John Morley.

The life of William Ewart Gladstone, Volume 2 online

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Vol. I. page 485

When the report of the Irish Financial Relations Commission of 1894
was named to him, Mr. Gladstone made the following observations : —

The changes adopted in that year were explained in my budget
speech, and will be found in my volume of Financial Statements,
pp. 53, 60, and 69. They affected the Spirit Duties and the

1. The Spirit Ditties. — We laid 8d. per gallon upon Irish spirits,
imposed at the same time Is. per gallon in Scotland, and laid it
down that the equalisation of the duty in the three countries
would require a reduction of the duty of 8s. chargeable in England.
Sir Robert Peel had imposed Is. per gallon on Irish spirits in
1842, but was defeated by the smuggler, and repealed the duty in
consequence of the failure. In 1842 the duty was levied by a
separate revenue police. I abolished this separate police, and
handed the duty to the constabulary force, which raised it, and
without difficulty.

2. The Income-Tax was also in that year extended to Ireland. I
pointed out that Sir Robert Peel, in imposing the burden on Great
Britain, proposed to give a compensation for it by progressive
reductipns of duty on consumable commodities, and that Ireland
had for twelve years enjoyed her full share of the compensation
without undergoing any Dart of the burden; but I also laid it
down as a fundamental principle that the peace income-tax was to
be temporary, and I computed that it might cease in 1860. This
computation was defeated, first by the Crimean war, second by a
change of ideas as to expenditure and establishments which I did
everything in my power to check, but which began to creep in
with, and after, that war. We were enabled to hold it in check
during the government of 1859-66. It has since that time, and
especially in these last years, broken all bounds. But although the
computation of 1853 was defeated, the principle that the income-
tax should be temporary was never forgotten, at least by me, and
in the year 1874 I redeemed my pledge by proposing, as mentioned,
to repeal it — a course which would have saved the countrv a sum
which it is difficult to reckon, but very large. This fact which was
in the public mind in 1853 when the income-tax was temporary, is
the key to the whole position. From this point of view we must
combine it with the remission of the consolidated annuities. I have
not now the means of making the calculation exactly, but it will be
found that a descending income-tax on Ireland for seven years at
7d., then 6d., then 5d., is largely, though not completely, balanced
by that remission. It will thus be seen that the finance of 1853 is
not responsible either for a permanent peace income-tax upon
Ireland, or for the present equalisation of the spirit duties. At the
same time, I do not mean to condemn those measures. I condemn
utterly the extravagance of the civil expenditure in Ireland, which,

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if Ireland has been unjustly taxed, cannot for a moment be pleaded
as a compensation. I reserve my judgment whether political
equality can be made compatible with privilege in point of taxation.
I admit, for my own part, that in 1853 I never went back to the
union whence the difficulty springs, but only to the union of the
exchequers in or about 1817. It is impossible to resist the
authority which has now affirmed that we owe a pecuniary, as well
as a political debt to Ireland.


Vol. I. page 473

Mr. Gladstone to Sir Stafford Northcote

Aug. 6, 1862. — I have three main observations to make upon
the conversion scheme, two of which are confessions, and one a
maxim for an opposition to remember.

1. In the then doubtful state of foreign politics, had I been
capable of fully appreciating it at the time, I ought not to have
made the proposal

2. Such a proposal when made by a government ought either
to be resisted outright, or allowed to pass, I do not say without
protest, but without delay. For that can do nothing but mischief
to a proposal depending on public impression. The same course
should be taken as is taken in the case of loans.

3. I am sorry to say I made a more serious error, as regards the
South Sea Stocks, than the original proposal In the summer, I think,
of 1853, and a good while before harvest the company proposed to
me to take Mr. Goulburn's 3 per cents, to an equal amount in
lieu of their own. They were at the time more valuable and I
refused ; but it would have been wise to accept, not because the
event proved it so, but because the state of things at the time was
so far doubtful as to have made this kind of insurance prudent.

