Chapter 13

Peel told me he was disposed to grant the motion for any correspondence between the Board of Control or any member of it, &c., with a direct negative. To move the previous question was an admission of some error. I was telling him the circumstances when it was necessary to attend to Aberdeen's business. I must tell him to-morrow.

_February 17._

At the Cabinet dinner at Lord Melville's, talked to Peel and gave him a copy of the report of the Privy Council and of my letter to Sir J. Grant. He is disposed to take a high tone, and thinks men will follow him better when he does than when he temporises. I am sure they will.

He says he would reduce everything so low as not to be beat upon establishments. If he is beat upon unimportant questions he does not care, and will not go out. They will not get a majority for stopping supplies, and if they can agree upon motions, he is prepared to play the game of '83 [Footnote: Alluding to Pitt's course at the beginning of his first Ministry. He retained office a whole Session in spite of the motions carried against him, and in the general election of 1784 obtained an overwhelming majority.] with them. I am sure he is right.

_February 18._

House. First a question from Lord Holland whether the orders to the Admiral respecting Greek slaves, &c., would, after the settlement of Greece, apply to Candiot Greeks. Then Lord Melbourne's motion for Portuguese papers. He did not speak well--but very bitterly. Goderich spoke pathetically against the Terceira affair--Lord Wharncliffe well with us--Lansdowne wide and loose--the Duke very excellent--Aberdeen worse than usual, and very imprudent, abusing Miguel and making awkward admissions.

It was quite established that Canning had nothing to say to the Portuguese Constitution, and I think we shall hear no more of Terceira. Fifty-two to twenty-one--no proxies.

_February 19._

Cabinet. Leopold's answer. He wants troops and money. After long talk it was resolved the French troops might stay a year, till he could raise others, and money should be given.

_February 20, 1830._

In riding with Lord Rosslyn had a long conversation with him upon Indian matters. He had just been reading the despatches from Lord Stuart and Lord Heytesbury upon these subjects. I told him I had anticipated all Lord H. suggested and had done, I really thought, all that could be done. I am to send him the secret letter. He thinks, as I do, that Aberdeen is in a great hurry to get rid of the Greek question, and disposed to incur future embarrassments to avoid present inconvenience.

Lord Rosslyn does not much like the division of last night, but I believe it was a good one.

_February 21._

This morning looked through the finance accounts of the three years, ending 1819, and the three ending 1828, with a view to comparing the state of the country with what it was before Peel's Bill. The increased consumption is astonishing. The increase of British tonnage and in the number of seamen since 1819 is equal to the whole tonnage and to all the seamen in the foreign trade with Great Britain, although that is increased nearly in the same proportion with our own.

The increased consumption of tea and coffee is 50 per cent. The number of pounds in 1819 being about 30,000,000 of pounds, and now 45,000,000 pounds.

The import of foreign raw produce is much increased--of that produce which competes with the landed produce of England.

Hardinge called. He thinks the Government quite safe now. Indeed, he never had much apprehension. He regrets Sir James Graham's divergence from the road which leads to office. He thinks he came up to London intending well; but that he thought under present circumstances he could be a more considerable man out of office than he would be in a subordinate situation.

The Duke of Northumberland says the salary of the Lord-Lieutenant may well be reduced to 20,000£ a year.

_February 24._

Lord Rosslyn, who called upon me at the office, thinks I may go a little too far in my directions with regard to Russian spies, that is, in a public despatch. I had directed that if it appeared danger was likely to arise from their return to Europe or from their passage into any Asiatic country, their persons should be placed under restraint, and in all cases their papers and letters got possession of. He suggests that this might be mentioned in a private letter, or left to the discretion of the Local Governments.

We had a long conversation on Lord Stanhope's motion for to-morrow, when Whigs and Tories are to combine to beat us.

The division last night in the House of Commons on Lord J. Russell's motion for giving two members to Manchester, Birmingham, and Leeds, was not satisfactory. There were 140 for it, and only 188 against it. The Tories stayed away.

