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with that of Local Acts, and the growing appreciation thereof by
local authorities, are pointed out in the fifth annual report of the
Local Government Board, 1875-6 (p. Iviii.) On the other hand, the
attention of the House of Lords was directed by Lord Redesdale on
July 18 and 20, 1876, to the abuses to which this system, in general
so useful and advantageous, was liable, and the need of great watch-
fulness by Parliament to obviate the same. 1

Mr. Toulmin Smith comments on the unauthorised donation by
the Commissioners of Woods and Forests, on April 26, 1865, of the
sum of 15,000. to ' the Bishop of London's Fund,' out of the land
revenues of the crown, ' as a contribution in the name and on the part
of her Majesty.' These revenues (under the Civil List Act) form part
of the Consolidated Fund, and can only be appropriated by Parliament.
The Queen had already made a liberal contribution to the bishop's
fund from her privy purse ; but this act of the Commissioners of
Woods was illegal without the previous sanction of Parliament. J
Also the case of the gun-metal presented by government towards

f Hans. D. v. 230, p. 951. For particulars concerning the official

See their Ann. Rep. for 1875-6. staff of the P, W. Loan Com. see

Com. Pap. 1876, v. 81, p. 51. Com. Pap. 1877, v. 57, p. 136.

h 88 & 39 Viet. c. 83. J Smith's Parl. Rememb. 1865,

1 Hans. D. v. 230, pp. 1519, 1618. p. 66.



of loans or
debts, &c.,
the sanc-
tion of

the construction of the National Memorial to the Prince Consort.
And the enquiry before the Committee of Public Accounts, in 1867,
as to a present made by a secretary of state of 400. worth of govern
ment stores to a colony without proper authority. k

In urgent cases, requiring immediate relief, or
when7 on grounds of public policy, secresy is advisable,
the government can have recourse in the first instance
to the ' Civil Contingencies,' or the ' Treasury Chest '
funds, the nature of which will be hereafter explained.
But they are strictly accountable to Parliament for all
such transactions, and the advances so made out of
these funds must be replaced out of moneys voted by
Parliament for that service. 1

No remission by government of loans, or of the
principal or interest of debts due to the crown, whether
by foreign powers, corporations, local authorities, or
individuals, is justifiable without the knowledge and
consent of Parliament.

By Act 11 & 12 Viet. c. 54, the Crinan Canal Company was as-
sumed by government, because the company were unable to repay the
sums advanced to them by the Treasury. See also the case of the
Leith Docks, &c. By the Act 23 & 24 Viet. c. 48, the lords of the
Treasury were authorised to accept the sum of 50,0002. in full satis-
faction for a debt of 228,3742. 9s. Sd. incurred by the City of Edin-
burgh for advances made by the Treasury on behalf of the harbour
and docks of Leith ; this debt having been secured by bonds to the
said amount, granted by the corporation of Edinburgh. The Bill
was brought in by Mr. Laing, the secretary to the Treasury ; it
elicited no debate in the House of Commons, but was referred to a
select committee, before whom Mr. Laing appeared, and showed
that the proposed arrangement was the best bargain that could be

k Com. Pap. 1867, v. 10, pp. 692,

1 See Mr. Pitt's advance to Messrs.
Boyd, Benfield & Co. in 1796. Parl.
D. v. 6, pp. 385-424 ; also Hans. D.
v. 63, pp. 1139, 1314. Peel's Me-
moirs, v. 2, p. 174. Knight's Hist,
of Eng. v. 8, p. 548. Rep. on Pub.

Moneys, Com. Pap. 1857, Sess. 2, v.
9, p. 615.

m S. O. H. of 0. March 25, 1715,
and March 29, 1707. Compounding
debts due to the crown. Com. Jour.
v. 75, p. 167 ; v. 81, p. 66. Case of
the Crinan Canal Co. Ib. v. 83, pp.
213, 219, 251.


made by the government." Whereupon the Bill was reported and
agreed to by both Houses. See also the Dominica Hurricane Loan
Act, 23 & 24 Viet. c. 57.