For the benefit of the expert, I give Mr. Gladstone's further observa-
tions on this highly technical matter : —

I have other remarks to offer. I write, however, from memory.
Three millions of the £8,000,000 were paid in exchequer bills.
The difference between £100 and the price of consols at the time
may, in argument at least, fairer be considered as public loss.
You say it was 90 or 91. We could not, however, if the operation
had not taken place, have applied our surplus revenue with
advantage to the reduction of debt The balances would have been
richer by £5,000,000, but we had to raise seven millions for the
services of the year 1854-5. Now, as I am making myself liable
for the loss of half a million of money in repaying the South Sea
Company, and thereby starving the balances, I am entitled to say
on the other hand that the real loss is to be measured by the
'amount of necessity created for replenishing them, and the charge
entailed in effecting it. This I tnink was done by the exchequer

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bonds: and beyond all doubt a large saving was effected to the
public by raising money upon those bonds, instead of borrowing
in consols at 84 or thereabouts, which I think would have been the
price for which we should in that year have borrowed — say, at 84.
The redemption price, i.e. the price at which on the average
consols have been in recent times redeemed, can hardly I think be
less than 95, and may be higher. There was in 1854 a strong
combination in the City to compel a 'loan* by bearing the
funds ; and when it was defeated by the vote of the House of
Commons, a rapid reaction took place, several millions, as I under-
stand, were lost by the 'bear/ and the attempt was not renewed
in 1855, when the loan was, I believe, made on fair terms, relatively
to the state of the market.


Vol 1. page 491

In cabinet on Wednesday Lord John Russell opened the question*
of the Reform bill, stated the prospect of defeat on Sir K Dering's
motion, and expressed his willingness to postpone the measure
until the 27 th April. Lord Palmerston recommended postpone-
ment altogether. Lord Aberdeen and Graham were averse to any
postponement, the latter even declaring his opinion that we ought
at the time when the Queen's Speech was framed to have assumed
the present state of circumstances as inevitable, and that, there-
fore, we had no apology or ground for change ; further, that we
ought if necessary to dissolve upon defeat in order to carry the
measure. No one else went this length. All the three I have named
were, from their different points of view, disposed to concur in the
expedient of postponement, which none of them preferred on its
merits.. Of the rest of the cabinet, Molesworth and I expressed
decidedly our preference for the more decided course of at once
giving up the bill for the year, as did the chancellor, and this for the
ultimate interest of the plan itself. Lord Lansdowne, Wood, Claren-
don, Herbert were all, with more or less decision of phrase, in the
same sense. Newcastle, Granville, and Argyll were, I believe, of the
same mind. But all were willing to accept the postponement until
April 27, rather than the very serious alternative. Molesworth
and I both expressed our apprehension that this course would in
the end subject the government to far more of censure and of
suspicion than if we dealt with the difficulty at once. Next day
Lord John came to see me, and told me he had the idea that in
April it might probably be found advisable to divide the part
of the bill which enfranchises new classes from that which dis-
franchises places and redistributes seats; with a view of passing
the first and letting the latter take its chance ; as the popular feel-
ing would tell for the first while the selfish interests were provoked
by the last. He thought that withdrawal of the bill was equivalent
to defeat, and that either must lead to a summary winding up of

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the session. I said the division of the bill was a new idea and a
new light to me ; but observed that it would by no means help
Graham, who felt himself chiefly tied to the disfranchising part ;
and submitted to him that his view of a withdrawal of the bill,
given such circumstances as would alone induce the cabinet to
think of it, was more unfavourable than the case warranted. —
March 3, 1854.


