Chapter II
. The Great Budget. (1860-1861)
It was said that by this treaty the British nation was about blindly to throw herself into the arms of this constant and uniform foe.... Did it not much rather, by opening new sources of wealth, speak this forcible language—that the interval of peace, as it would enrich the nation, would also prove the means of enabling her to combat her enemy with more effect when the day of hostility should come? It did more than this; by promoting habits of friendly intercourse and of mutual benefit, while it invigorated the resources of Britain, it made it less likely that she should have occasion to call forth these resources.—PITT (February 12, 1787).
I
As we survey the panorama of a great man’s life, conspicuous peaks of time and act stand out to fix the eye, and in our statesman’s long career the budget of 1860 with its spurs of appendant circumstance, is one of these commanding points. In the letter to Acton already quoted (p. 1), Mr. Gladstone says:—
Before parliament met in 1860, the ’situation’ was very greatly _tightened_ and _enhanced_ by three circumstances. First, the disaster in China.(11) Secondly, a visit of Mr. Cobden’s to Hawarden, when he proposed to me in a garden stroll, the French treaty, and I, for myself and my share, adopted it (nor have I ever for a moment repented or had a doubt) as rapidly as the tender of office two months before. Thirdly, and the gravest of all, the Savoy affair. If, as is supposed, I have Quixotism in my nature, I can assure you that I was at this juncture much more than satiated, and could have wished with Penelope that the whirlwind would take me up, and carry me to the shore of the great stream of Ocean.(12) And the wish would in this point not have been extravagant: the whirlwind was there ready to hand. In and from the midst of it was born the budget of 1860.
The financial arrangements of 1859 were avowedly provisional and temporary, and need not detain us. The only feature was a rise in the income tax from fivepence to ninepence—its highest figure so far in a time of peace. “My budget,” he wrote to Mrs. Gladstone (July 16), “is just through the cabinet, very kindly and well received, no one making objection but Lewis, who preached low doctrine. It confirms me in the belief I have long had, that he was fitter for most other offices than for that I now hold.” “_July 21 or rather 22, one A.M._—Just come back from a long night and stiff contention at the House of Commons.... It has been rather nice and close fighting. Disraeli made a popular motion to trip me up, but had to withdraw it, at any rate for the time. This I can say, it was not so that I used him. I am afraid that the truce between us is over, and that we shall have to pitch in as before.”
The only important speech was one on Italy (August 8),(13) of which Disraeli said that though they were always charmed by the speaker’s eloquence, this was a burst of even unusual brilliance, and it gave pleasure in all quarters. “Spoke for an _oretta_ [short hour],” says the orator, “on Italian affairs; my best offhand speech.” “The fish dinner,” Mr. Gladstone writes, “went off very well, and I think my proposing Lord Palmerston’s health (without speech) was decidedly approved. I have had a warm message from Lord Lansdowne about my speech; and Lord P. told me that on Tuesday night as he went upstairs on getting home he heard Lady P. spouting as she read by candle-light; it turned out to be the same effusion.”
Another incident briefly related to Mrs. Gladstone brings us on to more serious ground: “_Hawarden, Sept. 12._—Cobden came early. Nothing could be better than the luncheon, but I am afraid the dinner will be rather strong with local clergy. I have had a walk and long talk with Cobden who, I think, pleases and is pleased.” This was the garden walk of which we have just heard, where Cobden, the ardent hopeful sower, scattered the good seed into rich ground. The idea of a commercial treaty with France was in the air. Bright had opened it, Chevalier had followed it up, Persigny agreed, Cobden made an opportunity, Gladstone seized it. Cobden’s first suggestion had been that as he was about to spend a part of the winter in Paris, he might perhaps be of use to Mr. Gladstone in the way of inquiry. Conversation expanded this into something more definite and more energetic. Why should he not, with the informal sanction of the British government, put himself into communication with the Emperor and his ministers, and work out with them the scheme of a treaty that should at once open the way to a great fiscal reform in both countries, and in both countries produce a solid and sterling pacification of feeling? Cobden saw Palmerston and tried to see Lord John Russell, and though he hardly received encouragement, at least he was not forbidden to proceed upon his volunteered mission.(14) “Gladstone,” wrote Cobden to Mr. Bright, “is really almost the only cabinet minister of five years’ standing who is not afraid to let his heart guide his head a little at times.” The Emperor had played with the idea of a more open trade for five or six years, and Cobden, with his union of economic, moral, and social elements, and his incomparable gifts of argumentative persuasion, was the very man to strike Napoleon’s impressionable mind. Although, having alienated the clericals by his Italian policy, the ruler of France might well have hesitated before proceeding to alienate the protectionists also, he became a convert and did not shrink.
