And though I said, gentlemen, that I would not dwell upon the contents of those addresses in detail, yet I observe, without surprise, that the Liberal Associations for the west and south-west of Scotland speak of this as a time when the finance of the country is disordered. I have not yet had an opportunity of calling attention to that subject. I do not hold, gentlemen, that good finance is the beginning and the ending of good government, but I hold this, that.it is an essential of good government—it is a condition of good government. Without it you cannot have good page 64 government—and with it you almost always get good government. The things are harmonious, though they are not identical. The finance of the country has, however, been made the subject of high consideration, and very unusual consideration, before a dignified assembly in the south within the month that has not yet closed; for on the 10th of November was held the great annual festival of the Lord Mayor of London at Guildhall, and on that occasion the Chancellor of the Exchequer, to whom is intrusted the supreme care of our finance, used these remarkable words, He said, "In challenging us upon our finance, our opponents are challenging us upon a point on which we are strong, and on which we can be secure of victory." Well, gentlemen, you will feel with me that I may be too bold in venturing upon an attempt to storm the fortress at this point, at which it is so strong. If I were about to storm, gentlemen, the Castle which for so many centuries has looked down upon Edinburgh, I would endeavour to select that portion of the rock which was easiest and most accessible. I am therefore to a certain degree perhaps daunted by this declaration of the Chancellor of the Exchequer. At the same time, political generosity is not yet altogether dead, and I have enough of it in my nature, notwithstanding this announcement of the impregnable character, the unassailable character, of the Ministerial finance—I have enough of it in my nature to be disposed to make a trial, to bring that finance under criticism, and under your clear review; and it will not be my fault, gentlemen, if I fail in the endeavour to lay it before you in such a manner that friends can sympathize with what I may conclude, and that opponents shall have the opportunity of clearly understanding what it is, and the opportunity of confuting me if they can.

There is one preliminary observation, gentlemen, with which I will trouble you, and it is this, that when you are dealing with the proceedings, either of an economical or of an extravagant Government, the present circumstances never set forth the whole case. In this country our economies are eminently prospective, because for a very long series of years, in fact ever since economies began—I may say about half a century ago—the wise practice has been to carry them into effect, with the most liberal consideration for individual interests. The consequence is that the savings that they make accrue progressively and not at once, and therefore, whenever by a happy combination there is an economical Government in office, that economical Government invariably leaves to its successor a harvest of economies, and the succeeding Government derives from time to time a large portion of the benefit of what the economical Government has done, but of what that economical Government never profited by as far as public reputation is concerned. And, gentlemen, the very same thing is the case with regard to the extravagant Government. Extravagance, also, is prospective as well as economy. Incur what charges you will, those charges do not instantly accrue as moneys to be liquidated; and therefore I warn you that everything I say to-day upon economy or upon extravagance is less than the truth, because I shall endeavour to confine myself to statements of that which actually exists, which is admitted to exist; and assuming that it is a correct description of that which now exists, it will not convey to you the whole of the mischief which has been done. Gentlemen, I shall avoid minute details. I shall use round numbers, endeavouring to put everything in the most accessible and the most intelligible form rather than to be in precise correspondence with the accounts, by describing to you how many shillings and how many pence in each case come at the end of the long figures of millions, in which our financial transactions are expressed.

The last year, gentlemen, of the Liberal Government was a year in which we were called upon to pay £800,000 for an Ashantee war, which was a melan- page 65 choly necessity not growing out of the will or the proceedings, perhaps, f any particular Government, certainly not growing out of the proceedings of the Government of the time, but growing immediately out of a necessity which was not disputed or denied. We also on that occasion in that year paid £3,200,000 on account of what were called the Alabama claims; and though I have always thought that as a mere matter between parties Great Britain was harshly treated in being called upon to pay so large a sum, I now thrust such considerations altogether aside. The object in view was twofold. It was the assertion of a great principle most valuable to mankind—and to be productive, I hope, in the future of immeasurable good. It also had in view another aim, which has been completely accomplished—viz. the aim of removing a formidable obstacle to affection and goodwill between the four-and-thirty millions of Anglo-Saxons who inhabit these islands and the five-and-forty millions who inhabit the United States of America. Swelled in that way by £4,000,000, our expenditure for the year 1873-1874 was £70,000,000 of money—not a difficult figure to remember. The present Government has had for its last year the year 1878-1879. Its expenditure for that year is seventy-eight and a quarter millions of money. In order to make the comparison fair, they ought to have deductions as well as we. We were entitled to deductions bringing us down from £70,000,000 to £66,000,000. They are entitled to deductions on account of increases of charge—certainly for some of them they are responsible, but at the same time they are increases of charge that I will not assume to lie wholly at their account—to about the same amount. They have had a large increase upon the education votes, which is a legitimate expenditure, and a beneficial expenditure. They have had a large increase upon local charges, which, whether it be a beneficial measure or not, or whether or not it was in all respects wisely done, was not done by their mere motion, but was done in compliance with a desire that certainly went beyond the limits of the Conservative party. I deduct from their account on these grounds £4,000,000—I do not believe that is very far from the mark. Their war expenditure I will not deduct, because their war expenditure, so far from having been an inheritance from other Governments and from other times, has been the fruit, as we hold, of their needless and their wanton choice. In both