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that had Sir Robert Peel done no more than this, he would have deserved a high place as a financier in the grateful remembrance of his country.

A few weeks more, and all this glory was in the dust. The Government, defeated on the Irish Life Protection Bill, left office; and Lord John Russell's Administration took their places, and, in the main, carried on their measures. The next year was marked by a commercial panic and the Irish Famine, which necessitated a loan of eight millions.

1848, the year when the Income Tax expired for the second time, opened gloomily indeed. Doubt and distress seemed to fill the atmosphere. The effects of the commercial panic were still bitterly felt in England ; Ireland was still prostrate; the West Indian Islands sent over a cry of trouble, while a fear of the possibility of an invasion added to the general feeling of instability. The Budget announced a deficiency, partly caused by a falling-off in the Revenue, partly by increased expenditure enhanced by the invasion panic; and the times, though rendering any increased burdens difficult, caused any remission of taxation to be even more doubtful. Lord John Russell found himself obliged to provide for a deficit of £3,346,000, To do this he proposed to re-enact the Income Tax Act, but with this change—it was to be in force for five years; the first two at one shilling in the pound, instead of sevenpence. This being very unpopular, and opposed by Joseph Hume, although unsuccessfully, the Government did not press the first part of the measure, but only sought for a renewal for three years at the old rate. A diminution in the expenditure was likewise found practicable ;—the revenue turned out not quite so bad as was expected, and the deficiency was provided for by issuing exchequer-bills and the sale of stock.

The military estimates for this year amounted, including the charge for the Kaffir War, to £18,745,000; while in 1842, even with the expense of the Chinese Expedition, they had only risen to £16,115,000, and in 1835 to no more than £11,657,000. This great and—what was worse-progressive increase, attracted considerable attention ; and the financial campaign of 1849 opened with a motion of Mr. Cobden's for reducing the expenditure by ten millions. This rough-and-ready plan was rejected; but the hint was not lost on the Government, and a reduction of two millions and a quarter was actually made; a diminution which, though far from what Mr. Cobden had desired, probably was not far from equalling the economical anticipations of the financial reformer.

A considerable surplus, larger than had been calculated on, agreeably surprised the Government; who, in the following

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year, proposed to retain a portion of this to strengthen their balance-in-hand, and to employ the remainder in reducing stampduties and abolishing the excise on bricks. Loans for improving land were likewise to be made out of the augmented bala es in the Exchequer; the repayments of which appear, as they have accrued, not to have been in all cases, as they should have been, applied to reducing debt, but to meet the current expenditure of subsequent years. The reduction in the stamp-duties was, however, not considered sufficiently advantageous to the landed interest, in whose favour the alteration had been proposed, and a further diminution of the scale was wrested from the weakness of the Government.

The financial prospects of 1851 were not very brilliant, and the Ministry far from powerful. The Income Tax again expired, and there was no doubt of a considerable amount of reluctance in the House of Commons to its re-imposition. Sir Charles Wood, in bringing forward the first of the two Budgets which he was fated to propose that year, gave an interesting analysis of the incidence of taxation, by which it appeared that, speaking generally, and including Local Rates, a revenue of twenty-five millions and a half was imposed on property, while the amount of other taxation was forty-five millions and a half. Hence the Chancellor of the Exchequer argued that relief was due rather to consumers than to owners of property, and proposed a reduction of the duties on coffee, on foreign timber, and on agricultural seeds, in addition to the fall which was to take place this year in the sugar-duties ;-he also intended to abolish the window-duties, and to impose instead a housetax, less in proportion. A proposal to relieve local rate-payers, by dividing the charge of pauper-lunatics between them and the Consolidated Fund, was included in this scheme, the most substantial part of which was a renewal of the income-tax for

The whole, compared with those Budgets of former years which we have been considering, bears the impress of weakness, of an endeavour for ineffectual conciliation of political opponents, of palliatives rather than actual remedies. À ministerial crisis followed, which, though partly owing to other causes, Sir Stafford Northcote is doubtless justified in ascribing in some measure to dissatisfaction at the Budget. The Government ultimately, owing to Lord Stanley's inability to form an Administration, resumed their functions. A vehement opposition to the Income Tax ensued. The Conservatives objected to it altogether as a permanent tax; the Radicals desired its continuance, but objected to the manner in which it was assessed, and desired to see it fall more heavily on property:

As, however, these two opposed hosts of enemies could not be

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induced to combine, the tax itself survived; though Joseph Hume was enabled to inflict on the Government a defeat, by his motion that it should be imposed for one year only, and not for three as they desired. The house-tax also was remodelled, and arranged to afford exemption to the lower class of houses. The debates on this tax gave Mr. Disraeli and Mr. Gladstone both an opportunity of expressing their opinions on the Income Tax, and both stated their objections to it in its present form.

It is interesting to note this record of opinions from men of such opposite character, together with the fact that both of them have had subsequently to renew this obnoxious impost. The following year saw Lord Derby in power, but no great alterations in the financial system of the country followed; more were proposed in Mr. Disraeli’s abortive Budget of December in that year, the most commendable feature of which was the enlargement of the house-tax as a subtitute for other taxation. An alteration in the income-tax, to be brought down to incomes of £50 a year, was also part of the scheme--a plan to which, theoretically, there can be no objection, if the tax is to form part of the permanent financial system of the country; especially if connected with what undoubtedly would be one of the fairest methods of mitigating its hardships, if an immunity from taxation were granted (as proposed by Bentham) to a fixed minimum of income, sufficient to provide the necessaries of life.

