tell the skilful financiers who sat on the Treasury bench half as well as they knew themselves that in laying down the principle that all exceptional and temporary expenditure was to be borne entirely by a minority of the country, they were sanctioning a doctrine which was unjust in principle, and which was fraught with the greatest peril to the future of this country.

expressed the pleasure with which he had listened to the hon. Member for Brighton (Mr. Fawcett). For a great length of time the opinions enunciated in that speech had been virtually tabooed in this House, first by an intense prejudice, excited by agitation, and then by the fact that the commercial treaty with France precluded action with respect to an essential portion of the tariff of this country; but now that the French treaty had come to an end he trusted that the House of Commons would avail itself of the freedom it had obtained, and of the opportunity to consider the whole system of taxation adopted in this country. Under the French treaty more that £500,000 worth of duty was foreclosed, not merely with reference to France alone, but with reference to all the countries with which England had treaties, containing the most Favoured Nation Clause. He knew it was idle to attempt to hasten public opinion, but also that the common sense of the country, now liberated, would compel a re-consideration of the financial system of this country. He wished to point for a moment to the example of the United States. The prosperity of the United States was largely growing under a financial system which was totally opposite to our own, for half the general taxation of America was derived from Customs' duties, and the imposts were increased as revenue was required. Did their trade decrease in consequence? Quite the reverse. The constant flow of emigrants into the States showed that the American financial system was not adverse to labour, or viewed with dislike by the labouring classes. The United States, under their system, were reducing their National Debt at the rate of £40,000,000 a-year, while England had only been able to reduce hers at the slow rate of about £1,000,000 a-year on the average of the last 25 years. He therefore denied that the financial system of the United States was either absurd or burdensome to the people.

The peculiar hour of the night is a guarantee that I shall not trespass upon the House for more than a few minutes. Indeed, there is not much to be said, for this is a post mortem examination of a Budget which has committed suicide, and has been buried at the cross-roads; but, where it not, I think there is a moral to be drawn from the discussion of to-night. I must say that the apology for—I can hardly call it defence of—his treatment of his former Budget made by the Chancellor of the Exchequer is somewhat unsatisfactory. He said that the right hon. Gentlemen who sit beside him were not petulent children; but they may be something worse — they may be spoilt children; spoilt by this obsequious majority which sits at their back, and is ready to be dragged through any mire at the bidding of the Government. I ask on what plea — I ask the hon. Gentleman below me, whom I hear grumbling — on what plea is it to be said that the late Budget of the Government was reprobated by their own party? The only time there was a division they had a majority in favour of their well-known "lucellum" motto; and, although, no doubt, some portions of that Budget were not popular, from what I hear of the private opinions of those who sit around me, I believe the state of feeling on this side of the House was such that the Budget would have been passed if it had not been withdrawn. The real reason it was withdrawn was this. There was an agitation in the eastern parts of this Metropolis; there were meetings; there were the rumblings of a storm; and what I deduce from these things is, that if these unfortunate clerks, who are to be saddled with the 2d. in the pound of extra income tax, wish to get it taken off they must imitate the example of their co-citizens, the manufacturers of matches. Let them assemble in Palace Yard; let them threaten to pelt the right hon. Gentleman the Chancellor of the Exchequer; let them make the Government unpopular, and you will soon find that the extra 2d. of income tax will be deducted with the same facility and alacrity that signalized the withdrawal of the matchbox tax. This is really the moral to be deduced. Do not talk to me about petulant children. Was ever such a defence made for a Government? That they will do what the House of Commons like, that they have no principles of their own, and that they are acting on principles enunciated by others. If ever there was a speech calculated to drag a Government into contempt, it was the lame apology made to-night by the Chancellor of the Exchequer. I do not want to go into this Budget. I will not discuss these points; but I will say, joining here with the hon. Gentleman the professorial Member for Brighton, that you never can have a reduction of taxation unless you take back your Estimates and reduce them. Do not talk to me of the expression of opinion evoked from the country by the proposed abolition of purchase — the little bit of red rag you are holding out to the unfortunate people. Let them come to pay for it, and you will see the feelings of the country. There never was such a project brought before the House of Commons. We are actually asked, as the right hon. Gentleman opposite (Mr. Disraeli) has said, to vote an ill-defined, indefinite, and unfathomable estimate of a project which has never yet been laid upon the Table of the House. I have no objection to offer against that being met by direct taxation; but I have an objection against an ill-formed plan being foisted on the country under the pretence of Army regulation and re-organization, and that the country should be left in total ignorance of what is to pay for it. I am obliged to the right hon. Gentleman opposite for having revived the discussion of the subject; I think it wanted reviving. Till this evening we have never known why the Budget was withdrawn; but we now know that there were certain unseen influences of great men—not like the bold meetings of matchmakers in Palace Yard—and that it was owing to these unseen influences that the Budget was withdrawn. The Chancellor of the Exchequer still says he thinks that Budget was a good one. Well, Sir, he says he is not a petulant child; no, he has come to years of discretion; and these years of discretion teach him this, that he had sooner preserve his place with our Budget than go into exile carrying his own schemes into execution.

deemed it deplorable that an hon. Member professing to represent, as the hon. Member for Brighton (Mr. Fawcett) did, the interests of the working classes should enunciate such opinions as he had just expressed, and which were cheered from the Opposition benches, whence they might have been expected to come. The statement had been made over and over again that it was to be assumed, as laid down from the Treasury bench, that exceptional expenditure was, as a rule, to be borne by a minority of the country; but he had never heard anything of the kind laid down by the Chancellor of the Exchequer in the whole course of the Budget debates. He had already adduced figures which he believed to be incontrovertible, and which, when every allowance was made for differences of opinion as to what was exceptional, direct, and indirect taxation, showed that the Budget erred, if it erred at all, in favour of those paying direct taxation, and that it was an erroneous assumption that the taxation of the country was borne by a minority. Local taxation, if it was direct, usually involved direct benefits to persons of property, and those who were benefited would be the last to wish that the country should bear charges which especially formed no part of Imperial taxation.

