It was against the whole spirit of the constitution. Finally, the Duke contended that there was no deficit in the revenue, but an ample margin, taking into account the ordinary increase that might be anticipated.

66

The Earl of Derby, in a long and powerful speech, gave his support to Lord Monteagle's amendment. He remarked that the present Bill was not a Supply Bill" at all; but a Bill to repeal a tax; and he argued that the Duke of Argyll's argument involved an absurd limitation of the powers of the House. He expressed his satisfaction that the amendment originated with the noble baron (Lord Monteagle), who was not an opponent of the Government. But he could further assure the House that he had no desire whatever to overthrow or even to embarrass the ministry. It would be, in his opinion, a national calamity if, to the existing causes of anxiety were added the complications and difficulties arising from Lord Palmerston being compelled to retire from office. He believed that the intervention of their lordships was necessary to save the country from great present, and still greater future, financial difficulties. With this exordium Lord Derby proceeded to discuss the Budget, and said, that he should have Mr. Gladstone's own authority for all the objections he should urge against the scheme. Having described the main features of the plan, dwelling particularly on the enlargement of a deficiency, he said,

"I shall not stop to show how completely different the measures now proposed by Her Majesty's Government are from those successive systems and plans origi

nated by the late Sir Robert Peel, but the Chancellor of the Exchequer laid down this paradoxical doctrine :-Most persons hold the opinion that periods of prosperity, in which the revenue is fairly productive, are those in which you ought to make financial amendments and improvements. On the contrary, says the Chancellor of the Exchequer, that is quite a mistake; the worse the position of your affairs, the more desperate your deficiency, the more serious your loss, and the greater your danger, the more imperative is the necessity for an audacious and daring Minister to enlarge that deficiency and to increase the difficulties, so that you may take your chance of throwing double or quits.' You are already half through, he tells you; one more dashing move, it is possible you may recover your fortunes, and if you fail you cannot be much worse off than you were before. lords, I say that is not the policy of a statesman-it is the policy of a desperate and improvident gambler.

My

Going on with his description of the Budget, he showed that the estimated surplus had already disappeared; and that the Chinese war expenses, and the fortification expenses, had, to be provided for. All this he did with great minuteness and many figures. Then what, he asked, were the financial prospects of 1861-2:

"I am assuming that the expenditure for 1861-2 will be no greater than that of the present year-that is, 70,100,000l.; and the amount by which it is underestimated, 230,000l., makes it 70,330,0002. The revenue of 1860-1 is 70,564,000l. From that sum we have to deduct the malt

and hop credits, which will not be available again, 1,400,000l.; the Spanish payment, 250,000l.; the loss upon the tariff, according to the Chancellor of the Exchequer, 700,000l.; and another sum of 150,000l., being the difference of the balance of income-tax for the first quarter of a year. These sums taken together make 2,500,000l.; and therefore, supposing all other things to remain as they are, the surplus in 1861-2 will be less or the deficiency greater by that amount, reducing the amount of the income for 1861-2 to 68,064,000l., and leaving a deficiency of 2,266,000l."

The remaining section of Lord Derby's speech was devoted to an attack upon Mr. Gladstone as a financier. Mr. Gladstone had pledged himself to take off the income-tax in 1860. Lord Derby did not blame him for not doing so, but he contended that Mr. Gladstone had no right to say that the falling in of the Long Annuities afforded the means of removing indirect taxation, inasmuch as he had calculated upon the falling in of those very annuities to remove the income-tax. Then, in 1857, Mr. Gladstone supported an amendment, moved by Mr. Disraeli, to the Budget of Sir Cornewall Lewis, to the effect, that the income and expenditure should be adjusted in a manner that appeared to be best calculated to enable Government to remit the income-tax in 1860. In 1857, Mr. Gladstone declared that the failure of the successionduty and the Russian war did not absolve the Government from the duty of straining every nerve to fulfil the pledges of 1853. But Mr. Gladstone was not then Chancellor of the Exchequer; Sir Corne

VOL. CII.

wall Lewis held that office. Up to 1858, Mr. Gladstone declared himself solemnly bound to redeem his pledges; yet, now the Annuities had fallen in, he remitted indirect taxes and not the income-tax ! In 1857, Mr. Gladstone was opposed to granting the income-tax from year to year, saying it was a sign of "a transition from a solid and steady system of finance to a vacillating and merely provisional finance." Yet, now he proposed the tax for one year.

