"I now proceed to submit to the House the estimate of the revenue for the year 1873-4, as compared with the actual revenue for 1872-3. The actual revenue for 1872-3 was 76,608,770%. The estimated revenue for the year 1873-4 is 76,617,000l.; so that there is an increase over the actual revenue of last year of 82307. We take the Customs at the same amount as they produced last year— viz., 21,033,000. The Excise we estimate to yield 25,747,000, or 38,000. less than last year. That decrease, I apprehend, is accounted for by what I have already mentioned about an apparent great rise in malt. The stamps we take at 10,050,000Z., being an increase of 103,000l. The land-tax and the house duty we take at 2,350,000l., or 13,0007. more than they yielded in 1872-3. The income-tax we take at 7,000,0007. It yielded 7,500,000/. last year, the difference of 500,000l. being, of course, accounted for by the relics of the higher rate we had before. The Post Office we take at 5,012,000., showing an increase of 192,0007.; the telegraph service we estimate to produce 1,220,000l., showing an increase of 205,000.; the Crown Lands we take at the same amount as last year-viz., 375,0007., and the miscellaneous we estimate at 3,830,0007., being an increase of 33,2307. over last year. The total estimated revenue for 1873-4 is 76,617,0007., being an increase of 546,2307. over the actual revenue of 1872-3. The Customs, as I have said, are put at the same figure as last year. The Excise we estimate to produce a total of 25,747,0007., divided under the following heads-Chicory, 70007.; licences, 3,880,0007.; malt, 6,980,000Z.; racehorses, 10,0007.; railways, 520,000l.; spirits, 14,200,000/.; sugar, 150,000.-total, 25,747,000l. The estimates for spirits is taken at a considerable advance over last year, it having been observed that the revenue from this source has of late years advanced steadily and almost in the same ratio, or about 700,0007. a year. In 1866, when my right hon. friend at the head of the Government was Chancellor of the Exchequer, he called attention to the large yield under the heads of Customs and Excise, and stated that 13,959,000/. from spirits was the largest sum raised in any period of our history by a tax on a single commodity. Well, the estimated income for the ensuing year from spirits under the heads of Customs and Inland Revenue is 19,000,000. The income-tax we estimate will produce 7,000,0007.; that is 1,750,000%. for every penny. When the late Sir Robert Peel first imposed the income-tax, he estimated, taking an average of years, that it would yield 728,0007. for each penny. So that the result of thirty years of experience, and I hope of the improvement of the tax, has been that it now yields a million for every penny more than it did in 1842. (Hear, hear.) It now remains for me to balance the two sides of the account. The income for the year 1873-4, as I have stated, will be 76,617,0007. The expenditure we estimate at 71,871,000%., showing a surplus of 4,746,000l. I have already informed the Committee that the balances approach very closely upon 12,000,000l. Now, the question arises, what are we to do with all this money? (Laughter and cheers.)

ever

"The first subject which must be in everybody's mind, and which, therefore, I will deal with first, is the damages in which we have been cast by the arbitrators at Geneva. Their amount, as far as we can tell by reducing American money into English, is 3,200,000Z., which we are to pay before the 1st of October next in gold at Washington. This appears to me, I confess, to be the service of the present year. (Hear, hear.) Some people, as I have observed, have attempted to make out that, seeing the arbitration occurred last year, it may be said in some degree to belong to last year. But I hold it to be an indubitable principle that nobody pays debts before he is obliged (hear, hear, and a laugh), and as we are not obliged to pay before the 1st of October next, it is in the year in which that fatal day arrives that our duties accrue in this matter. I therefore regard this as undoubtedly a charge not on the year that has gone by, but on the year that is now before us. But while I state this, I am also quite free to admit that this does not necessarily settle the question of the manner in which this large sum is to be met. It is quite true that it is a charge on the year, but it is also true that it is a charge entirely sui generis, and that it has never happened to us before, although I am quite willing to say I hope it may happen again-(oh, oh)-at least, I hope the chance of it may occur again by the reference of some future difference which may arise to arbitration. (Hear, hear.) So large a payment, however, undoubtedly interferes with our ordinary finance, but it interferes with it not as a permanent payment, but as one that comes once and that may never recur. We have taken these matters into our consideration, and we are of opinion that, on the whole, it is our duty to place one-half of this payment upon the ordinary revenue of the present year. (Hear, hear.) That will be the sum of 1,600,0007. As to the rest of the sum-viz., another 1,600,0007.-we think that we ought to provide for its payment, without any further resort to the taxation of the year, by asking for power to give Exchequer bonds or Exchequer bills for the amount, in case, which I do not at all anticipate, of an unfavourable state of the finances. By that means we have disposed, therefore, of 1,600,0007. of our surplus. There remains 3,146,0007., and the question is how are we to dispose of that sum?

