policy of the late Government, and explained under what circumstances, and on what conditions they had renewed the Exchequer Bonds, and had promised a repeal of the paper duties. Having alluded to and explained Mr. Disrael's recent unfortunate expression of "bloated armaments," which had been misrepresented, and misunderstood, he observed that we were now not drifting into a war, but into a state of chronic deficit. With 14,000,000l. of war taxes and an annual deficit of two millions and a half, it was high time for the House of Commons to look seriously at the matter. He objected very strongly to the attempt made, by the mode in which this Bill had been sent up, to evade the privileges of the House of Lords. If it were thought to fetter the judgment of the House by combining a number of financial propositions in one Bill, the object aimed at would not be attained. The practice was equally dangerous to the supervision of the House of Commons, who would not have the same means for examining and discussing one Bill as they would have in passing several money Bills of smaller amount through all their stages. In conclusion, while deprecating any diminution of the efficiency of our armaments, he strongly insisted on the introduction of a more economical system, and suggested that military and naval stores ought not to be collected in vast masses, as modern science, in its advance, might soon render them comparatively valueless. Lord Russell, having expressed his satisfaction that the question of the privileges of the Houses had not been raised, denied that the country was in a state of financial embarrassment; at least, he saw no signs of it, nor any prospect of a financial crisis, for, in spite of all reductions of taxation, the revenue met all demands upon it. He denied that the policy of Mr. Gladstone merited the title of "spendthrift;" for, while providing for the exigencies of the public services, he had avoided pressing too heavily on the people under the present circumstances of the country. In conclusion, he asserted the necessity of keeping up the navy and army, and denied that the foreign policy of the Government occasioned the present expenditure, but rather tended by its principles to decrease it. The Bill was then read a third time and passed. The financial measures of the Government thus received, though not without considerable debate and opposition, the sanction of Parliament. The financial discussions of the Session were, however, not entirely limited to the measures of the Chancellor of the Exchequer. Many points in our fiscal policy came under notice indirectly upon other occasions, especially with reference to the provision made for the defences of the country, for the supply of the army, for fortification of the coasts, and for the construction and equipment of those new ironcased ships which had now become so prominent a feature in nautical armaments. Of these discussions, a particular account will be given in the next chapter. Two debates, however, of a more distinctly financial character, which took place in the House of Commons, towards the latter part of the Session, and which excited considerable interest, will find here an appropriate mention. The first was on a motion proposed by Mr. Hubbard, and directed against the existing mode of levying the Income-tax. The other, which was considered to involve more important political consequences, and was at one time thought likely to compromise the position of the Government, arose upon a Resolution proposed by Mr. Stansfeld, one of the members for Halifax, affirming the possibility and expediency of reducing the expenditure of the nation. The terms of Mr. Hubbard's motion, which came before the House on the 13th of May, were as follows:-"That the incidence of an Income-tax should not fall upon capital or property, and, when applied to the annual products of invested property, should fall only upon the net income arising therefrom; and that the net profits, gains, or salaries of persons and partnerships (not being public companies) engaged in any trade, farm, manufacture, profession, or salaried employment, should be subject, previous to assessment, to such an abatement as may equitably adjust the burden thrown upon intelligence and skill as compared with property." Premising that it was the duty of the Government to collect the national revenue in such a way as not to interfere with the prosperity of the country, or to sow jealousy among classes, he proceeded to show what, in his opinion, was the right principle of an Income-tax; that the present tax violated that principle; and that our vicious legislation could be easily amended by the adoption of the true principle of an Incometax, as enunciated in the Resolution. His object was, he said, to induce the House, by affirming this principle, to give expression to an opinion which the Government would feel it their duty to make the basis of their financial arrangements for another year. He discussed very fully the modes of applying his principle to the various sources whence income was derived, suggesting the necessary distinctions, especially between companies and partnerships. Having anticipated and replied to objections to his motion, he dwelt upon the grievances suffered by the operation of the tax, under which none were truthfully treated, and upon the merit as well as fiscal advantage attending the removal of a temptation to fraud and dishonesty, practised in order to evade what was considered an unjust imposition. The motion was seconded by Mr. Crawford, one of the members for the city of London, who protested against the system upon which the Income-tax was levied, citing the opinions of high financial authorities, in support of his views, and condemning the inequalities of the tax, and the injustice of levying the same rate upon precarious and permanent incomes. The Chancellor of the Exchequer said, on the part of the Government, he was bound to ask the House not to be led away by authorities, but to regard the substantial interests involved in this question, not only of the Mr. Knightley opposed the motion. Mr. Hubbard, in reply, complained that the Chancellor of the Exchequer had not met his arguments fairly, but had employed arguments which were beside the merits of the case. The House having divided, there appearedFor the Resolution Against it.... Majority 62 99 37 State and the Treasury, but of Mr. Hubbard's, he had arrived at justice. A notice, he observed, the conclusion that it was full had been given of an intention of mischief. He was sensible of to move the previous question, the inequalities of the tax, but and the Government were pre- it was the bounden duty of the pared to vote for that motion, or House not to adopt any proposal to negative the Resolution. He that would weaken its foundacongratulated Mr. Hubbard upon tion. his great courage. Last year he had proposed an inquiry into this subject, and, although the Government were opposed to such a course, Mr. Hubbard obtained his committee, and thus had a tribunal to hear and determine his case. That committee was fairly constituted, and the plan