War that a great doubt exists whether there noble Earl said that his observations may not be another species of arm-namely, should be prospective; he did not keep Mr. Whitworth's, both heavy and light, that pledge; but, at the same time, that which may not be more advantageous than is clearly the important matter for your the Armstrong guns; and the consequence Lordships to consider. The question is of that will be that we must either be left not what was done by the late Government with an inferior arm or else incur the whole in 1858, or what was done by Mr. Gladexpense over again, and have to re-arm stone in 1859-the real question is, what the whole of the army, and find the vast are your financial prospects at present? amount of arms already in store perfectly I own I have been a good deal surprised, useless. Now, do not let me be misunder- although I have heard something of it out What I say is this:-When you of doors, at the gloomy predictions of noble are in doubt as to having the best possible Lords, and at the very lively apprehensions invention, it is most important that you which they seem to entertain as to the should not overload your stores, at a vast state of our finance. The noble Earl who expense of money, with a profusion of spoke first on that side of the House (the stores, which may ultimately be found to Earl of Carnarvon), and who I quite admit be of an inferior character, and be super- made a very able speech, was not only seded by some new invention. As I afflicted with alarm, but spoke of the moral said before, I do not presume to say in delinquencies-I think, of the failure in what direction the Government can effect morality-which had been exhibited in the economy. I should be sorry even to take present system of finance. upon myself to call upon your Lordships to affirm categorically that reduction is capable of being effected consistently with the circumstances of the times. My firm belief is that that is the case, but I do not possess that knowledge that would induce me to ask your Lordships to come to such a categorical decision. But, I say that the Government have before them the simple choice of two alternatives. Additional taxation is impossible. Renewal of taxation is almost equally impossible. It is impossible to continue in the present alarming and serious condition of our finances; and the only alternative to which they must, and I trust will look, is an unsparing, judicious, and at the same time a perfectly safe reduction of the public expenditure.

EARL RUSSELL: My Lords, I am very glad that, on this occasion at least, we shall not have to enter on the question of the privileges of the two Houses of Parliament. The noble Earl (the Earl of Derby) says that the House of Commons have the right to include all the supplies of the year in one Bill, and that your Lordships might, if you pleased, reject that Bill. There can be no doubt respecting these two positions. The noble Earl thinks the Commons have not done wisely in putting £22,000,000 of revenue in one Bill. I differ from him in that opinion. If the House of Commons had sent up the taxes piecemeal, and your Lordships had rejected some and accepted others, there would have been complete confusion in the financial arrangements of the year. The

THE EARL OF CARNARVON disclaimed having used the expression attributed to him by the noble Earl.

EARL RUSSELL: The noble Earl used the word "morality." What he feared for was the morality of the country. Certainly he did not use the precise phrase

moral delinquency," but he did express his apprehensions for the morality of the country if the Chancellor of the Exchequer should be allowed to pursue his present course. My noble Friend who spoke from the cross benches (Lord Overstone) was exceedingly alarmed at the present state of our finance, and my noble Friend who is now on the cross bench (Earl Grey) was hardly less alarmed. But I cannot avoid asking, what are the symptoms of a country getting into a state of financial embarrassment and political decay? Those symptoms are, I conceive, that the Government goes on with an increasing expenditure and a declining revenue; that it is constantly contracting new debts, and must therefore eventually bring on a financial crisis. What is the case in which we stand at present? The Chancellor of the Exchequer has proposed Estimates for this year which are greatly below those of previous years. They are £1,800,000 below those of last year, and I think £3,500,000, or nearly so, below those of 1860. Therefore you have not an increasing expenditure, as is constantly repeated. We are for ever hearing the phrase, "The expenditure is constantly increasing-where is this to end? If you increase your expenditure every year, what will you arrive at?"

as long as they have enough to do to provide for the demands of the year. That has been to a great extent the cause of those Votes which are made a reproach against my right hon. Friend the present Chancellor of the Exchequer, but on account of which I do not reproach the Chancellors of the Exchequer of former Governments. Now, let us see what took place? In raising the sums for the Russian war, Mr. Gladstone proposed that certain Exchequer bonds should be issued, which, in order to prevent the accumulation of debt, should be paid off at certain times. Sir George Lewis, who succeeded him as Chancellor of the Exchequer, proposed the establishment of a sinking fund, to pay off the debt contracted during that war. Mr. Disraeli came into office in 1858. He found a deficit before him; and the way in which he disposed of that deficit was to sweep away the obligation to pay the Exchequer bonds of Mr. Gladstone, and the sinking fund of Sir George Lewis. He swept away those two means of paying the debt which former Chancellors of the Exchequer had provided. I heard his statement in the House of Commons, and I thought he made a very wise provision. I never thought of reproaching him for tak ing that course. I believe the country does not like that process which was formerly resorted to, that hocus pocus of paying off debt with one hand, while you were contracting it with the other. Notwithstand

