It may be said that the proper test to apply is that of taxation. Let us then look at the question from this point of view. The Conservatives, we know, succeeded in 1874 to a very large surplus. Out of this they repealed or reduced duties, according to the Statistical Abstract, to the extent, in 1874, of £4,300,000; in 1875, £600,000; 1876, £416,000; and in 1878, £80,000-making in all nearly £5,000,000; while, on the other hand, they imposed taxes to the amount of £6,300,000. The difference, though no doubt considerable, is not sufficient to justify a change of financial policy.

It cannot then be maintained that there was any such severe suffering, or great change of circumstances, as could justify the Chancellor of the Exchequer in abandoning his policy, or in so arranging his budget as to entail on the country in three successive years very considerable deficits. No doubt, however, the result tended to conceal from the nation the real effect of a "spirited foreign policy." Lord Beaconsfield's Government did not venture to impose taxes sufficient to meet their expenditure, but though they may have deluded themselves, the election of 1880 showed that the people of England understood the real state of the case. But perhaps it will be said that these formidable deficiencies apply to three years only. Let us then take the whole six years of the late Conservative administration, and see how far they carried out their principle that we were not doing as much as we ought to reduce the debt. The previous Liberal Government took office in 1869, and at that time the debt, as shown in the Statistical Abstract, stood at £803,000,000, while it had been reduced by 1874 to £776,000,000. To arrive at the exact diminution there are various allowances which would have to be made on both sides, but, speaking roughly, we may say that the diminution was at the rate of £5,000,000 to £6,000,000 a year.

When the Conservatives took office in 1874, the amount of the debt was £776,000,000, and when they resigned in 1880 it was £774,000,000, showing an apparent reduction in six years of less than £2,000,000. To arrive at the real amount, however, we must on the one hand add £20,000,000, the amount raised for the purchase of the telegraphs, the Suez Canal shares, and local loans, and on the other hand we must deduct £4,000,000, being the reduction in bank balances. This gives a real reduction in six years of £18,000,000, being at the rate of only £3,000,000 a year. Lastly, I may add that under the present Government the annual reduction has risen again to over £7,000,000.

Another mode of testing Sir Stafford's administration on this head is to consider the mode in which he dealt with his special military expenditure. "The cost," he says, "of the preparation consequent on the Russo-Turkish war, and of the South African wars, had amounted

to about £12,285,000, the amount raised by borrowing had been only (?) £8,100,000, showing that £4,185,000 had been provided by taxation." The actual amount so borrowed, as stated by Mr. Childers in his very interesting budget speech, was rather less than the sum admitted by Sir Stafford, namely, £7,850,000, to which must be added £5,000,000, being our contribution towards the expense of £17,500,000 incurred by India in the Afghan war. This, then, makes £12,850,000 debt inherited by the present Government, on account of the war expenses incurred by Sir Stafford's administration, even if we do not include the South African expedition. Of this amount £3,300,000 only will be outstanding at the close of the present financial year, namely, on the 1st April, 1880, showing that the present Government will have paid, in addition to the whole of their own expenditure, over £9,000,000 of that incurred by their predecessors. Even if we admit Sir Stafford's argument, that in this conclusion the whole annuity of £1,350,000 ought not to be included, but only £800,000, the amount so paid would still be £7,000,000.

On this point also, therefore, the action of the present Government contrasts, I think, very favourably with that of their predecessors. I am very glad to see Sir Stafford Northcote, with the weight of his great authority, objecting to frequent changes in taxation. This, he very forcibly observes, "can only be done at the expense of a good deal of inconvenience. Trade operations are disturbed, and business is dislocated, perhaps for a very long time, by new imposts which may, after all, bring very little into the Exchequer. There are inconveniences which, no doubt, can and must be borne for adequate reasons, but to add to a tax one year in order to take off the addition in the next year is vexatious and harassing. Moreover, the policy would defeat itself. If a minister were to add a sixpence to the duty on a pound of tea for a year only, the result would simply be that there would be a considerable reduction in the quantity of tea that would be imported. The trade would be agitated, but the Exchequer would gain little or nothing." 1

Even as regards the Income tax, he continues, though the difficulties are less apparent, still, if we look deeper, 2 "we shall find mischief enough, and suffering enough, occasioned to many of the struggling taxpayers by the delightfully easy process of 'taking the income tax at a penny higher.'"

But have Conservative Governments acted up to these sound maxims? In order to avoid frequent changes of taxation, it is necessary to maintain a good margin between income and expenditure, so that in case of unforeseen expenses, there may be a substantial surplus to fall back on. Let us see how far Liberals and

(1) Sir Stafford Northcote, Nat. Rev. p. 609, January, 1884.
(2) Ibid.

Conservatives have borne this in mind. I will take the last twenty years. From 1863 to 1867 the Liberals were in power, 1868 and 1869 were Conservative years, 1870 to 1873 Liberal, 1874 to 1880 Conservative, 1881 to 1883 again Liberal. Now let us look at the surpluses and deficiencies:

It is clear from these figures that the Liberals have provided a surplus in every one of their ten years; while the Conservatives. have so arranged matters, that in their ten years we have five times had to face deficits amounting in all to over £11,000,000.