Upon this principle the surrender of the rights of the
crown in cases of ' Treasure Trove,' by relinquishing
the same to the finders, would be- unjustifiable, had it
not been authorised by the Civil List Act. p

So far as loans to foreign powers are concerned, the Loans to
practice of government has been heretofore somewhat powers.
irregular and objectionable, as the following cases will

In 1863, when the Ionian Islands were ceded by the British Prece-
government to the kingdom of Greece, a portion of certain arrears, dents,
due by the said islands to the imperial Treasury, was remitted,
without the previous authority of Parliament. 1 This proceeding
gave rise to a motion of censure in the House of Commons on
June 27, 1864. The chancellor of the exchequer defended the
course taken by the government, by reference to former precedents,
but at the same time he admitted that it was questionable whether
it might not be possible to improve the established practice in such
cases. In 1823, the government, by a convention with the Emperor
of Austria, agreed to accept the sum of 2,500,000?. in lieu of a
much larger amount due by Austria, under previous engagements
with the British crown. This proceeding was not submitted to
Parliament until the following year, when it was sanctioned by the
Act 5 Geo. IV. c. 9. A debt due by Portugal was remitted, by treaty,
in 1815, without any application to Parliament upon the subject.
In brief, the constitutional practice in such cases was thus denned
by the chancellor of the exchequer : When a sum of money, to
which the British crown was entitled, was surrendered, it was cus-
tomary to surrender the same by treaty, which was not made con-
tingent on the assent of Parliament. He admitted that, in a
constitutional point of view, the assent of Parliament was neces-

n Com. Pap. 1860, v. 15, p. 32. Accts. Com. Pap. 1874. v. 6, p. xx.

See Return of Cases wherein p. 143. Act 39 & 40 Viet. c. 31, 6,

the Treasury have compounded a and Public Loans Remission Act,

public debt, or reduced the interest 1877.

thereon, since 1857. Com. Pap. 1867, " 1 & 2 Viet. c. 2, 12. Hans,

v. 40, p. 317. And case of Cheshire D. v. 180, p. 440. In regard to the

debt due on account of Cattle Plague, prerogative of Treasure Trove, see

Hans. D. v. 197, p. 1807. See also Forsyth, Const. Law, p. 178.

Ib. v. 207, p. 1224 ; v. 216, p. 1605 ; Hans. D. v. 173, p. 1083 ; v. 176,

v. 219, p. 301. Rep. Com 8 . Pub. p. 568.



Grant of


sary, r but it was not usual to make it a condition precedent in the
treaty itself. But when the crown undertook to pay a sum of
money, it was customary to make such payment conditional upon
the assent of Parliament. After these explanations the motion of
censure was withdrawn. 8

In 1864, a Bill to carry out an ' unconditional agreement ' made
by treaty with Greece, to remit 4,000. a year, as a personal dota-
tion to George I., king of the Hellenes, out of a debt due by Greece
to Great Britain, was introduced by government, and passed with-
out amendment.*

Directly the House of Commons have agreed to the
Address in answer to the speech from the throne, the
Committee of Supply is at once appointed, for a future
day, by virtue of a standing order of July 28, 1870.
As it is the duty of this committee to consider the
estimates for the current year, the House then orders
the estimates for the Army and Navy to be laid before
them, and address the crown to give directions

O v

We may now proceed to state the various sources
from whence the public re venue is derived, and the extent
to which the revenue is subjected to the periodical re-
vision and control of the House of Commons.

The revenues of the crown in Great Britain were
anciently derivable from the hereditary lands of the
crown, and from the operation of various prerogative
rights. But since the establishment of parliamentary
government, these revenues have been mostly sur-
rendered to the control of Parliament, in exchange for
a permanent civil list. T The public revenues of the
country are now chiefly obtained from taxes and other
imposts, which are levied under the authority of Acts

' In fact he had distinctly admit/- Britain by Spain and Portugal for
ted this necessity upon a former oc- expenses incurred in Peninsular War.
casion. Hans. D. v. 172, p. 251. Hans. D. v. 200, p. 1617.

Ib. v. 176, pp. 361, 405. And Act 27 & 28 Viet, c. 40.
see procedure proposed by chanc. of
exch. in 1870, with a view to formal
relinquishment of debts due to Gt.

u Com. Jour. Nov. 25, 1867.
* See ante, p. 655.


of Parliament. w The whole revenue, from whatever
source derived, is now (with some trifling exception)
paid into the Bank of England or Ireland to the ac-
count of her Majesty's Exchequer. The old system of
retaining public money at the Exchequer itself has
been entirely abolished, and this great department re-
modelled, by recent legislation, as will hereafter appear,
when we consider the manner in which the control of
Parliament is exercised over the issue of public money.

The revenues which are thus paid into the Bank of
England, to the account of the Exchequer, comprise all
the principal revenues of the kingdom, including the
Customs and Inland Eevenue, and the receipts from the
Post Office.