Vol. I. page 511

Extracts from a letter to Lord John Russell, Jan. 20, 1854

... I do not hesitate to say that one of the great recommen-
dations of the change in my eyes would be its tendency to strengthen
and multiply the ties between the higher classes and the possession
of administrative power. As a member for Oxford, I look forward
eagerly to its operation. There, happily, we are not without some
lights of experience to throw upon this part of the subject. The
objection which I always hear there from persons who wish to
retain restrictions upon elections is this: 'If you leave them to
examination, Eton, Harrow, Rugby, and the other public schools
will carry everything. 9 I have a strong impression that the
aristocracy of this country are even superior in natural gifts, on
the average, to the mass : but it is plain that with their acquired
advantages, their insensible education, irrespective of book-learning,
they have an immense superiority. This applies in its degree to all
those who may be called gentlemen by birth and training ; and it
must be remembered that an essential part of any such plan as is
now under discussion is the separation of work, wherever it can be
made, into mechanical and intellectual, a separation which will
open to the highly educated class a career, and give them a
command over all the higher parts of the civil service, which up to
this time they have never enjoyed. . . .

I must admit that the aggregate means now possessed by
government for carrying on business in the House of Commons
are not in excess of the real need, and will not bear serious
diminution. I remember being alarmed as a young man when
Lord Althorp said, or was said to have said, that this country could
no longer be governed by patronage. But while sitting thirteen
years lor a borough with a humble constituency, and spending
near ten of them in opposition, I was struck by finding that the
loss or gain of access to government patronage was not traceable in
its effect upon the local political influences. I concluded from this
that it was not the intrinsic value of patronage (which is really
none, inasmuch as it does not, or ought not, to multiply the
aggregate number of places to be given, but only acts on the
mode of giving them) that was regarded, but simply that each
party liked and claimed to be upon a footing of equality with
their neighbours. Just in the same way, it was considered neces-

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sary that bandsmen, flagmen, and the rest, should be paid four
times the value of their services, without any intention of bribery,
but because it was the custom, and was done on the other side —
in places where this was thought essential, it has now utterly
vanished away, and yet the people vote and work for their cause
as zealously as they did before. May not this after all be found
to be the case in the House of Commons as well as in many
constituencies? ... ,

It might increase the uncertainties of the government in the
House of Commons on particular nights ; but is not the hold even
now uncertain as compared with what it was thirty or forty years
ago ; and is it really weaker for general and for good purposes, on
account of that uncertainty, than it then was ? I have heard you
explain with great force to the House this change in the position of
governments since the Reform bill, as a legitimate accompaniment
of changes in our political state, by virtue of which we appeal more
to reason, less to nabit, direct interest or force. May not this be
another legitimate and measured step in the same direction ? May
we not get, I will not say more ease and certainty for the leader of
the House, but more real and more honourable strength with the
better and, in the long run, the ruling part of the community, by a
signal proof of cordial desire that the processes by which govern-
ment is carried on should not in elections only, but elsewhere too
be honourable and pure ? I speak with diffidence ; but remember-
ing that at the revolution we passed over from prerogative to
patronage, and that since the revolution we have also passed from
bribery to influence, I cannot think the process is to end here ; and
after all we have seen of the good sense and good feeling of the
community, though it may be too sanguine, I cherish the hoDe
that the day is now near at hand, or actually come, when in
pursuit not of visionary notions, but of a great practical and
economical improvement, we may safely give yet one more new and
striking sign of rational confidence in the intelligence and character
of the people.


Vol. I. page 519

Prom the time I took office as chancellor of the exchequer I
began to learn that the state held in the face of the Bank and the
City an essentially false position as to finance. When those rela-
tions began, the state was justly in ill odour as a fraudulent
bankrupt who was ready on occasion to add force to fraud. After
the revolution it adopted better methods though often for unwise
purposes, and in order to induce monied men to be lenders it came
forward under the countenance of the Bank as its sponsor. Hence
a position of subserviency which, as the idea of public faith grew
up and gradually attained to solidity, it became the interest of the
Bank and the City to prolong. This was done by amicable and
accommodating measures towards the government, whose position