cases alike, the charges of collection are deducted before making the comparison. Taking, then, the deductions on the one side, and the deductions on the other, they are nearly balanced. Consequently the relation of the two figures which I first gave to you expresses fairly the relative expenditure of the two Governments as indicated by their views and their tendencies—that is to say, the Liberal expenditure at £70,000,000, and the Tory expenditure at £78,000,000. That is a difference, gentlemen, of eight millions of money, which, in my opinion, is fairly to be set down to the account of the present Government. You may say, gentlemen, that a good article deserves a good price. But there are some prices that are too high, even for a good article, and our contention is that this is an article not good, but bad, and one for which any price would be a great deal too high. If all the millions bestowed upon giving effect to the warlike policy of the Government had, instead of being so applied, been thrown down to the bottom of the sea, you would have been better off with such a mode of disposing of the funds than you are now. Now, that is the amount of expenditure. But I wish you to understand that it is a vice which appears to be engrained in the Tory party of the day. As long, gentlemen, as the Tory party was in a minority when in Government, we got on very decently with them. The two first Governments of Lord Derby kept within bounds, and never made themselves remarkable by financial extravagance. But it pleased the constituencies in January 1874 to constitute that which had not been seen since 1841, and which, when it was seen in 1841, was constituted under very page 66 different auspices and worked for very different aims. However, that majority was constituted; and I may say this, the result has been a Government of which I am the first to admit that it has written its name in history. It is a Government, gentlemen, that will have plenty of memorials. And one of its first greatest, and most undeniable is the perpetuation of the Income-tax. You were offered in 1845 the repeal of the Income-tax by Sir Robert Peel; but he advised, and you wisely chose, not to repeal the Income-tax, but to use it for the great purpose of reforming your commercial legislation. You were offered in 1874 the repeal of the Income-tax, and the constituencies then gave the same reply. I know the reason of their reply in 1845, but what the reason of their reply in 1874, why it was that they then preferred having the Income-tax to no Income-tax, I have not yet been able to discover But this, at any rate, is clear—there was a clear stage upon which, on our responsibility, we were ready to repeal the Income-tax, and it would have been with fairness to every class of the community. The Tories came in; the Income-tax since then has been raised from 2d. to 5d in the pound, and when you will get rid of it I do not know. I hope its but it will be, perhaps, in the days of your children or your grandchildren. This extravagance of expenditure is due to no one cause, It bubbles up everywhere It is due in a great part to what has been called a vigorous foreign policy, and a spirited foreign policy. But when Lord Derby was in office, Lord Derby had no disposition at all to that sort of vigorous or spirited foreign policy, and the first two or three years of the present Government passed by without and sort of manifestation of it. If you recollect, 1874 and 1875 showed nothing, of the kind, nor did, indeed, 1876. It has been 1878 and 1879 that have been the grand years for the development of this new system. But the extravagance of the Tory Government began to grow from the very first, as I will now show you. I will show it you by taking the expenditure upon the forces, upon the military establishments of the country. In the first year of the present Government it was £25,903,000; in the second year, £26,842,000; in the third year was £27,286,000; so that you see, quite independently of the vigorous and spirited foreign policy, it was walking upwards, quietly walking upwards, at the rate of half a million, and at the rate of a million a year; and these first three years, two years, perhaps, I should say, produced an augmentation in that branch of a million and half. I grant you that since the vigorous policy began to be developed, they have not been satisfied with that moderate rate of march. In the fourth year of the Government it rose from 27¼ millions to 30½; in the fifth year of the Government to 32¼. What the sixth year will do, gentlemen, we shall have the satisfaction of knowing somewhere about the month of April next; or, a any rate, we shall have the satisfaction of knowing so much as the Government may then think proper to disclose to us—for one of my complaints is that the never do make disclosures at the time when they are wanted, and at the time when they are regular. They appear to have but one rule for the choice of their opportunity, and that is, convenience to themselves. Well now, gentlemen this is rather remarkable. I have given you the fifth year as compared with the first, and the upshot of it is an increase on the military expenditure £6,500,000. Therefore, gentlemen, do not allow yourselves to be put to silence by being told that the charges of the country are increased because education is so expensive. Do not be put to silence or abashed by being told that it because they have been so very kind to the ratepayers. It is nothing of the kind. I take these hard figures, and I show you that the first year of military expenditure with the present Government, which was higher than our military expenditure, was £25,903,000, and that by the fifth year they had raised the military expenditure to £32,190,000—that is to say, they had raised the charge. page 67 by nearly six and a half millions of money. But pray observe what I am now going to tell you—so they went on while the Parliament was young, so they went on while the Parliament was middle aged; but, like other Parliaments, it began to grow old, and when it began to grow old, like other offenders, it began to think a little of what might take place at its dissolution. The consequence is that this Government, which from year to year had thus gone on augmenting our charge, produced in 1879 military estimates showing a decrease most gratifying to our feelings—promised upon the papers, a decrease of five millions in the year. Nearly the whole of this augmentation was to be got rid of. We were to have a decrease of five millions, and we were to have a surplus income of £1,900,000. That was the statement made last session. Need I tell you, gentlemen, that that statement was pure moonshine. There has been no real decrease; and this, although the advantage enjoyed by the Government was enormous, because owing to the low prices of food and every description of material there was an absolute saving in the prices of commodities necessary for the forces, amounting, as I understand, to £1,600,000 or £1,700,000. All that, gentlemen, is eaten up.

