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Chapter XXXI, of Cassells Illustrated History of England, Volume 9


Mr. Lowe's Budget for 1869: The Surplus swallowed up by the Abyssinian Expenditure: Remarkable Financial Device: Mr. Lowe creates a Surplus; and proposes a Remission of Taxes: The Budget carried - Discussion on the Enormous Cost of the Abyssinian Expedition: Explanation of Sir Stafford Northcote - The Endowed Schools Act of 1869: Speech of Mr. Forster: The Measure becomes Law - University Tests Bill: Passed in the House of Commons: Thrown out by the Lords - Conduct of Mr. O'Sullivan, Mayor of Cork: The O'Sullivan Disability Bill: The Mayor resigns his Office - Life Peerages Bill brought in by Lord Russell: Is thrown out on the Third Reading, on the Motion of Lord Malmesbury - State of the Country in 1869 - Irish Disaffection - Death of Lord Derby: Sketch of his Career - Death of Lord Gough - France in 1869: Pacific Attitude of the Emperor's Government: Dissolution of the Chambers: General Election: Senatus Consultum abrogating Personal Government: Violent Language of M. Rochefort: Meeting of the New Chambers: Inquiry into the Validity of Elections - Progress of the Spanish Revolution: Murder of Don Gutierrez de Castro: Meeting of the Cortes: It affirms the Monarchical Principle: Serrano appointed Regent: Prim wishes to offer the Crown to the Duke of Genoa: The offer declined: Republican Risings: Eloquent Speech of Senor Castelar - General Grant inaugurated President of the United States.
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The new Chancellor of the Exchequer, Mr. Lowe, brought forward his budget, in a speech of great ability, on the 8th April, 1869. The state of the revenue, he said, was moderately flourishing, although the receipts for the past financial year had fallen somewhat short (to the extent of about half a million) of Mr. Ward Hunt's estimate. His predecessor had calculated upon a revenue of 73,180,000, but the actual amount received did not quite reach 72,600,000. Passing now to the current year, Mr. Lowe estimated the expenditure at 68,223,000, and the revenue at 72,855,000, which would leave an available surplus of 4,632,000 at the end of the year. Nothing could be more satisfactory than such a prospect. Visions of a lowered income tax, of enlarged grants for special purposes, of general easiness in money matters, must have flitted before the minds of the assembled legislators. But Mr. Lowe had no sooner raised the hopes of his hearers than he dashed them to the ground. The whole of this large surplus, it appeared, except the trifling sum of 32,000, would be required to defray the cost of the Abyssinian expedition. The real cost of that expedition was now for the first time made known. Mr. Disraeli had asked for and obtained a vote of 3,000,000, in November, 1867, and a further sum of 2,000,000 had been voted for the expedition in the early part of the session of 1868. During 1868 every one supposed that 5,000,000 would cover the cost; but this was found to be by no means the case, and a third vote of 3,600,000 was taken in February, 1869. The total cost, Mr. Lowe feared, would hardly fall short of 9,000,000. Now, of the 8,600,000 that had been voted, ways and means had been found only for 4,000,000, so that 4,600,000 had still to be provided for. This sum would just be covered by the anticipated surplus, leaving a balance of 32,000.