said, the right hon. Gentleman the Chancellor of the Exchequer had now, as he had two years ago, an overwhelming majority who were anxious to maintain him and his Colleagues in office, and therefore he might look forward to being five, ten, or fifteen years financial adviser to the country. Under these circumstances, they had a right to expect a prescience in the Budgets of the right hon. Gentleman which could not be looked for from Ministers whose tenure of office was of a more transitory character. When the Chancellor of the Exchequer came into office the income tax was 6d., having been raised to that amount by his right hon. Friend (Mr. Hunt), in consequence of the Abyssinian War. That war had been sneered at, and even the Chancellor of the Exchequer himself had, in a speech delivered at the Institute of Civil Engineers, implied that no war was of much importance where there was no great loss of life. The right hon. Gentleman, indeed, had sneered at the Battle of Marathon because the loss of life there was very small. The Abyssinian War was carried on with great success and great honour to the country by the late Government, and one would have thought that the first application of a surplus would have been to reduce the income tax to the figure at which it stood previously to that war, but instead of this the right hon. Gentleman took off the duty on corn. The proposal was objected to at the time by two hon. Members of the House of high position, in the City of London as merchants and bankers—the hon. Member for Hull opposite (Mr. Norwood), and by his hon. Friend the Member for Woodstock on this side the House (Mr. Barnett). Was it wise, in view of contingencies which might arise, to take off taxes which nobody asked to have taken off? Had that tax, which was not considered protective in its character, and which had been left by Sir Robert Peel when passing his great measure of free trade been allowed to exist we should not be in our present difficulty. Had the Government looked forward two years ago they might have seen they would have to deal with this question of purchase, and they should have maintained the indirect taxation to meet the inevitable outlay. The hon. Member for Brighton (Mr. Fawcett) had pointed out most forcibly the evil of this Budget, that it introduces the principle of depending on a source of taxation which pressed entirely upon the upper and middle classes. For his own part, he had supported the Government against their own supporters, as, though he should rather have expected increased Estimates for the Navy than for the Army, yet it was a serious thing when a Government on its responsibility, and knowing so much more than hon. Members, asked for an increase in the Army Estimates for the House to refuse the demand. After abortive attempts at indirect taxation, the Chancellor of the Exchequer withdrew his Budget, and in- troduced one distinguished, in the words of the right hon. Member for Buckinghamshire, by a "sweet simplicity." This was simply a 6d. income tax, which, though it might not press heavily on Members of that House, who were all comparatively rich men, weighed with crushing force on the lower middle class—on persons with small incomes—on clergymen, for instance, who with, say, £250 per annum, had to educate a family; on medical men, and on small tradesmen. The right hon. Gentleman last year took off the sugar duties. In regard to that article persons might abstain from or economize its use; but they could not evade the full weight of the income tax. There were many, especially among the mechanic class, receiving £2 a-week, who yet had not to pay income tax. But the classes he had described had no alternative but to pay. He hoped the Government would give their serious attention to this subject with a view to reform, as he thought there were financial difficulties before them, particularly the expenditure which might be required in connection with the modification of the licensing system, which might entail severe demands on the Exchequer. He believed, in conclusion, that whenever they met their constituents, those on that side of the House who had protested against this large addition to so unpopular a tax would have no cause to regret the course they had adopted.

said, two questions had been raised—increased expenditure and the mode of meeting it. He thought it would have been well if the Government had in the first instance taken back their Budget for re-consideration; but, at the same time, he did not see that there was sufficient ground for objecting strongly to any of the items with the exception of that intended to pay the cost of abolishing purchase in the Army. He thought the Government had been hardly treated by those who, having instigated the expenditure, wished to back out when the time came to pay the piper. In regard to the mode in which the burdens of the country must be met the question of taxation was one of science, and he believed the income tax was a permanent tax, the objection to it that it was inquisitorial having nothing to do with the amount. He did not, however, believe that precarious incomes should be taxed at the same rate as incomes arising from real property. He believed in the future no course would be open to a Chancellor of the Exchequer but to have recourse to direct taxation, that mode being the only one that was rational and scientific. If it came in the form of a poll tax he believed there would be no objection to it. If the franchise of counties was on a level with that of boroughs—for he agreed that that House was composed too entirely of rich men—they would have heard less of the question of purchase than they had done, for he was convinced that the people of the country wanted the Army brought back to the people, and whatever cost the process might involve they would support it.

said, there would have been less objection to this increase of the income tax if it had been proposed openly in the first instance, instead of being included in a second Budget after the first had been rejected by the House. But the country was naturally dissatisfied with the vacillation of the Government; with its change of front on so many occasions, and then placing a burden on a class which was so Little able to bear it. It was a great inconvenience to professional men to have to pay their income tax in the first quarter of the year, while those who received their incomes from the public funds only paid it on receiving their dividends. If the Chancellor of the Exchequer did not promise that this would be remedied in future he should move an Amendment in Committee that the income tax should be collected twice a-year instead of once. The right hon. Gentleman had promised that employers would not have to return the incomes of their employés. But he (Mr. Hermon) had been inundated with letters complaining of this practice. [Mr. BAXTER said, the hon. Member was mistaken.] It had been insisted on in a worse form than that at first intended, for the employé was surcharged, and the only remedy for the amount being placed too high was to bring a certificate from the employer. He did not know who was responsible for the Inland Revenue; but he hoped that in future the Department would not pursue a course which caused so much annoyance.