There is no decrease, there is no surplus, there is an admitted deficiency—admitted by the Chancellor of the Exchequer himself—of six millions of money, which will be presented to you in April next, and for which you will be called upon in some manner to provide. But an extraordinary method has been adopted by our opponents of dealing with this matter. They call upon you to avoid altogether the consideration of expenditure, and to look to the rates of taxation, and they then take the rates of taxation per head over the United Kingdom, and they say that the taxation has not increased in proportion to the expenditure. Gentlemen, that is perfectly true. But then that is one of the things that we complain of. What we say is, that if you choose to increase your expenditure, you ought to increase your taxation; and they reply upon us, "Ah, but you are so fond of taxation." No, gentlemen. We are not fond of taxation, and we have shown what we thought of taxation by our proceedings when we have been in Government. But we are fond of this—we are fond of financial honesty. We are fond of squaring the account, and no nation, in our judgment, is financially honest which does not use its best exertions to square the account. What can be more idle than to attempt to satisfy the people of this country by showing that the taxes have not been increased in proportion to the expenditure? Why, what would you think of a spendthrift in private life who incurred charges every year to the extent of £10,000, but paid his bills only to the extent of £5000, and said, "You see I am not very extravagant after all. I have only paid £5000"? Now, that is the principle of computation upon which our friends have been acting at their Tory meetings and gatherings through the country; and I do not much blame them; for, gentlemen, I do assure you, upon my honour, I believe they have no choice—they have nothing better to say and to do. But as I have spoken of this question of expenditure per head, I will give you the results in the shortest and simplest form. The gross expenditure of the country per head is this—in our first year it was £2, 8s. 6d. per head—or rather in the year before we came into office—in 1868 the expenditure we took over was £2, 8s. 6d. per head. In the year 1872-1873 we had reduced it to £2, 4s. 5d. per head. No doubt that was raised in 1873-1874, but I have shown that 1873-1874 was loaded with a very large amount of charge, the principal part of which—namely, the Alabama payment—had nothing whatever to do with that year. I take, then, the next year—the first Tory year, 1874-1875—which shows the expenditure at £2, 5s. 10d. per head. The last of the Tory years—but I do not say that this will be the final close of the process—the last of the Tory years, 1878-1879, shows the expenditure raised from £2, 5s. 10d. to £2, 10s. 6d. per head—that is to say, we, counting down to the Alabama year, and before page 68 that year, show a decrease of 4s. 1d. per head in the expenditure of the country; the Tories show a corresponding increase, or one rather greater, an increase of 4s. 8d. per head. So much, gentlemen, for the amount of the expenditure per head.

Here is another most important and most essential item of the financial investigation—it is the item which exhibits the finance of the country under the view of surpluses and deficits. You well know in private transactions the meaning of those words—I need not stop to explain it. Well, in the five years from 1869-1870 down to 1873-1874 we were able to present to the country five surpluses, and these five surpluses in all amounted in round numbers to £17,000,000 of money. The Tory Government came into office; and I will divide the period, as I wish to throw all the historical illumination on this subject that I can. I will divide the period of their rule into two. I do it on this ground, gentlemen. It is a very slow process to build up a good system of finance; but it is difficult even to destroy a good system in a day. You must allow a certain time, consequently you will find that the first portion of the period of this Government, although it is not satisfactory, yet it compares advantageously with the second. The surplus, which, under the former Government had averaged about three and a half millions per annum, sank in the first year of the present; administration to £593,000. The next year it was £509,000, and the third year it was £439,000; so that the effect of the three first years before the spirited foreign policy was to work down the surplus by £3,000,000 annually. Then began the great development of that new method of Government policy and finance, under which we are told our country is at length to assume its true position in the world, a position, founded upon a new creed, with a variety of articles, the first of which is uniform financial deficiency. In 1877-1878 the deficiency is £2,640,000; in 1878-1879 the deficiency is £2,291,000; in 1879-1880, for which there was a pretended surplus of £1,900,000, we do not yet know the full extent of the blessings that are to be disclosed to us when the happy time of the financial harvest shall arrive, but we do know that it is not to be less—I mean the aggregate deficiency of these years, to be handed over, and to be provided for in some manner or other, either by the present dying Parliament or by some other Parliament—it will not be less than six millions of money. That, gentlemen, is to be compared with the £17,000,000 of the Liberal surpluses. And strange to say, for the first time in my life, I have found that our friends of the other way of thinking have actually made these surpluses an item of charge against the Liberal party. They say, "You have taken seventeen millions of money from the people more than was necessary for the carrying on of the government of the country, and we, on the other hand, by parity of reasoning, have been so tender to the feelings of the country, that we have actually taken from them £6,000,000 less than was absolutely necessary to carry on the government of the country." That, gentlemen is their view of the matter. They dispose of it by carrying the question out of the arid region of the intellect and they settle it by an appeal to the human affections. They call upon you to denounce the hard-heartedness of Liberal finance, which thus extracted from the people those millions—those £17,000,000—in order to apply them to the worthless and frivolous purpose of paying our debts; and they call upon you to admire the humane, comprehensive, and large-hearted proceedings, under which they have taken care that whatever you spend you never should raise enough to pay for it.