"We have carefully considered the matter, and we have come to the conclusion that it is our duty to propose a remission of taxation on some articles which enter very generally into the food of the people, and in that way to give the greatest and most general relief. After having weighed as well as we could the claims of different articles, we have come to the conclusion that the article on which it was desirable that we should fix was sugar. (Hear, hear.) There were a great many taxes which one would be exceedingly anxious to reduce, but there was scarcely one which enters so widely into the comforts of all classes of her Majesty's subjects, from the highest to the lowest, as sugar. It is a sweetener which enters into all sorts of food; it is the delight of children (a laugh), and the solace of age. (A laugh.) With all these admirable

qualities, it is exceedingly nutritious and wholesome, constituting really and truly an article of food. We are also very much encouraged by the result of former reductions to proceed in this direction. The sugar duty in 1872-3 produced 3,252,0007., that being a very considerable recovery from the sum which was taken off in 1870. We are now asking you to make this reduction chiefly on one ground, but there are others on which I need not enlarge which may be taken into account. The reduction of the duty in 1870 has brought into more conspicuous view a set of questions with which I confess I for one was very little conversant before, and on which I would wish to be allowed to say a few words. Nothing, perhaps, has been legislated about so minutely as sugar. It is divided into five different scales, the first being under the head of refined and the others of unrefined sugar. To each of these scales a different value is attached. Before 1865, the highest scale of refined sugar was, I think, taxed at 18s. per cwt., and the lowest at 12s. My right hon. friend near me in 1865 reduced the tax on the highest to 128., and on the lowest, if I am not mistaken, to 88. per cwt. In 1870 the House reduced the tax again to 6s. and 48., so that as we reduced the tax we gradually reduced the range within which the five scales I have mentioned operated. In other words, we left the same number of stairs as before, but then they were not so steep. The effect has been considerable, and I think beneficial. There are not only five different scales of duty for sugar, but seven different scales of drawback for one class—that is refined sugar. The drawback is not paid on the raw but on the refined article, and the system, as it stands, has given rise to innumerable practices, which I shall not call by any hard names, but which our neighbours across the Channel call by very hard names indeed. The result of the change to be made in the sugar duty will be to diminish very much the injury to which I am referring, because the difference will be so slight between the several classes of drawback that it will not be worth any person's while to dress up sugar so as to make it appear a different class from that which it really is. Complaint has been made on the same subject in France, where the duty is very high, and the best results will be produced, I think, in removing the injury to which I am referring if the House should assent to the proposal which I am submitting to its consideration. We shall still leave the scale existing; we have not the power to alter it; but the several scales will be so near each other that it will not probably be worth the while of any one to take much trouble in order to get more in the shape of a bounty than he would have to pay in duty, and the revenue will thus be more fairly treated. The reduction, I may add, which we propose is to take off again half the duty on sugar as before. The duty for the present year-1872-3

is 3,252,0007., and the half of that sum is 1,626,000l. We believe, however, that the increased consumption would give us 1,822,000%., and that the loss to the revenue, therefore, would be only 1,430,0007. I may mention, while on this subject, that we propose the reduced

duty should not come into effect until May 8, so that time may be given to those who hold stocks of sugar to get rid of them. ("Hear, hear," from Mr. Crawford.) We have no inclination to enter into another discussion with my hon. friend the member for the City of London, and after the cheer with which he has just received my proposal, I hope he will not come forward again as one of those evil counsellors who may be disposed to contend that further time should be given. ("Hear, hear," and a laugh.) The rates of duty will be found in the resolution, and it will be sufficient to state now that the highest rate on refined sugar will be 38. per cwt., on the first class 28. 10d., on the second 2s. 8d., on the third 2s. 5d., on the fourth 28., and on molasses 10d.

