unfavourable harvest. Two of the States which, together with us, form the barrier of Europe against the Atlantic are at this moment provisionally governed, and one of them seems to be in the throes of a civil war. If we turn in another direction, we find that the monetary world has been very much agitated and excited by the very large remittances which have been made from France to Germany, and in addition to that we have had at home the self-inflicted misery of strikes to contend with, besides a great rise in the price of all the necessaries of life, more especially in that greatest necessary in our cold and damp climate-coal. But I think that any one who attends to the narrative which I am about to lay before the House will not be able to trace the slightest vestige of any ill effect which those different vicissitudes and misfortunes have had upon the revenue and finances of the country. Things which in former years would have produced the most active effect seem now almost powerless. It really looks as though the winds that could bow the sapling were harmless against the oak-as if our finances, our business, our commerce, our trade, by the immense expansion which has taken place, have gained in solidity, and are more difficult to be moved, just because they are larger than before. I trust it will prove so. At any rate, my task is a very gratifying one-namely, to detail the financial results of a year of almost unexampled prosperity.

"The first point I would draw attention to is a comparison of the expenditure of the year which has just elapsed-1872-3-with the total grants within that year. By the words 'total grants' I understand the grants which were made in the Appropriation Act, together with the supplemental estimates which were granted in the current year. Now the total grant of the year 1872-3 amounted to 71,881,0007., and the actual expenditure of the year amounted to 70,714,000%., so that the actual expenditure is less than the actual grants by a sum of 1,167,000l., and less than the amount granted in the Appropriation Act by 949,000l., and less than the total original estimate in the budget by 599,000l. I now proceed to mention some of the principal items of this saving. The first is a sum of 205,000l. unexpended money-charges on the Consolidated Fund. That arises in this manner:-By the Act of 1869, by which the Chancery and Bankruptcy balances were transferred and paid into the Exchequer, provision was contained to the effect that, in case the funds fell below a certain sum, a grant should be made in aid of them from the Consolidated Fund. We have had to make such a grant since the Act was passed, and a sum of 100,000l. was put down for that purpose. Happily, however, the fund has been sufficient, and the grant has not, therefore, been called on. Another cause is somewhat similar in its nature. By the Telegraph Act, also of 1869, it was enacted that if the telegraph revenue should show a profit, that profit should be expended in the purchase of stock, and 100,000l. was put down to meet such an expenditure. In point of fact, however, the expenditure had not to be incurred, and the total saving on these heads has been 205,0007. Again, the

Civil Service estimates show a very large reduction indeed, amounting to no less than 766,000l. This arises principally on two heads -the one Education, the other Public Buildings. In respect of the first, the Education Department seem to have believed that the Act would come more rapidly into effect than it has done, and they made provision accordingly, which has not been called upon. That, I must say, is only in accordance with my own experience. An error which people are very likely to fall into is this that because a change is made, the change which is expected and desired can be at once brought about. According to my experience, it is a matter of time, labour, and care to bring a new system of any kind to maturity. Twenty years of excessive labour were devoted by able men to the old system, and I think we must not be too sanguine in expecting that the new scheme shall arrive at the point we should like to see it attain until, at any rate, several years have elapsed. (Hear.) Thus there has been a considerable saving on the Works Vote, class 1, amounting in round numbers to about 300,000l. On this subject the Committee on Public Accounts have made a very valuable suggestion. They point out that very large surrenders are often made in this department-amounting in 1869 to 240,000/., in 1870 to 270,000l., in 1871 to 243,000l., and in 1872 to 305,000. They point out how this has happened, and suggest that, when the sum taken for a particular work has not been expended, a system of transfer should be adopted similar to that which exists in the case of the army and navy. This suggestion was well worthy of consideration. In the Post Office there was an excess of 24,0007., and in the Telegraph department of 172,0007. I think that in future it would be better that supplemental estimates should be moved for any excesses of this kind than that they should be allowed to run on to the end of the year. (Hear, hear.) I have now compared the actual expenditure of the past year-1872-3-with the grants of the year, and it may be worth while to compare the expenditure of 1872-3 with that of 1871-2. The expenditure of 1871-2 was 71,490,000.; that of 1872 3 was 70,714,0007.; showing a decrease of 776,000. in the expenditure of last year as compared with the year preceding it. There was a decrease of expenditure on the army of 1,055,000.; the navy, 358,0007.; the Civil Service, 187,0007.; the Consolidated Fund charges, 222,0007.; and on the debt of 34,0007.; making in all 1,856,000l. There has been an increase of expenditure in only two items-namely, for the abolition of purchase 606,0007., and in the revenue department 575,0007., arising from the great extension of the Post Office and Telegraph departments; making the net decrease 675,000.