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was thus cushioned and made easy in order that it might be willing
to give it a continued acquiescence. The hinge of the whole situa-
tion was this : the government itself was not to be a substantive
power in matters of finance, but was to leave the money power
supreme and unquestioned. In the conditions of that situation I
was reluctant to acquiesce, and I began to fight against it by
financial self-assertion from the first, though it was only by the
establishment of the Post Office Savings Banks and their great pro-
gressive development that the finance minister has been provided
with an instrument sufficiently powerful to make him independent
of the Bank and the City power when he has occasion for sums in
seven figures. I was tenaciously opposed by the governor and
deputy-governor of the Bank, who had seats in parliament, and I
had the City for an antagonist on almost every occasion. — Undated


Vol. I. page 521

With reference to the Crimean war, I may give a curious example
of the power of self-deception in the most upright men. The offices
of colonial secretary and war minister were, in conformity with usage,
united in the hands of the Duke of Newcastle. On the outbreak
of war it became necessary to separate them. It evidently lay with
the holder to choose which he would keep. The duke elected for
the war department, and publicly declared that he did this in com-
pliance with the unanimous desire of his colleagues. And no one
contradicted him. We could only ' grin and bear it. 1 I cannot pre-
tend to know the sentiments of each and every minister on the
matter. But I myself, and every one with whom I happened to
communicate, were very strongly of an opposite opinion. The
duke was well qualified for the colonial seals, for he was a states-
man ; HI for the war office, as he was no administrator. I believe
we all desired that Lord Palmerston should have been war minister.
It might have made a difference as to the tolerance of the feeble and
incapable administration of our army before SebastopoL Indeed, I
remember hearing Lord Palmerston suggest in cabinet the recall of
Sir Richard Airy.

In that crisis one man suffered most unjustly. I mean Sidney
Herbert. To some extent, perhaps, his extraordinary and most
just popularity led people to refrain from pouring on him those vials
of wrath to which his office exposed him in the eyes especially of
the uninformed. The duties of his department were really
financial. I suppose it to be doubtful whether it was not the duty
of the secretary of state's department to deal with the question of
supply for the army, leaving to him only the management of the
purchasing part. But I conceive it could be subject to no doubt
at all that it was the duty of the administrative department of the
army on the spot to anticipate and make known their wants for
the coming winter. This, if my memory serves me, they wholly

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failed to do : and, the Duke of Newcastle's staff being in truth very
little competent, Herbert strained himself morning, noon, and
night to invent wants for the army, and according to his best
judgment or conjecture to supply them. So was laden the great
steamer which went to the bottom in the harbour of Balaclava.
And so came Herbert to be abused for his good deeds. — Auiobkh
graphic Note, Sept. 17, 1897.


Vol. I. page 5tf
Mr. Gladstone to Duke of Argyll

Oct. 18, '55. — You have conferred a great obligation on me by
putting me into the witness-box, and asking me why I thought last
year that we were under an obligation to Lord Palmerston for 'con-
centrating the attention of the cabinet on the expedition to the
Crimea. ' Such was then my feeling, entertained so strongly that
I even wrote to him for the purpose of giving to it the most direct
expression. And such is my feeling still. I think the fall of
Sevastopol, viewed in itself and apart from the mode in which it
has been brought about, a great benefit to Europe. . . . This
benefit I should have contemplated with high and, so to speak,
unmixed satisfaction, were I well assured as to the means by which
we had achieved it. But, of course, there is a great difference
between a war which I felt, however grievous it was, yet to be just
and needful, and a war carried on without any adequate justifica-
tion; so far as I can to this hour tell, without even any well-defined
Sractical object. . . . Your letter (if I must now pass from the
efensive) seems to me to involve assumptions as to our right
to rectify the distribution of political power by bloodshed, which
carry it far beyond just bounds. In the hour of success doctrines
and policy are applauded, or pass unquestioned even under mis-
giving, which are very differently handled at a period of disaster,
or when a nation comes to feel the embarrassments it has accumu-
lated. The government are certainly giving effect to the public
opinion of the day. If that be a justification, they have it : as all
governments of England have had, in all wars, at eighteen months
from their commencement. Apart from the commanding considera-
tion of our duty as men and Christians, I am not less an objector
to the post- April-policy, on the ground of its certain or probable
consequences — in respect first and foremost to Turkey ; in respect
to the proper place and power of France ; in respect to the interest
which Europe has in keeping her (and us all) within such place and
power ; in respect to the permanence of our friendly relations with
ner ; and lastly, in respect to the effects of continued war upon the
condition of our own people, and the stability of our institutions.
But each of these requires an octavo volume. I must add another
head : I view with alarm the future use against England of the
arguments and accusations we use against Russia.

