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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.Sir John Moore was left in a most critical situation. All those fine armies, which were to have enfranchised Spain without his assistance, were scattered as so much mist; but this he only knew partly. He knew enough, however, to induce him to determine on a retreat into Portugal, and there to endeavour to make a stand against the French. He wrote to Sir David Baird and Sir John Hope��both of them still at a great distance��to retreat too: Sir David, with his division, to fall back on Corunna, and then sail to Lisbon to meet him; Sir John to await him at Ciudad Rodrigo. Had Moore carried out this plan whilst Buonaparte and his troops were[568] engaged with the army of Casta?os, and with Madrid, his fate might have been very different. But here again he was the victim of false information. Mr. Frere, who seems to have really known nothing of what was going on, and to have believed anything, wrote to him from Aranjuez, on the 30th of November, protesting against his retreat, and assuring him that he had nothing to do but to advance to Madrid, and save Spain. He expressed his most unbounded faith in the valour and success of the Spaniards. He talked to Moore of repulsing the French before they collected their reinforcements. On reflecting on the statements of Mr. Frere, Sir John concluded that Madrid was still holding out, and thought it his duty to proceed to its rescue. He was joined, on the 6th of December, by Hope and the artillery, and he wrote again to Sir David Baird to countermand his retreat, and order him to come up with dispatch. Thus precious time was lost, and it was not till the 9th that he was undeceived. He had sent Colonel Graham to Madrid with a reply to Morla, and to procure intelligence of the real state of affairs. Graham now came back with the alarming and astonishing truth that the French were in Madrid; that it had held out only one day. It is strange that Sir John did not instantly commence his retreat; but he was still misled by false accounts of the strength of the French, and actually resolved to proceed to Madrid. On the 11th he sent forward his cavalry, under General Stewart, when they came upon the advanced post of the enemy occupying the village of Rueda. It was but about eighty men, infantry and cavalry. They were quickly surrounded by the British dragoons, and the whole killed or taken prisoners. On the 14th, an intercepted letter of Berthier to Soult fell into Moore's hands, by which he learned that various French divisions were moving down upon him, and that Soult was in advance. He thought that he might meet and beat Soult before the other divisions arrived, and he therefore, after sending a dispatch to General Baird to warn him of Soult's approach, crossed the Tordesillas, and continued his march as far as Mayorga, where he was joined by Sir David Baird and Sir John Hope, so that his army now amounted to twenty-three thousand five hundred and eighty on the spot. He had other regiments in Portugal and on the road, making up his total to thirty-five thousand.

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