Gentlemen, that may be very well, as far as it goes; but then I think that this humane method and policy ought to exhibit itself also in some other form—that is to say, ought to be able to point out that upon the whole it has made large remissions of taxation, and larger page 69 remissions than have been made by the flinty-hearted people of the nature of my friend Mr. Lowe, who was formerly Chancellor of the Exchequer. Let us see, then, how this matter stands. It stands thus. The late Government, at the time of the Franco-German war, was called upon to meet a sudden and large expenditure. We instantly imposed the corresponding taxation. We then imposed £3,000,000 of taxation for the year 1871, but in the other years of our Government we were happy enough to repeal these £3,000,000, and a great many other millions. We remitted £15,400,000, so that the balance of taxation remitted was £12,400,000. We might claim credit for the remissions of 1874, much with the revenue such as we left it. But I will strike these out of the account. Now, I take the Tory Government—and I will be equally concise. The Tory Government has made certain remissions since 1874—I need not trouble you with the details—I may fairly call them odds and ends, the total sum of them would stand very well under "sundries" in a private account, but the whole amount of them is £487,000. But they have imposed £6,250,000—that is to say, they have imposed a balance of five and three-quarter millions, or in round numbers, six millions of money. So that while adopting the false and ruinous principle of shrinking from their duty in failing to ask Parliament to lay on the taxes necessary to meet the expenditure which they have invited it to sanction, and which it has sanctioned—while doing that, while thus failing of their duty to raise a sufficiency of taxation, yet they have imposed upon you nearly £6,000,000 of taxes in order to produce their £6,000,000 of deficiency.

I have gone very succinctly, gentlemen, over those essential heads with the aid of your patience, but I am sorry to say that there is another chapter of finance which I must more succinctly still lay before you—namely, Indian finance. Do not remain any longer under the delusion—if you ever have been under the delusion—of believing that you have nothing to do with Indian finance. Sir Robert Peel, in 1842, with great sagacity, repudiated the idea that the British taxpayer and the British citizen had no interest in the state of the Indian account. He repudiated it when the debt of India was a trifle compared with what it now is, when the deficiencies of India were smaller than they now are, when the policy of India had been placed by him under a wise control, and when the prospects of India were bright and sunny as compared with the prospects of to-day. Even then he gave that monition—much more must you now lay the matter to heart. Now, what is the state of India as to its public debt? In 1874 it stood at £107,500,000; in 1878 it had risen to £134,500,000. What is the state of India with respect to surplus and deficiency of income? Well, I am glad to say that, down to the disappearance of the late Government, the surpluses of our administration in India, after deducting a year of deficit, which was due to the famine, amounted to £4,682,000. But we left behind us in India an admirable Governor-General, and the present Administration allowed him to continue in office for two years. For these two years, though he had great difficulties to encounter, he had two more surpluses and he left office with another sum of £1,988,000, or, in round numbers, £2,000,000, to the good, so that there was a sum of nearly £7,000,000 to the good shown upon that account. It was after the disappearance of Lord Northbrook that the new policy, of which you have had a nearer knowledge in Europe, began to develop itself in India; and with the commencement of that new policy, so fatally accurate is the machinery that is set at work, there began the reign of deficiency. In 1876-1877 there was a deficiency of £2,183.000. Out of the four years there are three deficiencies, and as Lord Northbrook and the Liberal Government retired, leaving behind a balance of surplus of nearly seven millions of money, so the present Government have accumulated an aggregate deficit in the last four years of £5,831,000, or, in round numbers, £6,000,000, of money, in beautiful correspondence with the £6,000,000 which are promised for a deficit at home. There, gentlemen, the same thing occurred; the same spirit of expenditure seemed page 70 to come in with the operations of the Tory Government. We left the military expenditure of India at fifteen millions and a quarter, and in four years the present Government increased that military expenditure by £1,400,000, long before they had commenced the recent course of transactions: I mean to say, apart altogether and separate from the ruinous charges of the Afghan war. If I look, gentlemen, at another subject for a moment, namely, at the general expenditure of India, I must say its increase is most alarming. I am not going to lay the whole responsibility of that increase on the Government. I cannot accurately divide the responsibility. I know not how much is due to avoidable and how much to unavoidable causes; but this know, that the expenditure of India during our time was £50,400,000 on the average; it was £49,600,000 in our last year of office, and I know that it has now risen to £58,970,000, or very nearly sixty millions of money. I do not say, gentlemen—pray observe I have not attempted to analyze the amount—what share of it may be, in my opinion, due to the folly of the Government, but what are we to say to this great fact, that with those tremendous figures staring them in the face, they have not taken even those figures as a warning against the setting on foot of their most mischievous and, in my opinion, most guilty plans for the invasion of Afghanistan. They are now heaping up deficiency upon deficiency, difficulty upon difficulty, and they have brought it to such a point that I warn you in this hall, that, if but a few years more of similar proceedings are permitted, you, the people of England, Scotland, and Ireland, will be called upon to come down and to take upon your own shoulders the 134 millions of East Indian debt, and the whole responsibility for the ruinous finance of that country.

