CHAPTER XXXI.
THE REIGN OF VICTORIA (continued).
Mr Lowe's Budget—The Surplus disappears—Mr. Lowe creates a Surplus and proposes Remissions of Taxes—Cost of the Abyssinian Expedition—Sir Stafford Northcote's Explanation—The Endowed Schools' Bill—Speech of Mr. Forster—The Commissioners—Religious Tests at the Universities—Sir John Coleridge's Bill—Sir Roundell Palmer's Speech—The Bill passes through the Commons—It is rejected by the Lords—The Mayor of Cork—The O'Sullivan Disability Bill—Mr. O'Sullivan resigns—The Bill dropped—Life Peerages—Lord Malmesbury's Speech—Fenianism in Ireland—Deaths of Lord Derby and Lord Gough—European Affairs: the Emperor prophesies Peace—The General Election—The Senatus Consultum—Official Candidates—The Revolution in Spain—Wanted a King—General Grant the President of the United States—The Alabama Convention rejected.
THE new Chancellor of the Exchequer, Mr. Lowe, brought forward his Budget, in a speech of great ability, on the 8th of April, 1869. The state of the revenue, he said, was moderately flourishing, although the receipts for the past financial year had fallen somewhat short (to the extent of about half a million) of Mr. Ward Hunt's estimate. His predecessor had calculated upon a revenue of £73,180,000, but the actual amount received did not quite reach £72,600,000. Passing now to the current year, Mr. Lowe estimated the expenditure at £68,223,000, and the revenue at £72,855,000, which would leave an available surplus of £4,632,000 at the end of the year. Nothing could be more satisfactory than such a prospect. Visions of a lowered income tax, of enlarged grants for special purposes, of general easiness in money matters, must have flitted before the minds of the assembled legislators. But Mr. Lowe had no sooner raised the hopes of his hearers than he dashed them to the ground. The whole of this large surplus, it appeared, except the trifling sum of £32,000, would be required to defray the cost of the Abyssinian expedition. The real cost of that expedition was now for the first time made known. Mr. Disraeli had asked for and obtained a vote of £3,000,000, in November, 1867, and a further sum of £2,000,000 had been voted for the expedition in the early part of the Session of 1868. During 1868 every one supposed that £5,000,000 would cover the cost; but this was found to be by no means the case, and a third vote of £3,600,000 was taken in March, 1869. The total cost, Mr. Lowe feared, would hardly fall short of £9,000,000. Now, of the £8,600,000 that had been voted, ways and means had been found only for £4,000,000, so that £4,600,000 had still to be provided for. This sum would just be covered by the anticipated surplus, leaving a balance of £32,000.
Here an ordinary financier would have stopped, content to have balanced the revenue, and to have defrayed out of current receipts, so as not to add a penny to the National Debt, the heavy and unforeseen charges entailed by the Abyssinian expedition. But Mr. Lowe was not an ordinary financier, and, as a surplus did not exist, he resolved that one should be created. He proceeded to unfold a plan for the more economical collection of the revenue, by concentrating in one payment, to be made in January, the income tax and the assessed taxes, instead of dividing the former into two instalments, payable in April and October. This plan he proposed to bring into operation for the first time in January, 1870; so that (no collection being made in October, 1869) the taxes for three quarters, ending the 31st of March, 1870, should be paid next January, in which month the whole of the income tax and the assessed taxes would have to be paid in future years. That is to say, Mr. Lowe proposed to collect five quarters' taxes within twelve months. The reader will think that it is not difficult to create a surplus in this way. Nevertheless, Mr. Lowe showed that the proposed change in the mode of collecting these taxes was based on common sense and sound economy, and that a sum of £100,000 would be saved merely by having one collection instead of two, and employing the Excise officials instead of amateur collectors. He also discussed the assessed taxes with great force and acuteness, and proposed to convert most of them into licence duties, following the successful precedent of the dog tax, and that they should be payable for the future at the beginning of each year, instead of by two instalments in April and October. Assuming that the House adopted his scheme, Mr. Lowe calculated that before the end of the financial year (March 31st, 1870) there would have been paid into the Exchequer, £600,000 of the Excise licences, £950,000 of the land tax and assessed taxes, and £1,800,000 of the income tax—in all £3,350,000—which, with the £32,000 surplus of revenue over expenditure, would put the Government in possession of a surplus of £3,382,000. How was this surplus (which Mr. Lowe might well describe as a "windfall") to be disposed of? As the chief inconvenience attending the transition from the half-yearly to the annual method of payment would fall on the income tax