ing to allow themselves to be duped by gross misrepresentations of the nature and effects of financial measures.

In consequence of the recommendation of the Committee of Finance of 1828, in their third report, the sinking-fund plan of 1819 was changed. Till then, the law required that five millions a-year should be paid out of the consolidated fund to the commissioners for redeeming the national debt, whether or not the public income exceeded the expenditure by that sum. The way by which this application of a fixed sum of five millions was managed, was by making good any deficiency of income occasioned by it, by borrowing the amount of the deficiency on Exchequer bills. But, as in point of fact, the surplus income constantly fell short of five millions by two or three millions a-year, the practical result of this piece of financial policy was the borrowing of money to pay debt. This appeared to the Committee of Finance to be such a monstrous absurdity and abuse, that a majority of them came to the decision of advising the discontinuance of the plan. It also was found upon investigating the operation of creating new debt to redeem the old one, that it was attended with great loss; because the interest paid on the new debt was greater than that saved upon the purchases made by the Commissioners of the National Debt. The measure recommended by the Committee of Finance was to apply for the future to the reducing of debt no more than what really was an excess of income over expenditure.* It is worth while to notice here the pertinacity with which the worst parts of our financial system are adhered to, and vigorously supported; a circumstance completely established by the fact, that the greatest resistance was made in the Committee by persons of the highest authority in matters of finance, to the decision which the Committee came to. The question for getting rid of the system of a fixed sinking-fund was carried only by one vote; and in the minority, no less distinguished financiers appeared than Mr. Huskisson, Mr. Tierney, Mr. Baring, Mr. Harris, and Mr. Goulburn.

The dead-weight payments, and the old sinking-fund, having ceased in the way now mentioned, the annual Parliamentary account for the year 1829 is the first that gives anything like a fair and clear statement of the annual income and expenditure, although it is still extremely imperfect; and we shall therefore begin what we have to say, in order to explain our present financial condition, with this account.

According to this account, the revenue of 1829 was £50,706,000, the expenditure £49,075,000, and the surplus of income over expenditure £1,711,548. With this surplus, Mr. Goulburn commenced his financial operations for 1830. To this surplus he was able to add, in calculating the Ways and Means of 1830, a saving in the interest on 4 per cent. stock, and on exchequer bills, and a reduction to be made in the annual estimates for the army, navy, &c., as follows:

£1,711,000

Surplus income over expenditure in 1829,
Reduction of interest on 4 per cent. stock,
Reduction of interest on exchequer bills,

750,000

180,000

Reductions in the estimates for the army, navy, &c.,

1,100,000

* An act was passed early in the session of 1829, for carrying this recommendation

into effect.

Brought forward

And he was further enabled to increase this estimated surplus of 1830, as compared with 1829, by the expected produce of an additional duty on spirits,-taken at,

Making a total surplus of,

£3,741,000

330,000

£4,071,000

Mr. Goulburn having this great surplus to assist him in conducting the financial measures of 1830, wholly threw aside the policy of his predecessors, as to the redemption of debt; for instead of applying the surplus to this object, he repealed taxes to the amount of £3,875,000, and left, accordingly, no more for the future surplus of income over expenditure, than a few hundred thousand pounds. The taxes which Mr. Goulburn repealed were the following:

We do not blame Mr. Goulburn for repealing taxes, in preference to continuing the sinking-fund. This policy was clearly right on general principles, considering how many of the existing taxes were higly inju rious to the industry of the country. But we are decidedly of opinion, that his selection of the beer tax, as the most fit to be repealed, was an egregious error. For if he had acted on anything like sound principles of taxation, he would have turned to account the means of making a reduction of £3,000,000 of revenue, to getting rid of those duties which fell on the manufactures of glass, paper, soap, &c., and to the reducing of those excessive duties which give rise to the prosperous trade of smuggling.

But the repealing of the beer duty served the interests of that class out of which members of Parliament are chosen, and of the members themselves; and votes in the House of Commons were more immediately an object to Ministers, in the early part of the session of 1829, than the promoting of the national industry.

When Lord Althorp became Chancellor of the Exchequer, the amount of taxes repealed by his predecessor left him only a surplus income of a few hundred thousand pounds, as has already been stated; and consequently, without any means of repealing more taxes, except reducing the public expenditure. But although he was thus situated, he repealed more taxes, and at the same time increased the expenditure; and produced, as an inevitable consequence of such proceedings, the present existing deficiency of the revenue.*

*

The following is the plan proposed by Lord Althorp, in his first budget, on the 11th of February, 1831, for repealing or reducing taxes:

The estimates voted in 1831 were greater than those voted in 1830, for the Army, by the sum of £225,150; the Navy, £360,250; Miscellaneous Services, £743,490; making a total increase of £1,328,890. But deducting from the Miscellaneous Services, a sum of £322,711, formerly charged on the consolidated fund, the real increase was £1,006,079.

In order in part to make good the revenue which would be lost by reducing these duties, he proposed the following new taxes:

The successful opposition which was made to this scheme of finance, for repealing old bad duties, and imposing less injurious new ones, left, for the general result, when the session closed, the following old taxes repealed, and new ones laid on :

Deducting the estimated produce of the new duties from the sum which the revenue was to be reduced by those repealed, the actual reduction of revenue amounted to £1,205,000; being very nearly the exact sum which the revenue appears, by the Parliamentary accounts, to have been deficient on the 5th of July, 1832.

