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TWO:Great Britain, which had amassed so vast a debt in aiding the Continental sovereigns against Napoleon, played the magnanimous to the last. She gave up her share of the public indemnities, amounting to five million pounds, to the King of Holland and the Netherlands, to enable him to restore that line of fortresses along the Belgian frontiers which our Dutch king, William III., had planned, and which Joseph II. of Austria had suffered to fall to decay, thus rendering invasion from France especially easy. Nor was this all: she advanced five million pounds to enable the different sovereigns to march their troops home again, as she had advanced the money to march them up, the money demanded of France not being ready. Truly might Napoleon, in St. Helena, say that England, with her small army, had no business interfering in Continental wars; that "with our fleet, our commerce, and our colonies, we are the strongest power in the world, so long as we remain in our natural position; but that our gains in Continental wars are for others, our losses are for ourselves, and are permanent." TWO:Mother says death is best![See larger version] TWO: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 tariff��to 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 less��to 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 tax��at least, if a temporary one��was 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.George Grenville succeeded to both Bute and Dashwood, becoming first Lord of the Treasury and Chancellor of the Exchequer, and the king announced that he had intrusted the direction of affairs to him, and the Lords Egremont and Halifax, the Secretaries of State, whence they soon acquired the name of "The Triumvirate." The Duke of Bedford quitted his post as ambassador at Paris, and was succeeded by the Earl of Hertford. The Earl of Sandwich became head of the Admiralty, and the Earl of Shelburne head of the Board of Trade. Old Marshal Ligonier was removed from the post of Master of the Ordnance to make way for the Marquis of Granby, but received a peerage. These changes being completed, the king closed the Session of Parliament on the 19th of April, with a speech, in which he declared the peace honourable to his Crown, and beneficial to his people. TWO:Whilst Cornwallis was pursuing Washington through the Jerseys, Clinton swept Rhode Island of the American troops, and drove Commodore Hopkins with some ships up Providence River, where he remained. Rhode Island, however, required a strong body of English soldiers constantly to defend it. Meanwhile Sir Guy Carleton, having destroyed the American flotilla on Lake Champlain, was daily expected to march from Crown Point and invest Ticonderoga, which was only fifteen miles distant, and where Schuyler lay prepared to abandon it on the approach of the English. But Carleton, who had displayed so much activity and energy, now, like the rest of our generals, seemed at once to abandon them at the decisive point. He descended the Champlain to Isle-aux-Noix, put his forces into winter quarters there, and proceeded himself to Quebec, to prepare for the next campaign. Thus ended the campaign of 1776.[See larger version]