Both Cobden and I, says Mr. Gladstone, were keenly in favour of such a treaty (I myself certainly), without intending thereby to signify the smallest disposition to the promotion of tariff treaties in general. I had been an active party to the various attempts under Sir Robert Peel’s government to conclude such treaties, and was as far as possible removed from any disposition to the renewal of labour which was in itself so profitless, and which was dangerously near to a practical assertion of a false principle, namely that the reductions of indirect taxation, permitted by fiscal considerations, are in themselves injurious to the country that makes them, and are only to be entertained when a compensation can be had for them.(15) ... The correspondence which would in the ordinary course have been exchanged between the foreign offices of the two countries, was carried through in a series of personal letters between Mr. Cobden and myself. I remember indeed that the Emperor or his government were desirous to conceal from their own foreign minister (Walewski) the fact that such a measure was in contemplation. On our side, the method pursued was only recommended by practical considerations. I contemplated including the conditions of the French treaty in a new and sweeping revision of the tariff, the particulars of which it was of course important to keep from the public eye until they were ready to be submitted to parliament.
At the end of 1859 the question of the treaty was brought into the cabinet, and there met with no general opposition, though some objection was taken by Lewis and Wood, based on the ground that they ought not to commit themselves by treaty engagements to a sacrifice of revenue, until they had before them the income and the charges of the year. Writing to his wife about some invitation to a country house, Mr. Gladstone says (Jan. 11, 1860):—
I cannot go without a clear sacrifice of public duty. For the measure is of immense importance and of no less nicety, and here it all depends on me. Lord John backs me most cordially and well, but it is no small thing to get a cabinet to give up one and a half or two millions of revenue at a time when all the public passion is for enormous expenditure, and in a case beset with great difficulties. In _fact_, a majority of the cabinet is indifferent or averse, but they have behaved very well. I almost always agree with Lewis on other matters, but in trade and finance I do not find his opinions satisfactory. Till it is through, this vital question will need my closest and most anxious attention. [Two days later he writes:] The cabinet has been again on the French treaty. There are four or five zealous, perhaps as many who would rather be without it. It has required pressure, but we have got sufficient power now, if the French will do what is reasonable. Lord John has been excellent, Palmerston rather neutral. It is really a great European operation. [A fortnight later (_Jan. 28_):] A word to say I have opened the fundamental parts of my budget in the cabinet, and that I could not have hoped a better reception. Nothing decided, for I did not ask it, and indeed the case was not complete, but there was no general [resistance], no decided objection; the tone of questioning was favourable, Granville and Argyll delighted, Newcastle, I think, ditto. Thank God.
_To Cobden, Jan. 28._—Criticism is busy; but the only thing really formidable is the unavowed but strong conflict with that passionate expectation of war, which no more bears disappointment than if it were hope or love. _Feb. 6._—Cobbett once compared an insignificant public man in an important situation to the linch-pin in the carriage, and my position recalls his very apt figure to my mind.
Of course in his zeal for the treaty and its connection with tariff reform, Mr. Gladstone believed that the operation would open a great volume of trade and largely enrich the country. But in one sense this was the least of it:—
I had a reason of a higher order. The French Emperor had launched his project as to Savoy and Nice. It should have been plain to all those who desired an united Italy, that such an Italy ought not to draw Savoy in its wake; a country severed from it by the mountains, by language, by climate, and I suppose by pursuits. But it does not follow that Savoy should have been tacked on to France, while for the annexation of Nice it was difficult to find a word of apology. But it could scarcely be said to concern our interests, while there was not the shadow of a case of honour. The susceptibilities of England were, however, violently aroused. Even Lord Russell used imprudent language in parliament about looking for other allies. A French panic prevailed as strong as any of the other panics that have done so much discredit to this country. For this panic, the treaty of commerce with France was the only sedative. It was in fact a counter-irritant; and it aroused the sense of commercial interest to counteract the war passion. It was and is my opinion, that the choice lay between the Cobden treaty and not the certainty, but the high probability, of a war with France. (_Undated memo._)
II
Out of the commercial treaty grew the whole of the great financial scheme of 1860. By his first budget Mr. Gladstone had marked out this year for a notable epoch in finance. Happily it found him at the exchequer. The expiry of certain annuities payable to the public creditor removed a charge of some two millions, and Mr. Gladstone was vehemently resolved that this amount should not “pass into the great gulf of expenditure there to be swallowed up.” If the year, in such circumstances, is to pass, he said to Cobden, “without anything done for trade and the masses, it will be a great discredit and a great calamity.” The alterations of duty required for the French treaty were made possible by the lapse of the annuities, and laid the foundation of a plan that averted the discredit and calamity of doing nothing for trade, and nothing for the masses of the population. France engaged to reduce duties and remove prohibitions on a long list of articles of British production and export, iron the most important,—“the daily bread of all industries,” as Cobden called it. England engaged immediately to abolish all duties upon all manufactured articles at her ports, and to reduce the duties on wine and brandy. The English reductions and abolitions extended beyond France to the commodities of all countries alike. Mr. Gladstone called 1860 the last of the cardinal and organic years of emancipatory fiscal legislation; it ended a series of which the four earlier terms had been reached in 1842, in 1845, in 1846, and 1853. With the French treaty, he used to say, the movement in favour of free trade reached its zenith.
