Of the continuance of the struggle in 1862, a few items from the diary give an adequate picture:—
Jan. 30, 1862.—A heavy blow in the announcement of increased military estimates from Sir George Lewis gave me a disturbed evening. 31.—Worked on the formidable subject of the estimates, and made known to the cabinet my difficulties. Feb. 1.—Cabinet 3-½—6. It went well; the tenth penny [on the income-tax] proved to be a strong physic; £750,000 of reductions ordered. 12.—Wrote mem. on possible reductions, etc., to dispense with income-tax. The whole question, I think, is, can we be satisfied (I think we ought and will) with 21 millions for army and navy instead of 27? March 1.—Cabinet 3-3/4—6-1/4, very stiff, on the Belgian negotiations I had to go to the ultima ratio. 31.—H. of C. The fortifications got their first blow.
By midsummer public feeling veered a little: “The tide has turned. Lord Palmerston is now ‘the strong swimmer in his agony.’ ”[34]
A candid and friendly observer has told us the situation: “When I was private secretary to Lord Palmerston,” he says, “and Mr. Gladstone was his chancellor of the exchequer, it was a constant source of sorrow to me, and a perpetual cause of mystery, to note how they misunderstood one another, and how evidently each mistrusted the other, though perfectly cordial and most friendly in their mutual intercourse.... If the proposal was adhered to, Mr. Gladstone gave way. This seemed to Lord Palmerston a case of gratuitous difficulties put in his way, and attempts to thwart without the courage to resist.”[35]
In closing this chapter, let us note that in spite of Lord Palmerston, he won no inconsiderable success. When 1866 came, and his financial administration ended, he had managed, with the aid of the reduction of debt charge after the lapse of the long annuities, to carry expenditure back to the level of 1857. Naval expenditure rose until 1861, and then began to fall; army expenditure rose until 1863, and then began to fall. In 1859, when he went to the exchequer, the total under these two heads was nearly twenty-six millions; when he quitted office in 1866 the total was twenty-four millions. In the middle years it had swelled to twenty-eight. After half a dozen years of panic and extravagance, all sedulously fostered by a strong prime minister, that he should still have left the cost of government little higher than he found it was no defeat, but an extremely satisfactory performance. “We must follow the nature of our affairs,” Burke says, “and conform ourselves to our situation. Why should we resolve to do nothing because what I propose to you may not be the exact demand of the petition? If we cry, like children, for the moon, like children we must cry on.”[36]
III
Savings Banks
Ruminating in the late evening of life over his legislative work, Mr. Gladstone wrote: “Selecting the larger measures [pg 052] and looking only to achieved results, I should take the following heads: 1. The Tariffs, 1842-60. 2. Oxford University Act. 3. Post Office Savings Banks. 4. Irish Church Disestablishment. 5. Irish Land Acts. 6. Franchise Act. Although this excludes the last of all the efforts, viz., the Irish Government bill.” The third item in the list belongs to the period (1861) at which we have now arrived.
The points to be noted are three. 1. The whole of my action in 1859-65 was viewed with the utmost jealousy by a large minority and a section of the very limited majority. It was an object to me to get this bill passed sub silentio, a full statement of my expectations from it would have been absolutely fatal. I admit they have been more than realised. 2. The Trustee Savings Banks were doubly defective, nay trebly, for they sometimes broke. (1) Their principle was left in doubt—were the general funds in trust, or cash at a banker's? This was vital. (2) They never got or could get within the doors of the masses, for they smelt of class. It was necessary to provide for the savings of the people with (a) safety, (b) cheapness, (c) convenience. The banks cost money to the State. The Post Office Savings Banks bring in a revenue. 3. Behind all this I had an object of first-rate importance, which has been attained: to provide the minister of finance with a strong financial arm, and to secure his independence of the City by giving him a large and certain command of money.
A sequel to this salutary measure was a bill three years later with the apparently unheroic but really beneficent object of facilitating the acquisition of small annuities, without the risk of fraud or bankruptcy.[37] An eyewitness tells how (March 7, 1864) “Mr. Gladstone held the house for two hours enchained by his defence of a measure which avowedly will not benefit the class from which members are selected; which involves not only a ‘wilderness of figures,’ but calculations of a kind as intelligible to most men as equations to London cabdrivers; and which, though it might and would interest the nation, would never in the nature of things be made a hustings cry. The riveted attention of the House was in itself a triumph; the deep impression [pg 053] received by the nation on the following day was a greater one. It was felt that here was a man who really could lead, instead of merely reflecting the conclusions of the popular mind.” The measure encountered a pretty stiff opposition. The insurance companies were vexed that they had neglected their proper business, others feared that it might undermine the poor law, others again took the pessimist's favourite line that it would be inoperative. But the case was good, Mr. Gladstone's hand was firm, and in due time the bill became law amid a loud chorus of approval.