Formerly, the proceeds of parliamentary taxes Consoii-
constituted separate and distinct funds, but by the Fund.
Act 27 Geo. III. c. 13, 47, it was directed that the
various duties and taxes should be carried to and
constitute a fund, to be called ' The Consolidated

When the annual revenue raised by taxes is found
insufficient, as in the case of war, to meet the annual
expenditure, Parliament grants authority to raise money
by loan to cover the deficiency. All moneys so raised
are dealt with like the ordinary revenue, and are paid
to the account of the Exchequer for the credit of the
Consolidated Fund. 7

Until the year 1854, the charges of collection and
management of the revenue of Customs, Inland Eevenue,

w For an historical account of and Mr. Disraeli's observations, Hans,

the several branches of the Public D. v. 206, pp. 625, 976, 983.
Revenue, see Public Income and x Com. Pap. 1868-9, v. 35, pp.

Expenditure of Gt. Britain, 1801- 811-931. The Consolidated Funds

1869. Com. Pap. 1868-9, v. 35, p. of England and Ireland were united

889, et seq. presented to Parlt. in by 56 Geo. III. c. 98 ; and by 1 Viet.

1869. As to the distinction between c. 2, various hereditary revenues of

direct and indirect taxation, and the the crown were carried to this fund,
proportions contributed by each to y Second Rept. Com 6 . Pub. Accts. *

the public revenue, see Mr. Lowe's Com. Pap. 1873, v. 7, p. 207. //


Gross re- and the Post Office, were payable out of the gross
belaid receipts of these imposts, respectively, and only the net
into the revenue, after these and other deductions, was paid


quer. into the Consolidated Fund. The constitutional objec-
tions to this practice were repeatedly pressed upon the
attention of successive administrations without effect.
At length, on April 29, 1847, Dr. Bowring submitted
to the House of Commons a series of resolutions based
upon the report of the Commissioners of Public
Accounts in 1831 recommending the adoption of an
improved system for the security of the public
revenue, and for ensuring greater accuracy, simplicity,
and completeness, in the public accounts ; and re-
quiring that the gross revenue of the country, without
any deduction whatever, should be paid into the public
chest, and be subjected to the surveillance and control
of Parliament. After some debate, the motion was
withdrawn. But, on April 30, 1848, the discussion
was again renewed, and Dr. Bowring succeeded in
carrying his resolutions by a bare majority. When
questioned upon the subject in the following session,
the chancellor of the exchequer informed the House
that steps had been taken by the government to carry
out in part the reforms proposed by the resolutions. 2
But it was not until 1854 that the great object aimed
at by Dr. Bowring was sought to be accomplished by
the passing of a Bill, which was introduced into Parlia-
ment by Mr. Gladstone, ' to bring the gross income and
expenditure of the United Kingdom, &c. under the
more immediate view and control of Parliament.' a By
this Act, it was intended that the whole of the gross
revenues of the country, derived from the Customs,
Excise (with the exception of certain drawbacks,
discounts, and repayments), and other taxes (not in-
cluding the land revenues of the crown, which are

Hans. D. v. 102, p. 499. Act 17 & 18 Viet. c. 94.


otherwise provided for), should be paid into the Gross

Exchequer, and the cost of collection be defrayed out

of votes in supply. b Besides the cost of collection, the exche

. .... quer.

revenue was formerly chargeable with certain judicial
and other salaries, pensions, and other payments,
under the authority of various Acts of Parliament. By
Mr. Gladstone's Act, these charges were transferred
either to the Consolidated Fund or to the annual
supplies to be voted by Parliament.

On July 9, 1877, a resolution was proposed in the House of
Commons to condemn the action of government in refusing to place
a vote in the estimates to defray the salary of an office which, until
1854, had been paid out of the Consolidated Fund. Ministers justi-
fied their act on the ground that the office was a sinecure, and that
it was only after it had become vacant that they decided to
abolish it. d

Under the authority of this Act, moreover, a very large
number of charges, previously paid out of the Consoli-
dated Fund, were placed, thenceforth, in the annual
estimates. 6 And, by the Act 19 & 20 Viet. c. 59,
certain superannuations and other charges which still
remained payable out of the gross revenues were
directed to be removed from the same, and placed upon
the Consolidated Fund, &c. The only payments re-
maining which could be legally charged upon the gross
revenues were the charges on the land revenues of the
crown the net receipts only of which are payable to
the Consolidated Fund, under the statute 10 Geo. IV.
c. 50, 113, and the Civil List Act of 1 & 2 Viet.
and the drawbacks, bounties, repayments, and dis-
counts, aforesaid.

