in moving—

"That, in the opinion of this House, the incidence of Imperial taxation has so changed that the proportion borne by the working classes has greatly increased, and ought to be diminished by a re-adjustment of such taxation,"

said: In calling the attention of the House to the change which has taken place in the incidence of Imperial taxation during the last 15 years, I am fully sensible of the magnitude and importance of the question, and of my own inability to do justice to it. I have, therefore, to ask the indulgence of hon. Members while I endeavour, as briefly and as clearly as I can, to show how far that change has affected the pressure of taxation on various classes of the community, and produced a state of things which calls for a remedy. The change to which I have referred has been so gradual, and has been brought about in a manner so little calculated to excite attention, that hitherto it has almost escaped criticism. It may be said that this is not an opportune time for bringing forward such a question; that the Chancellor of the Exchequer, so far from having a surplus at his disposal, has had barely sufficient to meet the expenditure of last year. I do not, however, ask that the taxation of the country shall be increased by a single penny; what I wish to point out is, that in fairness to the poorer classes, the distribution of its pressure should be re-adjusted. One of the strongest reasons for urging that there should be no delay in the consideration of this question is, that notwithstanding the Chancellor of the Exchequer has no surplus, Government appears determined to develop still further the policy—I venture to think, the unfair and dangerous policy—of giving grants from the Imperial Exchequer in aid of local rates. In pursuance of this policy the House has recently had under its consideration three important measures. First, there is the English Prisons Bill. The annual cost of maintaining those prisons was stated by the Home Secretary as being £385,000, and notwithstanding the assurance of the right hon. Gentleman, I am not sanguine enough to believe that they will cost less under Imperial than under local management. Then we have the Scotch and Trials Pri- sons Bills, which will bring up the total annual amount of grants in aid of local prison rates to £500,000 or £600,000. When these measures become law the change in the incidence of Imperial taxation will, as I shall show by-and-bye, be still further increased. I believe that the sources of Imperial revenue may not unfairly be divided into three distinct heads—(1) Indirect taxation on articles of consumption; (2) Direct taxation—namely, stamps, income tax, land tax, inhabited house duty, and assessed taxes; (3) Sources of revenue which are not of the nature of taxation —namely, the Post Office, Telegraph Service, Crown Lands, and Miscellaneous. It is difficult, I admit, to ascertain precisely in what proportions those taxes fall upon the various classes of the community. I believe that the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), in his Budget speech in 1859, made not an unfair definition of the incidence of taxation, when he said—

"All classes are affected by taxation, but direct taxation falls upon the middle and wealthy classes, while indirect taxation weighs with much more severe pressure upon the poor and labouring man."—[3 Hansard, cliv. 1401.]

The general accuracy of this definition has since been confirmed by several eminent statisticians, who have turned their attention to this subject. Professor Leone Levi, whose authority has been appealed to by the Prime Minister, and the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), after an able and interesting analysis of the Census Returns of 1861, came to the conclusion that rather more than two-thirds of the population of the 'United Kingdom belong to the working classes—that is, persons living by manual labour, and one-third to the middle and upper classes. He further came to the conclusion, after careful inquiry, that the working classes on an average consumed per head as much ardent spirits and malt liqours as the middle and upper classes, and that, consequently, they paid two-thirds of all the duties on those articles, and the upper and middle classes one-third. This estimate is fully confirmed by inquiry made by Mr. Dudley Baxter, a gentleman who has given great attention to this question. In 1857 an attempt was made by the Inland Revenue Board to ascertain the consumption of tea and sugar by the working classes, by moans of returns obtained from grocers in more than 300 towns and villages in Great Britain, and a large number in Ireland. The result was an estimate, which was accepted by the late Sir George Come-wall Lewis as reliable, that at that time 56 per cent of the consumption was by the middle and upper classes, and 44 per cent by the working classes. As the consumption in 1856 was 63,000,000 lbs, this would give nearly 4½ lbs per head to the upper and middle classes, and 1½lb per head to the working classes. Mr. Dudley Baxter, writing in 1869, assumed that by far the largest portion of the increase in the consumption of tea which took place in the 11 years subsequent to 1856—namely, from 63,000,000 lbs to 111,000,000 lbs—had been by the working classes, and that their consumption was then at the rate of 3 lbs per head, while that of the upper and middle classes was 5½ lbs; thus making the proportions of the whole consumption, three-fifths for the working classes, and two-fifths for the middle and upper classes. Mr. Dudley Baxter's inquiries regarding the consumption of sugar and tobacco led him to a similar conclusion as to their proportionate consumption; and that as regards the smaller articles of the tariff—namely, coffee, currants other preserved fruits, &c., the working classes took nearly one-third, and the upper and middle classes two-thirds. In order to form an estimate of the change which has taken place in the incidence of taxation, I have to ask hon. Members to compare the Imperial Revenue, and the proportions in which it is contributed now, with what it was 15 years ago, and the proportions in which it was contributed then. Instead, however, of taking a single year at each period, it will, I think, give a better idea of the position if we take the average of the three years ending 1864, and compare them with the average of the three years ending 1876. My reason for not going back further than 1862, is simply that by that time the large reductions in Customs duties, arising from our Commercial Treaty with France in 1860, and the repeal of the Excise duty on paper in 1861, had then been carried out, and therefore a comparison can more fairly and easily be made with recent years. I may add, that had I gone back 20 years, while it would have been more difficult to make the comparison, my argument would have been even stronger than it is. For the purpose of this comparison, and to avoid wearying the House with figures, I shall take it that at both periods the Customs and Excise duties were paid in the following proportions:—

	Working classes.	Upper and Middle classes.
(1) Spirits, malt, and licences for their sale	⅔	⅓
(2) Tea, sugar, tobacco, and corn	½	½
(3) Coffee, currants, raisins, &c.	⅓	⅔
(4) Taxes on conveyance	⅙	⅚

