In support of the clause repealing the duty, it was contended that this was a tax already condemned by the House, which was pledged to repeal it; that, although its remission would not be directly reproductive, it would augment other sources of revenue; that paper was an ingredient used in other manufactures, which made the incidence of the tax peculiarly oppressive; that the excise regulations were vexatious to the makers of paper, which tended to narrow competition, it being difficult to define what was paper, and that there was no other tax open to so many objections.

Mr. Milnes, Mr. P. Urquhart, Mr. Norris, Mr. Mellor, Mr. Lindsay, Mr Ayrton, and Sir John Shelley maintained these arguments.

Mr. Disraeli stated the views which he and those who acted with him took of the question immediately at issue and of the subjects inextricably involved in it. If the House, he observed, entertained a conviction that there had been on the part of the Government such financial and political negligence that they had not provided for the exigencies of the State, it would be its duty to declare a want of confidence in the Government; but he thought it was in the present case bound to accept the statement of the Minister that he had a surplus of revenue; the question then was, to what purpose it should be applied. With respect also to the form in which his financial measure had been proposed by the Minister, he thought he was justified; but that its adoption this year was unwise, unnecessary, and impolitic, being

calculated to provoke a collision with the other House. Assuming, then, the existence of a surplus, which he had never denied, he laid it down as a principle in our financial policy that in the remission of taxation war-taxes should have the preference, and that, upon every ground of policy as well as political economy, a public contract with the nation should be rigorously fulfilled. The income-tax was not essentially a war-tax, but if the whole surplus had been appropriated to its reduction he should not have objected; the remission of the war-duty on tea, however, would not only relieve consumers and stimulate consumption, but give an impulse to our trade with China. Although the House had resolved not to remit that duty, he insisted that they (the Opposition) should not lose any opportunity of urging the inexpediency of repealing an excise duty upon paper, affecting only a limited industry, rather than reducing another indirect tax which had so many claims to a preference. He gave, therefore, his sincere opposition to this clause, which stood in the way of the question whether the war-duties on tea or on sugar should be remitted.

Lord John Russell, in answer to Mr. Disraeli, dwelt upon the inconsistencies manifested by the opponents of the proposed financial measures, and upon the confusion into which our trade and finances would be thrown if their views of the constitutional question were adopted. This year, as well as the last, the Government, he observed, had been of opinion that the best mode of applying the surplus was by repealing the paper duty, as a relief to indus

remove them. Was it true that these were war-duties? They were imposed in time of peace, and not for the purposes of war, and the remission of the tea and sugar war-duties (so called) would sacrifice 2,500,000l., or twice the amount of the paper duty. The doctrine of engagement, set up by Mr. Disraeli, was a pure and perfect figment. Mr. Gladstone then explained the motives which had influenced the Government in deciding upon proposing the remission of the paper duty, and called upon the Committee to keep faith with the country, and, especially, with the trade, which had relied, and was justified in relying, upon the vote of the House that the duty should be repealed. After protesting against the manner in which the question of a surplus had been dealt with in the discussion, he referred to an imputation repeated by Mr. K. Seymer, that the proposition he had submitted to the House was made to conciliate Mr. Bright. He presumed that it was meant that he had a covert intention to change the burden of taxation, and that this proposition was an insidious beginning of this project. Not one act or one syllable from him had been cited to sustain this imputation, and, whether or no this was the object of Mr. Bright, it was not his. The proposition he had submitted to the House was founded upon sound principles of finance and of political economy.

Sir J. Pakington said he had listened to these debates from the first to the last, and had heard nothing to to affect the opinion he had formed, and which was entertained, he believed, by a majority of the

House, and of the country, that the Budget was open to three fatal objections-that the remission of taxation it proposed was unwise; that the Budget was no better than a party manoeuvre ; and that it offered an unnecessary offence, if not an insult, to the House of Lords.

Lord Palmerston summed up the debate in a short but effective speech. He expressed a hope that in spite of a fortuitous concurrence of discordant atoms, the Committee, in deciding a most important question of financial policy, would not be led away by the unfounded arguments used by the opponents of the clause. The Committee having divided, the numbers were:For the clause Against it

Majority

. 296

. 281

15

The issue of this debate having been regarded as doubtful, the majority was hailed by the successful party with great satisfaction. An opposite result would have been very critical, and probably fatal, to Lord Palmerston's Administration.

It remained to be seen how the House of Lords would deal with the financial measures of the Government, and especially with the part which they had defeated by so large a majority in the preceding year, the repeal of the paper duty. In certain quarters, an opinion was entertained that it would be expedient, under existing circumstances, to reject the Ministerial Bill, even at the cost of impeding the other financial arrangements of the year; the responsibility of which result, as these persons maintained, would devolve on those who, by

adopting an unreasonable mode of procedure, left the House of Lords no alternative. The Duke of Rutland, in accordance with those views, gave notice of a motion for postponing the Bill for six months. But among the greater part of the Conservative party more temperate counsels prevailed, and the mischief of placing that House at issue with the House of Commons a second time upon a question of taxation, was justly regarded as outweighing the danger even of an erroneous financial policy. When, therefore, the Revenue Bill was proposed for a second reading on the 7th of June, it was generally anticipated that, however distasteful to a majority of their lordships, it would be suffered to pass unresisted.

The motion was made by Earl Granville in a very moderate and conciliatory speech. The noble lord began by observing that he could hardly consider the Duke of Rutland serious in proposing a motion adverse to the Bill, for nothing could be more alarming than that the House of Lords should place itself in collision with the other House of Parliament on this subject. Declining to review the financial plan of last year, which had resulted in a deficiency of 1,600,000l. a deficiency fully accounted for by the bad harvest, which marred the calculations of the Chancellor of the Exchequer -he proceeded to state that the provisions of the Bill were not made in any fanciful manner, but in the ordinary mode in which all past Chancellors of the Exchequer had made their calculations, and from these it appeared that there was a surplus of 2,000,000l. in

round numbers. Although doubts had been expressed concerning this surplus, he believed them to be utterly unfounded. Lord Granville then proceeded to explain the various details of the measure, and stated the reasons which had induced the Government to continue the tea and sugar duties, and to abolish the excise duty on paper. The duty on paper impeded its manufacture, pressed on almost every article sold, and formed a slight export duty upon all goods sent abroad wrapped up in paper, and was injurious to the diffusion of cheap and good literature, while it was no check upon bad. The tax on paper had been condemned by the abstract. resolutions of the House of Commons, and by leading men of every party in both Houses of Parliament. Their lordships had objected to its repeal last year, not because they considered the tax good in itself, but because the revenue was not in a condition to dispense with its contribution. Now, however, that there was a surplus, the Government were justified in proposing its repeal. In regard to the inclusion of the principal parts of the financial scheme in one measure, it was strictly according to precedents (many of which he quoted). The course of the House of Lords last year in rejecting the Bill was, to say the least, “unusual”; nevertheless, the House of Commons had behaved with the greatest moderation; and this Bill had been brought in in the present form in order to restore that House to the position it ought to occupy in the taxation of the country. He trusted the Duke of Rutland would withdraw his motion.