reminded hon. Members opposite that a standing Army was to a great extent necessary, owing to the existence of a mercantile class in this country, and of large mercantile interests abroad, which often involved us in difficulties. What, for example, had owners of property to do with the Abyssinian War or the Alabama dispute? He thought the House should have learned enough from the past to take warning with regard to financial legislation for the future. He believed that the shilling duty on corn was the victim of metaphor. It was called "the last rag of Protection," and so was abolished, though it was not practically felt, and produced £900,000 a-year. Again, the removal of the last shilling upon timber had been of no benefit to the trade. If they removed taxes of which no one complained, they were necessarily compelled to replace them by taxes which were objectionable. The Chancellor of the Exchequer was almost too clever, and removed himself a little too much from the sympathies and understandings of ordinary men. He took the liberty of recommending to the right hon. Gentleman the example of the Irish gentleman who said he was obliged to drink two bottles of port wine every day to prevent himself from being too witty, or the conduct of the advocate who drank a pot of porter to bring down his intellect to a level with that of the Judge's. In the same way the right hon. Gentleman should try to put himself more on a level with ordinary men. For his own part he did not wish for any reversal of principles in the taxation of the country. All he desired was moderation and caution. For example, it had been laid down that when once a duty had been entirely repealed it could never be re-imposed. If so, it was clearly desirable to reduce and not entirely abandon duties.

said, that as an independent Member he looked upon the discussion initiated by the right hon. Gentleman opposite as waste of time. He must say he thought Ministers had not been treated fairly, because when they proposed their different schemes for carrying on the services of the country, every individual plan was objected to by hon. Members opposite, who, however, were not prepared to suggest anything better. The income tax was no doubt very disagreeable, but the Government, in the end, had no honourable alternative but to increase it, because the House would not allow them to do anything else.

denied that those who sat on his side the House were responsible for any waste of time. The most inaccurate statements had been made with regard to local taxation, and he would not allow them to pass without denial. An hon. Member had stated during the evening that local taxes were entirely for local benefit—the benefit of gentlemen with estates and the owners of one class of property only. Such a statement was altogether erroneous and misleading. For example, the charges for gaols, the Militia, lunatics, education, and the maintenance of turnpike roads, were for the benefit of all classes of the community, and fully justified the contention that a great portion of those charges should come from Imperial sources, and not from the locality only. In a Return issued by the present First Lord of the Admiralty, £42,000,000 were set down as the amount which was not charged on real property; and the amount of taxation on real property was stated at £7,000,000. Nothing was said of the £16,000,000 notoriously levied by local taxation on real property, which would give a total of £23,000,000. Admitted. But from the £42,000,000 there should be deducted £32,000,000 for Excise, Customs, Post Office, and Assessed Taxes, to which owners of real property contributed quite as much as the owners of personal property, and the result would show really £10,000,000 as against £23,000,000 on real property. When these figures were fully gone into the gross inaccuracy of such statements as those to which he alluded would be shown. The Chancellor of the Exchequer said the Government had withdrawn their various financial propositions because the House disliked them. But was it not the duty of Ministers to guide the House? Was the Ministry to be led by men below the gangway? The right hon. Gentleman laughed at this; but the country would not think it a joke. The Chancellor of the Exchequer, in the course of the debate on the Motion of the hon. Member for Westminster (Mr. W. H. Smith), wished the Opposition joy of the votes they were about to give on the Motion disapproving of the Budget. He (Sir George Jenkinson) might return the compliment, and wish the right hon. Gentleman joy of the demonstration which awaited him in Westminster Hall, and which he was afraid to face. It was not a matter of congratulation that a Cabinet Minister should be afraid to walk through Westminster Hall to the House of Commons. He wished the right hon. Gentleman joy of having to withdraw his Budgets one after another; but he should be sorry to be in the right hon. Gentleman's place. He should also wish the Chancellor of the Exchequer joy when he went before the country, and hoped it would be remembered that the right hon. Gentleman had spoken as follows in reference to the first financial proposal:—

"I have struggled in preparing this Budget to make the increase of the income tax as light as possible, because I know how bitterly it pinches the lower middle classes."

And, again—

"Therefore hon. Members will see that if this extra expenditure were thrown upon the income tax, so far from the difficulty being solved, another and a greater one would be created."

They had now to deal with that greater difficulty, in the shape of a tax which was hateful to the right hon. Gentleman himself, to the great mass of his supporters, and to the country.

said, it was impossible to agree to the clause in its present shape, because the whole system and structure of the income tax were based on the principle of collecting the tax once in the year. The matter was carefully considered and settled in 1869. The sums collected from the smaller income tax payers were so exceedingly small as to be hardly worth the collector's going twice to them. A man with an income of £200 would pay altogether, at 6d. in the pound, £5; and it was monstrous that the collector should go twice in the year and collect £2 10s. each time. They must consider, not only the person who paid but the expense of collection; and it was not the interest of the taxpayers themselves that that expense should be unduly increased. No doubt people of small incomes would find it inconvenient to pay any tax; but then if a man's income was small the amount of the tax demanded from him was small. The rule of collecting the tax once a year was now perfectly settled and well understood, and was acquiesced in by the country, and he trusted that this clause would not be pressed.

hoped the words that had just fallen from the Chancellor of the Exchequer would be duly pondered over by the income tax payers The right hon. Gentleman told them that because a man was poor it was really too much trouble for the taxgatherer to go to him twice a-year, and that about the time when his Christmas bills came in and his rent fell due, it did not signify much whether such a man had to pay £5 or half £5. But with many people a £5 note was not a thing to be laughed at. He had seen many men who worked very hard to keep their families in decency, and to whom the having to pay a £5 note to the Government, in addition to their other charges, was a very serious thing indeed, and when they insisted on taking the hard earnings of those struggling people, it really ought not to be too much trouble for the taxgatherer to go to them twice a-year. He hoped that every man who paid income tax on his small income would remember the words of the Chancellor of the Exchequer.