_February 25._

House at 4 and until 2. Lord Stanhope's motion for a Committee of the whole House on the internal state of the country. He made a weak speech, because to get votes he abstained from stating the cause of distress, which in his opinion is currency, or any remedy. Goderich and Lansdowne made good speeches. Rosebery not a bad one, though as usual pompous. All suggesting some remedies--all for reducing taxation, but against a Committee of the House. Lord Radnor made a good vulgar speech. King spoke better than usual. He proposed, but afterwards withdrew, an amendment for a Committee upstairs. The Duke, who alone spoke on our side, did not speak well, and some of his statements were hazardous. Lords Darnley and Bute declared there was no distress near them.

We divided well. There being but fifteen present for Lord Stanhope's motion, and ten proxies.

_February 26._

Chairs at 11. Went over with them the letter on Batta.

Lord Wharncliffe intends on Tuesday to propose examining the Chairman of the East Indian Company.

_February 27._

Wrote a note to Loch to tell him of Lord Wharncliffe's intention. He does not like the idea at all, and wishes to see me before the Committee sits. I have named Monday at eleven. I told him my feeling was against his being examined, as I thought it unfair; besides, he was not the best witness. I told Lord Wharncliffe he should examine Lord Amherst.

At the Cabinet room I attempted to read the papers respecting Irish education. My opinion is that it would be better to let the matter rest for the present; the agitation of it may revive animosities, and if any good be attainable, it may be attained at a more favourable period than the present. I rather doubt whether it might not be yet more safely left to the people themselves, as education in England and in Scotland.

_March 1._

Cabinet. We were to have talked about Irish education, but more important matters intervened. There is a motion on Friday of Mr. Davenport's for a Committee on the internal state of the country. Peel thinks there will be a union of parties in favour of it. He feels it must be opposed. Some of the friends of Government have said they must vote for it. He proposes that Goulburn should to-morrow give notice of his intention of explaining his views as to taxation on Monday week. Peel thinks that he can procure an adjournment of the debate till after Goulburn's exposé.

Goulburn suggests taking off the whole of the beer tax, and remitting the hop duty for this year, as well as remodelling it. He likewise proposes lowering the duties on East and West India sugar, the former from 37_s_. to 25_s_., and the latter from 27_s_. to 20_s_.

As the revenue is decreasing, these reductions cannot be taken from it. There must be a commutation. This he proposes to be a modified property tax, to apply to landed property, all fixed property, and the funds as well as all offices, but not to the profits of trade.

_March 2._

There seems to have been some incivility last night on the part of Sir Charles Burrell and Sir E. Knatchbull against me, with reference to my opposition to the Duke of Richmond's motion on the wool question last year.

_March 3._

Peel's. Met Bankes, Graham, and Ashley. It was, after talk, agreed that the papers asked should be refused, unless in the course of the debate it should appear that the granting of Grant's petition and the report of the Privy Council would improve the division. I expect a regular attack upon myself from all quarters. I would give a year of the House of Lords to be there to throw grape-shot amongst the small lawyers.

Cabinet room. Read despatches relating to the expedition to Algiers, which is certainly going.

Cabinet dinner at Peel's. The affair of the vacated offices becomes serious, for it seems certain that it is necessary to take the declaration again upon any new patent, and the Board of Admiralty should have taken the declaration as well as Castlereagh--the Board of Control as well as me.

The Chancellor continues to have no objection to reducing the salaries of the Supreme Court Judges.

_March 5._

Chairs at 11. I got rid of them as soon as I could, as I wished to go to the Committee.