Now, gentlemen, I hope that what I have said thus far has been intelligible, and I will endeavour to be intelligible to the end. It is fair to hear what is to be said upon the other side. With that view I turn myself, gentlemen, to the highest authority, and, again, I name the highest authority—the Chancellor of the Exchequer. The Chancellor of the Exchequer executed a most extraordinary manoeuvre on the 10th November; for the first time he made a budget speech, as I have told you, at Guildhall. In that budget speech, after having stated his deficiency at £6,000,000, he made a plea, he made two pleas, but this was the first plea—during our period of office, he said, there has been great depression of the seasons affecting our agricultural interests. Now, I want to remove misapprehensions upon that subject. We have had this year, in the dispensation of Providence, a harvest deplorably deficient; but permit me to say that the harvest of 1879 is not the cause of the falling revenue, or of the deficit of 1878 and 1877, and the bad finance of earlier years. Now, let us look at the harvests before 1879. I have shown you the astounding contrast between the state of things as it was and the state of things as it is, and allow me before I go further to say this; I make no boast of the state of things financially as it was under the Liberal Government. We did, at the outside no more than our duty. I do not think that our economy was an economy for which we are entitled to claim spccial credit. A Government cannot carry economy beyond the point up to which it is firmly and resolutely supported by the people. I make no claim; this is not self-laudation; I merely quote it as an instance of tolerable performance of duty, and I place in contrast with it that which I call intolerable departure from duty. But it is all to be put upon the back of the seasons, is it? Well, I will take the seasons, and see how they stand. I take the price of wheat as the cardinal article from which you may form, upon the whole, a judgment; and I find that for the five years when we were in office the price of wheat on the average was 53s. 5d. a quarter; for the page 71 five complete years before the present year, during which the present Government has been in office, the price of wheat was 52s. a quarter—it was nearly the same, but cheaper by 1s. 5d. The food of the people was cheaper, and therefore, as far as the price of wheat is concerned, that did not contribute to the distress of the country, or to the deficiency of the revenue. But of course it is open to say, and quite fair to say—"Well, well, but the price of wheat when you were in Government was kept down by enormous foreign importations. You had good harvests, and we had bad." But was that so? I say that if there was a difference affecting the cultivation of the soil, it was no great or extraordinary difference. Now, compare the harvests of 1869 to 1873 with the harvests from 1874 to 1878, and again I resort to the very fairest criterion—namely, the yield of the acre of wheat in the number of bushels it produced. I will not trouble you with the numbers for each year in particular, I will only give you the results. The result of the yield of the wheat harvests in our five years was, that the acre of land produced upon the average 26 bushels of wheat and 4-5ths of the 27th bushel. I now take the five years of the present Government, and I find that the acre of land for those five years produced 26 bushels of wheat and 3-5ths of the 27th bushel, so that the difference between 3-5ths of a bushel and 4-5ths of a bushel constitutes this terrible depression of the seasons. And this is what the Chancellor of the Exchequer who ought to be by far the best informed man in the country on every detail of these questions, thinks it fit and becoming to produce before the citizens of London, whose presumed want of agricultural knowledge, I am afraid, tempted him to be less careful than usual.