hoped the hon. Member would press the clause to a division. The Chancellor of the Exchequer said it would disarrange everything to resort to the method of half-yearly collection; but a greater financier than he, in introducing that tax, had laid down the rule that it should be collected, not half-yearly but quarterly. And at that time it was not thought a "monstrous" thing to collect it every quarter. He maintained, rather, that the really "monstrous" thing was to call upon the taxpayers just when the pressure of their yearly and half-yearly bills and rent came round, to pay on the 1st of January not the money necessary to carry on the affairs of the country for the current quarter, which was surely as much as Government required, but the whole expenses of the Government between that date and the 31st of the following December. There was no justification at all for that course. He did not see why the Government should demand more from the taxpayer than was necessary to pay its way for the current quarter. As to the tax being scarcely worth collecting from those poor people, the right hon. Gentleman's words would, he hoped, beremembered—and he might, perhaps, be asked, if it was not worth collecting, to take the tax off those persons altogether.

lamented that the feeling of the right hon. Gentleman for the lower middle classes whom he had said were so bitterly pinched by the income tax did not prompt him to accede to the proposed clause. The tone of the right hon. Gentleman was now very different from what it had once been—he thought he remembered the time when the right hon. Gentleman deemed it expedient to collect five quarters in one year. The right hon. Gentleman had already taken back and amended his Budget twice; and he (Colonel Knox) advised the right hon. Gentleman to take it back for the third time, and to re-model it in accordance with the views that had been expressed by a large number of hon. Members. The Government might gain ample time to enable them to adopt this course by withdrawing their Army Regulation Bill; and if that suggestion were followed, there would be no necessity to tax these poor people at all, while their supporters would follow them into the lobby quite as readily as they did at present.

said, he should vote for the Motion if it were pressed, because he believed it to be founded upon justice. The object should be to make taxes fall as lightly as possible on every member of the community; but this income tax fell as heavily and inconveniently as possible, and especially upon those whose tax the right hon. Gentle- man said was hardly worth collecting. To make a tax of this kind just, it must be levied at a uniform rate over a long series of years. He recollected when the right hon. Gentleman at the head of the Government used to say that his object was to get rid of the income tax as soon as possible; but now that kind of speech was altogether abandoned. Now the Minister relied only upon the income tax—as soon as there was any surplus at their command they abolished some indirect tax; and the result was that when the rainy day came they were compelled, as in the present instance, to fall back upon the income tax as their only resource. Such a tax, even if it was necessary, should not be made intolerable. These smallsums which the Chancellor of the Exchequer thought were hardly worth the trouble of collecting were of great importance to those who had to pay them.

did not think that the subject under discussion was one of great importance either one way or the other. He had not heard any complaints of the tax being collected only once a year—especially as generally people were not pressed for immediate payment. They could pay in February or March; and he even knew some people who at this date had not yet paid the January tax.

said, he represented a large constituency, the labourers, mechanics, and small farmers in which would feel severely the considerable increase in the income tax now proposed. He trusted that the hon. Member would persist in dividing the Committee on a proposal which he believed to be just and reasonable.

opposed the clause, on the ground that it would interfere with the arrangement entered into two years ago under which all the income tax was to be paid in January.

said, it certainly was not a matter of indifference to his constituents that they should have to pay the year's tax at one payment. He hoped that the Chancellor of the Exchequer—bearing in mind his own words of that evening, that he was not a "petulant child," and would rather act on the opinion of the House than on his own opinion—would re-consider this matter.

hoped his hon. Friend the Member for Preston (Mr. Hermon) would not allow himself to be discomposed by the laughter of the Chancellor of the Exchequer, for his hon. Friend, though a young Member of that House, must have observed that Gentlemen very often affected to laugh at arguments which they did not find themselves able to answer. He was not at all surprised that his hon. Friend the Member for Preston had raised this question; but he was surprised that for the last few years the country had submitted to the present mode of payment of the taxes. The present Government was so proud of what had been called that evening their "obsequious majority"—and he thought that majority had never proved itself so obsequious as it had done on Monday last—that they seemed unconscious of the extent to which discontent was smouldering throughout the country at their recent measures. There was no point on which greater dissatisfaction was felt than the present mode of collecting taxes. The present Motion referred only to the income tax; but two years ago the Chancellor of the Exchequer had introduced a new plan of collecting, not the income tax only, but the assessed taxes and other imposts, which were now required to be paid in one payment instead of in two instalments. He was astonished at the language of the hon. and learned Member for Stroud (Mr. Winterbotham), who said—if he understood him rightly—that there was great convenience and advantage in this system of paying taxes. Much had been said that evening about poor people, to whom it was an intolerable hardship to have these taxes pressed out of them at one time; but it must not be supposed that the hardship was not felt by other classes than the poor. It so happened if there was one period of the year more inconvenient than another for the payment of taxes in a lump it was that period of the year at which these taxes were collected. He did not believe the country would long bear the present system of collection; it was complained of as a grievance; he had heard it from all quarters; and he would, therefore, cordially give his hon. Friend the Member for Preston his vote.

said, he was glad to see the Secretary of State for War in his place. A great deal had been heard lately of "the War Office scandal," and surely this was the time to get up and explain what his intentions were with regard to the future collection of the income tax in the War Office. The late Commissioners had held high posts in the War Office, and some explanation was due to the character of the Department. ["Question! question!"]

said, he was unable to discover the relevancy of the hon. and gallant Member's observations to the Question before the House.

made a few further observations, which were rendered inaudible by cries of "Question!"

, who had been alluded to as representing a constituency which did not contain any poor people, said, he regretted exceedingly that he had as many poor constituents as most hon. Members; but he had been informed by a gentleman who understood this question better perhaps than any person in the House, that the alteration now proposed would not be of any benefit whatever. He was told that with regard to the payment of this tax in January, that it never was paid at that time, but that if this introduction into the Bill was insisted upon there would never be any relaxation at all. He was not prepared to say whether that was right or wrong; but before this Bill was drawn some consideration was given to the question of the term of payment; and if there had been any advantage in dividing the payment between January and July it would have been considered and adopted.