(M8) The financial fabric that rose from the treaty was one of the boldest of all his achievements, and the reader who seeks to take the measure of Mr. Gladstone as financier, in comparison with any of his contemporaries in the western world, will find in this fabric ample material.(16) Various circumstances had led to an immense increase in national expenditure. The structure of warships was revolutionised by the use of iron in place of wood. It was a remarkable era in artillery, and guns were urgently demanded of new type. In the far East a quarrel had broken out with the Chinese. The threats of French officers after the plot of Orsini had bred a sense of insecurity in our own borders. Thus more money than ever was required; more than ever economy was both unpopular and difficult. The annual estimates stood at seventy millions; when Mr. Gladstone framed his famous budget seven years before, that charge stood at fifty-two millions. If the sole object of a chancellor of the exchequer be to balance his account, Mr. Gladstone might have contented himself with keeping the income-tax and duties on tea and sugar as they were, meeting the remissions needed by the French treaty out of the sum released by the expiry of the long annuities. Or he might have reduced tea and sugar to a peace rate, and raised the income-tax from ninepence to a shilling. Instead of taking this easy course, Mr. Gladstone after having relinquished upwards of a million for the sake of the French treaty, now further relinquished nearly a million more for the sake of releasing 371 articles from duties of customs, and a third million in order to abolish the vexatious excise duty upon the manufacture of paper. Nearly one million of all this loss he recouped by the imposition of certain small charges and minor taxes, and by one or two ingenious expedients of collection and account, and the other two millions he made good out of the lapsed annuities. Tea and sugar he left as they were, and the income-tax he raised from ninepence to tenpence. Severe economists, not quite unjustly, called these small charges a blot on his escutcheon. Time soon wiped it off, for in fact they were a failure.
The removal of the excise duty upon paper proved to be the chief stumbling-block, and ultimately it raised more excitement than any other portion of the scheme. The fiscal project became by and by associated with a constitutional struggle between Lords and Commons. In the Commons the majority in favour of abolishing the duty sank from fifty-three to nine; troubles with China caused a demand for new expenditure; the yield from the paper duty was wanted; and the Lords finding in all this a plausible starting-point for a stroke of party business, or for the assertion of the principle that to reject a repealing money bill was not the same thing as to meddle with a bill putting on a tax, threw it out. Then when the Lords had rejected the bill, many who had been entirely cool about taking off the ’taxes upon knowledge’—for this unfavourable name was given to the paper duty by its foes—rose to exasperation at the thought of the peers meddling with votes of money. All this we shall see as we proceed.
This was the broad outline of an operation that completed the great process of reducing articles liable to customs duties from 1052, as they stood in 1842 when Peel opened the attack upon them; from 466 as Mr. Gladstone found them in 1853; and from 419 as he found them now, down to 48, at which he now left them.(17) Simplification had little further to go. “Why did you not wait,” he was asked, “till the surplus came, which notwithstanding all drawbacks you got in 1863, and then operate in a quiet way, without disturbing anybody?”(18) His answer was that the surplus would not have come at all, because it was created by his legislation. “The principle adopted,” he said, “was this. We are now (1860) on a high table-land of expenditure. This being so, it is not as if we were merely meeting an occasional and momentary charge. We must consider how best to keep ourselves going during a _period_ of high charge. In order to do that, we will aggravate a momentary deficiency that we may thereby make a _great and permanent addition to productive power_.” This was his ceaseless refrain—the steadfast pursuit of the durable enlargement of productive power as the commanding aim of high finance.
III
At the beginning of the year the public expectation was fixed upon Lord John Russell as the protagonist in the approaching battle of parliamentary reform, and the eager partizans at the Carlton Club were confident that on reform they would pull down the ministry. The partizans of another sort assure us that “the whole character of the session was changed by Mr. Gladstone’s invincible resolution to come forward in spite of his friends, and in defiance of his foes, for his own _aristeia_ or innings.” The explanation is not good-natured, and we know that it is not true; but what is true is that when February opened, the interest of the country had become centred at its highest pitch in the budget and the commercial treaty. As the day for lifting the veil was close at hand, Mr. Gladstone fell ill, and here again political benevolence surmised that his disorder was diplomatic. An entry or two from Phillimore’s journal will bring him before us as he was:—
_Jan. 29._—Gladstone’s emaciation in the past fortnight alarms me, as it has, I find, many other persons. _Feb. 5._—Gladstone seriously ill; all the afternoon in Downing Street; a slight congestion of the lungs. Great treaty and financial speech put off till Thursday. Was to have been to-morrow. Gladstone wished to see me, but I would only stay a minute by his bedside. He looked very pale. He must not speak for ten days, or Ferguson (his doctor) said, he will meet Canning’s fate. _Feb. 6._—With Gladstone in the evening. He is still in bed, but visibly better. _Feb. 7._—With Gladstone a long time in the morning. Found him much better though still in bed. Annoyed at the publication of the new treaty with France in the Belgian papers, it being part of the scheme of his finance measure. _Feb. 8._—Gladstone drove out to-day; bent on speaking the day after to-morrow. Ferguson allows him. I again protested. _Feb. 9._—Saw Gladstone; he is better. But I am frightened at the proposed exertion of Friday. _Feb. 10._—Saw Gladstone in the morning, radiant with expected success, and again at night at 10 o’clock in Downing Street still more radiant with triumph. Spoke for three hours and fifty minutes without suffering. Thinks that the House will accept all that is material in his finance scheme. _Feb. 13._—Dined with Gladstone; ordered not to leave the house this week. _Feb. 25._—Called on the Gladstones at breakfast time. Found them both exceedingly happy at the immense majority of 116 which affirmed last night the principle of his grand budget.(19) His hard dry cough distresses me. Gladstone thinks he has done what Pitt would have done but for the French Revolution. With characteristic modesty he said, “I am a dwarf on the shoulders of a giant.”