"I now proceed to compare the revenue of the year 1872-3 with the estimate of that year. The estimate was 71,846,000l. The actual revenue for the year has been 76,608,7707., so that there was an increase of revenue over estimate of 4,781,7707. The expenditure, as I have stated, for the year was 70,714,7707., and, subtracting one of these amounts from the other, we found a surplus of income over

expenditure for the year which has just expired of 5,894,0007. (Hear, hear.) Of this revenue there were derived from sources other than taxes-from the Post Office, Telegraphs, Crown Lands, and Miscellaneous-10,191,000/., so that the residue alone was derived from taxation. The Customs have, I find, increased by a very large amount; in fact, there has been an increase in every item of Customs' revenue with the exception of coffee, chicory, and molasses. Coffee produced in the financial year to March 31, 1872, 362,0007. The loss on coffee has been only 157,000l. On the reduction of the duty in May there was an enormous increase of consumption, and every month except September shows an increase over the corresponding month of the previous year. The returns are very gratifying, because it had always been said that coffee was an article which it was no use relieving from taxation, since the English could not make it, and did not like the trouble of it; and, in point of fact, it was not a national beverage. The result has shown the contrary. The increase in consumption has been seven per cent. in coffee and eight per cent. in chicory, whereas in the previous year there was a decrease of eleven per cent. The loss on coffee was estimated at 165,000l., but it has only been 157,000l. The result of the change of duty had been that while the revenue from coffee and chicory in 1871-2 was 479,000l., as compared with an estimated revenue of 495,0007., the revenue in 1872-3 was 273,000l., as compared with an estimated revenue of 265,000l. It is pretty plain, therefore, that I was right in thinking that coffee was over-taxed with respect to tea, and that it only required to be placed on a level with it for the consumption to increase. The increase in Customs' duties has been-in spirits, 357,0007.; in tobacco, 253,000l.; in tea, 129,0007.; in wine, 37,0007.; and in sugar and molasses, 85,000l. I now turn to the Excise. The revenue from Excise in the year just expired has been 2,475,000l. in excess of the estimate, spirits showing an increase over the previous year of 1,330,0007., making the total receipts from spirits 13,600,000. The increased consumption has continued throughout the year, and at the rate of 25,000l. per week. During the six months, April to September, it was at the rate of 30,000l. per week; and in the last six months it was at the rate of 20,000l. per week. It is impossible to make such a statement as this without very mixed feelings. On the one hand, we cannot help thinking to what much better use the greatest part of the money-only a small portion of which is represented by these enormous totals-might have been put; on the other hand, we cannot but in some degree rejoice that the state of the working classes has enabled them to make this expenditure, although they might have spent the money is so much better a way. I now come to malt, the increase on which is also very large. The increase of revenue in 1872-3 over 1871-2 is 866,000l., but of this 400,0007. is due to exceptional circumstances. It arises from a late malting in 1872 and an early malting in 1873. The real increase in the quantity of malt made is represented by the respect

able figure of 466,000l. The licences, which have not been progressive lately, show an increase of 148,0007. Stamps also show a remarkable increase over the estimate of 247,000l., while as compared with last year's, produce deeds show an increase of 105,000., bills of exchange of 110,000/., receipts and drafts of 40,000l., marine insurance of 12,0007., probates and administrations of 75,0007., and fee stamps of 10,0007., making altogether 352,000l. On the other hand, there has been a falling off of 190,000l. in the Legacy duty, which of course is not under the control of the Government; but it must be remembered that the amount of legacy duty in 1871-2 was the largest on record-viz. 3,371,000l. The Income-tax shows an increase over the estimate of 560,000l. I now come to the comparison of the revenue in 1872-3 with that in 1871-2. In 1872-3 it was 76,609,000l., in 1871-2 it was 74,708,0007., showing an increase of 1,901,0007., although taxes were remitted calculated to cause a loss of 3,240,000l.