, although not a metropolitan Member, wished to be allowed to say, on behalf of a large number of persons with whom he had been long connected—the clerks—that the collection of the tax from such people living on small salaries and having to keep up an appearance was a very considerable hardship. The Chancellor of the Exchequer had taken back his Budget several times already; and he thought it would be well if the right hon. Gentleman would take it back again and reconsider it with reference to this tax.

said, the income tax was collected yearly in Scotland, and no complaints had been made. He had happened to be in the Income Tax Office in Edinburgh a short time before Parliament met, and had seen a Return from all the counties in Scotland, which showed that before the end of January 97 per cent of the income tax for all Scotland was within the coffers of the Chancellor of the Exchequer. The fact was the course of legislation was rather to collect the taxes in one sum, and within his recollection the poor rates had always been so paid.

said, he was fully aware that the practice in Scotland was to collect the income tax but once a-year. He thought, however, that it would be better for this country if the Chancellor of the Exchequer would allow himself to be governed by the good old English custom in this respect.

said, he was quite ready to admit that if the Amendment were carried it would be inconsistent with the views of those who were in favour of the abolition of purchase. He, however, was opposed to its abolition, and he regretted that no division had been taken on the Motion for the second reading. He saw no good reason why the system of purchase should be done away with, and a great burden as a consequence thrown upon the taxpayers of the country. They were asked by the Government to make a great sacrifice, in order to cut down the regimental system; but he maintained they would gain nothing by it. The regimental officers had, at all times, efficiently done their duty; the system itself had never been impeached, and was cheap to the country. The Government now, it was true, proposed to give officers a certain price for their commissions; but then they gave them no idea as to what was to be done with them with regard to promotion. The result would be that the whole Army would be reduced to that dead lock which existed in the artillery. Surely the House ought to have been informed what the scheme of the Government was with respect to retirement. The principle of selection was, he might add, entirely opposed to the feelings of our officers; it was like taking a knife to cut off the heads of men who might have advanced some steps in their profession, and who might see another placed above them. It was said, too, by the supporters of the Bill that they were desirous of keeping up the esprit de corps and local feeling in regiments; but how, he should like to know, was that to be accomplished if a man might be passed on to another regiment and left with little or no hope of obtaining the command of his own. The Government maintained that the abolition of purchase constituted the backbone of their Bill, and that if it were not effected the whole Bill would be worthless; but he, for one, could see no reason why, even though the purchase clauses were struck out, the rest of the Bill should not be passed. Being in favour of purchase, and believing that the question was raised by the Amendment, he should vote for it.

said, the question was not whether exchanges should or should not be permitted, but whether the payment of money for exchanges should be allowed. Even the hon. and gallant Gentleman who had just spoken admitted that, if purchase were abolished, the system of exchanges must be abolished also. As to the House not having come to a vote in favour of doing away with purchase, he could only say that there was abundant opportunity for doing so both on the second reading and on the Motion for going into Committee. It might fairly be said that the intention that purchase should be abolished had been distinctly expressed. There was no intention on the part of the Government to prevent exchanges; but they proposed to forbid payment for exchanges. [An hon. MEMBER: How are they to be got?] He should not take up the time of the House by quoting from the Papers which lay before him on that point; but those who were familiar with the evidence on the subject knew that some officers were very desirous to go abroad — to India, for instance — while others were anxious to serve at home. Reasonable and proper exchanges of that kind there was no intention to prohibit; what it was desired to prevent was money bargains for the purpose, which had, according to the Report of the Royal Commission, given rise to great abuses. Several hon. Members spoke highly of the regimental system, and contended that the abolition of purchase would strike a blow at that system; but was it not, he would ask, cutting at its very root to seek to perpetuate a traffic which would admit of a man's exchanging from one regiment to another when he pleased?

said, the right hon. Gentleman seemed to imagine that the constitution of every officer was the same, and that any climate was suitable to it; but when he talked of men being willing to go out to India, he must bear in mind that they received there a considerable increase of pay. The case was very different, however, when it came to be a question of serving in China or the West Indies, and it was idle to suppose that officers would go to those countries voluntarily unless they got some remuneration. To prevent exchanges would, in his opinion, be a most cruel and outrageous measure.

said, he was glad that the hon. and gallant Member for Gloucestershire (Colonel Kingscote) had spoken, because the Government must perceive from his speech that the views of officers, to whatever party they belonged, were entirely opposed to their scheme. As to exchanges, he quite concurred with the hon. and gallant Member for Oxfordshire (Colonel North) that it would be a most cruel hardship to the officers not to permit them. He might mention that in the course of his own service in India has happened to be very ill, in consequence of duty performed at the Cape of Good Hope, and that had he not been able to exchange he would probably not be in that House at that moment. Some means should be provided by which officers who could not bear extremes of heat or cold should be able to exchange to a more temperate climate. The Secretary of State for War seemed to think that it was a question appertaining entirely to the purchase branches of the Army; but he believed the right hon. Gentleman was altogether mistaken. Exchanges took place in the Engineers and Artillery, as well as in the Navy, and sums of money passed just as in the purchase corps. How could you prevent money from passing in this way? No regulations could stop it altogether, and it would therefore be much better for the right hon. Gentleman to say at once that there were exceptions to every rule, and that under certain circumstances, where the health of officers was en- dangered, they would be allowed to exchange from one regiment to another.

said, he thought he had made it clear that exchanges would not be prohibited, but that the passing of money for exchanges would be. If money passed on such occasions in the Artillery or Engineers, it was only a proof how catching a vicious system was, and how necessary it was for the House, when extinguishing the system of purchase, to extinguish it altogether.

