March 6.
Read letters from Sir J. Macdonald. They came by Constantinople. The only news they contain is that the Russians certainly have the intention of conquering Khiva and Bokhara. This comes from Chasanes Murza. I told the Duke, who seems disposed to make it an European question.
I showed the Duke a most atrocious libel on royalty which has been published in the 'Calcutta Gazette.' If the King saw it he would recall Lord William by the Sign Manual. A letter must be written immediately in the press. It is in such a state that our Government cannot stand if it be permitted to go on uncontrolled.
I asked the Duke as to taxation. He said he thought it could be done without income tax. To lay on income tax would be to weaken ourselves in the opinion of all foreign Powers. Besides, it would prevent our reducing the Four per Cents.
He calculated the loss of the beer duty at 3,500,000£. and, marine insurance, cider, remission of hop duty, &c., would make the loss 4,500,000£.
To meet this he expected
£
Surplus of last year 1,700,000
Additional from general improvement 400,000
Additional malt by reducing beer duties 500,000
Increased duty on spirits 500,000
Reducing Four per Cents 750,000
Savings 1,400,000
Ireland, soap, &c. 450,000
Stamps 200,000
————-
5,900,000
4,500,000
————-
1,400,000
There may have been more; but he spoke, and I write from memory.
I told him I thought that with a diminished duty on beer and an increased duty on spirits he could not expect an increase of 500,000£ on spirits. He admitted that was the weak point. He said he was sure we could not carry an income tax while we had a million surplus. If we have a good harvest, I have no doubt the increase on malt will be great; but I apprehend there must be a repayment of beer duties, and if there should be, the loss will be enormous.
March 8.