In justifying the £6,000,000 vote of credit taken during the RussoTurkish war Sir Stafford observes that "the case was one which did not admit of delay. The country had forces which were costing a good deal of money; but when the moment came at which it was necessary to show that they could be brought into action if required, it appeared that we were without the means of moving a corps d'armée. If those means had not been at once provided, the mischief would have been done. Promptitude in war,' Mr. Gladstone lately told us, ' means cheapness.' Promptitude in averting war means something better still . . . It fell to the lot of the Conservative Government to make up for previous neglect, and to place our establishments on a footing which has increased their efficiency,"1 &c.

This passage is calculated to give the impression that the Liberals. had neglected to maintain our establishments on a proper footing, and that the Conservatives on taking office found themselves compelled to incur a large expense for this purpose. As a matter of fact, however, Lord Beaconsfield's Government came into office in

(1) Sir Stafford Northcote, Nat. Rev. p. 612, Jan. 1884.

March, 1874, and the £6,000,000 was voted in 1877, when they had been for more than three years in power.

I observe that Conservative critics generally quote with much satisfaction that part of Sir Stafford's article in which he contrasts the average annual expenditure of the six Conservative and the three Liberal years. The figures already given (page 146) show clearly why Sir Stafford takes the average of his six years. The expenditure increased under his rule from £74,000,000 to £84,000,000. This was the amount when Mr. Gladstone came into office, and that is certainly the fair sum to take for comparison. Sir Stafford then makes his comparison under the following heads: First, total expenditure of all sorts; secondly, total expenditure excluding Debt; thirdly, Military and Naval expenditure; and fourthly, Civil Service expenditure, exclusive of the Post Office service. As to the first head I think I need say no more. No one will really class repayment of debt in the same category as real actual expenditure.

The second head is almost equally illusory, for, as has been so often pointed out, the repayment of debt is by no means the only item which must, in fairness, be struck out of the account. The last two heads have been already dealt with. If we compare the expenditure on the army and navy of the three Liberal years with the three last Conservative years, instead of with the whole six, the result shows a large balance in favour of the present administration. Lastly, Sir Stafford observes that the Civil Services of the present administration show an average increase of £3,000,000. Now if we look back we shall find that the Grants in Aid of Local Taxation for the year 1875 were £3,300,000, and for Elementary Education £2,139,000, making £5,400,000; while, in 1883, they were respectively £6,000,000 and £3,920,000, making £9,920,000, and showing an increase of no less than £4,500,000 under these two heads alone.

Perhaps it will be said that, though I have compared the Civil Services of 1879-80 with those of 1882-3, the last year in which the accounts are complete, I have omitted to deal with the general expenditure of that year, in which it amounted to nearly £89,000,000. It seems useless, however, to compare a year of war, either with years of peace or with years of war in which the payment of the expenditure was in great measure deferred. Conservative statesmen, moreover, generally speak as if the Egyptian policy stood on the same footing as the war in Afghanistan. But the cases are entirely different. While many Liberals objected altogether to any interference in Egypt, the Conservatives were almost unanimous in calling on the Government to "protect British interests" and adopt a vigorous policy in Egypt. So strongly did they feel the necessity of interference in Egypt that, thinking there was some hesitation on the part of the Government, they held a great meeting

in Willis's Room on the 30th of June, 1882, attended by Sir Stafford himself, Lord Salisbury, the Duke of Buccleugh, Lord Carnarvon, Lord Galloway, Lord C. Hamilton, Mr. Lowther, Mr. Stanhope, Mr. Balfour, and other Conservative leaders. Sir Stafford, after dwelling on the importance of the British interests in Egypt, urged that, in justice to the Khedive, we were bound to intervene. The Khedive, he said, "having acted with the most perfect loyalty and good faith, and with an amount of courage for which few were prepared, we find him left, or threatened to be left, in a position of the greatest difficulty, to the utter shame of the counsels of England." Lord Salisbury spoke very strongly in the same sense, and justified the meeting on the express ground that "if the public does not interfere to guide a divided and faltering Government, we shall find our country issue with diminished authority, with broken power, and having accepted humiliation, which may for ever jeopardise our position as a nation."

How different is the case in regard to Afghanistan! The Liberal party with one voice objected to a forward policy in that country the moment they obtained any inkling of what was going on. The Duke of Argyll questioned Lord Salisbury on the subject. In reply Lord Salisbury said: "None of those suspicions of aggression on the part of the English Government have any true foundation. Our desire in the future, as it has been in the past, is to respect the Afghan ruler, and to maintain, as far as we can, the integrity of his dominion. . . There is no reason for any apprehension of any change of policy or of disturbance in our Indian Empire. Our relations with the Ameer of Cabul have undergone no material change since last year. I do not believe that he is worse disposed towards us than hitherto, or that his feelings are in any way more embittered towards the British Government." This answer naturally lulled the Liberals into security; but from the moment they discovered the real state of the case, they never ceased to protest against what was being done.

To sum up then, this, I fear very tedious, comparison of Liberal and Conservative finance, I would first point out that, taking Sir Stafford's own figures, the late Conservative Government incurred special liabilities for the Russo-Turkish and South African wars of £12,285,000, only £4,185,000 of which they paid out of taxes, while they raised £7,850,000 by borrowing, to which must be added our contribution of £5,000,000 towards the expense of the Afghan war. On the other hand the present Administration have not only paid the whole of the extra war expenditure incurred during the last three years for the Egyptian and South African wars, amounting to £6,500,000, but have also liquidated at least £7,000,000 of the (1) Lord Salisbury, South-Eastern Gazette, March 20th, 1880. VOL XXXV. N.S.

M