And that all other Customs and Excise duties—namely, the duty on wine, gold and silver plate, armorial bearings, carriages, game, and other licences, were paid wholly by the middle and upper classes. I shall further assume that all taxes, other than Customs and Excise —namely, stamps, income tax, land tax, and inhabited house duty, were wholly paid by the middle and upper classes. I find that the average Revenue of the three years ending 1864 was £70,227,000. Of this, £6,532,000 was derived from the Post Office, Telegraph Service, Crown Lands, and Miscellaneous, leaving £63,694,000 as the amount actually taken from the pockets of the ratepayers. In what proportions was this amount contributed? Of this sum the upper and middle classes paid all taxes other than Customs and Excise—namely, £22,149,000, and of Customs and Excise, £18,741,000, making together £40,890,000, or 64 per cent of the total taxation. The working classes paid of Customs and Excise £22,804,000, or 36 per cent of the total taxation. If we turn now to the three years ending 1876, we find that the average revenue was £76,472,000; of this, no less than £11,363,000 was derived from the Post Office, Telegraph Service, Crown Lands, and Miscellaneous, leaving £65,109,000 as the actual amount paid by the taxpayers. And how was this contributed? Taking precisely the same basis of calculation as in the former period, I find that of this sum the middle and upper classes paid all taxes other than Customs and Excise—namely, £17,816,000, and of Customs and Excise £20,558,000, making together £38,374,000, or 59 per cent of the total taxation; while the working classes paid of Customs and Excise, £26,735,000, or 41 per cent of the total taxation. We have, therefore, the striking fact that while the total annual amount raised by taxation had not increased to the extent of £1,500,000, the upper and middle classes paid £2,500,000 less, and the working classes £4,000,000 more during each of the three years ending 1876 than they did during each of the three years ending 1864. The incidence of taxation had so changed that the working classes paid in the latter period 5 per cent more, and the middle and upper classes 5 per cent less than in the former period. Had the incidence of taxation been the same at both periods, the working classes would have paid £3,295,000 less during each of the three last years, and the middle and upper classes £3,295,000 mere than they actually contributed. To that extent, therefore, the burden of taxation has been shifted from one class to another. But this is not the full measure of the change which has taken place. I have already stated that for convenience I have in this comparison taken the working classes as at both periods paying half the duty on tea and tobacco: while that would be a fair estimate of the former period, the actual proportion now contributed by the working classes is estimated by Professor Leone Levi at two-thirds and by Mr. Dudley Baxter at three-fifths. If we take the latter estimate, it will be found that the difference amounts to £1,170,000; so that, in reality, the working classes have during each of the last three years paid not £3,295,000, but £4,465,000 more than they would have paid had the pressure of taxation fallen on them in the same proportion as it did 15 years ago, while the upper and middle classes have been relieved to that extent. We naturally ask for some explanation of this change; and it is not far to seek. The revenue in 15 years had increased from £70,227,000 to £76,472,000, or £6,245,000. Of this, no loss than £4,830,000 was provided from the Post Office, Telegraph Service, Crown Lands, and Miscellaneous, leaving only £1,415,000 to be met by increased taxation. However, during that period of 15 years the amount derived from taxes paid by the working classes on articles of consumption had increased, notwithstanding the abolition or repeal of duties on some articles, from £22,804,000 to £26,735,000, or £3,931,000; an amount sufficient not only to meet the required sum of £1,415,000, but leaving a surplus of £2,516,000, all of which was devoted to the reduction of taxes formerly borne by the middle and upper classes. If, however, I stopped here I should not give the House a full idea of the change that has taken place in the incidence of taxation. I need not remind hon. Members that the question of Local Taxation has of late years attracted great attention, especially since the Resolution of the hon. Member for South Devonshire (Sir Massey Lopes) was carried in 1872. Since then not a year has passed in which large grants in aid of local rates have not been made from the Imperial Exchequer. Twenty years ago those grants amounted to £1,430,000 per annum—I have not been able to ascertain what they were 15 years ago—in 1872–3 they amounted to £2,390,000; in 1874–5 additional grants for paupers, lunatics, and police brought them up to £3,290,000; in 1876–7, chiefly from the same class of grants, the amount had reached £4,267,000; so that in four years there has been added nearly £1,900,000 per annum to the taxation of the country. What I have now to ask hon. Members to consider is the effect which those grants in aid of local rates have had on the incidence of Imperial taxation. I find that Professor Leone Levi estimates that the working classes contribute one-sixth of all local rates, and the upper and middle classes five-sixths. This estimate was adopted by the right hon. Member for Green-wick (Mr. Gladstone) when addressing this House in 1873. On the same occasion Lord Beaconsfield took the proportions as one-fifth and four-fifths. I am content to take Lord Beacons field's estimate, and if it is a fair one it follows that since 1872 the working classes have been relieved of local rates to the extent of £400,000 a-year, and the upper and middle classes to the extent of £1,500,000 a-year. What I wish particularly to call attention to is the important fact that just in proportion as you make grants from the Imperial Exchequer in aid of local rates, you relieve the middle and upper classes to the extent of four-fifths of the amount granted, and the working classes to the extent of one-fifth, while you add the amount so granted to Imperial taxation; and that addition, as I have shown, has hitherto been entirely on articles of consumption, of which the working classes pay about three-fifths, and the upper and middle classes two-fifths. It appears to me that if we are to transfer the burden of local rates to Imperial taxation, then the taxation required to meet those grants should be so raised that it shall not increase the proportion of taxation borne by the working classes. It may be said that the duties upon articles of consumption, which form the bulk of the Customs duties, have been greatly reduced during the last 15 years. It is true that the duties on tea and other articles have been reduced, and that as regards corn and sugar they have been abolished; but any loss thus resulting to the Exchequer has been far more than counterbalanced by the increase in the consumption of spirits, malt, tea, and tobacco, which, in the aggregate, has augmented the amount of taxation paid by the working classes to the extent which I have pointed out. It may be urged that the number and earnings of the working classes have increased so much during the last 15 years that they are better able to pay £27,000,000 a-year now than £23,000,000 then. This also is undoubtedly true; but the same argument applies with even greater force to the upper and middle classes. During that period they, too, have increased in numbers; while the increase in the trade of the country and in their wealth has been at a rate, I believe, unparalleled even in the history of this country. In 1862 our exports and imports were £392,000,000; in 1876 they amounted to £630,000,000. In 1862 the gross annual valuation of property and profits assessed for income tax was £352,000,000; in 1876 it was £571,000,000. While, therefore, the middle and upper classes are much richer than they were 15 years ago, and much better able to bear an increased amount of taxation, we have the broad fact, which I believe it is impossible to controvert, that they have been relieved of a large amount of taxation, which has been transferred to the shoulders of the working classes. I wish it to be clearly understood, that the question is not whether the working classes pay mere or less than their fair proportion of Imperial taxation, although I am prepared to show that, in proportion to their means, their contributions are greater than those of richer classes of the community. The question is, whether they are now paying a larger proportion of such taxation than they did 15 or 20 years ago, and whether we shall go on shifting taxation from the richer to the poorer classes; or shall we, as an act of justice, rectify the wrong we have done—perhaps unintentionally done—by re-adjusting our taxation so as to make the pressure on all classes now, similar to what it was in former years? It may be said that the working classes have the question of the amount of taxation they pay in their own hands, and had they consumed less spirits, malt, tea, and tobacco, their share of taxation would have been diminished in proportion. This is, no doubt, true; but I cannot find that any statesman or writer who has made this subject his study, has asserted that the consumption of any of those articles by the working classes is, per head, greater than that of the middle and upper classes: indeed, so far as regards intoxicating liquors, the results which I have given to the House are based, as I stated in my opening remarks, on the assumption that per head the middle and upper classes not only consume the same quantity of spirits and malt as the working classes, but, in addition; that they consume all the wine that comes into the country. So long as this is the case, I cannot understand why the consumption of those articles by the working classes should be any reason for making them by means of that consumption to pay a greater proportion of Imperial taxation than they did 15 years ago. Had it been the case that the only contributions from the working classes arose from the duties on intoxicating liquors and tobacco, it might be urged that, apart altogether from the question of revenue, it is desirable to limit the consumption of those articles; but this is not the case. We have still a duty of 6d. per pound on tea, which last year yielded £3,706,000; duties on coffee, cocoa, and chicory, which produced £318,000; and those on currants, raisins, and other preserved fruits, which amounted to £484,000; making in all £4,508,000 derived from taxes upon those articles of food. Why not redress the injustice done to the working classes by abolishing all these duties, leaving under the category of Customs only intoxicating liquors and tobacco. Such an act would be one of the simplest justice. But it would not be complete justice. The relief to the working classes would, in proportion to their consumption, be rather less than £3,000,000, while the middle and upper classes would have relief to the amount of rather more than £1,500,000; so that if in some other form the deficiency thus created of £4,500,000 in the revenue was laid on the middle and upper classes, their taxation would only be increased by £3,000,000 a-year, and even then their proportion of Imperial taxation would be £1,500,000 a-year less than it was 15 years ago. This, however, is all the redress that it is in your power to give without touching on spirits, malt, and tobacco. But apart from the argument of justice in favour of the course which I have ventured to suggest, and which of itself should be sufficient, there are other arguments of great weight, to which I shall briefly refer. It has been estimated that nearly two-thirds of the earnings of the working classes are spent on food and drink: the question, therefore, of a cheap supply of food is to them one of the first importance. A quarter of a century has passed away since Lord Beaconsfield, in his Budget speech in 1852, made the following important admission with reference to free trade. "The principles," he said,

"upon which you have given cheap bread to the community, are principles which ought to make you cheapen the sustenance of the community in every form."

Since then the right hon. Gentleman the Member for Birmingham (Mr. Bright), who has done more for the cause of free trade—I might say for the cause of humanity—than any man living, has advocated that we should have a "free breakfast table." Thanks to the Chancellor of the Exchequer, that has been partially accomplished; and I venture to affirm that there are the strongest reasons why he should deal with tea, and all other taxed articles of food, as he has already dealt with sugar. Tea, originally a luxury, has become, next to bread, one of the prime necessaries of life. It gives its name to one of the recognized meals of the great bulk of the population. It is used by all classes, and very largely by the very poorest classes: the widow who has a weekly allowance of 2s. or 2s. 6d. from her parish, spends part of that 2s. or 2s. 6d. on tea, while many of those whose wages vary from 8s. to 12s. a-week, almost live on bread and tea. It is the innocent rival of ardent spirits and malt, the enormous consumption of which this House is continually invited to assist in finding some way of diminishing. If we are in earnest, why not take the natural way, by giving the encouragement that free trade can give to the consumption of a beverage which to many is a mild and grateful stimulant? The duty upon tea has been well characterized "as the most odious of indirect taxes;" the specific duty of 6d. per lb falls far more heavily upon the cheap teas consumed by the poor, than upon the expensive teas used by the rich. The following extract from a Trade Circular just issued puts this so well, that with the permission of the House I shall read it:—

"That even a 6d. duty has recently been a crushing charge, will be seen from the fact that sound common Congou has been selling for months past at 7½d. to 8d. per lb in bond, on which price the duty amounts to a tax of 75 to 80 per cent, while the duty often for years together doubles the first cost of sound, wholesome, broken leaf tea (a class of tea which can be bought in bond at about 6d. or 6½d. per lb). The first cost of the duty is not, however, all that the public have to pay, for they have to bear the expenses of the salaries of the Customs House, of freeing tea from its clutches, and of paying wholesale and retail dealers for the charges and work imposed upon them in advancing and recovering money for the consumers at large. The indirect cost of the tea duty to the nation may be moderately estimated at 1½d. per lb. Few of the well-to-do classes, who can afford as much tea and sugar as they require, have an idea of how much the question of price affects the buying power of the poor; we are told that about Bothnal Green it is common for the poorer classes to go to the grocers in the morning for a 'ha' porth of tea an' a penn' orth of sugar,' and to buy the same quantity in the evening—the earnings of the day, we presume, being too uncertain to admit of the purchase of the day's wants at once. The lowest price at which broken leaf tea—which costs from 6d. to 6½d. per lb—is retailed in London at present, is 1s. 4d. per lb, a 1d. per ounce, or ½d. per half ounce. Without duty broken leaf tea could in some past years—though not at present, when it is relatively dear—have been retailed at 8d. per lb, or ½a. per ounce, and common whole leaf tea at 1s. per lb. The effect of such retail prices upon consumption could hardly fail to be extraordinary, and happily there seems to be no practical limit to the production of the lower grades of tea."