But notwithstanding the Acts of 1854 and 1856,

b Mr. Gladstone's speech, in Hans, lection of the Revenue ; ' and North-

D. v. 130, p. 216 ; see also Ib. v. 135, cote on Financial Policy, p. 238.

p. 301. a Hans. D. v. 235, p." 1023.

c As to the results which have fol- e Mr. Gladstone, in Hans. D. v.

lowed from this improved system, see 169, p. 1943.
Peto on Taxation, ch. ix. ' On the Col-


Gross the intentions whereof were clearly to require the pay-
payable to naent of the whole revenue, minus the drawbacks, &c.
e uer 6 " above mentioned, into the Exchequer, this result was
not obtained, owing to an omission in the Acts of any
provision to render such a course compulsory. Accord-
ingly, the attention of the Committee on Public
Moneys, in 1857, was directed to the matter, and they
recommended the passing of a law to make it impera-
tive on the government to pay the gross revenues to
the Exchequer, without any other deductions than
those above-mentioned, in order that all issues for the
public service might receive the previous sanction of
Parliament. They also suggested that, if possible, the
charges on the land revenues should be brought under
the same parliamentary control.* By Treasury minutes,
dated February 15 and December 23, 1858, the go-
vernment agreed to this recommendation, excepting so
far as the land revenues were concerned, which, for
reasons stated, could not be carried out until a new
civil list should be under consideration^ But although
the Treasury undertook to submit to Parliament a Bill
to effect this desirable improvement, no such measure
was brought forward, and this great reform remained
partially uncompleted until the passing of the Ex-
chequer and Audit Departments Act, in 1866, the
tenth clause of which has made the practice obligatory.
Before the passing of this Act, the cost of collection
was still deducted in some cases from the gross revenue ;
in other instances part of the cost was paid out of the
gross revenue, and another part voted by the House of
Commons in the supplies of the year. h

Salaries in for considerations of public convenience, it is cus-
depart- tomary, in the case of the revenue departments gene-



f Rep. Com 6 . Pub. Moneys, p. 4. h Peto on Taxation, p. 210. But

Com. Pap. 1857, 2nd Sess. v. 9. see Earl Grey on Parl. Gov. (new

Com. Pap. 1857-8, v.34, p. 380; ed. pp. 85-90) for remarks on evil

and 1800, v. 39, pt. i. p. 174. effects attending this change.


rally, to pay the salaries of employes, in the first in-
stance, out of revenue receipts, and afterwards to re-
pay these advances to the Exchequer out of the
parliamentary votes for the said departments. This
practice has been tacitly approved by the Committee of
Public Accounts, and is sanctioned by the tenth clause
of the Exchequer Act. 1

With this exception, therefore, the whole public
revenue of the country, together with moneys received
from loans, is placed to the account of the Consolidated
Fund, out of which all public payments are made.
Such payments are twofold : 1. By authority of per-
manent grants, under Acts of Parliament. 2. Pursuant
to annual votes in Committee of Supply, payable out of
the Consolidated Fund by ways and means annually

The services provided for by permanent grants are
in the proportion of about thirty millions to seventy grants.
millions of revenue. They are as follows :

1. The National Debt, j including the funded and
unfunded debt; 2. The Civil List k ; 3. Annuities to
~the royal family, and pensions ; 4. Salaries and
allowances of certain independent officers ; 5. Courts
of justice ; 6. Certain miscellaneous services, com-
prising interest and sinking fund of the Kussian, Dutch,
and Greek loans, compensations, &c. These charges
are made payable out of the Consolidated Fund, by

1 Fifth Rep. Com 8 . Pub. Accts. 1194-1214; 38 & 39 Viet. c. 45.
Com. Pap. 1871, v. 11, p. 435; 2ud Treasury Minute of 23 July, 1881,
Rep. Com. Pap. 1873, v. 7, p. 250; on Mr. Gladstone's scheme for fur-
Treasury Minute, Com. Pap. 1867, v. ther reducing the National Debt.
39, p. 33^. Com. Pap. 1881, v. 17, p. 307. For

J Amos, Primer of Eng. Const, ed. precautions taken to secure punctual

1875, p. 222. For origin of National payment of interest to the national

Debt, see Macaulay. Hist, of Eng. v. creditor, and also payment of other

4, p. 319. For particulars regarding fixed charges by the Bank of Eng-

several sinking funds established land, on behalf of government, see

since 1716, and progressed opinion in Shilling Mag. v. 4, p. 44.