said, he had lately retired from a non-purchase corps in which he had served for 25 years. He had been in most climates, and knew it was perfectly impossible for the Royal Artillery to serve efficiently in all our Colonies if it were not for the system of exchanges. If private soldiers and noncommissioned officers broke down in health they were invalided home and pensioned in proportion to their length of service. But as to the officers who served their country faithfully, they in a like case were to be offered, the wide world. They could get leave; but when this expired they must either rejoin or find somebody to go in their place. Were these men, for whom there was no half-pay, to be told that if they broke down they would not be allowed to exchange? The Secretary of State for War said he did not object to exchanges so long as only travelling expenses were paid, and no other money passed. Now, suppose a man through ill-health wished an officer to serve in his place at some distant, and, perhaps, unhealthy station, did the right hon. Gentleman think the substitute would go out upon payment of his steamboat fare? The Government and the Committee should discuss this subject in a business-like way, and not as mere theorists. Let the Secretary for War leave the system of exchanges as it was. It had worked well, and hereafter would have no effect whatever in perpetuating the purchase system.

denied that all old officers opposed the abolition of purchase, though the majority might do so. As an old officer himself, he had long been in favour of the abolition of purchase pur et simple, his only condition being that over-regulation prices were recognized. If money payments were now allowed as a consideration for exchanges, the purchase system would to some extent be perpetuated, and he should, therefore, certainly oppose the Motion if it were pressed to a division.

observed that, though it had been stated on the part of the Government that nothing but the most rigid system of selection could prevent purchase growing up again, yet the Government were now going to allow in respect to exchanges any amount of money to be paid under the name of travelling expenses.

supported the Amendment. The hon. and gallant Gentleman who proposed it (Colonel Anson) brought it forward to prevent the injury which would otherwise be done to individual officers; but the complaint to be made against the proposals in the Bill was that they would do great injury to the British taxpayers. The right hon. Gentleman the Secretary of State for War said the other night that the Government were going to put an end to a rotten and effete system. But this was begging the whole question. The system had worked right well. The Government were seeking additional naval and military strength. Was this the time for incurring a large additional outlay by removing the purchase system? Until they had the whole scheme of the Government before them, he entreated the House not to consider those Members factious who refused to proceed with the Bill. Under the present system of exchange an officer was able without detriment to himself to inhabit the climate that best suited his health; but if it were abolished he would often be obliged to remain at stations injurious, and perhaps fatal, to his constitution. It would be cheaper to allow the officers to settle this matter for themselves than to take it out of their hands.

observed, that the Secretary of State for War was very boastful about no division having been taken on the purchase system, and the Prime Minister cheered his observation on that point. The Prime Minister had on his side the advantage of great battalions. But he need not be so boastful of his battalions when he could not get one from their ranks to say a single word in defence of his measure. The right hon. Gentleman the First Lord of the Admiralty pointed proudly behind to the hon. and gallant Member for Haverfordwest (Colonel Edwardes), who did say a word in favour of the abolition of purchase. He congratulated Her Majesty's Government on having among their ranks at least one who did bear Her Majesty's commission, and who supported this measure. The exception in this case proved the rule. He gave the Government credit for being as well-intentioned as any men that ever sat on the Treasury bench; but they left out of consideration a very important element in dealing with this subject—they forgot that they were dealing with men, and they utterly ignored the feelings, the constitution, and health of officers. They wanted to prevent the passing of money for exchanges, which they could not prevent. Did they not know that money passed with respect to adjutancies of Volunteers? Why, then, by legislation attempt to stop what they could not prevent?

said, that the reason why the supporters of the Government did not speak in favour of the Bill was that they were really anxious it should pass, and the reason why hon. Gentlemen on the other side spoke so much was that they wanted it to be lost. The noble Lord (Lord Elcho) had declared that he would use every form of the House to oppose the Bill—[Lord ELCHO: Hear, hear!]—and it was well known that talking against time was one of the most effectual methods of obstruction. Why, that very evening they had listened to a speech of an hour and a-half's length from a right hon. Gentleman (Mr. Disraeli), who was one of the most able and eloquent orators in the House; but that speech must have left on all their minds the impression that the right hon. Gentleman also was making use of that form for the purpose of deferring the time for going into Committee on this Bill. Perhaps, also, the object of the Opposition was to defer another Bill to which they had an equally strong objection. Another reason why the supporters of the Bill did not address the House was that they had perfect confidence in the Secretary of State for War, and they knew that the task of replying to hostile criticisms might be safely left in his hands.

said, he thought that the Government might well say—"Save us from our friends;" for the hon. Member had, by way of shortening the discussion, introduced irrelevant subjects of a personal character that were eminently qualified to beget discussion. He had no intention of availing himself of the opportunity thus created; but he protested against the referencee that the hon. Member had made to the Leader of the Opposition, who had only discharged a public duty in calling attention to the financial policy of the Government.

said, the system of exchanges was one which righted itself; but what would be the result if it were put an end to? They might have half the officers of a regiment invalided. Were they going to double the number of officers in regiments in unhealthy climates? A great many questions had been put to the Government in the course of the debate, but no answers had been received. In fact they appeared—as he had said the other night—to be in a thick fog on the subject. If the Secretary of State would only communicate some information to hon. Members, he would do much to expedite this business.

said, his noble Friend (Viscount Bury) had laid down the proposition that an officer in the Army had a right to choose the country in which to serve.

observed, that what he said was that by the present system of exchange a man usually had the power of selecting the country in which he was to serve.