This correspondence between the sum, which it appears would be the deficiency, on tracing out the effects of the measures of Mr. Goulburn and Lord Althorp, in 1830 and 1881, and the sum which, in reality, was the deficiency, leaves no room for doubt as to the accuracy of the statement here given, and as to the manner in which the deficiency has arisen. It is made quite clear that this result has followed from persisting in repealing taxes, without making any proper effort to reduce the expenditure. The keeping up of the expenditure at its greatest possible amount,

has been all through the great error of our ministers of finance ; and the consequence of doing so, fully shows that until retrenchment is made the basis of repealing taxes, the finances cannot be free from the embarrassment in which they now are.

Before we proceed to state what is requisite to be done to place the finances of the country on a sound footing, we shall shortly allude to the chief defects of the existing system. Now that the law has declared that there shall be no sinking fund, unless there is a surplus of revenue, the deficiency which has taken place has put an end to all those expectations which the public have been so long told to form of the extinction of the debt. This is, in itself, a matter of grave consideration; for, surely, with a debt of £800,000,000, we can never be quite right, until the financial circumstances of the country admit of a real sinking fund, of a large amount, being formed for the paying off a large portion of it. Although it was perfectly wise to abandon such schemes of redemption as have hitherto been acted upon, no financial reform will be complete, which shall not provide the means of gradually getting rid of at least from one third to one half of the present debt.

The next great defect in our system is the taxing of industry, directly, for obtaining a large amount of revenue. The duties on glass, paper, soap, and other manufactures, are so many direct restrictions on the employment of labour and capital, and the accumulation of national wealth. These duties should all be repealed; but this cannot be done without a loss of revenue, to the amount of nearly two millions a-year.

Another conspicuous blot in our system, is the keeping the duties so excessively high on tobacco, foreign spirits, and a few other articles, as to create a trade of smuggling of such a vast extent, that it requires an annual expence to be incurred of nearly a million a-year in attempting to suppress it. But to cure this evil, the reduction of duties, which are necessary, would be accompanied with a loss of revenue to the amount of nearly three millions,

In point of fact, these two classes of duties, namely, those which fall on manufacturers, and those which create smuggling, must be got rid of either by imposing other taxes, or by reducing the amount of the public expenditure. It is no doubt possible, to obtain the means of reducing five millions of existing taxes, by laying on a property tax. But such a measure ought not to be proposed, or acceded to, until the practicability of reducing the expenditure from three to five millions, has been submitted to the most severe test. This has never yet been done. The progress which the last committee of finance was making in this work, led to its sudden extinction. The assertion of Mr. Goulburn, when he was Finance Minister, and of Lord Althorp in his last budget speech, that the reduction of the expenditure had been carried as far as possible, are mere words, that ought not to have the smallest influence on any man's mind. Ministers deceive themselves egregiously in thinking that the reasons which serve to convince the House of Commons, that the expenditure is not too high, produce the same effect on the public. These reasons are nothing better than a few commonplace cant phrases strung together, to suit the purpose of raising cheers from the supporters of Government. They contain nothing like proof of any distinct proposition. But the time is now come when it will be quite impossible for any minister to obtain a vote for nearly fourteen millions a-year for the Army, Navy, and Ordnance.

The more the state of the finances of the country is inquired into, the more certain it appears, that the first great question the reformed House of Commons will have to take in hand, will be, the expediency of reducing the public expenditure to a very large extent; not by a few hundred thousand pounds here, and a few more there, but by some millions. As all the expenses incurred in the army, navy, ordnance, and miscellaneous services have been voted annually, there can exist no vested interest to be set up against any reduction which may seem to be expedient; not even by the receivers of half pay or of military pensions. And, although no one probably would propose wholly to get rid of these charges, the House of Commons may, with the strictest propriety, revise the several parts of the non-effective service, and thus save the public a large part of the expense now incurred upon it. If Lord Althorp shall be the Minister of Finance in the new House of Commons, he will find that he cannot again declare that the reduction of the expenditure had been carried as far as possible, without raising hundreds of voices to deny the truth of this assertion. If the electors do their duty in choosing their representatives, he will find a great majority of the House against him. He will, in point of fact, if he employs such language as this, at once put an end to the administration. What Lord Althorp should do, without farther loss of time, is to make the Lords of the Treasury discharge the duties of a Commission of Inquiry. They should sit every day, and have before them, for examination, the heads and chief officers of each public department of expenditure. These persons should be made to explain, and defend as well as they can, every item in their proposed future estimates. The evidence should be taken down in short hand, and the Board should make a minute on each case, expressing its judgment upon it. The whole should be completed and printed, and ready for delivery to each member of the House of Commons, when the new Parliament shall assemble. But more than this should be done. Ministers should determine to appoint a new Committee of Finance, to be composed of the most intelligent and most independent members of the House, for the purpose of examining and reporting upon the estimates for 1833. Unless some measures, such as these now suggested, be adopted, it is difficult to conceive how the financial business of the country can ever be carried through the House of Commons; for if the estimates shall be at all similar in amount to what they hitherto have been, and if they shall be brought before committees of the whole House, without any previous inquiry and reports, the time which will be occupied in debating them will preclude the possibility of going on with any other public business.

As the greatest practical evil which the nation endured under the corrupt system by which the House of Commons was constituted, was the waste of its treasures, so the first great practical good it should de.... rive from the change which has taken place in the constitution of the House, is the reform of all financial abuses. To what extent the influence of our kings has been employed, and is still employed, in governing their ministers in matters of extravagance, will now be made manifest; as also to what extent the influence of noble proprietors of close boroughs has had its way for similar purposes. The first contest which will take place amongst old friends, in consequence of the reform in Parliament, will be, or at least ought to be, between the ministers and these influences. If they are weak enough to make themselves any longer subservient to them, they will soon find, to their cost, that the