Whereas, it was, in fact, a diminishing expenditure. Then, with regard to the state of your revenue. You have a revenue which is fully equal to the demands that are made upon it. My right hon. Friend the Chancellor of the Exchequer has of late years remitted some taxes, and you have heard something of the effect of those remissions; but, at the same time, he imposed other taxes; and the balance between taxes remitted and taxes imposed is £1,090,000 a year, I think, in favour of taxes imposed. There is another security. If you have on ore hand a diminishing expenditure, you have on the other an increasing revenue. But that is not all. Are the revenues of the country falling? So far from that, the average of increase of revenue of late years from old sources, from established taxes, has amounted to no less than £900,000 a year. There fore, in order to meet that with which I shall have to deal presently, a deficit of £3,500,000 in the two past years-[A noble LORD: Five millions]-I state it at £3,500,000, which I hold to be far more accurate, you have £1,950,000 of increased revenue. No one can doubt, that if even you do not reduce your expenditure much below the present rate, yet with an increase of nearly £2,000,000 of revenue per annum, you will soon be in a state in which you can more than pay off all the debt which has been created. So that, so far from the present state of our finance justifying the gloomy ap-ing what the noble Earl said about retro. prehensions which have been entertained, spection, this debate has turned very much I hold that it is a state of finance which upon what has been done in former years. may cause anxiety, because the expen- The noble Earl seemed possessed with the diture is very large, and the revenue is notion that the country is going to ruin, very large, but that there is in it no-in consequence of the measures which have thing to cause the least gloom or appre- been adopted in former years; and the hension as to the future. Then comes the Chancellor of the Exchequer has been question raised by my noble Friend on the charged with having taken the course of cross-bench (Earl Grey)-Ought you, un- a spendthrift-it has been said, "So reckder these circumstances, to have during re- less has been the course which you have cent years provided a considerable increase been pursuing, that you have taken the of revenue? My noble Friend says that malt credits." What were the malt creyou ought to have taken security against a dits? The malt credits were sums due by deficit. I ask, how is that security to be certain persons to the State on account of provided? In 1819 the House of Commons taxes, and what Mr. Gladstone did was to voted that there ought to be £5,000,000 say to those persons, Pay up what you of surplus for the purpose of providing a owe. When a private person incurs an sinking fund. But that did not go on for expenditure of £1,000, and has a debtor many years. Nor was it unreasonable or who owes him £1,000, it does not seem to unnatural that that should be so; because him to be at all a spendthrift course to say, I cannot think it unwise that the country" I will go to my debtor and obtain from and the House of Commons will not agree him the means of making this payment. to provide a large sum for the purpose But on the part of the Chancellor of the of a sinking fund, or to pay off past debts, Exchequer such a course seems to be

ex

thought utterly reckless. No doubt, mea-vernment had given instructions to the Earl sures have been adopted by the Go- of Elgin to go up the Peiho. He went up. vernment which have led to an increase of He overcame the little resistance that was debt; but the circumstances which have made, and signed the treaty of Tien-tsin. occurred during these years have been un- A question afterwards arose with regard precedented, and such as could not have to the ratification of the treaty. The noble been foreseen. The first event which oc- Earl opposite and his Government were of curred was the China war. The noble Earl opinion that an imposing force should be opposite (the Earl of Derby) had given sent to the mouth of the Peiho to accomthose extraordinary orders to the company Mr. Bruce, who was afterwards to mander of our fleet in China, that he was to go to the mouth of the Peiho with an imposing force. He did not tell him to go in a peaceable manner; he did not tell him to make war; but he placed him in that extraordinary position that he could hardly avoid fighting, without submitting to an imputation upon the gallantry of the officers and men whom he commanded. Four days after we came into office, those extraordinary orders produced the conflict at the Peiho, with a loss of between four hundred and five hundred men, killed and wounded, in that unfortunate and illmanaged expedition. We had to provide for extraordinary measures, in order to vindicate the honour of the country, and secure peace with China. Is there any one who will blame us for having taken that course? Is there any one who will blame the Chancellor of the Exchequer for not having foreseen exactly what result those extraordinary, and I think most unwise, orders of the late Government would produce? I think it was impossible that any budget should have been framed with a foresight of such consequences. Then it happened last year, long after my right hon. Friend had produced his budget, that an occurrence took place which made it necessary for the Government to send forces to Canada, to take care of Her Majesty's possessions there. Would any one have thought the Government blameless if they had declined to take that course?