Lord Derby having retired, Lord Aberdeen's Administration was formed, with Mr. Gladstone as Chancellor of the Exchequer. The revenue had exceeded, the expenditure had been less than, Mr. Disraeli's anticipations ; nevertheless, a re-imposition of the income-tax was found necessary. Sir Stafford Northcote bears a favourable testimony to the great ability with which the measure was introduced by Mr. Gladstone; throughout, indeed, the work of a master-hand is visible. Two inducements to accept the measure were offered: the first, that it should, after passing from the primary charge of 7d. through two diminishing stages of 6d. and 5d., cease finally in 1860; the second, that it should be accompanied by some extensive remissions of indirect taxation ; yet we cannot doubt that the most powerful argument in its favour lay in the fact that the tax was practically unavoidable. And, doubtless, the greater part of Mr. Gladstone's audience practically coincided with him in his feeling that the income-tax was attended with many inequalities and many inconveniences—that, though a powerful reserve in time of war, and an instrument of commercial reform in time of peace, it was not a tax well fitted to be a portion of our ordinary financial system. Meanwhile, a great reduction was to be made in the tea-duties; a large number of other customs-duties were to be dealt with; on a hundred and twentythree articles they were to be entirely remitted, on a hundred and thirty-three reduced; protective and discriminating duties were to be abandoned to a great extent, and rated duties, as far as possible, to be substituted for duties ad valorem. The excise on soap also was struck off the list of taxes, and various remissions made.

The most remarkable feature of this Budget, however, was the new Succession Duty.

"l'he object was to provide that a tax should be laid upon all successions to property taking place in consequence of death. Hitherto, the legacy duty had been applicable only to personal property descending either by bequest or inheritance. Personal property passing under the trusts of a settlement, and real property, whether passing by settlement, inheritance, or devise, had been exempt from duty. This state of things, said Mr. Gladstone, was too anomalous to be permanent. There might be reasons for exempting real property from taxes imposed upon other kinds of property; for it was admitted, or at all events it was argued, that real property bore an undue proportion of local taxation, and was more heavily rated to the income-tax than personalty, besides having to pay much more in the form of stamp-duties on the occasion of its transfer ; but there could be no such reason for exempting personal property passing under settlement from a charge to which the like property passing in another manner was subject; and, even as regarded real property, he pointed out that the reason assigned for the exemption was wider than the exemption itself; and that if it were on account of its peculiar burdens that freehold property was to be allowed to escape, leasehold and copyhold property would have an equal claim to indulgence, which, however, they did not enjoy. He proposed, therefore, to abolish the existing distinctions, and to charge the succession duty upon successions of all kinds.'

The claims of certain kinds of property to consideration on account of peculiar burdens imposed on them, and the amount of interest which the heir took in his inheritance, were also considered, and allowed for by various provisions.

Hitherto, the amount of revenue realized has not equalled Mr. Gladstone's expectations, but there can be no doubt of the justice of the principle of the measure; and as long as it remains on the statute-book, it will be a valuable source of supply to the British Exchequer.

This Budget is in many ways remarkable. It is the first, since that of 1845, which can be considered as carrying out the principles of Sir Robert Peel's policy; and yet there is a marked difference between the disciple and his master,---not always in favour of the former.

We miss, as Sir Stafford Northcote truly says, the caution which marked in so striking a manner the financial plans of Sir Robert Peel; on the other hand, we meet with a boldness of conception truly Mr. Gladstone's own. A more prudent man would probably have abstained, after the experience of past

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years, from holding out an expectation that the income tax should cease after 1860; but, on the other hand, a more prudent man, who refrained from giving some such promise, would hardly have succeeded in reimposing that unpopular tax. A more cautious man might have read the signs of the times better; but a more cautious man would, doubtless, have hesitated before proposing those measures of reform in the commercial tariff, which assisted in infusing into the national finance that vigour which carried it buoyantly through the stormy days that followed.

We must not, also, leave unnoticed another portion of the financial scheme of the next year-Mr. Gladstone's endeavour to lower the interest on a portion of Consols. No minister hitherto has been found bold enough to grapple with the difficulties of such an attempt. In this case it failed; but the causes of the failure do not appear to be due to any want of judgment in the measures proposed, but rather to the disturbances in the money-market which took place before the changes could be carried into effect. The plan was very favourably received at the time, and would probably have succeded had it been introduced under more auspicious skies: for, in 1853, the happy days of peace were rapidly drawing to a close.

Connected with this part of the subject, Sir Stafford Northcote makes a few remarks on those who expected that the discoveries of gold in Australia and California would produce a revolution in the rate of interest :

* There were, indeed, those who thought that the large discoveries of gold would reduce its value as a medium for the purchase of commodities. It is certainly possible that they may have this effect. Perhaps they have already to some extent, produced it. But there seems no reason for concluding that an alteration in the relative value of gold and of other commodities would lead to a reduction in the rate of interest, or to a rise of the Funds.

In writing this, Sir Stafford Northcote appears to have lost sight of the fact, that though the interest payable on the Funds may be maintained at the present rate, yet the relation which that interest bears to the actual income of the country may be widely altered. Should what we may, for convenience, term the purchasing power of money fluctuate in course of time very much from the present ratio; should the time ever come (to put it broadly) when in England a labourer, who is now paid half-acrown, may receive a sovereign as wages for the same work, and yet only be able with that sovereign to buy as much food and clothing as the half-crown now affords, and this change be owing solely to the greater cheapness of gold; then the Fundholder, and with him also all who have bargained to receive a fixed interest for their money, will find themselves exactly in

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