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BUDGET OF 1860 811

Dee. 1. — What I find press hardest among the reproaches upon
me is this : — * You went to war for limited objects ; why cud you
not take into account the high probability that those objects would
be lost sight of in the excitement which war engenders, and that
this war, if once begun, would receive an extension far beyond
your views and wishes/

Dec. 3. — I do mean that the reproach I named is the one most
nearly just. What the weight due to it is, I forbear finally to
judge until I see the conclusion of this tremendous drama. But I
quite see enough to be aware that the particular hazard in question
ought to have been more sensibly and clearly before me. It may
be good logic and good sense, I think, to say : — 'I will forego endis
that are just, for fear of being driven upon the pursuit of others
that are not so.' Whether it is so in a particular case depends very
much upon the probable amount of the driving power, and of the
resisting force which may be at our command.

Vol. I. page 660

Sir William Heathcote wrote to Mr. Gladstone, May 4, 1861 : —
I understood you in your rebukes of Lewis in 1857, to be aim-
ing not only at a change of his plan of finance in that particular
year, but (if. that were impossible, or at least could not be carried),
at a resumption as early as circumstances would allow, of what you
thought the proper line of action which he insisted on suspending.
Income-tax and war duties on tea and sugar were ana would
continue to be, as I understood, the primary claimants for reduc-
tion of taxation, in your judgment. . . . The very vehemence of
your convictions ana expressions on both occasions perplexes me.

Mr. Gladstone replied the same day : —

. . . You think, 1. That I bound myself to the reduction of the
tea and sugar duties as a policy for future occasions, and not
merely for the issue then raised. 2. That in like manner I was
bound to the reduction and abolition of the income-tax. 3. That
even if there arose in the system of our expenditure a great change,
involving an increase of ten or fifteen millions of money over 1853,
I was still in consistency bound to hold over the first chance of
reduction for income-tax, tea and sugar. 4. That consequently
until these duties were remitted I could not propose to prosecute
any commercial reforms involving, as nearly all of them do, a
sacrifice of revenue for a time. 5. It is because I have departed
from these positions by proposing a multitude of reductions and
abolitions of duty, other than the three mentioned, and partly or
wholly in preference to them, that you have lost confidence in my
judgment on these matters (a confidence to which I do not pretend
that I had ever any claim).

If I have interpreted you aright, and I hope you will tell me
whether I have done so or not, this is all to me exceedingly
curious ; such are the differences in the opinions of men formed

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from their different points of view. Now I will give you mine.
To give effect to the pledge of honour, by which I became bound
in 1853, 1 made a desperate effort in 1857, with all the zeal of which
I was capable, and with all the passion to which I am liable. It
was my opinion that the course then taken would be decisive as to
the operations in 1860, for the income-tax never can be got rid of
except by prospective finance, reaching over several years, and
liable to impediment and disturbance accordingly. I therefore
protested against the whole scale of expenditure then proposed ;
as well as against particular kinds of expenditure to which I might
refer. I likewise protested against the provision for that expendi-
ture which the government of the day proposed. First, because
the expenditure itself was excessive, in my view. Secondly,
because in the mode of that provision I thought the remission of
income-tax was large out of all proportion to the remission on
indirect taxes; and this disproportion I regarded as highly

Online LibraryJohn MorleyThe life of William Ewart Gladstone, Volume 2 → online text (page 74 of 91)