Mr. Gladstone’s own entries are these:—
_Feb. 10, ’60._—Spoke 5-9 without great exhaustion; aided by a great stock of egg and wine. Thank God! Home at 11. This was the most arduous operation I have ever had in parliament. _March 9._—Spoke on various matters in the Treaty debate; voted in 282:56; a most prosperous ending to a great transaction in which I heartily thank God for having given me a share. _March 23._—A long day of 16-½ hours’ work.
Of the speech in which the budget was presented everybody agreed that it was one of the most extraordinary triumphs ever witnessed in the House of Commons. The casual delay of a week had raised expectation still higher; hints dropped by friends in the secret had added to the general excitement; and as was truly said by contemporaries, suspense that would have been fatal to mediocrity actually served Mr. Gladstone. Even the censorious critics of the leading journal found in the largeness and variety of the scheme its greatest recommendation, as suggesting an accord between the occasion, the man, and the measure, so marvellous that it would be a waste of all three not to accept them. Among other hearers was Lord Brougham, who for the first time since he had quitted the scene of his triumphs a generation before, came to the House of Commons, and for four hours listened intently to the orator who had now acquired the supremacy that was once his own. “The speech,” said Bulwer, “will remain among the monuments of English eloquence as long as the language lasts.” Napoleon begged Lord Cowley to convey his thanks to Mr. Gladstone for the copy of his budget speech he had sent him, which he said he would preserve “as a precious souvenir of a man who has my thorough esteem, and whose eloquence is of a lofty character commensurate with the grandeur of his views.” Prince Albert wrote to Stockmar (March 17), “Gladstone is now the real leader of the House, and works with an energy and vigour almost incredible.”(20)
Almost every section of the trading and political community looked with favour upon the budget as a whole, though it was true that each section touched by it found fault with its own part. Mr. Gladstone said that they were without exception free traders, but not free traders without exception. The magnitude and comprehensiveness of the enterprise seized the imagination of the country. At the same time it multiplied sullen or uneasy interests. The scheme was no sooner launched, than the chancellor of the exchequer was overwhelmed by deputations. Within a couple of days he was besieged by delegates from the paper makers; distillers came down upon him; merchants interested in the bonding system, wholesale stationers, linen manufacturers, maltsters, licensed victuallers, all in turn thronged his ante-room. He was now, says Greville (Feb. 15), “_the_ great man of the day!” The reduction of duties on currants created lively excitement in Greece, and Mr. Gladstone was told that if he were to appear there he could divide honours with Bacchus and Triptolemus, the latest benefactors of that neighbourhood.
(M9) Political onlookers with whom the wish was not alien to their thought, soon perceived that in spite of admiration for splendid eloquence and incomparable dexterity, it would not be all sunshine and plain sailing. At a very early moment the great editor of the _Times_ went about saying that Gladstone would find it hard work to get his budget through; if Peel with a majority of ninety needed it all to carry his budget, what would happen to a government that could but command a majority of nine?(21) Both the commercial treaty and the finance speedily proved to have many enemies. Before the end of March Phillimore met a parliamentary friend who like everybody else talked of Gladstone, and confirmed the apprehension that the whigs obeyed and trembled and were frightened to death. “We don’t know where he is leading us,” said Hayter, who had been whipper-in. On the last day of the month Phillimore enters: “_March 30._—Gladstone has taken his name off the Carlton, which I regret. It is a marked and significant act of entire separation from the _whole_ party and will strengthen Disraeli’s hands. The whigs hate Gladstone. The moderate conservatives and the radicals incline to him. The old tories hate him.” For reasons not easy to trace, a general atmosphere of doubt and unpopularity seemed suddenly to surround his name.