Lord Derby proceeded to say he did not object to the repeal of the paper-duties if we could afford to do so; but he contended that under the circumstances it was improvident to throw away 1,285,0001. a year. He should like to hear from the Government that they were not playing into the hands of the Manchester school, whose object was to render taxation odious by the pressure of direct taxes, so that under no circumstances could the country go to war. The Government might have different views, but if they had the same objects they could not more effectually promote them than by the system of finance they were encouraging. He concluded by reading an eloquent extract from a speech delivered by Mr. Gladstone in 1857, for the purpose of showing the inconsistency of his present policy with the doctrines which he then professed. The noble Earl's speech was received with great cheering.

Earl Granville made a short reply, vindicating Mr. Gladstone from the severe comments of the preceding speakers.

The House then divided, when . there appeared :--

[G]

second reading...... }

193

89

This result was hailed with great demonstrations of triumph. In the country it was received with various feelings. In the first place there arose the constitutional question as to the right of the House of Lords to reject a Bill involving matters of taxation that had received the sanction of the House of Commons. There was much division of opinion on this pointcertainly there were not wanting high authorities to sanction the course taken by the Lords, although it could hardly be disputed that in the present instance they had carried their privilege to the verge of constitutional usage, and that the continuance of the paper-duty by their act, in spite of the decision of the House of Commons, would form a marked precedent for the future. But the opinions of the public at large turned rather upon the propriety of the decision which the Lords had arrived at, than upon the legal principles involved in their jurisdiction. Apprehension as to the financial prospects of the country was by no means confined to the Conservative party. Many members of the Liberal party in both Houses felt distrust of the prudence of Mr. Gladstone's operations on the revenue, and thought that the remission of the paperduties was neither urgently necessary in point of policy, nor welltimed in the face of a probable

deficiency of revenue in the next year, and an unusual demand upon the resources of the country. The majority of the public were, therefore, disposed to regard the intervention of the House of Lords, whether strictly warranted by prudential or not, as a step which prudential considerations justified. Those, on the other hand, who were interested in the repeal of the tax, or strongly opposed to it on financial grounds, took up the constitutional objection with great warmth, and loudly asserted that the Upper House of Parliament, by their presuming to reverse the decision of the Commons upon a question of taxation, had acted in violation of the established principles of our Government, and committed an innovation which would become a precedent for more dangerous aggressions on popular rights. To give expression to these views, meetings were held and associations formed, and the question was discussed with much energy by the press; the cheap newspapers, which felt severely the burthen of the paper-duty on their enterprise, vehemently impugning the conduct of the Lords, while the established and higher-priced journals, anxious to maintain their ground against the increasing competition of their rivals, represented the constitutional question as of trifling importance in comparison with the financial danger from which the Lords had saved the nation. In the House of Commons opinion was divided in like manper as it was out of doors. The Conservative party firmly maintained the validity of the act of the Upper House as in accordance with settled precedents. The more advanced section of the Li

beral party denounced it as an unconstitutional innovation. Lord Palmerston was by no means disposed to bring matters to a rupture between the two Houses; at the same time, regarding the question of principle which was involved, as deserving to be maturely considered, he took the prudent step of proposing in the first instance that an inquiry should be made into the precedents on the subject, by means of a Committee appointed to ascertain and report upon the practice of Parliament in regard to Bills for imposing or repealing taxes. This motion the noble lord made on the 25th of May, refraining on that occasion from entering into any discussion of the point on which the Committee was designed to furnish information. Sir John Pakington expressed his approval of this step. Mr. Edwin James disapproved of it as inadequate to the occasion; and Mr. Thomas Duncombe proposed an amendment in the following terms:

"That this House having learned with deep regret that the further progress of a Bill passed by this House for the repeal of the Excise-duties on paper manufactured in the United Kingdom has been postponed by the House of Lords for six months, it is the opinion of this House that when the state of public business admits, Parliament ought not again to adjourn beyond November next, whereby another opportunity may be afforded to the House of Lords of considering whether the Bill may not be advantageously agreed to."