Here an ordinary financier would have stopped, con tent to have balanced the revenue, and to have defrayed out of current receipts, so as not to add a penny to the National Debt, the heavy and unforeseen charges entailed by the Abyssinian expedition. But Mr. Lowe was not an ordinary financier, and, as a surplus did not exist, he resolved that one should be created. He proceeded to unfold a plan for the more economical collection of the revenue, by concentrating in one payment, to be made in January, the income tax and the assessed taxes, instead of dividing the former into two instalments, payable in April and October. This plan he proposed to bring into operation for the first time in January, 1870; so that (no collection being made in October, 1869) the taxes for three quarters, ending the 31st March, 1870, should be paid next January, in which month the whole of the income tax and the assessed taxes would have to be paid in future years. That is to say, Mr. Lowe pro posed to collect five quarters' taxes within twelve months. The reader will think that it is not difficult to create a surplus in this way. Nevertheless, Mr. Lowe showed that the proposed change in the mode of collecting these taxes was based on common sense and sound economy, I and that a sum of 100,000 would be saved merely by I having one collection instead of two, and employing the I Excise officials instead of amateur collectors. He also! discussed the assessed taxes with great force and acute- ness, and proposed to convert most of them into license; duties, following the successful precedent of the dog tax, and that they should be payable for the future at the beginning of each year, instead of by two instalments in April and October. Assuming that the House adopted; his scheme, Mr. Lowe calculated that before the end of the financial year (March 31, 1870) there would have been paid into the Exchequer 600,000 of the Excise licenses, 950,000 of the land tax and assessed taxes, and 1,800,000 of the income tax - in all 3,350,000 - which, with the 32,000 surplus of revenue over expenditure, would put the Government in possession of a surplus of 3,382,000. How was this surplus (which Mr. Lowe might well describe as a " windfall ") to be disposed of? As the chief inconvenience attending the transition from I the semestrial to the annual method of payment would; fall on the income tax payers, Mr. Lowe thought that 1 they had the first claim to relief from the surplus; he therefore proposed to take off a penny from the income tax. Next he proposed to abolish the import duty of one shilling on every quarter of corn, left by Sir Robert Peel when he repealed the Corn Laws in 1846. This duty, though it produced 900,000 a year, combined in Mr. Lowe's opinion all the bad qualities which a tax could possibly have, and prevented this country becoming a great entrepot of corn. The fire insurance duties were also to be given up, though this reduction would not take effect till after Midsummer. The total remission of taxes thus foreshadowed would amount to 2,940,000, leaving, when deducted from the estimated surplus, a balance of 442,000. Mr. Lowe admitted that his plan was attended by certain drawbacks. Under its operation the Treasury would be in a state of plethora at one part of the year and starved at another; and there might be taxpayers to whom the concentration and unification of the State's demands on their purses might be inconvenient. But he had various expedients in petto to meet the first objection, the chief among which was that during the non-productive months of the year the Government should be empowered to borrow at their discretion from the Com missioners for the Reduction of the National Debt; while with regard to the second objection, the taxpayer, like the eel in the adage, would find the change nothing when he had become used to it. Mr. Lowe's budget was, of course, sharply criticised, and the delusive character of a surplus obtained by a financial trick was loudly insisted upon; but the real merits of the scheme, which were undoubtedly great, carried it through.

The statement made by Mr. Lowe, en passant, with regard to the aggregate expenditure on the Abyssinian expedition naturally attracted much attention. The Conservative Government had estimated that the total cost would not exceed 5,000,000; how then, when no unforeseen circumstance had occurred, none but the most shadowy opposition been encountered, and no reinforcements been needed, could the expenses have shot up to the enormous figure of 9,000,000? It appeared that by far the greater portion of the money - more than 7,000,000 - had been spent by the Bombay Government. The duty of explanation accordingly fell on Sir Stafford Northcote, Secretary for India in the late Government. Sir Stafford Northcote stated that when the first estimate was framed (that for 3,000,000, laid before the House by Mr. Disraeli, in November, 1867), the expedition had not left India; and that the second estimate (for 2,000,000 additional) was necessarily vague and loose, and exceeded, in fact, the information furnished by the departments. He pointed out, among the reasons for the insufficiency of the estimate, our entire ignorance of the country into which the expedition was dispatched, its actual barrenness of supplies, and the necessity of taking precautions against events which never occurred, Much of the excess, he added, had arisen since the period up to which the estimate extended, and in conveying the troops from Abyssinia to India after the expedition was over. These explanations failed to remove the suspicion that there had been culpable laxity on the part of the Bombay Government. The suddenness of the last rise in the estimate was quite mysterious. Mr. Ward Hunt stated, in the discussion which took place in March, 1869, when the supplementary vote of 3,600,000 was demanded, that so recently as the 8th December, 1868, the Indian Government had telegraphed to this country that they had only spent 5,000,000.

Although the time of Parliament was too much taken up with discussions arising out of the Irish Church Act to allow of any comprehensive educational measure being brought forward in this session, yet an important Act was passed, by which a machinery fitted to grapple with the long-standing abuses connected with the endowed schools of the country was successfully established. The condition of these schools had lately been inquired into by a royal commission, the report of which had been laid before the House. Upon the basis of this report the Government was now prepared to legislate, and the duty of pre paring a bill fell into the hands of Mr. W. E. Forster, the Vice-President of the Council. The recommendations of the commissioners had been of a very sweeping character; besides advising that full power of inquiring into the efficiency of every endowed school, and of putting an end to waste and abuse of trust funds, should be taken by the Government, they had recommended the formation of a central examining council, and the formation of provincial boards throughout the country under the control of the central authority. But the Government itself did not see its way to the appointment of provincial boards for the present; and the select committee to which the bill was referred, after the second reading, struck out all the clauses which proposed to constitute an examining council. What remained, however, of the bill was sufficient to make a useful working measure of reform.