The fortunes of the budget have been succinctly described by its author:—
They were chequered, and they were peculiar in this, that the first blow struck was delivered by one of the best among its friends. Lord John Russell, keenly alive to the discredit of any tampering as in former years with the question of the franchise, insisted on introducing his Reform bill on March 1, when the treaty and the financial proposals of the year, numerous and complex as they were, had not proceeded beyond their early stages. This was in flat violation of a rule of Lord Bacon’s, even more weighty now than in his time, which Sir James Graham was fond of quoting: “Never overlap business.” The enemies of the treaty were thus invited to obstruct it through prolonged debating on reform, and the enemies of reform to discharge a corresponding office by prolonged debating on the finance. A large majority of the House were in disguised hostility to the extension of the franchise. The discussions on it were at once protracted, intermittent, and languid. No division was taken against it. It was defeated by the pure _vis inertiæ_ of the House skilfully applied: and it was withdrawn on June 11. But it had done its work, by delaying the _tail_ of the financial measures until a time when the marriage effected by the treaty between England and France had outlived its parliamentary honeymoon. There had intervened the Savoy and Nice explosion; settlement with China was uncertain; the prospects of the harvest were bad; French invasion was apprehended by many men usually rational. The Paper Duty bill, which would have passed the Commons by a large majority in the beginning of March, only escaped defeat on May 8 by a majority of nine.(22)
When Lord John had asked the cabinet to stop the budget in order to fix a day for his second reading, Mr. Gladstone enters in an autobiographic memorandum of his latest years(23):—
I said to him, “Lord John, I will go down on my knees to you, to entreat you not to press that request.” But he persevered; and this although he was both a loyal colleague and a sincere friend to the budget and to the French treaty. When reform was at last got rid of, in order to prosecute finance we had much to do, and in the midst of it there came upon us the news of hostilities in China, which demanded at once an increase of outlay ... sufficient to destroy my accruing balance, and thus to disorganise the finance of the year. The opposition to the Paper bill now assumed most formidable dimensions.... During a long course of years there had grown up in the House of Commons a practice of finally disposing of the several parts of the budget each by itself. And the House of Lords had shown so much self-control in confining itself to criticism on matters of finance, that the freedom of the House of Commons was in no degree impaired. But there was the opportunity of mischief; and round the carcass the vultures now gathered in overwhelming force. It at once became clear that the Lords would avail themselves of the opportunity afforded them by the single presentation of financial bills, and would prolong, and virtually re-enact a tax, which the representatives of the people had repealed.
On May 5 the diary reports: “Cabinet. Lord Palmerston spoke 3/4 hour against Paper Duties bill! I had to reply. Cabinet against him, except a few, Wood and Cardwell in particular. Three wild schemes of foreign alliance are afloat! Our old men (2) are unhappily our youngest.” Palmerston not only spoke against the bill, as he had a right in cabinet to do, but actually wrote to the Queen that he was bound in duty to say that if the Lords threw out the bill—the bill of his own cabinet—“they would perform a good public service.”(24)
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Phillimore’s notes show that the intense strain was telling on his hero’s physical condition, though it only worked his resolution to a more undaunted pitch:—
_May 9._—Found Gladstone in good spirits in spite of the narrow majority on the paper duty last night, but ill with a cough. _May 15._—The whigs out of office, and perhaps in, abusing Gladstone and lauding G. Lewis. I had much conversation with Walpole. Told me he, Henley, and those who went with them would have followed Gladstone if he had not joined this government, but added he was justified in doing so. _May 18._—Gladstone is _ill_; vexed and _indignant_ at the possible and probable conduct of the peers on Monday. Nothing will prevent him from denouncing them in the Commons, if they throw out the paper bill, as having violated in substance and practically the constitution. Meanwhile his unpopularity flows on.
IV
The rejection of the bill affecting the paper duty by the Lords was followed by proceedings set out by Mr. Gladstone in one of his political memoranda, dated May 26, 1860:—
Though I seldom have time to note the hairbreadth ’scapes of which so many occur in these strange times and with our strangely constructed cabinet, yet I must put down a few words with respect to the great question now depending between the Lords and the English nation. On Sunday, when it was well known that the Paper Duties bill would be rejected, I received from Lord John Russell a letter which enclosed one to him from Lord Palmerston. Lord Palmerston’s came in sum to this: that the vote of the Lords would not be a party vote, that as to the _thing done_ it was right, that we could not help ourselves, that we should simply acquiesce, and no minister ought to resign. Lord John in his reply to this, stated that he took a much more serious view of the question and gave reasons. Then he went on to say that though he did not agree in the grounds stated by Lord Palmerston, he would endeavour to arrive at the same conclusion. His letter accordingly ended with practical acquiescence. And he stated to me his concurrence in Lord Palmerston’s closing proposition.
Thereupon I wrote an immediate reply. We met in cabinet to consider the case. Lord Palmerston started on the line he had marked out. I think he proposed to use some meaningless words in the House of Commons as to the value we set on our privileges, and our determination to defend them if attacked, by way of garniture to the act of their abandonment. Upon this I stated my opinions, coming to the point that this proceeding of the House of Lords amounted to the establishment of a revising power over the House of Commons in its most vital function long declared exclusively its own, and to a divided responsibility in fixing the revenue and charge of the country for the year; besides aggravating circumstances upon which it was needless to dwell. In this proceeding nothing would induce me to acquiesce, though I earnestly desired that the mildest means of correction should be adopted. This was strongly backed in principle by Lord John; who thought that as public affairs would not admit of our at once confining ourselves to this subject, we should take it up the first thing next session, and send up a new bill. Practical, as well as other, objections were taken to this mode of proceeding, and opposition was continued on the merits; Lord Palmerston keen and persevering. He was supported by the Chancellor, Wood, Granville (in substance), Lewis, and Cardwell, who thought nothing could be done, but were ready to join in resigning if thought fit. Lord John, Gibson, and I were for decided action. Argyll leaned the same way. Newcastle was for inquiry to end in a declaratory resolution. Villiers thought some step necessary. Grey argued mildly, inclined I think to inaction. Herbert advised resignation, opposed any other course. Somerset was silent, which I conceive meant inaction. At last Palmerston gave in, and adopted with but middling grace the proposition to set out with inquiries, and with the intention to make as little of the matter as he could.