THE EARL OF DERBY: Did I rightly understand the noble Earl to say that it was we who ordered an imposing demonstration to be made at the mouth of the Peiho? The noble Earl is much mistaken. It was our predecessors; and when we came into office, we found the expedition at the mouth of the Peiho.

THE EARL OF MALMESBURY: I must deny that my instructions to Mr. Bruce were such as were likely to lead to a collision with the Chinese.

EARL RUSSELL: The Earl of Elgin had gone up the Peiho. The former Go

go peaceably up that river. I have always thought those were very imprudent directious, but it was not our business to criticise them when the task devolved upon us of defending the honour of the country; and till this moment I have never pressed any censure upon them. With regard to another great head of expenditure during the course of the past year, I am sure every one would have blamed the Government if it had not sent sufficient force to Canada at the time when hostilities might have broken out, though nobody could very well have foreseen that an American captain would have acted, as his own Government thought, in so outrageous and indefensible a manner as the commander of the ship that boarded the Trent. These are things that would defeat any calculations, and the Chancellor of the Exchequer, I think, would have come with a very ill grace before the House of Commons if he had said, as my noble Friend on the cross benches seemed to think he ought to have done-The state of Europe is very much perplexed, a war is going on in America, and no man can say what may be the consequences; give me £2,000,000 of taxes in order that I may be able to meet any emergency. The House of Commons might say-Produce the evidence of danger, show us something which requires this increase of taxation; but, till that is done, we will not give to your vague apprehensions of danger taxes which will diminish the resources of the people. My noble Friend on the cross benches (Lord Overstone) said something with regard to our commercial interests, and wished to take credit for some predictions which ho formerly uttered. But I can assure him that the facts which he states never occurred. My noble Friend seems to imagine that the French Government were anxious to establish a system of free trade, that they would have at once diminished the duties on our manufactures without any treaty. Now, I have heard from persons in official as well as unofficial stations that the Emperor of the French would

have been quite unable to make such a Hear, hear!] Well, that may be so. change. The sagacity and knowledge of But I think the House requires from commercial principles possessed by the the leader of the great party of which the Emperor of the French enabled him to see right hon. Gentleman the late Chancellor that it would be a great advantage to of the Exchequer is the organ in the other France if the duties on English produce House, something more definite than the and English manufactures could be re- observations which he has delivered toduced. But the protected interests were night. He says it is impossible for him to so strong in France that they would have judge, from want of information, whether defeated any attempts that could have the defence and security of the country been made by means of a legislative de- require that amount of military force cree. He therefore resorted to the which is now kept on foot; and yet he course of a treaty with this country, and is perfectly sure that there may be some the Ambassador of the French and Mr. reduction effected in those armaments. Cobden, who was sent to France, stated He does not know what the requiretheir belief, that if we made great reduc- ments of the country are; he does not tions in the wine duties, and also certain know what amount of force has actually other reductions, we might obtain the ad- been furnished, but yet he feels sure that mission of our manufactures into France, some reduction may be made. but otherwise we should totally fail in that object. That was done, and the results of the treaty have been stated by my noble Friend. I believe Mr. Cobden, who went to negotiate that treaty, and who per-ment, and therefore that I should be sorry suaded the French Government to reduce the duties from 30 per cent to 20, 15, and in some cases 10 per cent, is entitled to the gratitude of this country for uniting the two nations by those commercial bonds which tend so much to their mutual benefit. The noble Earl who spoke last (the Earl of Derby) touched on a topic which he thought it necessary to introduce, and on which I confess, after hearing his explanation, my doubts are much greater than ever. I had understood, with some of my noble Friends, that there had been a question of "bloated armaments."

THE EARL OF DERBY: I beg to say that I did not introduce the subject; it was introduced and enlarged upon by both the noble Dukes opposite.