While, therefore, we find that the duty on the lower classes of tea varies from 75 to 100 per cent, I find from The Produce Markets Review of last Saturday, that very fine teas are quoted as high as 3s. 6d. per lb in bond: on such teas the duty of 6d. per lb is less than 15 per cent of the cost; thus all sound principles of taxation are set at defiance, and the heaviest pressure is thrown on the poorer classes of taxpayers. Of the other principal articles of food which are still taxed—namely, currants and raisins, the abolition of the duties on them would be a great been to the working classes, and especially to the children of the poor, as it would enable them to have more frequently than they have now, something to make a homely meal more tempting and enjoyable. Let me point out, that if the duties on all articles of food were swept away, not only would the cost of collecting those duties be saved, but, by thus simplifying the Customs tariff, and having only two articles to deal with—namely, intoxicating liquors and tobacco, a further large annual saving might be effected by amalgamating the Customs and Excise, so that, instead of having two expensive managing bodies, all duties on articles of consumption would be levied under the control of one Board. Nor is this all. If the hindrances to trade, which are the invariable result of Customs duties, were removed, there is no reason why Great Britain should not become the tea depot for the 'whole of Europe. The Chancellor of the Exchequer, when proposing the abolition of the sugar duties in 1874, said—" That is a consideration which all interested in the prosperity of the country must regard as being of the first magnitude." The same argument is still stronger in favour of abolishing the duties on those articles of food which are still taxed; as I find that in 1875, while the total ' value of sugar exported from Great Britain amounted to £1,032,000, that of tea, coffee, raisins, currants, and other taxed articles of food, amounted to £9,561,000, so that even at present our export trade in those articles is vastly greatly than it is in sugar. It is a well-known fact that the total abolition of a tax on any article of general consumption is, as a rule, immediately followed by a striking augmentation in the importation of that article. In 1860 the duties on many articles of food were abolished, and what has been the result? The importation of cheese has doubled, that of live cattle has increased three-fold, while bacon and hams have increased five-fold. None of these articles are mere generally consumed by the great mass of the people than tea; it is not, I think, therefore too much to anticipate that if all duties on articles of food are abolished the importation will soon be increased by at least 50 per cent, and thereby a considerable stimulus will be given to our commerce and shipping, while there will also follow an increased demand for our manufactures. The total weight of those articles imported and exported from Great Britain amounted lastyear to upwards of 360,000 tons. The addition of 50 per cent would be no insignificant item even to the shipping trade of this country. I have thus endeavoured, however imperfectly, to point out the extent of the change which has taken place in the incidence of Imperial taxation during the last 15 years, and how the injustice done to the working classes may, at all events, to some extent, be redressed. If the views which I have expressed meet the approval of the House, it will be for the Chancellor of the Exchequer to say what taxes shall be imposed in lieu of those proposed to be abolished. I am well aware that it is impossible so to adjust the distribution of the pressure of taxation that it shall bear equally on all classes, in proportion to their ability to meet that pressure; and that even in the course of a year circumstances may arise which will, to some extent, alter the incidence of taxation; but, when we find that over a long course of years a great change has gradually been brought about—amounting as I have pointed out, to a transfer of upwards of £4,500,000 from the middle and upper classes to the poorer classes and that that change is still going on, I venture to think that the time has come when the question of the re-adjustment of Imperial taxation should have the most careful consideration of this House; and, as an element in that consideration, let me point out that the middle and upper classes have never been so lightly taxed as they are now since 1842 when the income tax was first imposed. An injustice has been done, and I venture to think that only circumstances of the most excep- tional character can justify delay in remedying that injustice; but no such circumstances exist. On the contrary, the present appears to be a singularly favourable time for re-adjusting our taxation. For the first time, since 1834, the Chancellor of the Exchequer has been in the position of having his estimated revenue and expenditure so nearly balanced, that he has had no surplus to dispose of, and no necessity for imposing additional taxation; therefore, such a change as I have ventured to propose would have a less disturbing effect on trade than at any former time. Moreover, great—I might say, unwarrantably great—as our expenditure is, the pressure of taxation now, when compared with any former period in the history of this country, cannot be considered excessive. During the last 15 years the population of the United Kingdom has increased 13 per cent, while the amount of Imperial taxes actually taken from the pockets of the public has increased by less than £1,500,000 a-year, or scarcely 21 per cent. I do not believe that it can be the wish of the middle and upper classes of this country, whose wealth has, of late years, increased so enormously, that their share of taxation should be quietly but steadily shifted from their own shoulders to those of their poorer fellow-countrymen, or that they will be unwilling to submit to such changes in our fiscal legislation as may be necessary in order that their contributions to the revenue of the country may be as great in proportion to those of the working classes as they were 15 or 20 years ago. I would remind the House that at the present time trade, in almost every department of industry, is in a depressed state. In some instances working people have been thrown out of employment; in others they are only partially employed; nor is there, apparently, any immediate prospect of improvement. Under those circumstances, the total abolition of the duties on all articles of food would not only be an act of justice, but an act done at a time when it would confer a benefit of great value upon vast numbers of the poorer classes of the community, while it would complete the wise and beneficent policy commenced in 1846 by removing the last remaining restrictions on the importation of food—a policy which has contributed in the highest degree to make our country prosperous, and its people contented and happy.

seconded the Motion, on the ground that the facts mentioned ought to be borne in mind by the Government and the House. Some few years ago the doctrine was asserted that an equilibrium ought to be maintained between direct and indirect taxation. But, while admitting that the Excise and Customs duties had been materially reduced, he held that the working classes still paid a larger proportion of the revenue than they did a few years ago, before the reduction. Therefore, whenever any reduction of taxation could be effected, or any change could be arranged in the imposition of taxation, it ought to be borne in mind that the tendency of late years had been to impose larger burdens on the shoulders of the working classes than on those of the middle or propertied classes of the country.

said, that he represented a large constituency, chiefly consisting of working men, and he protested against the statements of the Proposer and Seconder of the Motion that the working classes had to bear more than their fair share of taxation. It was not right for hon. Members to take advantage of their position to advance statements which they knew could not be substantiated, and which being, no doubt, fully reported in local newspapers, would be accepted as true by the constituencies which sent those Gentlemen to the House of Commons. His constituency and the neighbouring constituencies of Lancashire knew better, and they at least had a confident belief that the Chancellor of the Exchequer had brought in a good Budget, and that the Government did its best to equalize the incidence of taxation, and also to keep down the taxation of the country. If there was anything to complain of it had reference to the dulness of trade, for which they knew Government was not to blame. The working classes, however, would seek a remedy in rather a different direction than that indicated by this Motion. An impression was gaining ground that the practice of free trade had been pushed a little too far by Great Britain where there was no reciprocity. Not that he would advocate retaliation; but some part of the revenue for national purposes might be raised from the produce of those nations which did not receive our produce without taxation. Why should grain from Russia not be subject to some charge which grain from India was not subject to? Why should not grain from the United States be subjected to some small charge? It would not really be a tax upon food, because to a great extent the money would be paid by dealers, and go to lessen the profits of foreign merchants without appreciably raising prices to British consumers. Why should the reciprocity of these countries be an Irish reciprocity, the advantages of which were all on one side? He was not an opponent of free trade—far from it. He thought free trade good in theory; but its practice was carried too far, and free trade without reciprocity was not worth having.