His language in giving notice, on Tuesday, of the committee went near the verge of saying, We mean nothing. An unsatisfactory impression was left on the House. Not a syllable was said in recognition of the gravity of the occasion. Lord John had unfortunately gone away to the foreign office. I thought I should do mischief at that stage by appearing to catch at a part in the transaction. Yesterday all was changed by the dignified declaration of Lord John. I suggested to him that he should get up, and Lord Palmerston, who had intended to keep the matter in his own hands, gave way. But Lord Palmerston was uneasy and said, “You won’t pitch it into the Lords,” and other things of the same kind. On the whole, I hope that in this grave matter at least we have turned the corner.
As we know, even the fighting party in the cabinet was forced to content itself for the moment with three protesting resolutions. Lord Palmerston and his chancellor of the exchequer both spoke in parliament. “The tone of the two remonstrances,” says Mr. Gladstone euphemistically, “could not be in exact accord; but by careful steering on my part, and I presume on his, all occasion of scandal was avoided.” Not altogether, perhaps. Phillimore says:—
_July 6._—A strange and memorable debate. Palmerston moving resolution condemnatory of the Lords, and yet speaking in defence of their conduct. Gladstone most earnestly and eloquently condemning them, and declaring that action and not resolutions became the House of Commons, and that though he agreed to the language and spirit of the resolutions, if action were proposed he would support the proposal, and taunted the conservatives with silently abetting “a gigantic innovation on the constitution.” Loudly and tempestuously cheered by the radicals, and no one else. Yet he was the true conservative at this moment. But ought he to have spoken this as chancellor of the exchequer, and from the treasury bench, after the first lord of the treasury had spoken in almost totally opposite sense? The answer may be that it was a House of Commons, and not a government question. I fear he is very unwell, and I greatly fear killing himself. 17.—“I have lived,” he said, speaking of the debate on the Lords and the paper duty, “to hear a radical read a long passage from Mr. Burke amid the jeers and scoffs of the so-called conservatives.”
The struggle still went on:—
_July 20._—H. of C. Lost my Savings Bank Monies bill; my _first_ defeat in a measure of finance in the H. of C. This ought to be very good for me; and I earnestly wish to make it so.
_Aug. 6._—H. of C. Spoke 1-½ hour on the Paper duty; a favourable House. Voted in 266-233. A most kind and indeed notable reception afterwards.
_Aug. 7._—This was a day of congratulations from many kind M.P.’s.
The occasion of the notable reception was the moving of his resolutions reducing the customs duty on imported paper to the level of the excise duty. This proceeding was made necessary by the treaty, and was taken to be, as Mr. Gladstone intended that it should be, a clear indication of further determination to abolish customs duty and excise duty alike. The first resolution was carried by 33, and when he rose to move the second the cheering from the liberal benches kept him standing for four or five minutes—cheering intended to be heard the whole length of the corridor that led to another place.(25)
(M10) The great result, as Greville says in a sentence that always amused the chief person concerned, is “to give some life to half-dead, broken-down, and tempest-tossed Gladstone.” In this rather tame fashion the battle ended for the session, but the blaze in the bosom of the chancellor of the exchequer was inextinguishable, as the Lords in good time found out. Their rejection of the Paper Duties bill must have had no inconsiderable share in propelling him along the paths of liberalism. The same proceeding helped to make him more than ever the centre of popular hopes. He had taken the unpopular side in resisting the inquiry into the miscarriages of the Crimea, in pressing peace with Russia, in opposing the panic on papal aggression, on the bill for divorce, and on the bill against church rates; and he represented with fidelity the constituency that was least of all in England in accord with the prepossessions of democracy. Yet this made no difference when the time came to seek a leader. “There is not,” Mr. Bright said, in the course of this quarrel with the Lords, “a man who labours and sweats for his daily bread, there is not a woman living in a cottage who strives to make her home happy for husband and children, to whom the words of the chancellor of the exchequer have not brought hope, and to whom his measures, which have been defended with an eloquence few can equal and with a logic none can contest, have not administered consolation.”
At the end of the session Phillimore reports:—
_Aug. 12._—Gladstone is physically weak, requires rest, air, and generous living. He discoursed without the smallest reserve upon political affairs, the feebleness of the government, mainly attributable to the absence of any effective head; Palmerston’s weakness in the cabinet, and his low standard for all public conduct. He said in Peel’s cabinet, a cabinet minister if he had a measure to bring forward consulted Peel and then the cabinet. Nobody thought of consulting Palmerston first, but brought his measure at once to the cabinet. Gladstone said his work in the cabinet had been so constant and severe that his work in the House of Commons was refreshing by comparison. I never heard him speak so strongly of the timidity and vacillation of his comrades. The last victory, which alone preserved the government from dropping to pieces, was won in spite of them.