of Mr. Hubbard was put aside in the committee by a majority of 7 to 2, the majority including members who had previously been in favour of the plan; yet Mr. Hubbard now proposed that the House should affirm the very principle which his own chosen committee, after a searching inquiry, determined to reject. Mr. Gladstone then proceeded to demonstrate the financial effects of the proposed plan, exposing what he characterized as its gross injustice, the injury it would inflict upon the revenue, and the favour it would bestow upon one class to the prejudice of another. He cautioned the House, that when it began to countenance a cry of class against class, the plan of Mr. Hubbard would be extended and enlarged, so as to lay a burden upon property, and to exempt a large portion of the most wealthy classes; and he warned Mr. Hubbard that he was treading upon more dangerous ground than he was aware of. Having often been called upon to consider this question, he said, with reference to such a plan as The notice of motion given by Mr. Stansfeld excited a good deal of interest, and much speculation as to its effect upon the existing state of parties. Before the day fixed for the motion, the 3rd of June, notices of counter Resolutions had been given by several members, one by Mr. Walpole, another by Mr. Horsman, another by Lord Robert Montagu, and another, in the interest of the Government, by Lord Palmerston. The issue of the debate, involving these numerous amendments, was anticipated with much curiosity by the public. Shortly after the meeting of the House, Lord Palmerston rose, the day being Friday, to propose the customary motion, that the House at its rising do adjourn till the following Monday. Availing himself of this opportunity, the noble lord adverted to the notice of amend great surprise at Lord Palmerston's statements. It was, he hoped, needless for him to disclaim, on his own part, hostility to the Government. He had moved his amendment with the intention of supporting the Ministers against Mr. Stansfeld's motion. The construction put upon it by Lord Palmerston, however, was so serious, that he could not take upon himself to state at once what course he should pursue. ment given by Mr. Walpole, and Lord Robert Montagu first responded to Lord Palmerston's appeal. He disclaimed any motive but a sincere desire for economy, in bringing forward his amendment, and was sorry to hear from Lord Palmerston, that the question was to be converted into a party contest. If a subject of such importance could not be discussed without party spirit, he should wash his hands of the whole business, and have nothing to do with any of the amendments. He should withdraw his amendment, on the understanding that other honourable members did the same. Mr. Horsman censured in strong terms the course adopted by Lord Palmerston. His own amendment was not intended in a spirit of opposition to the Government, and he thought the course taken by the Prime Minister had placed the House in a very unfair position. Mr. Walpole expressed his Mr. Griffith thought that Lord Palmerston was justified in his view of the matter, and he should withdraw his motion. Sir F. Smith also withdrew the amendment which stood in Mr. Bright repudiated altogether the issue put upon the debate by Lord Palmerston. He and his friends would not be deterred from supporting Mr. Walpole's reasonable and judicious motion, by the construction which Lord Palmerston had put upon it. After some further irregular discussion, in which the Speaker was more than once called upon to interfere, Mr. Stansfeld rose to move his Resolution: "That the national expenditure is capable of reduc tion, without compromising the safety, the independence, or the legitimate influence of the country." He defended his motion, in opposition to the objections suggested to its method and its time. He justified its opportuneness, maintaining that any time was appropriate which was propitious for the object in view, to test the sincerity and good faith of the House, on the subject of expenditure. The discussion of the Naval and Military Estimates was ruled by considerations of policy, which were not fitted for a Committee of Supply, so that the discussion of those Estimates was useless and meaningless unless connected with the principles and views of policy which really governed them. What time, then, could be more fitting and less open to objection than when the whole Estimates for the year had been voted, and it was impossible to pervert the question into one of want of confidence in the Government? Approaching the financial question involved in the Resolution, he observed that our national defences were of the very essence of the question; but he warned the House against the consequences of an expenditure out of proportion to the resources of the country. Upon an average of the last few years, our expenditure had reached the amount of 70,000,000l., equal to an Incometax of 6s. a head of the population, and the question was, whether a normal and permanent expenditure of this amount was to be maintained in time of peace; whether we had not arrived at a time when some effort should be made to save our resources from a wasteful and excessive drain. The motion was seconded by Mr. Baxter, who objected to the amendments of which Lord Palmerston and Mr. Walpole had given notice, that they only expressed a hope that reduction of expenditure might be effected, whereas the Resolution boldly asked the House to affirm the expediency of retrenchment. He referred to figures, to show that this economy might be effected without detriment to the defences of the country, by cutting down the military and naval expenditure. Lord Palmerston moved, as an amendment, to substitute for Mr. Stansfeld's Resolution the following Resolutions :-"That this House, deeply impressed with the necessity of economy in every department of the State, is at the same time mindful of its obligation to provide for the security of the country at home and the protection of its interests abroad. That this House observes with satisfaction the decrease which has already been effected in the national expendi ture, and trusts that such further diminution may be made therein as the future state of things may warrant." He thought, he said, it would save the time of the House, if he proposed the amendment which the Government deemed it proper to submit to the House. He could not concur in the argument of Mr. Stansfeld, that the discussion of the Estimates in a Committee of Supply was inconvenient; on the contrary, he considered the Committee, where members were not restricted to a single speech, was a most convenient forum for the discussion of the Estimates. He contended that the expenditure complained of had been wisely asked for by the Government and sanctioned by Parliament; that it was their duty to take care that this country held a proper position in the affairs of the world, and for this purpose it was necessary that it should be in a state of perfect self-defence. The House, if it adopted Mr. Stansfeld's Resolution, would stultify itself; whereas his amendment pledged |