Now, gentlemen, I hope you will follow me in a very short chapter of my case, as I draw near the close of it—I am happy to say for your sakes—in which, perhaps, it will not be so easy for those unacquainted with Parliament to appreciate fully the weight of what I have to say, though I am quite sure that my many and respected colleagues whom I see around me, who have scats even in the present House of Commons, and whose numbers in the next House of Commons it will be your duty, gentlemen, largely to reinforce; I know very well that they will follow and comprehend the weight of what I am going to say. Mismanagement of finance is thoroughly bad; but that mismanagement may be accidental. What is even worse than mismanagement of finance is destruction or disparagement of the sound and healthy rules which the wisdom of a long series of finance Ministers, of an excellent finance department, and of many Parliaments have gradually and laboriously built up, to prevent abuse to secure public control, to work by degrees upon the public debt of the country, and to take care that the people shall not be unduly burdened. Now, gentlemen, I will tell you in a few words, and I do it fearlessly, because I speak as one who has had much experience, what are the rules of finance observed with almost unvarying uniformity until the accession of the present Government; and not by one party alone, for this, let me say, that Sir Robert Peel and Mr. Goulburn and the Conservative party of their day were, if possible, stricter, more rigid, better financiers, than the Liberals of their day; that is historical. But both parties, upon the whole, have uniformly adhered to those rules of finance, which I am going to give you in the briefest words. The first of them is, that the Chancellor of the Exchequer shall boldly uphold economy in detail; and it is the mark, gentlemen, of, I was going to say, a chicken-hearted Chancellor of the Exchequer, when he shrinks from upholding economy in detail, when, because it is a question of only £2000 or £3000, he says—that is no matter. He is ridiculed, no doubt, for what is called saving candle-ends and cheese-parings. No Chancellor of the Exchequer is worth his salt who is not ready to save what are meant by candle-ends and cheese-parings in the cause of his country. No Chancellor of the Exchequer is worth his salt who makes his own popularity either his first page 72 consideration, or any consideration at all, in administering the public purse. You would not like to have a housekeeper or steward who made her or his popularity with the tradesmen the measure of the payments that were to be delivered to them. In my opinion the Chancellor of the Exchequer is the trusted and confidential steward of the public. He is under a sacred obligation with regard to all that he consents to spend. Well, there has been, I must say, one member of the present Government—and let me do him justice, it is a pleasure to do him justice—Mr. Smith, the First Lord of the Admiralty, who, when he was Secretary of the Treasury, fought like a man for the public purse—but I am bound to say hardly ever in the six years that Sir Stafford Northcote has been in office have I heard him speak a resolute word on behalf of economy. As to speaking irresolute words, gentlemen, I assure you they are wholly worthless. You had better spare them. They are perfectly understood. They are like the resistance of coy ladies, who are said to wish that more pressure should be used. That is the case of a Chancellor of the Exchequer who does not speak resolutely against waste. But that resistance in detail to jobbery and minute waste and extravagance is the first of all sound financial rules. It was violated on an early occasion by the present Government, when they executed as gross a job as, in my opinion, has ever been made known to Parliament, on the death of Sir E. Ryan, in creating an office of £2000 a year for the present Lord Hampton—to do what had been admirably well done without that office before, and has not been, and nobody pretends that it has been, one bit better done since. The second rule, gentlemen, is this, and this is perhaps the most essential of them all; that once in the year, and only once, the Chancellor of the Exchequer shall make his financial statement—shall say such was my income and such was my charge for the year that has expired, so that Parliament can judge me upon it; such is my estimated income and such is my estimated charge for the year that is to come, so that Parliament can form its judgment with reference to the condition of the country, whether it is reasonable, and if there be need, what measures it shall take in order to supply the means. Now, there are great occasions, undoubtedly, when it is necessary for a Chancellor of the Exchequer to depart from such a rule. A war may break out which could not have been anticipated long after, months after, his budget—of course I do not speak of cases like this. But what I say is this—that, as a rule—I think in nine cases out of ten, or some such proportion, for the forty years before the day of the present Government—this plan of one annual statement was observed; and the consequence of it was that Parliament was always in a condition to form a comprehensive view of the financial condition of the country. But now the whole thing is forgotten and thrown to the winds. We never have a real annual account. If you go down to the House of Commons now on the day of the statement in April by the Chancellor of the Exchequer, you will see that it is regarded with very great indifference. There is no crowd of people wishing to know, as there used to be, wishing to know what is the condition of this great Empire. They know very well that nothing will be told them as to the future which can with any kind of decency be kept back; and they know perfectly well that, as the year goes on, finance will be brought before them by driblets, so that they never will have the opportunity of truly adapting the provision that they make to the real wants of the Empire. It has now, gentlemen, come to this. We have a budget in April; we have a second budget in July; we have a third budget in February or March, in February generally; and this year a further