of not only leading but sustaining public opinion at a critical period. That has been the high fortune of the people of Bath, and they have proved themselves worthy of it by the spirit and constancy they have shown. I cannot doubt they will continue their patriotic course by supporting Mr. Forsyth, an able and accomplished man, who will do honour to those who send him to Parliament. For nearly five years the present Ministers have harassed every trade, worried every profession, and assailed or menaced every class, institution, and species of property in the country. Occasionally they have varied this state of civil warfare by perpetrating some job which outraged public opinion, or by stumbling into mistakes which have been always discreditable, and sometimes ruinous. All this they call a policy, and seem quite proud of it; but the country has, I think, made up its mind to close this career of plundering and blundering.-Ever yours sincerely, B. DISRAELI."

The spirit and tone of this letter call for no comment, as it carried with it its own condemnation and its own punishment. The Conservatives committed another great mistake in opposing the re-election of Sir Henry James at Taunton, on his appointment as Solicitor (afterwards Attorney) General; breaking, in so doing, the recognized rule of courtesy by which a public man in his position, of whatever party, is left undisturbed in the possession of honour and distinction deservedly won-never more deservedly than in the present case. Nor did the conduct of the election make things better; for while the admirable tact and temper displayed throughout the contest by Sir Henry James placed him higher than ever in general opinion, the tactics of his opponents were marked by characteristics so directly opposite as to meet with great reprobation from the best men even of their own party. He carried his election, and the next step in a proceeding consistent throughout was to lodge a petition against his return, which was pending when the year closed.

The boldest defence of the much-blamed policy of the Government was undertaken by Mr. Lowe, at the Cutlers' Feast, at Sheffield. "When," said he, "nearly five years ago her Majesty's Government took office, they came to a resolution that they would not be mere drawers of salary and distributors of patronage; but that, if they remained in office at all, they would make their tenure of power memorable in the history of this country. They took a survey of different political questions, and they came to resolutions the most daring, perhaps-I will not say the most extravagant-that any set of middle-aged and elderly gentlemen had ever before arrived at. (Laughter.) They determined they would solve, if they were soluble by their means, and by the aid of the majority which had brought them into power, the leading difficulties that beset the path of the politician; that they would shrink from no difficulty, they would avoid no unpopularity or obloquy, but would grapple with, and, if possible, surmount all the leading difficulties then seen on the political horizon. Their programme was an audacious, almost

an extravagant programme; but the strangest part of it was that, with the exception of higher education in Ireland, they had realized the whole of it. Every single thing they had undertaken to do, to his surprise, and no doubt their infinite astonishment, they had realized it all within the past five years. It appeared to him a mere dream when he paused and looked back at it; but they had done all the things they had set their heart upon, and they believed they had done their duty by the country. But, on the other hand, he was bound to say that, although they had done this work, they had not received that reward which they had expected to receive. (Laughter.) He did not try to cast blame on any one. No doubt there were many reasons which might account for it. There was such a thing as sameness. People got weary of seeing the same people in the same places for a long time, though by a recent shuffle of the cards, perhaps that had been obviated a little." (A laugh.)

Referring to himself, Mr. Lowe said he had, as they were aware, within the last two or three months been the object of about as much written and spoken abuse as ever had been showered on one man, and he had had no opportunity of making any explanation. In the programme to which he had referred two parts had been allotted to him. One was the introduction of competition in the civil service that had been done as they knew; the other was to enforce economy. They were aware that the duty of the Treasury was to enforce economy, and it was its privilege to make things as disagreeable as possible to the great spending departments in enforcing that economy. When he succeeded to that office he took a step which at once brought him into notice. It was no doubt true he did not feel within himself any of that admirable genius for finance which they had seen in Mr. Pitt, Sir Robert Peel, and Mr. Gladstone. He knew himself too well that he had none of that power, but he had read in the Latin Grammar that economy was a great revenue. He felt that the task of watching over the revenue was open to him, and to that task he devoted himself. The first thing he did was to issue an order to the Treasury that no new expenditure would be allowed without his opinion being taken upon it. (Cheers and laughter.) That was not so before. It was supposed that it was only the duty of the Chancellor of the Exchequer to busy himself with matters of high finance, leaving questions of expenditure to be dealt with by an inferior official, called the Secretary of the Treasury. Now, it appeared to him that that arrangement was a very bad one for the public service, and he resolved that it should not exist any longer; but great pressure was brought to bear upon him. There was the pressure of deputations, and, worse still, of the House of Commons, which, instead of protecting the revenue, was its most powerful assailant. He thought, if the Government really was in earnest, he would not be doing what was right if he left the expenditure without protection in the hands of an official of inferior rank, who had not the weight of a Cabinet Minister. Such a person as the Secretary of

