FORE:Before this, however, the financial statement for the year had been made, and for awhile the Corn Law question was suspended for the country to recover from its astonishment at finding in the Minister of the Conservative party one of the boldest reformers of our tariff who had ever occupied the Ministerial benches. But yesterday his position had appeared one of the greatest difficulty, in which a cautious hold upon the established sources of revenue, with some well-balanced proposals for additional taxes, was all that could be expected. He had not the good fortune of Mr. Goulburn or Lord Althorp in having a surplus to dispose of. The Whig Government had bequeathed to their successors a deficit, which had been increasing from year to year, with a revenue falling off even in the face of new taxes. How[488] was the deficit to be met was the question which filled the mouths of public men; a question which was answered by the famous financial statement of Sir Robert Peel on the 11th of March. After showing that the deficiency for the coming year would be little short of 2,500,000, and that this deficiency might be expected to be considerably augmented by the position of affairs in India and China, the Minister declared that he would not consent to resort to the miserable expedient of continual loans. He declared that he would not attempt to impose burdens upon the labouring classes, and that if he did, recent experience had shown that they would be defeated. In fact, the country had arrived at the limits of taxation upon articles of consumption. After ridiculing the various suggestions of people who were constantly sending him projects for taxes on pianofortes, umbrellas, and other articles, accompanied with claims of very large percentages upon the proceeds, he acknowledged the principle laid down by financiers that increased revenue may be obtained by taking off the taxes which pressed upon industry, but declared that the first effect was always a diminution in revenue, and that time was found necessary to restore the amount. In these circumstances, he stated what the measure was which, under a deep conviction of its necessity, he was prepared to propose, and which, he was persuaded, would benefit the country, not only in her pecuniary interests, but in her security and character. His scheme was this: he proposed, for a period to be limited, an income tax of not more than 3 per cent., from which he would exempt all incomes under 150, and in which he would include not only landed but funded property. Sir Robert Peel calculated that the tax would yield 3,350,000 a year, a sum which, with an addition to the spirit duties in Ireland, and an export duty of 4s. on coals, would not only cover the existing deficiency, but enable him to remit indirect taxes to the amount of 1,200,000. The sliding scale had brought little credit to the Minister, and the income tax was in its nature an unpopular measure; but the proposal to reduce the custom duties on 750 out of the 1,200 articles in the tariffto remove prohibitions altogether (in itself a vast concession to Free Trade doctrines)to reduce the duties on raw materials of manufactures to five per cent. or lessto keep the duties on articles partially manufactured under twelve per cent., and on articles wholly manufactured under twenty per cent., was a scheme which excited general admiration. The measure was, indeed, contested by the Whig Opposition at every stage. The preliminary resolutions were debated for eight nights. There were many of Sir Robert Peel's old supporters who looked on the financial plan with distrust, as being founded, in a great measure, avowedly on those principles of political economy which they had been accustomed to sneer at; but, in truth, it was not unfavourable to the interests of their party. We have already seen that the new taxat least, if a temporary onewas calculated to impose a far greater burden upon the manufacturing and moneyed class than upon the landowners; in fact, by exempting incomes under 150 a year, and assessing land only upon its net rental, the burden was imposed almost entirely upon that middle class which was the especial object of the dislike of Tories of the more advanced kind. At the same time, by cheapening articles of general consumption, the Minister did something towards securing popularity among the working classes, who, as exemplified in the Chartist agitation, were not always disposed to take part against the landowners. The Income Tax Bill passed, after considerable opposition in the Commons. An amendment proposed by Lord John Russell was rejected by a vote of 302 to 202, and another amendment, proposing the reading of the Bill on that day six months, having been thrown out on the 18th of April by a vote of 285 to 188, the third reading was carried by a majority of 130 on the 30th of May. No debate took place in the Lords until the third reading, when the Bill passed by a majority of 71.As the Government was determined to persevere, and to carry the Reform Bill by means of a large creation of peers, if necessary, some of the leading members of the Opposition in the Upper House began to think seriously of their position, a sort of appeal having been made to them in a letter from the king's private secretary, suggesting the prudence of compromise and concession in order to save his Majesty from the painful alternative of a creation of peers. Accordingly, Lords Wharncliffe and Harrowby put themselves in communication with Lord Grey, and this fact was announced by the former in a letter to the Duke of Wellington, stating that he entertained good hope of being able to arrange such a plan of compromise as would prevent the necessity of a second rejection of the Bill by the Lords, and so enable them to alter and amend it when it came into committee. The Duke, in reply to this, said that he was glad of a possibility of an arrangement by mutual concession on the Reform question; and that, for his part, all that he desired to see, under the new system, was a chance of a Government for this hitherto prosperous, happy, and great country, which should give security to life and property hereafter. "The political unions," he said, "had assumed an organisation which any man who could read would pronounce to be for military purposes, and nothing else." In the meantime Lord Wharncliffe had waited by appointment upon the Prime Minister at his house, in Sheen, where he discussed the Reform question with him for two hours, without ever adverting to the political unions, and he reported the issue in a long letter to the Duke of Wellington. The result was that Lord Grey made some trifling concession in matters of detail, and in return Lord Wharncliffe gave him the assurance that he would do what he could to bring the Opposition lords to take a more favourable view of the Ministerial scheme and its probable consequences. This was followed by cordial shaking of hands, and[346] permission was given on each side to communicate with intimate friends and colleagues. The Duke of Wellington, however, declined to take any part in these deliberations. He believed that the Government could be carried on, though with difficulty, under the existing system; but under the system which the Reform Bill would introduce he doubted if the Government could be carried on at all. Nothing came of Lord Wharncliffe's negotiation with the Government, which declined to make any material concession. It had the effect, however, of splitting the Conservative party in the Upper House, breaking the phalanx of the Opposition, and thus preparing the way for the triumph of the Government.