improvement has been effected, and a fourth budget has been interpolated on the 10th of November. Do not suppose that I am speaking lightly of this matter, though it may be well page 73 to relieve a dry subject as far as one can by a reference of that sort. I assure you, gentlemen, upon my whole knowledge and experience, that the efficiency of the popular and Parliamentary control upon the expenditure of the country entirely depends upon the maintenance of the principle of the annual, as opposed to the triennial or tri-monthly, budget. It is idle to talk of controlling the expenditure of the Government, unless you compel them to adhere to that rule. That is bad enough, but even that is not all. The old rule of Chancellors of the Exchequer, the rule which I inherited from Sir Robert Peel, and on which I endeavoured to act, and which in my early days nobody presumed to deny, was this, that if an expenditure was uncertain, you were not entitled to come down in April and say, "I cannot tell you precisely what it is, but I will tell you it when I can give an exact statement." The answer is, You are bound to estimate for it to the best of your ability, and if there is a doubt, you are bound to rule that doubt in favour of the larger side, so that your demands may be ample; and in no case, so far as human foresight can avoid it, should the public revenue be placed in a deficiency. Why, now, gentlemen, that rule has been trampled systematically under foot. A Zulu war in April. Not a figure, not a pound, not a shilling, not a penny was estimated in the Budget for the Zulu war. "I have not received the accounts from the auditors for the army and the navy, and I cannot tell you exactly what it will be." I want to know, gentlemen, what would be your condition if you were engaged in a great European war, when the accounts often take years to make up, and when any accurate estimate cannot by possibility be formed, if the Chancellor of the Exchequer is to be permitted to keep in his pocket all those heavy charges that are none the less accruing upon you, and to leave you in virtual ignorance of what they are going to be. What is the consequence of this? I will illustrate what I am saying. I am not using light or idle words. I have not used a word in this speech, or in any other, so far as I know, that I am not prepared to justify. What has been the consequence? If you will look over the budgets of the last Government, you will see that in almost every case we spent less money than we had asked Parliament to give us. We acted upon this old, well-established—ay, and I will venture to say, conservative principle, not in a party sense, but in a sense higher than a party sense—this conservative principle of compelling the Ministry to state all the charge that he is likely to incur, in order to maintain the efficacy of popular control. But what has been the case in this Government? Why, in the five years of this Government eight millions and a quarter of money were spent—almost entirely, I think, in the last of those years—more than the Chancellor of the Exchequer had asked for in his April budget. Of course it is intended to be true, but virtually, I may say, there is no truth, inasmuch as there is no accuracy in the account, and a system is adopted under which accuracy is impossible and under which control is no more than a perfect phantom. Well, here is another rule, and it is this, that when you have not money enough you must supply the deficit by taxation. But that is a rule not only not observed, but it is ridiculed. Sir Stafford Northcote told us last year—he said really to tax the country at a period like this, when there is distress, though it was not very great distress, still it would be very disagreeable to people's feelings to be called upon to undergo additional taxation; and after all, he said, an occasional deficit is no such very great matter. Now, gentlemen, what I object to is this: we are all of us—I mean, considered as taxpayers—a great deal too much given to laxity in this matter; to spend too much and not to insist upon a rigid rule of making a sufficient provision for what is spent. But the Constitution appoints one particular man to teach us sound doctrine, and to nail us up to that particular doctrine, and that page 74 particular man is the Chancellor of the Exchequer. And that Chancellor of the Exchequer—acting, I am bound to say, in perfect harmony with his colleagues—that Chancellor of the Exchequer is the very man who comes down to corrupt whatever there is of financial virtue in us, and to instil into our minds those seductive and poisonous ideas that it does not, after all, matter very much if there is a deficit, and that it is extremely disagreeable when commerce is not in the most flourishing state to call upon the people to pay. Was that the practice of Sir Robert Peel?—because these gentlemen sometimes—as often as they find it convenient, which is perhaps not always—fall back upon Sir Robert Peel as a Conservative Minister. He came in upon a deficiency in 1842. He had a large deficiency. He had to deal with the people at a period of the most serious distress, grievous distress, such popular distress as has not been known within those last few years. And he came to Parliament and stood at his place in the House of Commons, pointed out the figures as they stood, and said to them—I ask you, will you resort to the "miserable expedient" of tolerating deficit, and of making provision by loans from year to year? That which he denounced as the "miserable expedient" has become the standing law, has become almost the financial gospel of the Government that is now in power. I will not detain you, gentlemen, upon one other rule that I had noted down, because I have already had occasion to refer to it, but I may simply say it was this, to aim at annual surplus as a main instrument for the steady reduction of the public debt. I have told you already that that rule is now made by the Conservative Government and party the subject of ridicule, and that if you raise money, if you aim at having some respectable surplus for the reduction of debt, that is denounced as a method of taking from the people more taxation than is necessary in order to meet the public charges.