Loch showed me a letter from Lord William Bentinck, by which it appears that the officers of the Cawnpore division of the army wished to have a general meeting for the election of delegates to England. Sir J. Whittingham forwarded their request to Lord Combermere, highly disapproving of it. Lord Combermere directed the Adjutant-General to write a letter coinciding with Sir J. Whittingham's opinions, and adding that he would be the advocate of the army both in India and in England. Lord William (Bentinck) is going up the country with the _Government_ and wishes to take Lord Dalhousie with him. He expects very uncivil treatment, and says the discontent is deep-seated. The same account is received from other quarters.

The debate was adjourned last night. R. Grant made a speech in a moderate tone, but disingenuous. Lord Ashley spoke good stuff apparently, but Henry says he could not hear him. Lord Graham was unembarrassed and did well; but the 'Times' hardly gives him ten words.

I sent a note to Peel to-day observing upon the disingenuousness of Grant's speech. He told me he had been reading the papers, and saw it was no question of judicial independence, but of judicial aggression, and he thought the tone of the Governor who was in the right much better than that of the Judge who was in the wrong. So I hope he will make a good speech.

_March 6._

Read letters from Sir J. Macdonald. They came by Constantinople. The only news they contain is that the Russians certainly have the intention of conquering Khiva and Bokhara. This comes from Chasanes Murza. I told the Duke, who seems disposed to make it an European question.

I showed the Duke a most atrocious libel on royalty which has been published in the 'Calcutta Gazette.' If the King saw it he would recall Lord William by the Sign Manual. A letter must be written immediately in the press. It is in such a state that our Government cannot stand if it be permitted to go on uncontrolled.

I asked the Duke as to taxation. He said he thought it could be done without income tax. To lay on income tax would be to weaken ourselves in the opinion of all foreign Powers. Besides, it would prevent our reducing the Four per Cents.

He calculated the loss of the beer duty at 3,500,000£. and, marine insurance, cider, remission of hop duty, &c., would make the loss 4,500,000£.

To meet this he expected

£ Surplus of last year 1,700,000 Additional from general improvement 400,000 Additional malt by reducing beer duties 500,000 Increased duty on spirits 500,000 Reducing Four per Cents 750,000 Savings 1,400,000 Ireland, soap, &c. 450,000 Stamps 200,000 --------- 5,900,000 4,500,000 --------- 1,400,000

There may have been more; but he spoke, and I write from memory.

I told him I thought that with a diminished duty on beer and an increased duty on spirits he could not expect an increase of 500,000£ on spirits. He admitted that was the weak point. He said he was sure we could not carry an income tax while we had a million surplus. If we have a good harvest, I have no doubt the increase on malt will be great; but I apprehend there must be a repayment of beer duties, and if there should be, the loss will be enormous.

_March 8._

Sent Mr. Elphinstone a letter giving an account of the travels to the North of the Paropamisan range into Cabul.

The Duke said we really must look out for a new Governor-General. I suggested Hardinge. He said Hardinge had not as yet station enough in the opinion of the public, in the army, or in Parliament. He wished him to be Secretary in Ireland. It would have been much better if he had gone there instead of Lord F. Gower, and Lord P. to the War Office. To be sure, then we should not have had the reductions Hardinge had effected. He had, as I knew, always wished Hardinge to go to Ireland.

I observed that Hardinge was rising every day in public estimation, which the Duke acknowledged, and I added that I was sure none would do the duty better, for he had firmness and habits of business. The Duke seems to think of Elphinstone. He said he was a very clever man. I told him I had been an hour and a half with Elphinstone last night. I told the Duke all my notions respecting individual responsibility, members of Council, &c., and that I had begged Elphinstone to think of them. The Duke seemed generally to approve of them. It seems Lord Wellesley never would go to Council. I do not wonder at it; but the Duke used to tell him he was Governor-General _in Council_--that he ought always to go there.

_March 10._

Dined with the Duke. Cabinet dinner. Only the Peers there. The others detained by Lord Palmerston's motion on Portugal, on which there was a majority of two to one, 150 odd to 70 something. Huskisson made a very bad dull speech. We talked about a successor to the Speaker. They seem to think he will not resign now, as he would not get a good pension in the present temper of the House.