said, he was glad to hear the explanation. It was impossible for the Government to accept the Amendment. The Bill was intended to prevent anything like vested interests amongst the officers. The Government proposed to abolish purchase, in order that officers might be treated as was best for the good of the service, and if exchanges for money were allowed it would be impossible to prevent an officer who had spent money for an exchange from having a vested interest. He held in his hand an agent's business circular—a list of exchanges which officers desired to effect; in one case a "large bonus" was offered, and in another "nominal terms" were proposed; and he referred to these only to show the pecuniary value of the arrangements that were constantly being made. A remarkable case was named in the evidence taken by the Commissioners of 1856, at page 87, the witness stating that his noble Friend (Lord Eustace Cecil), when junior lieutenant, for accepting an exchange, was selected for a captaincy in the Guards, without purchase, and promoted over the head of another officer who was several steps above him. [Lord EUSTACE CECIL said, the evidence referred to was totally incorrect.] He was not responsible for the evidence, but he had quoted it accurately. It was not intended to interfere with exchanges; it was fully admitted that officers ought to be able to exchange; and the only object of the clause was to prevent the Bill sanctioning the payment of money. There were, however, regulations under which there was no difficulty whatever in providing for travelling and legitimate expenses, which were well understood and could be easily settled in each case. He believed that his hon. and gallant Friend was making a bugbear of the question of exchange in order to prejudice the Bill.

observed, that the evidence to which reference had been made was given 16 or 18 years ago, and had he known of it at the time he would have contradicted it. The facts were these:—He exchanged from the 43rd Regiment in India to the 88th at home. He was promoted, perfectly unknown to himself, without solicitation on his part, by a noble Lord of opposite politics to his own, Lord Strafford, who could not have had any such reason for the promotion as that which was stated in the evidence.

said, with respect to exchanges, that they were invariably and without exception under the control of the authorities. No exchange could take place that had not the sanction of the Commander-in-Chief. It was well known to all officers that there were Army agents in London, and that the paper to which reference had been made was published by them. What he wished the House to understand was, that no agreement between officers for exchange could be carried out which had not the sanction of the Horse Guards, no matter what stage they had reached, and if an officer was serving in a climate which did not agree with him, and could get one at home who was willing to go out, he did not see any objection to an exchange on the payment of a small sum provided no injury was thereby caused to the public service. It was impossible to prevent the carrying out of a system of exchange.

said, the agents who issued circulars such as had been quoted were not the authorized Army agents, who were paid by the State for the services which they rendered to officers. The Secretary of State for War had not given the Committee the slightest notion as to his objection to exchanges except that money passed. In fact, he believed the right hon. Gentleman had taken up the question without any great consideration or knowledge of it. While the purchase system existed a legitimate objection to exchanges might be raised, because sometimes a man might exchange from one regiment to another in order to get in the second regiment a higher price than he was able to obtain in the first. This objection was not a valid one, however, after purchase was abolished. According to the present rules an officer was entitled to his half-pay after 25 years' service; but everybody was aware that many officers after serving a certain number of years abroad broke down in health, and were obliged to return home, where they often entirely recovered. Did the right hon. Gentleman intend to give such men their half-pay before they had served 25 years? Vested interests had been talked about, but no vested interest could accrue from paying money for exchange. The present scheme was one to transfer from one regiment to another officers who had entered under a different system, and though they had already had breaches of faith he was not prepared for such a gross one as this. The officers had entered the service under the impression that they could not be transferred from one regiment to another without their own consent, and therefore the present proposition was a gross breach of faith. In the course of this discussion reference had been made to the rights of officers. Now, no officer claimed to have any right whatever against Her Majesty the Queen, who in the exercise of her unlimited prerogative might promote anyone she pleased to the highest rank in the Army. The case was different, however, when the House of Commons came to consider the subject involved in this Bill, and hon. Members ought not to forget they were dealing with the rights of gentlemen who did not cease to be citizens when they became soldiers, and who were entitled to fair play, justice, and an equitable construction of the terms on which they entered the Army. He hoped that the right hon. Gentleman would take back this provision and consign it to the same limbo as the restrictive clauses in reference to selling out had been consigned to.

said, he wished to make a brief explanation respecting exchanges on the part of officers on foreign service. The remarks made tonight had principally been directed to the case of officers who wished to return home in consequence of their health having been impaired while on foreign service. His right hon. Friend the Secretary of State for War had explained that it was never intended in any way to interfere with exchanges between officers so circumstanced; but his right hon. and gallant Friend opposite asked what an officer was to do who came home in impaired health. By the present regulations, which would still remain in force, he would be placed on temporary half-pay, and on his restoration to health he would also be restored, when an opportunity offered, to full pay in a regiment. There was no intention whatever to interfere with the rules respecting temporary half-pay to officers in impaired health.

said, that after what had passed he thought it right to state that he happened to be with the late Lord Salisbury when he received the letter from Lord Strafford offering a commission in the Guards to his son. Lord Salisbury handed that letter to him (Mr. Disraeli), and he had a lively recollection of its contents. They were of a nature most gratifying to Lord Salisbury; but perfectly inconsistent with the statement in the evidence quoted by the hon. and gallant Gentleman opposite (Captain Vivian). No one could have been more pleased by its reception than Lord Salisbury, but no one could have been more surprised.

, in answer to the complaint that the interests of officers would be sacrificed unless they were allowed to exchange, suggested that the system in operation in the East India Company's Armies should be adopted generally in the British Army. In India, when the health of an officer broke down, he was granted a sick cer- tificate for such time as might be necessary for his restoration, and allowed to come to Europe on European pay, the vacancy in his regiment not being filled up. By this means the difficulty was overcome without the necessity of exchanging to other regiments, a system which could have no other effect than that of destroying the admirable regimental system now in existence. In the Royal Army, as the Committee had just learnt from the Surveyor General of the Ordnance (Sir Henry Storks), when an officer's health broke down while abroad, he was sent to England and placed upon half-pay, and his place in his regiment filled up; and it depended upon influence and good fortune when he could get restored to full pay by effecting an exchange or otherwise. When the purchase system was absolutely done away with, and no money could pass from officer to officer, the European Army would be precisely in the condition the Indian Army had been in for 70 years. They would be obliged to have recourse to the bonus system, as a transaction, not between officer and officer, but embracing a transaction between the officer retiring and the regimental fund. Otherwise, there would be a total block of promotion.

