SIR WILLIAM THOMSON. LL.D. D.C.L. PROFESSOR OF NATURAL PHILOSOPHY IN THE UNIVERSITY OF GLASGOW FROM A PHOTOGRAPH BY FERGUS BROTHERS. GREENOCK. BLACKIE & SON, CNDON, GLASJCW & EDINBURGH. GLADSTONE'S BUDGET-SCHEME OF 1860. of all persons whose property was above £100, which according to the estimate based on parliamentary returns would, he said, yield a revenue of about £27,000,000, and thus more than cover the deficiency caused by the proposed reductions. Such a scheme of course excited considerable attention, and though this is not the place to consider its merits or demerits, it could scarcely have been passed by without notice, as illustrating the extent to which financial questions were then being discussed. 331 in which the chancellor of the exchequer introduced his financial scheme, nor in all that speech which included an elaborate statement did he once falter or fail to hold the deep interest of his audience in the lucid explanations which he put forth. "Public expectation," he said, "has long marked out the year 1860 as an important epoch in British finance. It has long been well known that in this year, for the first time, we were to receive from a process not of our own creation, a very great relief in respect of our annual payment of interest upon the national debt-a relief amounting to no less a sum than £2,146,000-a relief such as we never have known in time past, and such as, I am afraid, we shall never know in time to Besides that relief, other and more recent arrangements have added to the im come. £12,000,000 a year, levied by duties on tea and sugar, which still retain a portion of the additions made to them on account of the Russian war, is about to lapse absolutely on the 31st of March, unless it shall be renewed by parliament. The Income-tax Act, from which during the financial year we shall have derived a sum of between £9,000,000 and £10,000,000, is likewise to lapse at the very same time, although an amount not inconsiderable will still remain to be collected in virtue of the law about to expire; and, lastly, an event of not less interest than any of these, which has caused public feeling to thrill from one end of the country to the other-I mean the treaty of commerce, which my noble friend the foreign minister has just laid on the table Before parliament met in 1860 Mr. Cobden's mission had been fulfilled, and the approaching financial statement of the chancellor of the exchequer was looked forward to with no little interest, and with some anxiety, for it was known that the commercial condition of the country-notwithstanding some disturb-portance of this juncture. A revenue of nearly ances, one of the principal of which was a long and obstinate strike of the workmen employed in the building trades-was such as to warrant a wide and comprehensive scheme. In these respects Mr. Gladstone was not likely to disappoint the public expectation. For two or three days the financial statement had to be postponed, because of a temporary illness from which he was suffering; but on the 10th of February he walked into the house without any apparent traces of his recent indisposition. Every seat was occupied, every avenue crowded, and he was received with cheering from all parts of the house, after which every sound was hushed, and the whole assembly listened with almost breathless attention, for it was known that the revenue from customs, excise, assessed taxes, and the post-office had surpassed that of any previous year by £2,023,000; that the imports and exports had increased also beyond those of any other period, amounting to nearly £335,000,000; that pauperism had diminished, wages were high, employment plentiful, the funds steady and at a good figure, the rate of discount low, and money abundant; and that the budget must derive peculiar importance from the changes which would result from the commercial treaty concluded with France. There was neither doubt nor hesitation in the manner has rendered it a matter of propriety, nay almost of absolute necessity, for the government to request the house to deviate under the peculiar circumstances of the case from its usual, its salutary, its constitutional practice of voting the principal charges of the year before they proceed to consider the means of defraying them, and has induced the government to think they would best fulfil their duty by inviting attention on the earliest possible day to those financial arrangements for the coming year which are materially affected by the treaty with France, and which, though they reach considerably beyond the limits of that treaty, yet, notwithstanding, can only be examined by the house in a satisfactory manner when examined as a whole." Mr. Gladstone went on to state that the financial results of the year, so far as the receipts were concerned, were eminently satisfactory. The total estimated revenue was £69,460,000; the actual amount produced was not less than £70,578,000. The expenditure had been £68,953,000. Under ordinary circumstances this amount would have left a surplus of £1,625,000; but there had been additional charges, arising out of the expedition to China, in the army of £900,000, and the navy £270,000. Then came the effect of the treaty with France, for which there was to be deducted from the customs £640,000. The total was £1,800,000, which would have placed the revenue on the wrong side of the account; but in a happy moment, Spain, "not under any peculiar pressure from us, but with a high sense of honour and duty," had paid a debt of £500,000, of which £250,000 would be available at once, so that a small surplus would still be left on the total revenue. With regard to the interest of the debt in the coming year, the estimated charge was £26,200,000, leaving £2,438,000, or more than the annuities which were about to lapse. The consolidated fund charges would be £2,000,000; the army, militia, and the charge for China would be £15,800,000; the navy and packet service, £13,900,000, or altogether £29,700,000, being an increase of more than £3,000,000 on the military estimates of the preceding session. The miscellaneous estimates were £3,500,000; the revenue departments, £4,700,000 - the grand total being £70,100,000. Coming to the estimate of the year in perspective, Mr. Gladstone said that, taking the imports as they then stood, it was: Customs, £22,700,000; excise, £19,170,000; stamps, £8,000,000; taxes, £3,250,000; incometax, £2,400,000; with the post-office the total being £60,700,000; thus leaving a deficit of £9,400,000, and this without any provision for £1,000,000 coming due on exchequer bonds. Even if the existing war duties on