The candidates are Sir J. Beckett, Littleton, G. Bankes, Wynn of course. I mentioned Frankland Lewis as a good man, which he would be. I dare say the Chairs will think he should be elected unanimously.

It seems there must be a Bill of Indemnity for not taking the declaration, two Bishops, Chester and Oxford, not having taken it. The Duke finds he has at Dover, as Lord Warden.

We had some little conversation about the income tax, which the Duke is very hostile to, and I am glad we shall not have it.

_March 11._

The Russians have at last sent their reply to our expostulatory note. I have not had time to read it. Lord Heytesbury calculates that the last war cost them 12,000,000£, but they endeavour to conceal the amount.

Peel told me the House was quite excited against the Bombay judges, and that the division fairly represented its real opinion.

_March 12._

There was but one black ball in the election of Lord Clare, and the Chairs think that was put in by mistake; no one objected.

_March 13._

Read Sir H. Parnell's pamphlet on taxation.

Cabinet room at two. I had only got half through the Russian answer when the Cabinet met for the subject of taxation.

I rather expected to find that the Duke had had communications with Goulburn, and that the idea of a property tax was given up. However, that seemed not to be the case. It was determined the whole beer duty should be given up in any case.

£ The expected revenue is 50,250,000 The expected expenditure 47,930,000 ---------- Surplus 2,320,000 Add by reduction of Four per Cents 777,000 By 1_s_. 6_d_. on British, and 2_d_. on Irish and Scotch Spirits 400,000 By stamps in Ireland 220,000 3,717,000 Deduct beer tax, £3,200,000, but the loss to the revenue from the probable increase of malt, calculated at 2,500,000 ---------- 1,217,000 Probable increase of revenue 450,000 ---------- Sinking fund 1,667,000

The conversion of stock into annuities is proceeding at the rate of 1,000,000 pounds a month, and the increased annual charge already is 250,000 pounds. Certainly to this extent the estimated three millions of surplus might be fairly reduced; but to reduce the surplus to 1,200,000 pounds or 1,600,000 pounds would be an entire abandonment of the system adopted by the Finance Committee and the Government.

It seemed to me that the members of the House of Commons were all in favour of the income tax; all the Peers against it. The Duke was strongly against it. He apprehended the reduction of establishments, and particularly the pressure of the tax on men of 1,200 pounds a year, and under.

If I imposed the income tax, I would make it the means of a thorough reconciliation between the higher and lower classes. In this manner only would it be effectual and make a strong Government.

I object greatly to Goulburn's deductions from the old income tax. He excepts _occupiers_; that is, as regards land occupiers, quite right; but he excepts manufacturing capital and capital engaged in commerce. Now, why should the man who has 100,000 pounds in a manufactory, and makes 10 per cent, on that sum, pay nothing, while the man who invests his 100,000 pounds in the funds gets only 3 1/2 per cent, and pays 5 per cent, out of that reduced profit? The man who has a manufacturing or _commercial capital_ is a _saving man_. He can afford to pay something to the State, and why should he not? So the lawyer who may be making 10,000 pounds a year is to pay nothing. If he takes 5,500£. a year and becomes a judge, he pays 137 pounds 10 shillings. Yet his interest is still for life.

In all this there seems to me unfairness.

If the tax be imposed as it is proposed, it will be very difficult to include afterwards the classes now exempted. It will be impossible to take off the tax, and whenever a tax is unpopular, those upon whom it presses will say, 'Take it off. It is only adding 1/4 or 1/2 per cent. to the income tax.'

A real property tax is the fairest of all taxes--but an income tax is the most unfair even when it affects all income; but when it affects the income of some who have a life interest, and not the income of others in the same situation, it is most unfair indeed.