said, he had not been speaking of the system of exchanges, which had been broken up for many years. Mr. Sidney Herbert had told him they had taken special care to prevent such things taking place. What he wanted to ask was about the exchanges they were most interested about now—the exchanges from one regiment to another without going into half-pay. Of course, when an officer had a sick certificate he could go on half-pay. But how was the officer half-way up the list to do this? How could he sacrifice his position by doing so? If he exchanged under these circumstances he lost promotion, for he went to the bottom of the list, which was a very different thing to going on half-pay. What he wanted to know was, what was the objection against officers passing money from one to another in exchanging? There would be no purchase, and no possible harm could come of it, as it must come under the cognizance of the military authorities.

said, the general arrangements with regard to transfer would be left as they are at present, With re- ference to the desirability of exchanges from one regiment to another, he had before him the opinion of Lord Clyde that, though they might benefit individual officers, they were prejudicial to the interest of the service. The object of the Government was to benefit the service in preference to the convenience of the individual. They had no objection to exchanges made under proper regulations; but when the right hon. and gallant Gentleman asked what was the objection to the passing of money, his answer was, that the House had been occupied in vain in these debates if they had not arrived at the conclusion that these transactions between officers should no longer be the subject of money.

said, the Secretary of State for War was insisting on words in the Bill which would be most offensive to the officers of a regiment. They had heard of officers wanting to go up. But there were the officers who had risen from the ranks, to whom a few hundred pounds might be the greatest help.

suggested that the Secretary of State for War should, on the present question, defer to the authority of his right hon. Colleague the First Lord of the Admiralty, who, as hon. Members knew, was the highest authority in the House on the question of exchanges. Money was the universal medium of exchange, and a commodity was sure to find its value in the exchange of the world. Now, if that small argument could be brought home to the mind of the Secretary of State for War, who had charge of the Bill, it would dispose of the whole question.

said, he was aware that the abolition of purchase would not affect the non-purchase corps, and he was thankful that they would also remain unaffected by the principle of selection. But as one who was on the active list of those corps, he must in common fairness admit that if the system of exchange was prohibited in the rest of the Army, there was no good reason why it should not be extended to them; and if that were done, the result would be to render the officers in the artillery even more dissatisfied with their position than they were at the present moment. The power of exchange—and it was nonsense to say that ex- changes could be carried out without money—had hitherto been one of the great set-offs to the disadvantages under which they laboured owing to the slowness of promotion.

deprecated the practice of making personal questions of points raised in debate on this Bill, and objected to the reference made by the hon. and gallant Member for Truro (Captain Vivian) to the experience of the noble Lord opposite (Lord Eustace Cecil). When he quoted evidence from the Blue Book he should have known that it was given by the late Mr. Higgins; and he had the means of satisfying himself as to the truth of the matter. It was a very great mistake, because officers of the Army were obliged to deal with this subject, for Gentlemen on the Treasury bench to raise personal questions with regard to them. He protested against the attempts made by the hon. Member for Stoke (Mr. Melly), and other hon. Members, to stop discussion in Committee, when the Bill had to be dealt with on its merits, and complained that the right hon. Gentleman the Secretary of State did not pay sufficient attention to the points brought before him. He denied that there was any connection between purchase and exchange, referring for support to evidence given by Lord Clyde. In reply to the remarks of the hon. and gallant Member for Aberdeen (Colonel Sykes), he might observe that things might wear a different aspect if furloughs were granted as in the case of the regiments in India to which he had alluded. But was the Government prepared to grant furloughs? From what he had heard, he was rather disposed to think that the right hon. Gentleman at its head was about to curtail the leave of officers, so that if they had more than 60 days' leave they should have no pay at all. [Mr. GLADSTONE: The hon. and gallant Gentleman is entirely wrong.] Be that as it might, he must contend that it had not been shown that the system of exchange would do the slightest harm, while it would create no vested interests. He expressed a hope that the House would not treat this as a party question, but would support his Amendment.

said, he had been in the House a great many years, and that he had never made a personal attack on anybody whatsoever. He had read a letter the other day which was written by the hon. and gallant Officer (Colonel Anson), but he could not have supposed that it was a private one, although it was marked "private" at the corner; because it had been sent round to almost every regiment in England, and his hon. and gallant Friend himself had commented on its results. Even under these circumstances he had declined to read the letter except with the consent of the writer. As to the case of the noble Lord opposite (Lord Eustace Cecil), all he had done was in referring to it to read an extract from the evidence given before the Committee of 1856, which, up to the present time had never been contradicted, and which, therefore, he had a right to suppose was perfectly correct, taken as it was from a Parliamentary Paper.

said, he wished to complain of the circumstance that as he was crossing the House a few minutes before, to speak to his hon. and gallant Friend the Member for Bewdley (Colonel Anson), he was called to order by the hon. Member for Stockton (Mr. Dodds), who was in the habit of calling hon. Members to order, as in the present instance, without any sufficient cause. As he understood his hon. and gallant Friend, he made no complaint of the Financial Secretary because of his having read his letter to the Committee.

said, there was one important point which ought to be placed before the Committee, and it would commend itself to the right hon. Gentleman at the head of Her Majesty's Government, because the right hon. Gentleman made a statement last year during the debate on the Irish Land Bill on that very point. It was very important that the Army should be made as attractive as possible to young men, and if exchanges were to be prevented, he wanted to know whether it would not shut out from the Army a large class of men who were now anxious to join the service. These men were willing to serve for a certain time in any part of the world; but at the expiration of that time family ties, and other circumstances induced the wish to return home, and it was desirable that they should be allowed to exchange. He could not see what objection there could be to the system of exchanging, and he hoped the Government would allow it to continue.