"I will next refer to the state of the Exchequer balances for the four years from April 1, 1869, to March 31, 1873. On April 1, 1869, the balance was 4,707,000l. There has been a surplus of revenue over ordinary expenditure during the four years of 16,079,000., and an excess of repayments of loans for public works over advances of 2,109,000l., and other items, making together 22,895,000l. Out of that sum there has been applied directly to the extinction of debt 10,903,0007., leaving a balance on March 31, 1873, of 11,992,000l. Between April, 1869, and April, 1873, we have paid off debt to the amount of 29,633,0007., but during the same period we have incurred debt, for telegraphs, 8,668,0007., and for fortifications, 1,285,000l., making together 9,953,000l. Subtracting that from the amount paid off, there remains a net diminution of debt of 19,680,000l. The Committee should observe that the debt incurred for telegraphs is not money sunk, but represents reproductive expenditure (hear, hear), so that in truth we have not been far from reducing the debt by the large sum I first mentioned. On April 1, 1869, the total debt of all kinds, funded, unfunded, and terminable annuities, was 805,480,000l. On April 1, 1873, it had been reduced to 785,800,000l., it being composed as follows:Funded debt, 727,425,0007.; capital value of terminable annuities in Three per Cent. Stock, 53,546,0007. (42,000,000l. of which, I think, will drop in 1885); and unfunded debt-viz., Exchequer bills for we have no Exchequer bonds out-4,829,000/., making a total of 785,800,000l. The debt has been reduced within the current year by 6,861,000. I will give a few figures showing what I may call our capital expenditure during the last four years. During that time we have spent in fortifications and telegraphs 9,028,000l.; in the abolition of purchase 1,286,0007.; we have diminished the debt. by 19,680,000, and we have increased the balance in the Exchequer by 7,285,0007., making a total capital expenditure of 37,279,000l. During the same four years taxation has been remitted amounting to 9,166,0007., which I hope will be an answer to those who accuse

:

us of having devoted our attention wholly to the debt, and of having done nothing to alleviate the burdens of the people.

"I now turn to the financial year on which we are entering, and compare the estimated expenditure for that year with the grants of 1872-3. The estimated expenditure for the current year is 71,871,000%., and the grants of 1872-3 were 71,881,0007., showing a net decrease of 10,000l. There is a reduction of charge on debt of 80,0007., arising from the cancelling a large amount of stock, and the charges on the Consolidated Fund are reduced by 210,0007. On the other hand, there is a loss in terminable annuities, fortifications, and barracks. The army expenditure, as the Committee have heard from my right hon. friend (Mr. Cardwell), is 407,0007. less than in the past year, the chief decrease being 350,000l. in warlike stores. There is an increase on fuel and provisions of nearly 400,0007. On the navy there is an increase of 341,0007. There is an increase in the dockyards through the increase of wages of 136,000Z., also an increase of 144,000l. in naval stores, and an increase on steam machinery of 132,000., making together with various other items 475,0007. The increased cost of coal is estimated at 60,0007. The Civil Services show an estimated increase of 127,000. There is a decrease in Class 1 on a number of buildings now in hand, but an increase on the Natural History Museum and the new Courts of Justice, both buildings which we are now seriously about to commence. (Hear, hear.) We have only recently received the estimate for the New Law Courts, and I do not think that any time has yet been lost in that matter. In Class 2 there is an increase of 107,0007., due to an increase in the Local Government Board estimate caused by the Public Health Act, and in the Home Office estimate caused by the Regulation of Mines Act. Some increase also occurs in Class 3, which is attributable to the Irish constabulary, in consequence of the report of a Commission, and likewise to the metropolitan and county police. Industrial schools also exhibit an increase, which, I apprehend, will continue as long as those institutions are conducted under an Act so loosely drawn as the present one. On the other hand, criminal prosecutions, reformatories, and county prisons, show a decrease, which is, of course, gratifying. In Class 4 education shows a decrease of 100,000Z., which is owing to the fact I have already mentionednamely, that the Act does not come so rapidly into effect as was anticipated. Science and art and education in Ireland show an increase. Class 5 is practically stationary. There is some decrease in the charge for Colonial establishments, while for the diplomatic service and the Zanzibar mission there is an increase. In the Revenue departments the Customs and Inland Revenue show an increase of 40,000Z., arising from the new assessment to the incometax. In the Post Office there is an increase of 135,000l., attributable to the progress of the service, and the telegraphs exhibit an increase of 145,0007., due to the same cause-the revenue being estimated to increase in larger proportion.