said, he did not expect in the year 1877, with such a good Free Trade Chancellor of the Exchequer, to hear an hon. Member venture to propose the reversion of our free trade policy or to impose taxes upon the produce of other countries because they did not choose to follow our system. If his hon. Friend who brought forward the Motion had done nothing more than elicit the fact that there was in the House an hon. Member who still entertained such reactionary, impolitic, and foolish doctrines, he thought they would derive great benefit from the discussion. He was anxious to say a word in regard to the Motion itself. It was a very interesting subject how far during the great reforms which there had been for the last 30 or 35 years, the result might have been that the incidence of taxation may have been shifted to the extent suggested by his hon. Friend, especially during the last 15 years, and whether it was true that they had relieved, to a certain extent, the upper and middle classes at the expense of the working man. He did not think it would be possible at any length to discuss that question now; but there were one or two figures in regard to it which he should like the House and his hon. Friend to consider before they arrived at the actual conclusion to which his hon. Friend seemed to have arrived. The figures just given might be correct. They had been taken from the computations made by Professor Leone Levi, Mr. Dudley Baxter, and others, as to the comparative incidence of certain taxes; and no doubt, having before him the figures of the Customs and Excise, and the general figures of taxation for the years 1862, 1863, 1864, and the years 1874. 1875, and 1876, the hon. Member for Paisley (Mr. W. Holms), had taken it for granted that the result they worked out was not far from correct. The result of the statement of the hon. Member was stating the figures roughly, that in 1862, 1863, and 1864 the working classes were paying about £22,000,000 out of £63,000,000 then levied by taxation; and that in 1874, 1875, and 1876 they were paying £26,500,000 out of the £65,000,000 then levied; and therefore that the charge upon the working classes had increased by £4,500,000, whereas the charge on all other classes had increased only by £2,500,000. If these figures were a fair representation of the incidence of taxation in these periods it would appear that the proportion paid by the working classes had, to a certain extent, increased; but before they arrived definitively at that conclusion, there was one item of taxation which he thought ought to be well considered, and which he would venture to eliminate from the comparison which his hon. Friends the Mover and Seconder had made. He meant the tax upon spirits. He thought they had fallen into a somewhat loose and inconvenient way of dealing with questions touching intoxicating liquors during the last few years. They had treated wines, spirits, and beer as if for fiscal, sanitary, or other purposes they were practically articles of the same kind. The fact was that beer was now regarded almost as a necessary of life to the poor man, just as wines mere or less were necessary to the upper and middle classes. But spirits were not a necessary of life in any possible sense, and the rule with all those who had tried to lay down sound prin- ciples in our fiscal system had been to levy upon spirits as nearly as high a duty as could well be collected on that article without running the risk of smuggling foreign spirits or encouraging illicit distillation. For that reason he thought they ought to put spirits upon a perfectly different footing from wine and beer, and regard them not as a necessary of life, but a luxury; and he therefore ventured to eliminate spirits altogether from the general class of duties levied on articles of consumption. If that were done the result would be this. The duty levied on spirits during 1862, 1863, and 1864 averaged about £12,400,000, under the two heads of Customs and Excise; but the duty upon spirits in the last three years-1874, 1875, and 1876, averaged no less than £20,700,000. In that short period the consumption of spirits, with the rate of duty comparatively unaltered, increased by no less than £8,300,000. According to the calculation of the hon. Member for Paisley two-thirds of the spirits was consumed by the working classes, and one-third by the upper and middle classes. According to that calculation, speaking roughly, the amount of duty received from spirits having increased by the large sum he had mentioned, the following result was arrived at:—In the first period, 1862, 1863, and 1864, the total amount of taxation paid by the working classes, excluding spirits, was £14,000,000. Whereas in the second period, 1874, 1875, and 1876, the amount paid by the working classes was only £13,000,000. So that except on the item of spirits they were paying £1,000,000 a-year less with an additional taxation of £1,500,000 than they were paying in the former period. He would not say that that was conclusive upon the point raised by his hon. Friend, but it was an important consideration; and if they gave fair weight to it they would have this result—that in the aggregate the working classes had not increased their taxation during the last 15 years. He quite agreed with his hon. Friend that as they had taken the duty off corn and sugar, the time would come when the Chancellor of the Exchequer would be able to take it off tea. At the same time, while entirely agreeing with him, he ventured to state these figures to the House, not by way of disputing the general proposition of his hon. Friend, but to show him that if it was true that the working classes still paid somewhat more than they did 15 years ago, it was because they had added enormously to their consumption of spirits, and the greater part of that consumption was perfectly voluntary.

confirmed the statements of the hon. Member for Birkenhead (Mr. Mac Iver) that the working men of the North of England did not like to have free trade on the one hand and protection on the other. During a period of stagnant trade, which was felt very considerably in the cotton manufacturing districts, a large quantity of manufactured cotton goods found their way into this country front the United States; and, if they cheapened such goods in this country, the home consumers would be benefited. If the English manufacturers returned the compliment by exporting to America, they had to pay a duty of 20 or 30 per cent; but that was under the American tariff over which we had no control. It was when we dealt with our own dominions in India that a ground of complaint arose, for while American productions were admitted into this country free, our own goods had to pay 5 per cent on entering India. What that meant was that a manufacturer for the India market who produced £2,000 worth of goods a-week had to pay £100 a-week, or £5,000 a-year, to the revenue of India. The English manufacturers had a right to complain of this, particularly when the English market was liable to be inundated with goods that were admitted duty free, sent by a competitor that excluded ours by protective duties, in spite of which, however, we were able to maintain our own in the markets of the world.

said, he believed that the working classes paid an unfair proportion of the taxes of the country. The incidence of taxation was a fiscal question, and it had nothing to do with the morality of the spirit duties, or with the amount of spirits the working classes consumed, considered in relation to their social well-being. The working classes consumed spirits, not because they had any undue liking for them, but because they were easily obtained, and the working classes had less time at their disposal than the classes who drank the lighter alcoholic beverages. In savage countries alcohol was first drank in the form most easily distilled from the commonest materials, and it was only as civilization advanced that people began to appreciate wine and beer. We did not sufficiently consider the working classes in our system of taxing alcoholic drinks. Alcohol was necessary to the human economy, although it was abused; and while we complained of intemperance we ought to do all we could by our legislation to enable the working classes to drink beverages of lesser alcoholic strength. Instead of that, we levied our duties upon wines in the most extraordinary manner. Those that were consumed by the higher classes came in at a rate of duty that was not objected to; but we drew an artificial line as to alcoholic strength which kept out the Burgundies that would be most grateful to the people of this country. They would not thank you for what was called "Gladstone claret," and the shops opened for the sale of the miserable light wines had not succeeded. If we levied our Customs duties on a rational principle we should more easily admit natural wines, whether they contained much or little alcohol, and which were not fortified by the addition of alcohol. We should thus let in the wines of Spain, of Greece, and of other countries, which the people of this country would drink with pleasure. If the question was to be argued from a moral and a social point of view, we must give the people the opportunity of consuming the beverages that were provided by nature. The English workman, considering the amount of alcohol in a glass of beer, did not pay one-fifth part of the duty paid on an ordinary glass of whiskey. In Scotland and Ireland the people had not the same facilities for obtaining a good glass of beer as in England. The only fair mode of raising an income from beer, wine, and spirits was to tax each article in proportion to the alcohol contained in it. He objected to the introduction of social and moral views into a fiscal question.