Parliament on question of sinking k Concerning which see ante, p.

fund for reduction of National Debt, 655.
see Com. Pap. 186S-9, v. 35, pp.

VOL. i. 3s


permanent statutes, from year to year, without any re-
newal of parliamentary authority. 1 The principle of
not subjecting to the uncertainty of an annual vote the
provision for the security of the public creditor, the
dignity of the crown, annuities and pensions to royal
and distinguished persons, the salaries of judges and
other officers in whose official character independence
is an essential element, compensations for rights sur-
rendered, and like charges, is one the soundness of
which is generally admitted, although it may have
been in certain cases carried too far. m

The annual charges for the payment of interest on
the unfunded debt, for the maintenance of the naval
and military forces, for the collection of the revenue,
and for the various civil services, are prepared in the
respective departments of state to which they severally
belong, and are afterwards revised and approved by the
Treasury, in the manner described in the chapter of this
work which treats of the functions of that branch of
the executive government.

The ' unfunded debt ' consists principally of exchequer bills,
which are in the nature of temporary loans to the government.
Every year, during the sitting of the Committee of Supply, grants
are made from time to time of money on account, to be raised by
exchequer bills or loans. This supply of credit is voted in Com-
mittee of Supply, after which a resolution is reported from the
Committee of Ways and Means that a sum equal to that amount be
raised by loans or exchequer bills, to be charged on the next aids
to be granted by Parliament."

They are then submitted to the House of Commons by
command of the crown in very detailed estimates.

1 For financial history of these It is not customary to send the

great heads of expenditure, see Com. estimates to the House of Lords. In

Pap. 1868-9, v. 35, pp. 906-1134. 1786 they applied for a copy, and

m Rep. on Pub. Moneys, Com. were refused by the Commons, la

Pap. 2nd Sess. 1857, v. 9, p. 520. 1839 they succeeded in obtaining a

As to expenditure for diplomatic copy, ' almost for the first time in

service, see post, v. 2. their history.' Hans. D. v. 169, pp.

Cox, List. p. 193. Hans. D. v. 1140, 1603.
161, p. 1309.


Until the year 1863, there was one exception to this rule, in
respect to the Disembodied Militia estimates, which used to be for-
mally prepared by a committee of the House of Commons. In
former times, the privilege of the direct control of the House over
the expenditure upon the militia was highly prized, as one of the
safeguards of the liberties of the country, the militia being con-
sidered a constitutional force, as distinguished from the regular
army. Of late years that feeling has been entirely changed, in
consequence of the control acquired by the House over the regular
army in Committee of Supply ; the militia estimates had come to be,
in fact, prepared in the War Office, and to be merely formally assented
\o by the committee charged to prepare them. It was accordingly
agreed to abandon this ancient usage, and to permit these estimates
to be henceforth prepared by the executive government, and to be
presented to Parliament simultaneously with the ordinary army
estimates, as in the case of the expenses of the embodied militia
and the yeomanry and of the volunteers. P

In order that the House may be informed, as early Presenta-
as possible, of the expenditure for which they will have estimates!
to provide, the following resolution was agreed to on
February 19, 1821, and has ever since been complied
with :

' That this House considers it essentially useful to
the exact performance of its duties, as guardians of the
, public purse, that, during the continuance of the peace,
whenever Parliament shall be assembled before Christ-
mas, the estimates for the navy, army, and ordnance
departments should be presented before January 15
then next following, if Parliament be then sitting ; and
that such estimates should be presented within ten days
after the opening of the Committee of Supply, when
Parliament shall not be assembled till after Christmas.'

The necessity for giving due consideration to the
opinions expressed by the Committee on Public
Accounts on the appropriation accounts of the preced-
ing financial year is a serious impediment in the way
of laying the civil service estimates on the table at the
commencement of the session. q

p Hans. D. v. 168, p. 662. Mir. Mr. Gladstone, Hans. D. v. 208,
Parl. 1828, p. 1221. Hans. D. v. 16i>, p. 1653.
p. 198. Clode, Mil. Fore. v. 1, p. 43.

3 B 2


Esti- The estimates for civil services, commonly called

the miscellaneous estimates, together with those for the
revenue departments and packet service, were usually
presented somewhat later in the session. Since 1857,
the Committees on Public Moneys, on Miscellaneous
Expenditure, and on Public Accounts, have all re-
commended that these estimates should be laid on the
table every session, as soon as possible after the meet-
ing of Parliament, but the government experienced
great difficulty in expediting their delivery/ On

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