"Well, we have still something left, and I will not keep the House in suspense one moment on the subject. What we propose to do is to take a penny off the income-tax. (Cheers.) There has been considerable agitation against this tax, to which, however, we have felt it to be our duty to offer the firmest opposition. We are in no position to get rid of the tax in the present state of our finances; nor are we in a position, as I have often argued, to break down the integrity of the tax by treating one schedule in a different manner from another. We have no choice but to retain it; but we are anxious to act as fairly as we can towards all parts of the community, and having made a great remission of indirect, we desire to do something in the way of remitting direct taxation. (Hear, hear.) There is also another reason for the proposal which we make which is not quite so obvious. When Sir R. Peel imposed the income-tax in 1842, the tax, which was then 7d. in the pound, yielded, I think, 7,100,000., or about 100,000l. more than the present amount. (Mr. Disraeli-" Without Ireland.") At present a tax of 3d. in the pound would yield as much as a tax of 7 d. would yield in the days of Sir R. Peel, and we are therefore maintaining the amount of the tax as nearly as possible at its original level, while we are diminishing the number of pence in the pound. In consequence of the proposed reduction there will be a loss this of 1,425,0007.

year

"I have also to mention another small matter-I allude to a reduction of 30,000l. which we propose, by extending the exemption for servants to persons employed by hotel keepers and persons keeping houses for the sale of intoxicating liquors. They have made out, I think, a good cause, because they have hitherto been charged for their servants under circumstances which have caused other trades to be exempted. I had no sufficient answer to give to their argument, and therefore I give them this 30,0007. (Ă laugh.) I may also observe that the reduction of the duty on sugar will cause an increase of 30,000l. to the Excise, because the Excise demand a large sum for a certain amount of sugar used for the purpose of protecting malt, and the lower duty now paid to the Customs would be paid to the Excise. Setting that sum against the 30,000%. by which the Excise will be diminished by the remission

of the tax on the servants of hotel keepers, the amount of the Excise duties will remain unaltered.

"I will now state to the House the result of these changes. The Customs will be diminished, by the remission of half the sugar duties, to 19,603,000. The Excise will remain as it is. The Income-tax will be reduced from 7,000,000l. to 5,575,0007., and the expenditure will be augmented by 1,600,0007. on account of the ( Alabama' indemnity. Thus the estimated revenue will stand at 73,762,0007., against an expenditure of 73,471,0007., leaving a surplus income over expenditure of 291,0007. (Hear, hear.) To sum up briefly what we have done, I may say that we hope to pay during this year the amount of the Alabama' indemnity, 3,200,000l. (A hon. Member-"Half that amount.") No, we hope to pay, in fact we must pay, the whole of that amount during the year; we hope to reduce the National Debt by 6,000,0007.; we shall lend one million in excess of payments in respect of public works, and we shall remit taxation to the amount of 2,835,000l. I trust these estimates will be satisfactory to the Committee, and that hon. members will think that the Government have acted in a spirit of fairness and equality to all parties. (Cheers.) We have been anxious to hold the balance as evenly as we could between direct and indirect taxation, and to consult, as far as we could, the wishes and interests of every portion of the community. We believed that we could not listen to the request to take off the income-tax altogether, but we have endeavoured to make the burden more tolerable, and we believe that in reducing the tax upon sugar we shall not only largely relieve the consumers of that article, but also strike a vital blow at a very objectionable system that has grown up of giving bounties under the form of drawbacks. While they have done their best to relieve the tax-payers, the Government have not been unmindful of the duty resting upon them to reduce the debt as far as they were able. During the present year we have paid off 6,800,0007. of debt. There are, I believe, some who murmur at our having devoted such a large sum towards the payment of the debt. I hope, however, and indeed I believe, that those who hold that opinion are in a small minority, and that they will continue to be in a minority, for I am perfectly satisfied that whenever this nation shall arrive at a point when it shall lose its feeling for the corporate unity of the nation, and shall come to regard individual comfort as of more importance than the welfare and the well-being of the State, and shall consult merely the wishes and the convenience of the present generation; when we shall adopt the witty and worthless maxim-that as posterity had done nothing for us, it is our duty to do nothing for posterity-we shall not be far from the edge of that abyss into which so many States and Empires have been precipitated by self-seeking and sordid purposes. It only now remains for me to move the resolution, fixing the income-tax at 3d. in the pound."