said, he could not help thinking that they were getting a little wide of the Motion before the House. No doubt the question raised by the hon. Member for Paisley (Mr. W. Holms) was important and interesting, and it would be very important, indeed, if the case he had put had been a very strong one, which he did not think it was. It was an interesting question, whether the proportion of the burdens of taxation fell fairly on the different classes of the community? If the hon. Member had raised the general question as to whether the working classes bore an unfair share of taxation, it would have been necessary to raise other issues and controversies, which it would have been rather difficult to bring to an end. The hon. Member, however, said that he intended to raise the narrower question, whether the proportion of taxation was or was not increasing in its pressure on the lower classes. At first sight there was no doubt that the figures brought forward tended to show that the working classes were paying a larger amount of taxation now than they paid 15 years ago; whereas the upper and middle classes must upon the same showing be said to be paying less. But the House must look into the matter a little mere closely. The right hon. Member for Pontefract (Mr. Childers) drew an important distinction, but it was one which must be carried a little further, by proposing to eliminate the question of the amount spent upon spirits. He (the Chancellor of the Exchequer) would rather take the calculations of Professor Leone Levi in the very interesting pamphlet to which the hon. Member for Paisley had referred. He would rather take a different division—of taxes of a direct character—taxes on luxuries, and taxes on necessaries. If it were true that the working classes were paying more than they did 15 years ago, what was the reason? Was it because there had been any new taxes imposed on any one of those articles which they consumed? If the hon. Gentleman could have said that in those 15 years while they had been relieving property they had been at the same time adding to taxes on articles of consumption, there would have been something to be said. But, with the exception, perhaps, of a change in the spirit duties, there had been no additional taxation levied on articles of general consumption. On the other hand, there had been considerable reductions, notwithstanding which the expenditure of the people upon those articles on which the taxes fell had been so largely increased that they produced at the lower rate a very much greater amount of revenue than they did before. It was rather unfair to suggest that a larger amount of the pressure of taxation had been brought to bear upon the people because they were paying more on articles that were less heavily taxed than they used to be. He would admit that within the last 15 years there had been some change, although not a very great one, in the amount paid in the shape of direct and indirect taxes. In the result it came to this—that about 15 years ago the direct taxes were 35 per cent of the whole amount paid. They were now about 30 per cent. The indirect taxes then were 65 per cent, and were now 70 per cent. But this was what was remarkable—in 1862–3, the year to which attention had been drawn, the taxes were divided something in this way-35 per cent were paid in direct taxes, or £22,711,000. These were raised from land, house duty, stamps, and income tax. Then came the taxes on luxuries, including spirits, malt, wine, tobacco, and licences, which amounted to £26,000,000, or 42 per cent. Then came the taxes on sugar, tea, coffee, and other articles, amounting in the whole to £14,700,000, or 23 per cent. While direct taxation had fallen to £19,000,000, taxes on luxuries—such as spirits, malt, wine, and tobacco—had increased from £26,000,000 to no less than £41,000,000, or 42 per cent. During that time the taxes on necessaries had fallen from £14,700,000, to £8,338,000, and instead of being 23 per cent, they were now only 8 per -cent. Sugar now paid no duty whatever. There was a sum of £6,427,000 raised upon it in the year in question; last year sugar paid nothing whatever. Tea, which formerly paid a duty of 1s. 5d. per lb, then raised a revenue of £5,485,000. This year, at the reduced duty of 6d., it produced, in spite of the great increase of population, only £3,733,000. The consumption of tea hadlargely increased, but the amount it contributed to the revenue had been greatly reduced. These, therefore, were not instances of the increased taxation of the working classes. Coffee, which then produced £420,000, now produced only £200,000. Corn then produced £970,000. It now paid nothing, and was not likely to pay anything again. Other article's which then raised £800,000 now produced only £600,000. No addition had been made to the taxation of the people, while the increase of the population amounted to 14 per cent since 1862. These figures showed that the state of the case was something very different from what the figures at the first blush suggested; but no case had been made out of pressure on the working populations. On the contrary, they had been able and willing to spend so much as to bring this amount of revenue into the Exchequer. The hon. Member said that Parliament had been relieving burdens upon property. That was true to a certain extent; but Parliament had also been laying some burdens upon property and on the rateable property of the country and, to a great extent, for the benefit of the working classes themselves. In 1862, for example, there was voted for education the sum of £816,000. In 1876 the amount had increased to £1,881,000. There was an increase of 130 per cent in the expenditure on popular education, which was an expenditure for the benefit of the working classes, and it fell to a great extent on the rates and on the owners of property. There had also been a considerable expenditure on sanitary improvements for the benefit of the poor and the working classes, and it would be found that the chief burden had fallen upon property, although the expenditure had been mainly for the benefit of a particular class. It was not to be lost sight of, also, that wages had greatly increased during these years. If they were asked who paid the wages, they must answer they came out of the pockets of the employers. They were all, of course, glad that the working classes could afford to spend so much money as they do; but it would be rather hard to say because they had advanced to such a position both in respect of numbers and income that their smaller payments on individual taxes produced such satisfactory results, they were therefore over-taxed or had had their burdens increased. Then as to direct taxation. When a sudden emergency arose, and a great call had to be made on the nation—say, for instance, in case of war, or when some great expenditure was necessary, such as the Alabama indemnity—the duties on necessaries or luxuries were not raised, recourse was had to that instrument of finance, the income tax. How unfair, then, was it at this moment to speak of increased burdens on the poor and diminished burdens on the rich, unless, at least, they took into account what had been done by the latter during the last 15 years in contributing to the public burdens. He would not trouble the House further on this matter, though he might speak of the progress made during the last three years since the present Government had the charge of affairs. The hon. Gentleman would admit that they had done nothing in the sense he had suggested, for though it was true they had relieved rates to a certain extent, they had, on the other hand, done a great deal to relieve the taxpayer; by, for instance, the remission of the sugar duties, and by the exemption so freely made last year in favour of the lower class of income taxpayers. And it was not the rich only who benefited by the remission of rates, although they did so, no doubt, mere largely than the poorer ratepayers. In conclusion, he would read the concluding sentence of the able pamphlet of Professor Leone Levi, to which the hon. Member had referred. Having gone through the elaborate calculations he had made he said—

"As it is, I do not think the working classes of the United Kingdom have any reason to complain either of the amount of taxation or of the manner in which it is levied."

Since that time there had been a change made in favour of the working classes, and he thought that the conclusion at which Professor Leone Levi had arrived was one which would be endorsed by the House.

differed altogether from the hon. Gentleman who had introduced the subject, being of opinion that the burdens on the working classes in this country had not been increased, but had materially decreased during the last 15 years. He had risen to protest against the assumption that the spirit duty was to be regarded as a tax upon immorality. There was no more immorality in the consumption of spirits than there was in the consumption of bread, unless taken in excess. He was sure the Chancellor of the Exchequer regarded the spirit duty as a proper channel of obtaining revenue. He could not tell, however, why the spirits which were used in France, Portugal, or Spain to fortify wine should pay so low a duty on entering this country as 4s. or 6s., while the poor man in this country had to pay so high a duty as 10s. per gallon for the spirits of which he partook.

wished to ask the Chancellor of the Exchequer, as he had done on former occasions, in what way he proposed to provide for the increased charge in reference to Army promotion which would have to be met? When he said he had asked the Question before he did not allude to the year when the Chancellor of the Exchequer succeeded to the surplus, which enabled him to abolish the sugar duties to which he had so properly alluded, but rather to the year following.

I said on that occasion I looked to the growth of the revenue to meet the additional charges.