Now, gentlemen, there is yet one point more on which the Chancellor of the Exchequer seems to place a good deal of reliance, and after saying a few words upon it, I will release you from the duty which you have been discharging with such exemplary resignation, the duty of listening to me. The Chancellor of the Exchequer said, in the speech at the Guildhall, in winding up his argument on the finance in which he feels himself so strong, and where he cheerily denes all antagonists, and is ready to "stand against the world in arms"-he says, "The wealth of the country has not diminished. A penny of the Income-tax-and that is a very convenient unit and standard measure, which has been by a sort of general consent adopted for indicating the growth of wealth in the country, a penny of the Income-tax is worth £100,000 more than it was when we came into office". Now I want to apply a very simple test to this matter, which will exhibit to you, I think, as accurately, though very succinctly-will exhibit to you as accurately as anything I could say, the position in which we now stand, and the happy prospects that are spread out before you. "A penny on the Income-tax" (so said the Minister), "calculated on the same basis as formerly, would bring in £100,000 more than it did at the commencement of our Administration. I am bound to say that I do not believe that her Majesty's Government have entirely stopped that growth of wealth in this country, which the industry and enterprise of the country has brought about. But, in order that we may note what is the exact amount of our obligation to them in this respect, I wish not to stop with the year when the present Government came into office, not simply to test the value of the penny in the Income-tax in the year 1874 and in 1879, to go back a little farther, and to inquire at what rate the value of the penny in the Income-tax increased or diminished before we had the felicity that was opened upon us by the dissolution of 1874. Now, the state of the case is this The Income-tax was imposed in 1842; it was then at the rate of 7d. in the page 75 pound, and the value of the penny, after making a liberal allowance for the non-inclusion of Ireland, the value of the penny for the purposes of a fair comparison, I am confident, was less than £780,000. Well, in 1873, which we reckon the last year of our Ministerial existence, at that time the value of the penny in the Income-tax had increased to £1,850,000. The thirty-one years had produced an increment in the penny of the Income-tax amounting to £1,070,000. That is to say, the annual rate of increase over the whole of those years, with their Liberal Governments and their Conservative Governments, their good harvests and their bad, their flourishing trade and their depressed trade, the average annual increment of the penny in the Income-tax, one year taken with another, as you will perceive by dividing £1,070,000 by 31, was £34,000 a year. How stands the matter now? Since the finance of the present Government, which is their strong point, recollect, came into operation, the penny in the Income-tax has increased, as we are assured—and I do not for a moment question it—by £100,000 in six years. That is to say, that whereas formerly, under all Governments, it increased at the rate of £34,000 a year, since the present Government came in it has increased at the rate of £16,000 a year. It is idle for the Chancellor of the Exchequer to say he has not stopped the growth of wealth in the country. In six years he has disposed of half of it. Let them give him another six years at the dissolution, and depend upon it he will go far to dispose of the other half.

That is the state of the case, gentlemen, on the point where the Government are so strong. I will not trouble you, as a Liberal association, upon the other points where it is admitted that they are less strong; but one thing I must still call upon you to observe—although I had promised to release you. I remember a matter that I think of such importance that I feel myself bound to state it, in justice to you, and in justice to the Government. I have complained of the relaxation of financial rules, and the general upshot of the whole thing is that we never know where we stand; we never know whether we have heard the worst. At this time there is a belief, and a widespread belief, that the cost charged against India, and made known to us on account of the Afghan war, is not the true cost; that a great deal more has been incurred, while very little has been paid; that of these large amounts have been kept back as unsettled accounts, and not made known to us in any way. Nay, further, if I am rightly informed—and I mention it in order that it may be contradicted if it is untrue, because it is a thing upon which I cannot from its nature get positive knowledge. I am told that the cost of that war has been kept down by drawing enormously upon the matériel of the Indian army—upon the stores of its ordnance—and not replacing in proportion to what was withdrawn. That compels me, gentlemen, to go back to the past; and now I make a challenge to the Government upon a matter of fact which is ten years old, but which is so far applicable to the present day that, if an explanation can be given, it ought to be given. It is the case, gentlemen, of the Abyssinian war. I have told you that after all these damning figures, which I have stated to you when I ask myself, Do I know the worst? I have no confidence whatever that I know the worst. And I am in great fear that for years there will be evolved new difficulties accruing out of transactions that have already taken place, and bringing upon you heavy charges. What happened in the case of the Abyssinian war? I am not attacking the policy of the war. That was not peculiar to a party. I am speaking of the manner in which the charge was dealt with. Parliament was asked, in the end of 1867, to make provision for the Abyssinian war, and was told, if I remember rightly, by the Chancellor of the Exchequer of the day, that the charge would be £3,500,000, or that possibly it might reach as high as £4,000,000. In 1868—and of this I do not seriously complain—in 1868, the then Chancellor of the Exchequer said that he was obliged to page 76 put the figure higher, and that he thought the charge might approach £5,000,000 for the Abyssinian war. With that information, gentlemen, Parliament was left to content itself. The Abyssinian war was made, and was concluded early in 1868; by early I mean before the summer of 1868 was much advanced A dissolution was impending. Not a scintilla of further information was every conveyed to the country before the dissolution. We went to the country, believing that the Government had spent upon the Abyssinian war something less than £5,000,000. The Government must have known at that time what they had spent. The dissolution passed. The new Government came in, and we found that we had to pay there and then nearly £9,000,000 Now, this matter has been made the subject of reference in the House of Commons. I have wished to make it the subject of most distinct and intelligible reference, here. Let the explanation be given. Why was the country never told before the dissolution of 1868 that the Abyssinian war would cost, had cost, nearly, nine millions of money? Why were we left to take the case of the Government as having spent five millions of money upon that war? Because, unless it can be explained, gentlemen, in all these financial statements that we have had, and in all these financial statements that next session must bring forth, you will again have to recollect that a dissolution is impending, and when the figures are placed in your hands with which the country is to be entertained on the occasion of that dissolution, you will have to ask yourselves, "Are these figures like the figures to which you treated us on the occasion of the Abyssinian war?"