It is quite erroneous to suppose that those who pay an income tax are the only persons who suffer from it. The reduction of establishments, the diminished consumption, the increased economy in every article of expenditure on the part of those affected by it have necessarily the effect of reducing the wages of labour. The labourer may buy some things cheaper, but he has less wherewith to buy.

_Sunday, March 14._

Saw Hardinge at two. Told him how we stood as to the question of taxation. He said he thought the income tax would be popular, but agreed with me in thinking it should be established on strictly just principles.

Cabinet at three. Goulburn read a new statement showing the surplus this year, if we reduced beer and leather, and next year too. The surplus this year is about 2 millions. Next year about 1,500,000£.

The income tax reaches the funds, and the Irish, and the parsimonious, and the rich--so far it is good, but it likewise reaches the man of 100£ a year. It tends to diminution of establishments, to diminished demand for labour. To create an alteration in demand generally.

It was proposed to exempt professions and trades. This was unjust, and it would have led to an entire separation and hostility between the landed proprietors and the united body of labourers and manufacturers.

These last would have joined on all occasions in urging a further and still a further increase of income tax, and would never have consented to a tax on consumption. The income tax would finally absorb all other taxes.

Another great objection to the income tax now is that it would have the effect of perilling the reduction of the 3 per cents.

The Duke, Rosslyn, and I were decidedly against income tax. Lord Bathurst and Lord Melville, as well as the Chancellor, less decidedly so, but still in favour of abiding by the reduction of the beer and leather tax. Aberdeen said nothing, neither did Sir G. Murray, so they were understood to go with the majority.

Goulburn acknowledged the discussion had to a great extent changed his opinion, and that he was not then prepared to propose the tax.

Herries seemed much in its favour; but more, as it seemed to me, because he wished to maintain a large surplus according to the decision of the Finance Committee than for any good reason. Peel was decidedly for a property tax. He wished to reach such men as Baring, his father, Rothschild, and others, as well as absentees and Ireland. He thought too it was expedient to reconcile the lower with the higher classes, and to diminish the burthen of taxation on the poor man. I accede to the principle; but I doubt whether taxes on consumption do really press more heavily on the poor man than an income tax. What he has to look to is not the actual price of the article he wants, but the proportion which his wages bear to that price. It matters little to him what the price of candles may be, if he has not money wherewith to purchase them. That system of taxation is best for the poor man which most tends to increase the funds for the employment of labour; and every disturbance in the system, every alteration of demand, does intrinsic mischief.

After this matter was decided, Peel behaving most fairly, and declaring he would support the decision of the Cabinet whatever it might be, and that in this case the decision of the Treasury was to be principally looked to, we talked of Queen Donna Maria, in whose name Don Pedro has established a Regency in Terceira.

I read Leopold's letter to Lord Aberdeen, in which he refers to his letter of February 11, for the statement of his views in taking the Greek coronet, saying that he only acceded from courtesy, and as a matter of form, to the protocol, and further urging some alteration in the frontier. He has made an application for a joint guarantee by the three Powers of a loan of 60,000,000 paras, or 2,400,000£. Now we only agreed to guarantee 50,000£ a year, and that for troops. Nothing will be said upon this point till he has withdrawn his letter. He seems to be Aberdeen's pet. I do not think, had the Greeks searched Europe, they could have found a man whose character was more congenial to their own.

_March 17._

Leopold has withdrawn his obnoxious letter.

_March 18._

House at five. Debate on the Duke of Richmond's motion for a select Committee on the state of the labouring classes, and the effect of taxation upon the productive powers of industry.

A most dull debate, till Lord Holland spoke. I answered him. Lord Lansdowne next, then the Duke. I spoke, showing the impracticability of the Committee. I however showed up Committees rather too much. This Lord Lansdowne took hold of, not very fairly, but he did it well.

We had in the House 69; they 39.

With proxies we had 140 to 61. My uncle voted in the minority, and so did Coplestone. Dudley, Lord Malmesbury, Lord Gower, voted with us.