That had not been explained in the right hon. Gentleman's Budget speech, and when he asked the same question in another year his curiosity could not be satisfied. Would any portion of the charge to which he now referred have to be met this year? If so, from what source did the right hon. Gentleman hope to meet the charge? For his part, he could not but think that the right hon. Gentleman was running matters already a little too fine, having managed to secure a small surplus by squeezing together every item of miscellaneous expenditure. While he did not at all say that the Chancellor of the Exchequer ought to take other measures than those he had submitted to the House, he hoped the right hon. Gentleman would be in a position to satisfy them that his estimates of revenue were likely to be realized in the present year. The Chancellor of the Exchequer would, he thought, admit that the position, so far as financial prospects were concerned, was not free from causes of anxiety, the depression in trade continuing to be a very serious matter. He trusted with regard to the miscellaneous revenue that either the Chancellor of the Exchequer or the Secretary to the Treasury would give a fuller explanation than had yet been given. It would be interesting to learn, not in a general way, but item by item, how the revenue of 1877–8 would compare with that of 1876–7. There was another point on which he trusted we should have mere explanation. One source of increased revenue was from the capitalization of pensions contributed by India. What was capitalization of pensions as a means of revenue? He could only conceive it to be that India paid down a lump sum, and that in consideration of that sum we were to pay pensions over a number of years. If that were so, it was perfectly evident that we were using up a valuable resource, for which we should have to pay hereafter. As to the estimate of revenue from income tax for the coming year, since the arrears of the tax were to be taken at 3d. instead of 2d., there ought to be so far something to the credit of the country. But he looked in 'vain for any evidence of the effect of the additional penny in the first fortnight of the year. In the accounts the receipts of the tax were not materially larger than in the corresponding period last year. The first weeks or months were very important, because it was in them that the arrears were calculated, The Chancellor of the Exchequer, indeed, had warned us that we were not to pay too much attention to the first fortnight of the year. He could understand that warning when he saw the remarkable figures presented yesterday, from which it appeared that there had been an increase of £400,000 in the Excise, and of £100,000 in the Customs. The reason for that increase was that before the Budget there was a considerable apprehension that the spirit duties might be raised, and consequently in the fortnight before the statement of the right hon. Gentleman there was a tremendous rush to take spirits out of bond. He was told that in Glasgow the whole street was blocked up from a desire to escape this danger. He was sure the Chancellor of the Exchequer would admit that nothing could be said for the Budget from these figures. Then as to the prospects of the income tax for the current year, it was to be feared that from the continued depression of trade the revenue it would yield would be less than that of last year; inasmuch as instead of the tax being levied on the average profits of one good, one indifferent, and one bad year, it would be levied on the average profits of one indifferent and two bad years. Without wishing to criticize the estimates as regarded the Excise and Customs in any captious spirit, he felt bound to ask whether this country would continue to produce on the same scale as before, and whether its consuming power would remain undiminished? His right hon. Friend the Member for Pontefract (Mr. Childers) had already pointed out how serious the falling off had been in the consuming power of the country during the last quarter of the past year; and he was anxious that hon. Members who represented commercial constituencies should get up and say whether they saw a fair prospect of a revival of trade. He understood that there was a gleam of hope to be seen in the cotton trade in consequence of the price of the raw material having fallen to a low point. He would ask in what direction we might fairly look for an increase in our export trade? As regarded our trade with America, it was scarcely a promising fact that four great Atlantic Steamship Companies had laid up half of their fleets in consequence of the falling off in the trade, little or no profit resulting from running their remaining vessels. On the other hand, it was true that America had purchased a larger amount of sugar and tea than usual, but that was merely to supply the deficiencies in their stocks, which had fallen to a very low point. There were no signs, therefore, of a revival of trade with that country. Well, then, what should they say of France? The elasticity of the revenue of France after the great sufferings she had endured had elicited the admiration of Europe; but in France even trade was rather declining than reviving. Then as to Germany, she had not derived any advantage in the sense of increased commercial prosperity from the £200,000,000 indemnity she received from France, and for some time the condition of trade in that country had been deplorable. Should they look, then, to India for a revival of trade? India, too, had re- cently been passing through great calamities; and taking into consideration the further trouble of the silver question, he thought that would be a sanguine man who would say there was to be a revival of trade in India. As regarded Russia and the Levant, the clouded prospects of the East would not enable us to look with much hope in that direction. But even in the event of the threatening clouds to which he had referred passing away, we could not hope for an immediate revival of our foreign trade, or of the consuming powers of our own people, inasmuch as it always took a year or two to get rid of the effects of a great depression of trade. The right hon. Gentleman the Chancellor of the Exchequer had caught up the argument that there had been a reduction of pauperism; but it was a curious fact that pauperism generally fell as commerce was falling, and that when there was less pauperism there was less trade. He was told that the state of trade was very unfavourable throughout the country; the small shopkeepers were not paid for the goods they sold. Nor was this gloomy state of things likely to be counterbalanced by any speedy revival of business in the higher branches of commerce. He had never taken the line of a "croaker;" but he thought these were facts which ought to be taken into serious consideration. As for the condition of the wage-earning classes it was positively startling. He found that in the great collieries and iron districts men, who in 1873 were earning 7s. 4½d. a-day, were now receiving 4s.; while unskilled labourers, who had been paid 4s. in 1873, were now reduced to 2s. 11d. In the Cleveland iron works in 1873, the earnings of miners averaged 7s.; in 1877, they stood at 4s. 10d. The ironworkers' wages had fallen 37½ per cent. Looking at the matter broadly, it might be said that within the last few years there had been an average fall in wages of nearly 50 per cent, which could not fail to tell seriously upon the Excise and Customs returns. The case which had to be met was this—the number of men employed was smaller and the wages they received were lower than before. Was there any hope from the agricultural districts as to the increase of wages and profits made by farmers and landlords? There appeared to him to be no more hope from that direction than from any other to which he had referred. Under these circumstances he felt bound to ask, therefore, whether the House could accept the figures of the Chancellor of the Exchequer with its accustomed confidence? Where were the causes that might be expected to produce a revival of trade? He confessed he saw none in the great countries of Europe. On the contrary, the state of Europe could inspire nothing but gloomy forebodings. In reference to trade he might be permitted to remark that the depression we now witnessed in various countries was not entirely duo to causes beyond the control of the statesmen and population of those countries. America had tended to her own disaster and ruin by acting on false principles of political economy. The great military Powers of Europe wore tending to prolong the existing state of depression by their great armaments and expenditure. To what great cause could we attribute the present depression of trade? He was afraid that to a great extent Europe and America were themselves responsible for it. The prolongation of political uncertainty during the past year had tended greatly to the continuance of this disastrous state of things. Were we ourselves sure that we were doing all we could to remove the causes of this depression? Were any other causes at work which might prevent the revival of trade? The very great expenditure of the country certainly affected us all, and diverted a certain portion of capital, and the country had undeniably increased its expenditure. He brought no -charge against the Government, and did not call attention to the matter with any such object; but the increased expenditure which we had lately encouraged might tend to oppress trade and absorb capital. We were departing, but he did not say wrongly, from that old maxim which was generally held to be sound in trade. We wore endeavouring to surround many great trades with safeguards and interfering with them in various ways. That was being done not only in this country, but in other countries; but whilst this and other countries were so legislating, the working classes were also legislating through their trades unions and in other ways, and laying down new economical doctrines in Europe and in England, from which he hoped the country would be rewarded commer- cially, socially, and educationally; but we must be prepared for a disappointment as regards the near revival of trade. It was not amiss, therefore, that on occasions like the present, when we had a falling revenue and general depression of trade, we should try to realize to ourselves the steps we were taking from time to time, and seriously consider their bearing upon the prosperity of the country. The Chancellor of the Exche- had invited hon. Members on the Liberal side of the House to assist him to resist expenditure. They would do so on one condition—that when they came to his assistance he would not look round him at his Followers and accept or reject that assistance according to his prospects of being beaten or victorious. The right hon. Gentleman had, he admitted, been very orthodox in the principles of his Budget; but he was not always so firm in their application as Members on the Opposition benches could wish. Nor could he agree with what the right hon. Gentleman had said on the subject of our increased expenditure. He did not believe that it was nothing more than the shifting of burdens from one side to the other. He entirely admitted that the Exchequer had to pay so much more; but he did not perceive that the rates had to pay so much less. There was no diminution of the aggregate of the rates, and the rates would always increase so long as the Chancellor of the Exchequer had to take from the Imperial Exchequer to ease the burden without reforming the local spending bodies. That was the point which the Liberals had always urged. The charge against the Government was that, though they might wish to resist expenditure, they did not attempt to carry out reforms at the same time by which economy would be produced. The Government had a great deal to answer for if they did not get that support with regard to economy which the Chancellor of the Exchequer invited. Economy had been discredited, if not by the Government, certainly by the Conservative Party; they had said so much against economy that the Government had refrained from producing economical schemes. ["No, no"] He did not know one they had produced, and lie inferred it was because they feared they would not be able to pass them; but, if there was to be no opposition, how was it that, during the time they had been in office, they had not attempted in some way to counterbalance an increasing expenditure? He demurred to the Government saying that it was compensated for by a relief in rates, because the form in which it was given prevented the diminution of the rates themselves. What was urged on Her Majesty's Government was that in times when the revenue was not elastic and the expenditure was heavy, it was absolutely necessary that they should cast about and see whether there were other directions in which economies could be effected, and whether by reforming the administrative bodies they would not be able to produce some countervailing advantage on the other side. There was on the part of the Government au insufficient determination of purpose with regard to economy. If he would give the Opposition the opportunity of assisting him to check expenditure by a reform of the spending bodies, he would find every possible disposition on their part to give him that aid. The First Lord of the Admiralty, when he introduced the Navy Estimates, pointed out the immense reduction in the cost of iron and coal and other articles, the purchase of which formed so large a part of those Estimates; and on this very account, if those Estimates were at the point they were at the time of the former Government, they would be relatively higher, because in 1873 fabulous prices had to be paid for coal and iron. [An hon. MEMBER: The Army.] There had been an increase in the Army Estimates, although they were largely affected by the same considerations; and, without going into details, it might be assumed that the present Government were at a great advantage as compared with their Predecessors in their financial operations. The Chancellor of the Exchequer appeared to be ambitious in regard to the paying off of public debt; but he had paid off only £5,000,000 a-year, as compared with £8,000,000 a-year paid off by the late Government. The right hon. Gentleman had himself stimulated these comparative observations; but in making them he did not desire to divert attention from the main point—the satisfaction it would afford them to be taken a little more into the confidence of the right hon. Gentleman with regard to the evidence on which his Estimates were based.