the Treasury could only carry his own weight, and he (Mr. Lowe) thought the Government could not do less than give its weight to those whose duty it was to enforce economy, and therefore it was in an evil hour he had taken upon himself the duty of protecting the revenue, instead of leaving it to be done by an inferior official. Personally he had no reason to rejoice in it. It had multiplied his unpopularity by any figure they chose to suggest. It had turned the whole press-at all events all the London press-against him. He could not recommend any man who valued his own peace and comfort to follow his example in the future. It certainly had not tended to promote his self-satisfaction. He, however, must not be misunderstood. The dissatisfaction came from the outside. He had nothing to complain of or contend against with regard to his own colleagues. The House of Commons might be divided into two parts the economists and the spendthrifts, and it might be thought that the Chancellor of the Exchequer had nothing to do but to play off the one against the other. But it was not so. When the spendthrifts were to the fore, unfortunately the economists were not to be found, and when the economists were in advance the spendthrifts were judiciously silent. (Laughter.) Most of them opposed extravagance in the abstract, but were in favour of it in the concrete. (Laughter.) He had to contend then, not only against the House of Commons, but against the metropolitan press, which recently constituted itself in regard to the purchase of land on the Thames Embankment a provincial press. He never could see his way to allowing London to dip into the public purse to the extent of 40,000l. He had prevented that, but at what an expense to his own character? Why, his character had been almost ruined. (Laughter.) Take another instance, the increase of the pay of the clerks at the outports-a proposal which happened to have been advanced by members representing the outports. (Laughter.) What did they resort to when they found he would not yield? They stopped the supplies. He must say it was a relief to him that he should be involved in this no more. He should say no more now about his own case, for it was a pitiable one. (Laughter.) "It was my good fortune" (continued Mr. Lowe), "when I took charge of the finances, to find myself in this position. The expenditure exceeded the revenue at the end of the year by the sum of 513,0007. That was not a promising position to start with; but by drawing the payment of revenue back I contrived to create a surplus of three millions and a quarter, out of which I took off the corn duties and the insurance on fires. So that I got out of that pretty well. During the last four years I have been able to take off twelve millions of taxes; but I ask you if you had been paying three millions extra for taxes, as you would have done if the expenditure had not been watched over, how much of these twelve millions would have been remitted? But the expenditure has diminished, and the consequence is that the revenue of this country having increased during the period that I had charge of the

finances by a sum of twelve millions a year, every farthing of that twelve millions a year has gone into the pockets of the people, and not one sixpence of it has gone to increase the public expenditure. Nor, gentlemen, is that all. You have now-with the exception of Exchequer Bills, which are kept for the purpose of convenienceno unfunded debt at all; for although I have been obliged to increase the debt ten millions in order to pay for telegraphs, I have diminished the debt during four years by twenty-six millions. Even that is not all. I was called upon in 1870 to provide two millions on account of the war in Europe, and, as you know, in the present year I have been called upon to pay the sum of 1,600,000Z., the one-half of the 'Alabama' indemnity, and making altogether 3,600,000. So prosperous have been the finances during this period, that I have paid off the whole sum of 3,600,000l. without borrowing a sixpence or imposing a tax on you at all. That is the answer which I have to give to those who have been so liberal in criticizing. Can it be said, in exercising this strict economy in your public service, that anything has been shirked, or that anything which ought to have been done has been neglected? Look at the army. In 1859 the army numbered 84,000 men. Now it numbers 98,000, being an increase of 14,000, and this is amendment with this great reduction in the expenditure. If you look at the fine arts, I have spent 80007. in buying Sir Robert Peel's pictures, and 50,0007. in splendid collections of antiquity for the British Museum; so far from my having been stingy, I consider that these payments have been liberal in the extreme. I have been told that everything I have done has been mismanaged, and that the office I have vacated had broken down. I can only say I am proud of the position in which I have left your finances, and I trust many more Chancellors of the Exchequer will be able to give a similar account of receipts."

In conclusion, Mr. Lowe said he had only further to state that the time could not be far distant when it would be settled whether the Government would retain power or give place to those who opposed them step by step. They were not tenacious of office. They had laboured for five years, and it was a small matter whether they retained power or not; it was not for him to say whether it was a small matter for the people. If the decision of the country should be against them, they would retire into private life at peace with their own consciences, knowing that they had done their best for the country; they had left in the statute-book and in the history of the country records which calumny could not permanently distort, nor envy, with all its efforts, obliterate. (Cheers.)

CHAPTER IV.

The Money-Market-Bank rate of Discount-Railway Accidents-Board of Trade Circular-Ministerial Crisis and Scandal in Canada-The Ashantee War-Circumstances and History of the Gold Coast Dependencies—Impending Famine in Bengal -The Russians and Khiva-Negotiations.

THERE is nothing of marked interest in our domestic history to be recorded after the close of the session. The year proved, to the end, generally prosperous and tranquil. Frequent derangements of the Money-Market, produced by external causes, passed over without disastrous results. The enormous payments made by France to Germany on account of the indemnity produced little disturbance; but the German demand for the establishment of a gold coinage sometimes caused inconvenient pressure. The reaction from a period of excessive speculation produced serious embarrassment on the Stock Exchanges of Berlin and Frankfort, and at Vienna the difficulty amounted to a panic. In the autumn a still graver crisis commenced in the United States with the failure of more than one bank which had commanded general confidence. The immediate cause of stoppage was the investment in railway construction of an undue proportion of capital, and the immediate consequences were alarming. For a short time all the banks virtually suspended payment, except in the form of certified checks. The moderation and prudence of the commercial community, and the intrinsic soundness of the banks themselves, facilitated an early resumption of payments, and the financial crisis was, apparently, at an end; but every kind of enterprise was seriously discouraged, and the interruption of trade and the dimunition of the demand for labour threatened to cause much distress during the winter. The effect of foreign disturbances in England was indicated by rapid changes in the value of money, but timely vigilance on all occasions provided against impending scarcity. The bank rate of discount was reduced early in the year from 5 per cent. to 4 and to 3. In May it rose to 5, and in June to 6 and 7 per cent. At the end of August the rate was 3 per cent.; in September and October it rose again to 7 per cent., and in November to 9, from which it has since fallen to 4. Trade in general continued moderately active, though the rate of increase was diminished. A very unpleasant feature of the year was the increased frequency of railway accidents, which have arrived at such a measure of excess as to constitute a national scandal. Mr. Chichester Fortescue, the President of the Board of Trade, thought himself bound to emerge from the usual official reserve by addressing a circular to the directors of our numerous railway companies, calling their attention to the Report of Captain Tyler upon the accidents which took place on railways in the year 1872, the number of which was greatly in