payers, Mr. Lowe thought that they had the first claim to relief from the surplus; he therefore proposed to take off a penny from the income tax. Next he proposed to abolish the import duty of one shilling on every quarter of corn, left by Sir Robert Peel when he repealed the Corn Laws in 1846. This duty, though it produced £900,000 a year, combined in Mr. Lowe's opinion all the bad qualities which a tax could possibly have, and prevented England from becoming a great entrepôt of corn. The fire insurance duties were also to be given up, though this reduction would not take effect till after Midsummer. The total remission of taxes thus foreshadowed would amount to £2,940,000, leaving, when deducted from the estimated surplus, a balance of £442,000. Mr. Lowe admitted that his plan was attended by certain drawbacks. Under its operation the Treasury would be in a state of plethora at one part of the year and starved at another; and there might be taxpayers to whom the concentration and unification of the State's demands on their purses might be inconvenient. But he had various expedients to meet the first objection, the chief among which was that during the non-productive months of the year Government should be empowered to borrow at their discretion from the Commissioners for the Reduction of the National Debt; while with regard to the second objection, the taxpayer, like the eel in the adage, would find the change nothing when he had become used to it. Mr. Lowe's Budget was of course sharply criticised, and the delusive character of a surplus obtained by a financial trick was loudly insisted upon; but the real merits of the scheme, which were obviously great, carried it through.
The statement made by Mr. Lowe, en passant, with regard to the aggregate expenditure on the Abyssinian expedition naturally attracted much attention. The Conservative Government had estimated that the total cost would not exceed £5,000,000; how then, when no unforeseen circumstance had occurred, none but the most shadowy opposition been encountered, and no reinforcements been needed, could the expenses have shot up to the enormous figure of £9,000,000? It appeared that by far the greater portion of the money—more than £7,000,000—had been spent by the Bombay Government. The duty of explanation accordingly fell on Sir Stafford Northcote, Secretary for India in the late Government. Sir Stafford Northcote stated that when the first estimate was framed (that for £3,000,000, laid before the House by Mr. Disraeli, in November, 1867), the expedition had not left India; and that the second estimate (for £2,000,000, additional) was necessarily vague and loose, and exceeded, in fact, the information furnished by the departments. He pointed out, among the reasons for the insufficiency of the estimate, our entire ignorance of the country into which the expedition was despatched, its actual barrenness of supplies, and the necessity of taking precautions against events that never occurred. Much of the excess, he added, had arisen since the period up to which the estimate extended, and in conveying the troops from Abyssinia to India after the expedition was over. These explanations failed to remove the suspicion that there had been culpable laxity on the part of the Bombay Government. The suddenness of the last rise in the estimate was quite mysterious. Mr. Ward Hunt stated, in the discussion that took place in March, 1869, when the supplementary vote of £3,600,000 was demanded, that so recently as the 8th of December, 1868, the Indian Government had telegraphed that they had only spent £5,000,000.
Although the time of Parliament was too much taken up with discussions arising out of the Irish Church Act to allow of any comprehensive educational measure being brought forward in this Session, yet an important Act was passed, by which a machinery fitted to grapple with the long-standing abuses connected with the endowed schools of the country was successfully established. The condition of these schools had lately been inquired into by a Royal Commission, the report of which had been laid before the House. Upon the basis of this report Government were now prepared to legislate, and the duty of preparing a Bill fell into the hands of Mr. W. E. Forster, the Vice-President of the Council. The recommendations of the commissioners had been of a very sweeping character; besides advising that full power of inquiring into the efficiency of every endowed school, and of putting an end to waste and abuse of trust funds, should be taken by Government, they had recommended the formation of a central examining council, and of provincial boards throughout the country under the control of the central authority. But Government did not see their way to the appointment of provincial boards for the present; and the Select Committee to which the Bill was referred, after the second reading, struck out all the clauses that proposed to constitute an examining council. What remained, however, of the Bill was sufficient to make a useful working measure of reform.
THE QUADRANGLE, SOMERSET HOUSE.