said, he thought it right to reply at once, as he should have other opportunities of answering questions. As to much that had been said by the right hon. Gentleman, he was at a loss to see what his object was, for, though he said he was not a croaker, his language sounded rather like croaking. [Mr. GOSCHEN: I said that I was not an habitual croaker.] Well, if hon. Gentlemen would look back their minds upon past Budgets, they would find that on more than one occasion fears had been expressed that our Estimates would not be fulfilled. He did not complain of anyone getting up and croaking. The right hon. Gentleman had good justification for the course which he had taken. There was no doubt whatever that it was one of the characteristics of Englishmen that they liked grumbling. They took a gloomy view of their own affairs, and a comfortable croaker was a very acceptable friend. But the right hon. Gentleman and his friends had special reason for croaking, because they had just experienced a great disappointment. They supposed the Government would bring forward a gloomy Budget and propose additional taxation, and although hon. Gentlemen opposite would have been very sorry to have seen the Government plunged in such a difficulty, there was something in the misfortunes of our best friends that did not leave us without consolation. However, he did not complain of the course taken, because he remembered sitting on the Opposition bench and being lectured for venturing to doubt the Estimates of a Chancellor of the Exchequer to whose authority ho did not aspire. It was said—"You surely cannot undertake, with your limited means of information, to set your judgment against that of the responsible Advisers of the Crown." But he did not intend to repeat that form of lecture. Although he was prepared to answer any questions that might be put to him, he trusted that the House would not fall into the inconvenient practice of insisting that these Budget Estimates should be thoroughly satisfactory to every Member. Were they, for instance, prepared to relieve the Chancellor of the Exchequer and the Heads of Departments of their proper responsibility, or would they not rather continue to hold the Government responsible for the general correctness of their Estimates? Those Estimates were prepared from the fullest information the Government could collect, and it was with the most earnest feeling of responsibility that they laid them before the House. To have a vote, on the other hand, to determine whether the House ought to adopt these Estimates, would be a very unfortunate practice. The Budget of the present year was particularly strong in one respect. If he had been proposing any great financial changes, either in the way of addition or diminution of taxation, it might be right to call upon him to substantiate his Estimates more in detail than usual. He was, however, proposing to leave matters precisely as he found them. Was he to understand that the right hon. Gentleman objected to that course? Did he desire to force upon the House any new measures of taxation? He (the Chancellor of the Exchequer) had before him the detailed reasons for arriving at the amounts which were given in the Budget Estimate. In the first place, with regard to Excise, malt was one of those branches of the revenue on which it was difficult to arrive at a conclusion, without taking several considerations into account. It had been the custom to estimate the revenue from malt upon the actual produce of the last three years, and the average annual yield of those three years came to £7,800,000. That was the amount malt was estimated for in the current year, and that was £220,000 below the produce of last year, which was a peculiarly favourable one. It was to be borne in mind that the population was steadily increasing, and he compared this year not with good years, but with average years, some of which were bad. The right hon. Gentleman might say that things were getting worse rather than better, yet there was no justification for the anticipation that the consumption of malt, which had been continually increasing consumption, was going suddenly to decrease. Then, it had been taken into account that the traffic returns for some of the main lines of railway had shown in the week ending March 25 a very considerable increase, as compared with the corresponding week of the previous year. With regard to the spirits, again, the average annual yield of the last three years had been taken. It used to be the practice in estimating the revenue from that source to take the average of several previous years; but the plan became mere and more sanguine until it came to be the case that the anticipated growth of the revenue was discounted. Looking to the state of things, he had not only returned to the old practice, but had gone beyond it, for, after taking the average of three years, he had made a considerable deduction from it. In the last six weeks or so there had been no falling off as compared with the previous year; and with regard to the falling off during the past year, it must be borne in mind— that the winter had been a mild one, and that this circumstance had some effect on the consumption of spirits. Then the year 1877-8 would have two more working days than the previous year, and this fact made a sensible difference, since the daily average duty on spirits amounted to at least £40,000. These were small matters, and perhaps he ought not to have troubled the Committee about them; but they formed part of the answer he had to give to the challenge from the other side, and they served to show that these Estimates had not been cooked in order to produce a desired result. In so far as pressure had been put upon the heads of the great Revenue Departments, the object of it had been to get them to keep their Estimates down. With regard to the income tax, an unusual step had been taken—the assessment upon which the whole of the calculation was founded had been taken with no advance at all for increasing wealth. He believed that was an entirely unprecedented course. It had been found from year to year, even in bad times, that there had been a steady increase going on in the yield of the income tax. Taking into account, however, that matters generally were unsatisfactory, and that, in particular, the state of trade was not encouraging, he had taken the assessment of last year as the basis of his calculation. Well, the question had been raised by the right hon. Member for Pontefract (Mr. Childers), with regard to that tax, whether they had not been pressing into the Exchequer a great deal of income at the end of last year which, under ordinary circumstances, would have belonged to the present year—in other words, whether they had not been robbing 1877–8 for the sake of bringing the revenue of 1876–7 to the highest possible point. He could assure the right hon. Gentleman that that was not the case. Owing to the circumstances that last year the Income Tax Act was late in passing, and that there was a new assessment and an entirely new set of exemptions, which made fresh calculations necessary, and thereby cast much additional labour on the collectors, the collection of income tax fell very much into arrear. Four-fifths of the tax ought to have come into the Exchequer before the close of the year, and not a farthing more than that had actually been received. Pressure had certainly been used during the last two or three weeks to get in all that belonged to the year; but he could not see that there was anything wrong or suspicious in that, or anything at all open to observation. Really, if they were to be criticized in that manner, he must say criticism was pressed a little further than it should be. He did not think there was anything in the conduct of the financial business of the country since they had had the honour of holding these seats that should give to their Opponents or to anyone a right to suppose that they were trying to keep back the truth from the House. He had never shrunk from telling the exact truth, and he did not think it was fair to draw conclusions from any insufficient data that they were not making an honest and complete statement to the House. With regard to miscellaneous revenue, and especially to the capitalizing of pensions, the right hon. Gentleman had no doubt accurately described the case. He was correct in saying that it was carrying to revenue what, under a strict system of bookkeeping, ought to be charged to capital. He was right also in saying that it was not a practice introduced by them. It had been in force since 1851, and was usually adopted. But there were many things in our system of Exchequer balances which might on strict commercial principles be looked at differently from what they were. They all recollected how the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) had brought a debt from Spain into the revenue of the year. He admitted there were still other matters open to amendment. But he said this—if they were going to be mere strict in revising their accounts and giving all receipts to the account of capital, they had a fair right to do so; but they ought also to consider whether some of the charges to annual expenditure ought not also to be so treated. He would not trouble the Committee by going through the Customs account as he had done with the items of revenue. He had a justification from the Chairman of the Customs which went quite into detail on the subject. He justified his Estimates, not merely on his own observation as to the state of trade in different trade circulars that came to his knowledge, but from the results of inquiries at all the principal ports of the country by officers in the employ of the Customs. Each of those officers was desired to give information as to the state of the principal trade of the place—the state of employment, wages, and pauperism—which had all been taken into account, and the fair conclusion drawn from them as the leading officers of the Customs were in the habit of framing their Estimates. Nobody could be certain on these matters. It was impossible to prophecy that they would not be disappointed, as they had been disappointed over and over again. But, if having framed their Estimates with more than usual caution, they found themselves in the position of a reasonable surplus of £250,000, it would have been most unjustifiable to come to the House and ask for additional taxation. If the times were bad, it was rather unwise to make things worse than they were. The Government were told that their Predecessors had paid off a great deal mere of the Debt than they had done; but how had they paid off more? Why, by putting 2d. on the income tax, when it was not wanted. If the present Government had persuaded the House to give them an additional 2d. of income tax, they could easily have paid off mere Debt. Then they were asked—"Do we know the worst? What about the scheme of Army Promotion and Retirement?" He could only say that the Report of the Committee on that scheme was still in the hands of the Secretary of State for War. It was receiving at his hands that consideration which it was necessary that it should receive, and when it came fairly under the consideration of the Treasury it would also receive the full consideration of that Department. That was not a matter to be dealt with in a hurry, and they could not at present lay any figures on the Table in regard to it. If they were to say now at random that the scheme would cost a very large sum of money, they might be exciting expectations which it would afterwards turn out unwise to have excited; and, on the other hand, if they said it would cost a very small sum, they might be told that they were going to disappoint the just expectations of the officers. They, therefore, could not make their proposals until after full consideration, and it was not at all necessary or proper at the present moment to include that scheme of Army Promotion and Retirement in their financial arrangements. But, after all, what was that scheme? It was a scheme which was rendered necessary by the measure adopted by the late Administration, and for which that Administration took great credit to themselves—namely, the abolition of Purchase in the Army. No doubt that scheme was the legitimate child of that measure, and right hon. Gentlemen opposite appeared to be convinced that that legacy which they had left to their Successors would be of enormous dimensions. Was not that an illustration of some of the charges brought against the present Government, that it was increasing the public expenditure? Were they really the persons who were responsible for everything which appeared as an increase of that expenditure, or might they not turn round and say to their Predecessors" You have left us these legacies; we have done all that we could do honestly and fairly to carry out your measures, and you must remember that in this matter we are not our own masters, unless we were to think of turning back the stream, which of course we do not?" The Government had it constantly thrown in their teeth that they were an extravagant Government, who were continually increasing the public expenditure. He entirely denied that assertion, and although the expenditure had been increasing for a good many years, and during the last two or three, owing to causes perfectly well known to the House, such as the additions made to various Services, the Education Vote, and other matters, yet he challenged a comparison between the amount which, after all, they had taken out of the pockets of the taxpayers and that which had been taken out of their pockets by the preceding Government. The amount ought to be made known to the country. In the five years during which right hon. Gentlemen opposite were last in office the total amount taken from the people in the form of Customs, Excise, Stamps, Income Tax, and the House Duty—the five great heads of Revenue — was £325,000,000; that was to say, an average of £65,102,000 for each of the five years. Well, in the three years during which the present Government had held office, the corresponding sum taken out of the pockets of the taxpayers was £195,615,000, being an average of £65,205,000. Therefore, the real difference between what they had taken from the taxpayers and what had been taken by their Predecessors was measured by the sum of only £103,300. And that was not due to any increase in the burden of taxation, but to the increase of the population, as he had explained in speaking on the Motion of the hon. Member for Paisley (Mr. W. Holms). The present Government had taken off taxes and had relieved, and sensibly relieved, local rates. The rates had to some extent increased, but why? Because Parliament had thrown some extra services on them. The police were made more efficient, and therefore somewhat mere costly. Again, more expenditure was now thrown on the rates for sanitary purposes. He agreed with the right hon. Gentlemam the Member for the City of London (Mr. Goschen) that this expenditure, commendable as it might be from a social point of view, was, from an economical point of view, burdensome to the country. But the Government hoped and believed that these measures on the whole had been taken for the development of the resources of the country, and that in the course of a very short time some good fruit would be shown for the money which had been expended. Whether that should be so or not, the expenditure had been undertaken with good objects, and he would venture to say, with due regard to economical considerations, he did not think the Government were at all open to the charge of "simply shovelling out money." Some of these measures would, in his opinion, introduce improvements into the administration of the country, but that was a thing which it would take many years to work out. It was a work, however, they were prepared to go on with; but they did not admit the justice of the charges which the right hon. Gentleman had brought against them. He had gone at some length into these charges, because the Government had nothing which they desired to conceal. He did not, however, think it a very convenient course for the Committee that they should be put to the proof of their Estimates, and be required to show how it was that they estimated so much for spirits, so much for malt, and so on. Did the House wish to relieve the Government from responsibility in the matter? This was his fourth Budget; there had not been as yet a deficit, and he trusted that the year commencing might end as satisfactorily as the preceding years.