tea and sugar should be retained the deficit would still be £7,300,000. This would require an incometax of 9d. in the pound, there being no remission of taxation in the trade and commerce of the country; but the £9,400,000 would require an income-tax of 1s. in the pound. He knew that it might with justice be demanded of him, "What has become of the calculations of 1853?" His answer was, that in that year it was reckoned there would be gained by taxes then imposed between that and the present time a sum of £5,959,000, which was about the sum that the income-tax would have reached at 5d. in the pound in the present year. The succession duty had failed to produce what was expected; surpluses had been stopped by the intervention of war; and there was, moreover, the charge for additional debt incurred by the Russian war, which amounted to £2,920,000. The alteration in the spirit duties, however, had added £2,000,000 to the revenue; and the revenue generally had been so prosperous that if the expenditure had not rapidly increased the amount calculated in 1853 would have been realized. It was a constantly increasing expenditure which had destroyed the calculations of 1853. The chancellor of the exchequer then brought forward statistics showing how much richer the country was than in 1842 and 1553. In the former year the annual income of the country was £154,000,000; in 1853 it had risen to £172,000,000; in 1857-58 it stood at £191,000,000, and in 1859–60 at £200,000,000. The increase had occurred in every class in the country, and in the agricultural class most of all. In 1842 the gross expenditure of the country was £68,500,000; in 1853 it was £71,500,000; in 1859-60 it was £87,697,000; these totals, including the local expenditure as well as that of the state properly so called, showing a gradual but large increase. The comparative growth of wealth and expenditure was therefore wholly unequal, and it showed the course which the country was pursuing--a course with which he was far from being satisfied. But there was a deficit of £9,400,000 to be met. He had shadowed out a budget by which, with an income-tax of le. in the pound, their object could be achievedi, with a relief to the consumers of tea and EFFECT OF COMMERCIAL TREATIES. sugar to the extent of the remaining portions of the war duty; or, there was a more niggardly budget, which would keep up the duties on tea and sugar, yet still leave the country liable to an income-tax of not less than 9d. in the pound. It was his intention to apply in aid of the expenditure of the year a sum of not less than £1,400,000, which was no part of the proposed taxation of the year, but which would be obtained by rendering available another portion of the malt credit, and likewise the credit usually given on hops. The heavy income-tax which had been borne would not have been borne as it had been, but for the strength which the country had derived from the recent commercial legislation, and the confidence of the nation in the integrity and wisdom of Parliament. 333 from 15s. to the level of the colonial duty of 88. 2d. per gallon; and that on foreign wine (not merely French) from nearly 58. 10d. a gallon to 38. per gallon, and in 1861 still further, in reference to the strength of the wine-the lowest duty being 18. per gallon; the charge on French articles liable to excise duty in England to be the same as the English duty. The treaty was to be in force for ten years. Mr. Gladstone denied the charge of subserviency to France brought against the treaty, and said that he was aware it would be held to bear a political character. He pointed out that this was not alone an union of the governments, but that it was hoped it would be an union of the nations themselves, and that their being in harmony would be a conclusive proof that neither of them could be engaged in meditating anything dangerous to the peace of Europe. He next combated the objection which then existed, and has never ceased to have some force, that a commercial treaty is an abandonment of the principles of free-trade. That would be so in one sense if it involved the recognition of exclusive privileges. This particular treaty was an abandonment of the principle of protection. He was not aware of any entangling engagement which it contained; and it certainly contained no exclusive privilege. He hoped it would be a means, "tolerably complete and efficacious, of sweeping from the statute-book the chief among such relics of that miscalled system of protection as still remain upon it. The fact is and you will presently see how truly it is so that our old friend protection, who used formerly to dwell in the palaces and the high places of the land, and who was dislodged from them some ten or fifteen years ago, has, since that period, still found pretty comfortable shelter and good living in holes and corners; and you are now invited, if you will have the goodness to concur in the operation, to see whether you cannot likewise eject him from those holes and corners." Dwelling upon the effects of the treaty, Mr. Gladstone said that the reduction on wine would cause a loss in revenue of £515,000, on brandy of £225,000, on manufactured goods of £440,000 Enforcing the duty of the government to take further steps in the direction of relieving trade and commerce from imposts in pursuance of the principles of free-trade, notwithstanding the difficulties which existed, Mr. Gladstone entered into calculations to show that remissions of taxation had always been accompanied by increase of revenue consequent on the increase of trade and commerce. He then announced that he did not propose to touch the taxes on tea or sugar, which would be renewed as they then stood for one year. "I now come," he continued, "to the question of the commercial treaty with France. And I will at once confidently recommend the adoption of the treaty to the committee as fulfilling and satisfying all the conditions of the most beneficial kind of change in our commercial legislation." The first points of the treaty were that France was to reduce the duties on coal and iron in 1860; on yarn, flax, and hemp early in 1861. On the 1st of October, 1861, the duties would be reduced or prohibition removed from all British articles, so that no duty should be higher than 30 per cent ad valorem, all the staple manufactures of Britain being included. In three years afterwards the maximum duty was to be 25 per cent ad valorem. England, on her part, engaged herself immediately and totally to abolish all duty on all manufactured goods from France, to reduce the duty on brandy-making a total of £1,180,000. He main |