Mr. Whalley seconded the

amendment.

Mr. Bright regretted to find that some members on the opposite side of the House were disposed to treat this question with

levity. If he were a member of the party opposite, he thought he should view the question as one of great gravity. He agreed with Mr. Duncombe that there was a growing feeling in the popular mind on this subject; and, from the tone of the press throughout the country, he believed that, in the course of a few days, there would be a wide and almost universal discontent throughout the country, in reference to the course which the House of Lords had taken. He had felt a great interest in the repeal of the paperduty; but that question fell into utter insignificance in comparison with the greater question which had been raised between the two Houses of Parliament. He considered that the noble lord had not done himself justice, and that he had not done justice to Parlia ment and the country in not adopting a more decided course. course which the noble lord had proposed was perilous to the House, and might prove fatal to the Administration of which he was the chief. He agreed with the amend ment, which affirmed that time and reconsideration would probably act as mediators between the two Houses of Parliament. He therefore trusted that the noble lord would consent to the adjournment of the Debate, which he moved accordingly.

The

Mr. Childers seconded the adjournment.

Lord John Russell said there had never within his memory been a more important question than this, especially as it affected the highest privilege of the House. On this ground he supported the motion for the Committee, and asked the House to reject both the amendments which had been pro

posed. The duty of the Committee would be to ascertain whether there had been any privileges which the House of Lords had violated, and in what respects it had done so. He considered that this searching for precedents would give time for consideration, and he thought that deliberation would be advisable, so long as they walked in the paths of the constitution. He thought, however, that the amendment of Mr. Duncombe went far beyond the constitution, inasmuch as it interfered with the prerogative usually exercised by the Crown.

After some further debate, both the amendments were withdrawn, and a Committee, consisting of twenty-one members, was nominated.

The Committee, after a short interval, made their Report, which was purely historical in its character, merely setting forth the precedents applicable to the case under inquiry. Lord Palmerston, thereupon, gave notice of three Resolutions to be moved by him, and on the 6th of July proposed the adoption of them to the House. The first Resolution was in the terms following:-"That the right of granting aids and supplies to the Crown is in the Commons alone, as an essential part of their constitution; and the limitation of all such grants, as to the matter, manner, measure and time, is only in them." In moving this Resolution, the noble lord observed that the question at issue involved considerations of the utmost constitutional importance, and that the occasion was one which would take a prominent rank among our Parliamentary proceedings. He gave a slight historical sketch of the growth of the British Legislature,

Each branch possessed its separate independent authority, cooperating in harmonious action. The Commons' House, however, claimed particular privileges in regard to certain subjects; they claimed the right of determining matters connected with the taxation of the people. But, though the Commons denied to the other House the right of originating or amending such measures, the Lords had claimed the power to reject. In the present case the Bill rejected by the Lords was a measure for the repeal of taxation, and there were precedents upon which they rested their claim to reject such Bills. There was, indeed, a distinction between those precedents and the present case, in which the tax repealed was part of a combined financial scheme for the year, and the rejection of the Bill altered and deranged the whole bearing of the arrangement. At the same time, looking broadly at the matter, he did not think that, if the House of Commons had determined that a certain amount of taxation should be repealed, and had sent up a Bill to the other House, the Lords would, judging from what had happened on other occasions, have rejected it. If he believed that they had intended to take the first step in a financial scheme, it would become that House to take all the means in their power to defeat and frustrate that intention; but, till the House had proof of such an intention, they should not, unless driven to it, enter into a conflict with the House of Lords. Had the Lords no encouragement to take the course they had adopted? In the House of Commons, the second reading of the Paper-duty Repeal Bill was carried by a majority of fifty-three;