regretted the lateness of the hour for discussion on this subject. He thought that the right hon. Gentleman was needlessly sensitive to criticism, and defended the course taken by his right hon. Friend (Mr. Goschen). He protested against the supposition that any portion of the Opposition would have been glad to see a deficiency, or an increased imposition of taxation. The right hon. Gentleman asked whether they meant by their criticisms to relieve the Government from responsibility? Not at all, they distinctly held the Government responsible. But were they on that account not entitled to make observations on the Estimates, to put questions to the right hon. Gentleman, and to ascertain whether he had taken into consideration the abnormal circumstances of the country, the stagnation of trade, and the political condition of Europe. The right hon. Gentleman asked why did not hon. Gentlemen opposite reduce the expenditure? But the right hon. Gentleman must know very well that a reduction of the expenditure could only be effected by the strong hand of the Government exercising a vigilant control over the various Departments. Then, on the subject of Army Retirement, the right hon. Gentleman said he was not in a position to give particulars. His right hon. Friend did not ask for particulars, he only desired to know whether a scheme would be submitted which would bring a charge on the the revenue of the year, and if so, what were the prospects of meeting it? He congratulated the Chancellor of the Exchequer on having produced for the first time, since the days of Sir Charles Wood 28 years ago, a Budget in which no alteration was made one way or the other; but, considering the circumstances of the country and the state of Continental, affairs he stood in jeopardy every hour. The Chancellor of the Exchequer had an estimated margin of £225,000, which in ordinary circumstances might be considered not unreasonable; but he had three of the worst adversaries which a Chancellor of the Exchequer could have to encounter—namely, a stagnant, if not a falling revenue, a rising expenditure, and spending Departments too strong for his official hand to control. It was stated by the Government in mitigation of their enormous expenditure. of nearly £79,000,000, that only £65,600,000 came out of the pockets of the taxpayers. Expenditure was not disposed of by showing that we had other sources of revenue than taxes. On the Chancellor's method of calculation, however, the amount contributed by the taxpayers to the expenditure of the late Government was only £60,000,000. In connection with that subject he wished to know where the Chancellor of the Exchequer obtained his additional £13,400,000 from. The right hon. Gentleman had stated in his Budget speech that this amount was derived from the Post Office, the Telegraphs, the Crown Lands, and the Miscellaneous Receipts. On adding up these various items, however, it would be found that they only accounted for £12,650,000. When the right hon. Gentleman first came into office he said that there would always be Supplementary Estimates, to the extent probably of £300,000 or £400,000 a-year; but in his last financial year they amounted to £976,000, in the last but one to £1,180,000, and in the year before that to £1,410,000. In not one instance had he succeeded in keeping the expenditure within the Budget Estimates of what it would be. Such finance showed both absence of foresight and want of firmness at the Exchequer. It was impossible that the House of Commons could watch over and control the expenditure of the country with this system of gigantic Supplementary Estimates; and it would be necessary to establish a Finance Committee for the purpose of watching over the shifting estimates of receipts and expenditure month by month. He believed the gain upon the new savings banks was somewhat larger than the loss upon the old savings banks, which was put upon the other side of the account. He wished to congratulate the right hon. Gentleman as to the statement he made the other night as to the success of the new scheme of Treasury bills.

contended that the amount to be raised by taxes for the current year did not compare so unfavourably with past years as the right hon. Gentleman (Mr. Dodson) had implied. In regard to the amounts which were brought into both sides of the account, they amounted to something like £1,000,000. The right hon. Gentleman had spoken with some severity as to the large Supplemental Estimates introduced by the present Government; but this was to some extent due to the earlier time at which it was necessary to prepare the Civil Service Estimates, but last year the actual expenditure only exceeded the original budget Estimate by £81,000, which was not, on the whole, an unduly large amount. Some stress had been laid upon excess Estimates. He confessed they were annoying to one in his position, and in 1875 he had to face one of £437,000, which the present Government was not reponsible for, and which was attributable to Departmental deficiencies. The present Government might claim credit for having been able to discharge liabilities belonging to the late Government. He attributed no blame to them; they did their best to keep the Departments in order; but the fact remained that in the Telegraphs, the Post Office, and the Navy, charges were postponed amounting to no less than £437,000, which properly applicable to the year 1873–4, became a charge on the year 1874–5.

moved that the Chairman report Progress.

appealed to the Committee not to prolong the discussion at this stage.

said, it was not easy to advise the Committee as to the course it was proper to take on this Motion, because he admitted that a somewhat unusual course had been taken by the Government. The debate came on at a late hour, and the right hon. Member for the City of London (Mr. Goschen) having addressed the Committee, the Chancellor of the Exchequer, instead of taking the usual course and waiting to reply to observations that might be made, rose immediately and spoke at considerable length, and those on the Opposition side who wished to address the House had not had a favourable opportunity of doing so. At the same time, he was sensible of the position of the Government, and he thought some consideration due to them on account of the unexpected and unusual difficulties that had arisen in the way of progress with these Resolutions. If the Chancellor of the Exchequer could hold out any hope that Members would have an opportunity of renewing the debate, an arrangement might be come to. He could not sit down without saying one word upon the statement of the Chancellor of the Exchequer, who had taken very unnecessary exception to the remarks made in a very statesmanlike speech by his right hon. Friend the Member for the City of London. If a Member of that House, who was universally recognized as a competent authority upon such matters, expressed his opinions in regard to the finances of the country, and those opinions did not happen to coincide with those of the Government, they had no right to brand his opinions as the croakings of a disappointed Member of the Opposition.

said, there had been an admirable opportunity of discussing the Budget on the night it was introduced. He wished there had been more opportunities for financial discussion; but the House would, he hoped, bear in mind the great amount of time occupied in discussions of measures which were not usually discussed at such length. This Resolution if passed to-night must be reported, and further occasions of discussion would also arrive on the various stages of the Customs and Inland Revenue Bill. It was not, therefore, unreasonable on his part to ask the Committee to pass the Resolution, which was merely one for renewing the tea duty. After a short conversation,

said, that if the Resolution were now agreed to, and if it were possible to get the Bill printed in time, he would get the Resolution reported this day (Friday), and move the second reading on Monday. If the Bill could not be printed in time, he would take the Report on the Resolution the first thing on Monday, which would equally serve as an opportunity for raising discussion.