Mr. Gladstone felt keenly the separation, for he wrote to the Bishop of Oxford: "There have been two great deaths, or transmigrations of spirit, in my political existence—one, very slow, the breaking of ties with my original party, the other, very short and sharp, the breaking of the tie with Oxford. There will probably be a third, and no more." And in a speech at Liverpool, there was something of pathos in his reference to Oxford, when he said that if he had clung to the representation of the University with desperate fondness, it was because he would not desert a post to which he seemed to have been called. But he had now been dismissed from it, not by academical, but by political agencies.

Mr. Gladstone was elected to represent his native district in Parliament, and he was at the head of the poll in Manchester, Liverpool, and all the large towns. The result of the general elections was a considerable gain to the Liberal party, but that party sustained a severe loss by the death of Lord Palmerston, October 18, 1865.

A new cabinet was constructed, with Earl Russell as Premier, and Mr. Gladstone as the Chancellor of the Exchequer. Mr. Gladstone became for the first time the recognized leader in the House of Commons, which then meant virtually Prime Minister, for with the aged Premier in the House of Lords, and the youthful Chancellor in the Commons, it meant nothing else. But Earl Russell and his younger colleague were calculated to work in harmonious action, for they were both Reformers. The ardent temperament and the severe conscientiousness of the leader was the cause of much speculation and anxiety as to his management. His first appearance as leader of the House was therefore waited for with much curiosity. The new Parliament was opened February 6, 1866, by the Queen in person, for the first time since the death of Prince Albert. In the speech from the throne it was announced that Parliament would be directed to consider such improvements in the laws which regulate the right of voting in the election of the members of the House of Commons as may tend to strengthen our free institutions, and conduce to the public welfare. Bishop Wilberforce wrote: "Gladstone has risen entirely to his position, and done all his most sanguine friends hoped for as leader.... There is a general feeling of insecurity of the ministry, and the Reform Bill to be launched to-night is thought a bad rock."

May 3, 1866, Mr. Gladstone brought forward what was destined to be his last budget for some years. There was a surplus of over a million and a quarter of pounds, which allowed a further and considerable reduction of taxation.

The condition of Ireland was very grave at this time, and as apprehensions were felt in regard to the Fenians, a bill suspending the Habeas Corpus Act in Ireland was passed. Mr. Gladstone, in explaining the necessity for the measure, said that the government were ready at any time to consider any measure for the benefit of Ireland, but it was the single duty of the House at the moment to strengthen the hands of the Executive in the preservation of law and order. The bill was renewed by the Derby government, and passed as before, as the result of an anticipated great Fenian uprising under "Head-Centre" Stephens.

During a debate on the bill for the abolition of Church rates, Mr. Gladstone said that the law requiring Church rates was prima facie open to great objection, but he could not vote for total abolition. He offered a compromise and proposed that Dissenters be exempted from paying Church rates, and at the same time be disqualified from interfering with funds to which they had not contributed. The compromise was accepted, but failed to become a law.

On the subject of reform, mentioned in the address, there were great debates, during the session of 1866. The new Cabinet, known as the Russell-Gladstone Ministry, set themselves to work in earnest upon a question that had baffled all the skill of various administrations. As a part of the reform scheme, Mr. Gladstone brought forward a Franchise Bill in the House of Commons, March 12th.

The bill satisfied most of the Liberal party. Mr. Robert Lowe, a Liberal, became one of its most powerful assailants. His enmity to the working classes made him extremely unpopular. Mr. Horseman also joined the Conservatives in opposing the bill. Mr. Bright, in a crushing retort, fastened upon the small party of Liberals, led by these two members in opposition to the bill, the epithet of "Adullamites." Mr. Horseman, Mr. Bright said, had "retired into what may be called his political Cave of Adullam, to which he invited every one who was in distress, and every one who was discontented. He had long been anxious to found a party in this house, and there is scarcely a member at this end of the House who is able to address us with effect or to take much part, whom he has not tried to bring over to his party and his cabal. At last he has succeeded in hooking ... Mr. Lowe. I know it was the opinion many years ago of a member of the Cabinet that two men could make a party. When a party is formed of two men so amiable and so disinterested as the two gentlemen, we may hope to see for the first time in Parliament a party perfectly harmonious and distinguished by mutual and unbroken trust. But there is one difficulty which it is impossible to remove. This party of two is like the Scotch terrier that is so covered with hair that you could not tell which was the head and which was the tail." This sally, which excited immoderate laughter, remains one of the happiest examples of Parliamentary retort and badinage.

During this session the Conservative party met at the residence of the Marquis of Salisbury, and decided upon strongly opposing the measure proposed by the Liberal government. Mr. Bright characterized it as "a dirty conspiracy." On the other hand, the country supported the bill, and great meetings were held in its interest. Mr. Gladstone spoke at a great meeting at Liverpool. He said: "Having produced this measure, founded in a spirit of moderation, we hope to support it with decision.... We have passed the Rubicon, we have broken the bridge and burned the boats behind us. We have advisedly cut off the means of retreat, and having done this, we hope that, as far as time is yet permitted, we have done our duty to the Crown and to the nation." This was regarded as the bugle-call to the Liberal party for the coming battle.

The debate began April 12th, and continued for eight nights. "On no occasion since, and seldom before, has such a flow of eloquence been heard within the walls of the House of Commons." Mr. Disraeli spoke for three hours against the bill, and in his speech accused Mr. Gladstone of introducing American ideas of Government, and of having once assailed the very principles he now advocated, when in the Oxford Union he spoke against the Reform Bill of 1832. Mr. Gladstone's reply was one of the most noteworthy parts of this famous debate. He rose at one o'clock in the morning to conclude a legislative battle which had begun two weeks before. "At last," Mr. Gladstone said, "we have obtained a declaration from an authoritative source that a bill which, in a country with five millions of adult males, proposes to add to a limited constituency 200,000 of the middle class and 200,000 of the working class, is, in the judgment of the leader of the Tory party, a bill to reconstruct the constitution upon American principles.