V
In a contemporary memorandum (May 30, 1860) on the opinions of the cabinet at this date Mr. Gladstone sets out the principal trains of business with which he and his colleagues were called upon to deal. It is a lively picture of the vast and diverse interests of a minister disposed to take his cabinet duties seriously. It is, too, a curious chart of the currents and cross-currents of the time. Here are the seven heads as he sets them down:—
(1) The Italian question—Austrian or anti-Austrian; (2) Foreign policy in general—leaning towards calm and peace, or brusqueness and war; (3) Defences and expenditure—alarm and money charges on the one side, modest and timid retrenchment with confidence in our position on the other; (4) Finance, as adapted to the one or the other of these groups of ideas and feelings respectively; (5) Reform—ultra-conservative on the one side, on the other, no fear of the working class and the belief that something _real_ though limited, should be done towards their enfranchisement; (6) Church matters may perhaps be also mentioned, though there has been no collision in regard to them, whatever difference there may be—they have indeed held a very secondary place amidst the rude and constant shocks of the last twelve months; (7) Lastly, the _coup d’état_ on the paper duties draws a new line of division.
(M11) “In the many passages of argument and opinion,” Mr. Gladstone adds, “the only person from whom I have never to my recollection differed on a serious matter during this anxious twelvemonth is Milner Gibson.” The reader will find elsewhere the enumeration of the various parts in this complex dramatic piece.(26) Some of the most Italian members of the cabinet were also the most combative in foreign policy, the most martial in respect of defence, the most stationary in finance. In the matter of reform, some who were liberal as to the franchise were conservative as to redistribution. In matters ecclesiastical, those who like Mr. Gladstone were most liberal elsewhere, were (with sympathy from Argyll) “most conservative and church-like.”
On the paper duties there are, I think, only three members of the cabinet who have a strong feeling of the need of a remedy for the late aggression—Lord John Russell, Gibson, W. E. G.—and Lord John Russell leans so much upon Palmerston in regard to foreign affairs that he is weaker in other subjects when opposed to him, than might be desired. With us in feeling are, more or less, Newcastle, Argyll, Villiers. On the other side, and pretty decidedly—first and foremost, Lord Palmerston; after him, the Chancellor, Granville, Lewis, Wood, Cardwell, Herbert. It is easy to judge what an odd shifting of parts takes place in our discussions. We are not Mr. Burke’s famous mosaic, but we are a mosaic in solution, that is to say, a kaleidoscope.(27) When the instrument turns, the separate pieces readjust themselves, and all come out in perfectly novel combinations. Such a cabinet ought not to be acephalous.
Before he had been a year and a half in office, Mr. Gladstone wrote to Graham (Nov. 27, ’60): “We live in anti-reforming times. All improvements have to be urged in apologetic, almost in supplicatory tones. I sometimes reflect how much less liberal as to domestic policy in any true sense of the word, is this government than was Sir Robert Peel’s; and how much the tone of ultra-toryism prevails among a large portion of the liberal party.” “I speak a literal truth,” he wrote to Cobden, “when I say that in these days it is more difficult to save a shilling than to spend a million.” “The men,” he said, “who ought to have been breasting and stemming the tide have become captains general of the alarmists,” and he deplored Cobden’s refusal of office when the Palmerston government was formed. All this only provoked him to more relentless energy. Well might Prince Albert call it incredible.
VI
After the “gigantic innovation” perpetrated by the Lords, Mr. Gladstone read to the cabinet (June 30, 1860) an elaborate memorandum on the paper duty and the taxing powers of the two Houses. He dealt fully alike with the fiscal and the constitutional aspects of a situation from which he was “certain that nothing could extricate them with credit, except the united, determined, and even authoritative action of the government.” He wound up with a broad declaration that, to any who knew his tenacity of purpose when once roused, made it certain that he would never acquiesce in the pretensions of the other House. The fiscal consideration, he concluded, “is nothing compared with the vital importance of maintaining the exclusive rights of the House of Commons in matter of supply. There is hardly any conceivable interference of the Lords hereafter, except sending down a tax imposed by themselves, which would not be covered by this precedent. It may be said they are wise and will not do it. Assuming that they will be wise, yet I for one am not willing that the House of Commons should hold on sufferance in the nineteenth century what it won in the seventeenth and confirmed and enlarged in the eighteenth.”