EARL RUSSELL: The noble Earl is quite right; the subject was introduced by the noble Duke, and in following him he gave an explanation of what the term was intended to convey. But I was about to state that, as I understood, the phrase of bloated armaments applied to this country; and. that according to the argument, those bloated armaments were to be traced to the foreign policy of this country, which had made those armaments a necessity. We had only to change our foreign policy and we entirely got rid of the necessity for keeping them up. "Bloated armaments!" Why there is condemnation in the very phrase. The noble Earl now changes the argument, and says the phrase applied to other countries. [The Earl of DERBY:

THE EARL OF DERBY: I beg the noble Earl will not misrepresent my argu ment. I said I had not the information which would enable me to form a judg

to call on your Lordships to affirm catc gorically that there was room for retrenchment, my own firm impression being that there is room for retrenchment, though I am unable to point to the exact items capable of reduction.

EARL RUSSELL: If the noble Earl has not information sufficient to form an opinion, why should he entertain an impression that the Estimates are excessive? Why should he not rather think that they are just in accordance with the requirements of the country, for he admits the necessity of providing adequately for its defence? It does, I confess, appear to me as if the noble Earl, not choosing to commit himself to a definite affirmation that reduction can be practised, yet wishes to hold out to those who are firmly convinced that great reductions can be made a shadowy hope that he would be the man to carry them into effect. I must, however, advert shortly to an assertion which I understood to be made elsewhere, though the noble Earl has not touched upon it to-night-namely, that it is our foreign policy which imposes the necessity for large Estimates upon the country. As the person in the first place responsible for that policy, I should feel it a very great charge and a heavy accusation, if I had done anything as the organ of the Government to make it necessary that the people should bear burdens from which otherwise they would be exempt. But I am convinced that the policy which the present

QUESTION.

Government has followed has been one which, far from intending to increase CHINESE IMMIGRANTS IN AUSTRALIA. armaments, has tended to keep them within moderate bounds. The policy has MR. MARSII said, he wished to ask the been, in the first place, one of non-inter- Under Secretary of State for the Colonies, vention in the domestic affairs of other Whether an Act has been passed by the countries. Can any one say that is an Legislature of New South Wales imposing aggressive policy; or that, if we had pro- a fine of £10 on every Chinese landed in posed to interfere either on behalf of the the Colony, and an annual Poll Tax of £4 sovereigns, or of the nations which deposed on every Chinese resident there, and enactthose sovereigns, we should not have been ing other penalties against them; whether more likely to involve ourselves in war, Her Majesty has been advised to withhold or at all events in preparation for war, Her consent from such Act; and whether than we have been while carefully refusing he is aware that previous to the passing to interfere in the concerns of those coun- of this Act a Select Committee of the tries. The other principle which I have Legislative Council of New South Wales kept steadily in view is, that we should had, after examining witnesses, made a always encourage the independence of other Report wholly and entirely acquitting the countries; that it is for the advantage of Chineso residing in the Colony of the Europe and for the advantage of the world charges and imputations which had been that each independent nation should pre-made against them? serve its own state, its own privileges, and its own position. But that, again, is not a principle that tends to war; it is one that tends to peace, and to the preservation of the rights of every nation by other countries. I think the noble Earl who began the debate, and the noble Earl who spoke before me, have totally failed in showing that there is any danger in the present state of our finance. I believe that finance is in a sound condition, and even if you have no surplus, that it is not wise to impose taxes without necessity. With regard to the defence of the country, I believe that we have done no more than what is necessary; but at the same time I do not mean to say, that when it can be judiciously done, expenditure from time to time ought not to be reduced. Her Majesty's Government will be happy when the time comes that those reductions can be safely made, and after the defences of the country have been secured every op portunity for reduction will be eagerly

MR. CHICHESTER FORTESCUE said, that an Act such as that described by the hon. Member was passed by the Legislature of New South Wales a short time ago; it was assented to by the Governor, and had been left to its operation. With respect to the latter part of the hon. Gentleman's question, they had had no report at the Colonial Office of such a proceeding on the part of the Parliament of New South Wales. He might add that his noble Friend at the head of the Colonial Office was fully aware of the objectionable nature of this legislation under ordinary circumstances; but he was aware that an Act very similar had been in operation for many years in the neighbouring Colony of Victoria, that law having been enacted under the old constitution. He also knew that there was a strong feeling in New South Wales against increasing the number of Chinese males in Australia, there being scarcely any Chinese women in the country, and the Chinese in the Colony amounted to 21,000, or about onefourth of the adult male population. Under these circumstances, Her Majesty's Government would not advise the Crown to disallow the Act; but the Secretary of State had advised the Colonial Government to relax the stringency of the provision in cases where the Chinese immigrants were accompanied by their wives and families.

ELECTRIC TELEGRAPH COMPANIES.
QUESTION.

COLONEL WILSON PATTEN said, he
H