The intervening months did not relax this valiant and patriotic resolution. He wrote down a short version of the story in the last year of his life:—
The hostilities in China reached a rather early termination, and in the early part of the session of 1861 it appeared almost certain that there would be a surplus for 1861-2 such as I thought would make it possible again to operate on the paper duties. Unfortunately, the income tax was at so high a rate that we could not reasonably hope to carry paper duty repeal without taking a penny off the tax. The double plan strained the probable means afforded by the budget. In this dilemma I received most valuable aid from the shrewd ingenuity of Milner Gibson, who said: Why not fix the repeal of the paper duty at a later date than had been intended, say on the 10th of October, which will reduce the loss for the year? I gladly adopted the proposition, and proposed a budget reducing the income tax by one penny, and repealing the paper duties from October 10, 1861. With this was combined what was more essential than either—the adoption of a new practice with respect to finance, which would combine all the financial measures of the year in a single bill. We had separate discussions in the cabinet on the constitutional proposal [the single bill]. It was not extensively resisted there, though quietly a good deal misliked. I rather think the chancellor, Campbell, took strong objection to it; and I well remember that the Duke of Newcastle gave valuable and telling aid. So it was adopted. The budget was the subject of a fierce discussion, in which Lord Palmerston appeared to me to lose his temper for the first and only time. The plan, however, to my great delight, was adopted. It was followed by a strange and painful incident. I received with astonishment from Lord Palmerston, immediately after the adoption of the budget, a distinct notice that he should not consider it a cabinet question in the House of Commons, where it was known that the opposition and the paper makers would use every effort to destroy the plan. I wrote an uncontroversial reply (with some self-repression) and showed it to Granville, who warmly approved, and was silent on the letter of Lord Palmerston. The battle in parliament was hard, but was as nothing to the internal fighting; and we won it. We likewise succeeded in the plan of uniting the financial proposals in one bill. To this Spencer Walpole gave honourable support; and it became a standing rule. The House of Lords, for its misconduct, was deservedly extinguished, in effect, as to all matters of finance.
Of the “internal fighting” we have a glimpse in the diary:—
_April 10, ’61._—Saw Lord Palmerston and explained to him my plans, which did not meet his views. A laborious and anxious day. 11.—Cabinet. Explained my case 1-3. Chaos! 12.—Cabinet 1-3. Very stiff. We ’broke up’ in one sense and all but in another. 13.—Cabinet 3-3/4-6. My plan as now framed was accepted, Lord Palmerston yielding gracefully; Stanley of Alderley almost the only kicker. The plan of one bill was accepted after fighting. 15.—H. of C., financial statement for three hours. The figures rather made my head ache. It was the discharge of a long pent-up excitement. _May 13._—Lord J.R. again sustained me most handsomely in debate. Lord P. after hearing Graham amended his speech, but said we must not use any words tending to make this a vote of confidence. 30.—H. of C. Spoke one hour on omission of clause IV. [that repealing the paper duty], and voted in 296-281. One of the greatest nights in the whole of my recollection. _June 1._—Yesterday was a day of subsiding excitement. To-day is the same. Habit enables me to expel exciting thought, but not the subtler nervous action which ever comes with a crisis. 7.—To-day’s debate in the H. of L. was a great event for me.
The abiding feature of constitutional interest in the budget of 1861 was this inclusion of the various financial proposals in a single bill, so that the Lords must either accept the whole of them, or try the impossible performance of rejecting the whole of them. This was the affirmation in practical shape of the resolution of the House of Commons in the previous year, that it possessed in its own hands the power to remit and impose taxes, and that the right to frame bills of supply in its own measure, manner, time, and matter, is a right to be kept inviolable. Until now the practice had been to make the different taxes the subject of as many different bills, thus placing it in the power of the Lords to reject a given tax bill without throwing the financial machinery wholly out of gear. By including all the taxes in a single finance bill the power of the Lords to override the other House was effectually arrested.
(M12) In language of that time, he had carried every stitch of free-trade canvas in the teeth of a tempest that might have made the boldest financial pilot shorten sail. Many even of his friends were sorry that he did not reduce the war duty on tea and sugar, instead of releasing paper from its duty of excise. Neither friends nor foes daunted him. He possessed his soul in patience until the hour struck, and then came forth in full panoply. Enthusiastic journalists with the gift of a poetic pen told their millions of readers how, after weeks of malign prophecy, that the great trickster in Downing Street would be proved to have beggared the exchequer, that years of gloom and insolvency awaited us, suddenly, the moment the magician chose to draw aside the veil, the darkness rolled away; he had fluttered out of sight the whole race of sombre Volscians; and where the gazers dreaded to see a gulf they beheld a golden monument of glorious finance; like the traveller in the Arabian fable who was pursued in the Valley of Shadows by unearthly imprecations, he never glanced to right or left until he could disperse the shadows by a single stroke. “He is,” says another onlooker, “in his ministerial capacity, probably the best abused and the best hated man in the House; nevertheless the House is honestly proud of him, and even the country party feels a glow of pride in exhibiting to the diplomatic gallery such a transcendent mouthpiece of a nation of shopkeepers. The audacious shrewdness of Lancashire married to the polished grace of Oxford is a felicitous union of the strength and culture of liberal and conservative England; and no party in the House, whatever may be its likings or antipathies, can sit under the spell of Mr. Gladstone’s rounded and shining eloquence without a conviction that the man who can talk ‘shop’ like a tenth Muse is, after all, a true representative man of the market of the world.”
In describing the result of the repeal of the paper duty a little after this,(28) he used glowing words. “Never was there a measure so conservative as that which called into vivid, energetic, permanent, and successful action the cheap press of this country.” It was also a common radical opinion of that hour that if the most numerous classes acquired the franchise as well as cheap newspapers, the reign of peace would thenceforth be unbroken. In a people of bold and martial temper such as are the people of our island, this proved to be a miscalculation. Meanwhile there is little doubt that Mr. Gladstone’s share in thus fostering the growth of the cheap press was one of the secrets of his rapid rise in popularity.
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