In moving the second reading of the bill, Mr. Forster took occasion to explain in general terms the principal conclusion^ at which the Commission of Inquiry into Secondary Education, of which he had been himself a member, had arrived. In estimating the provision already existing in the country for the education of the " middle classes," the commissioners found that the schools which came under their observation naturally fell into three groups - denominated by them respectively first grade, second grade, and third grade schools, according to the age at which the scholars whom they instructed usually left them. In the first grade schools the average age of leaving was between eighteen and nineteen; in the second grade schools, between sixteen and seventeen; while in those of the third grade, constituting the immense majority in point of numbers, the age of leaving was about fourteen years. As a rule, the parents of boys in the first grade schools were persons of wealth, to whom money was little if at all an object in the education of their children. The schools themselves were pretty much on a par with the Public Schools, whose condition had been inquired into by a separate commission; and, as in the case of these, a considerable proportion of the scholars left school for the universities. Schools of the second grade were attended chiefly by the sons of professional persons, and of those engaged in commercial pursuits, whose sons were destined to follow similar avocations. In the third grade schools the scholars were found to be for the most part the sons of small farmers, small tradesmen and shop keepers, and superior artisans. In the schools of all three grades a thorough education was found to be hardly ever imparted, except in Latin and Greek; and efficiency even in these branches was chiefly confined to schools of the first grade. Mr. Forster quoted the evidence of many competent witnesses who had been examined by the commission, to the effect that secondary education in England, considered as a preparation for any of the learned professions or for an industrial career laboured under grievous deficiencies; yet there was probably no country in Europe in which the bounty of individuals in past ages had provided such liberal endowments for secondary education as was the case in this country. Taking these two facts together - the low standard of actual education, and the liberal provision made for it in endowed schools - Mr. Forster drew the obvious conclusion that these schools, under their existing management, failed both to fulfil the intentions of their founders, and to satisfy the needs of society. In support of this conclusion, he adduced some curious evidence from the report of the commission. The head master of a certain endowed school told an assistant commissioner that "it was not worth his while to push the school, as with the endowment (about 200 a year) and some other small source of income, he had enough to live on comfortably without troubling to do so." In the case of another school, with -an endowment of 651 per annum, the master put his nephew and son into the posts of second and third masters. The assistant commissioner " found the discipline most inefficient, and the instruction slovenly, un methodical, and unintelligent there was no one subject in which the boys see med to take an interest, or which had been taught with average care or success." At another school, where the endowment was 613 a year, there were thirteen pupils. At another, enjoying an income of 792 from the charity, the head master taught three boarders and no others, and the under master at tended when he chose. In a school where the endowment was 300 a year and a house, one boy was found under instruction, while there was a private school with eighty boarders close by. To facts of this kind - lament able as they were - Mr. Forster did not desire to attach undue weight; he did not conceal from the House that among the endowed schools of every grade many excel lent and useful institutions might be found; but he maintained that a case had been made out for interference on the part of the State, in order that where, through negligence or worse, the charitable intentions of a founder were defeated, the endowments might be restored to the beneficial use from which they had been diverted. Since the plan of provincial boards had been given up, the organisation which the bill proposed to create was exceedingly simple. A small commission, consisting of only three persons, would be appointed; this commission would send round inspectors to inquire into the local circumstances of the endowed institutions, and on receiving their report, would, if change were necessary, draw up schemes for the future government and conduct of the schools. The schemes, when prepared, were to be communicated to the trustees of the different endowments, that they might suggest alterations or modifications; they were then to be submitted to the Education Department, and that department would, after approval, lay them before Parliament. After having lain for a certain time on the table of each House, and not been objected to, a scheme would ipso facto come into operation.

In the course of the fuller explanations which were required of Mr. Forster by various members during the debate, he stated that the bill dealt with three thousand schools, viz., 782 grammar schools and 2,175 foundations, mostly elementary, with a gross income of 592,000, and a net income for education of 340,000, a sum which, well applied, might effect much; but the money was to a great extent wasted.. Requested to name the three commissioners to whom he proposed to entrust the preparation of the schemes, Mr. Forster gave the names of Lord Lyttelton, Mr. Arthur Hobhouse, and Canon Robinson. After being passed in the Commons, the bill was subjected to a searching examination in the House of Lords. Lord Salisbury proposed to exempt from the jurisdiction of the new commissioners all endowed schools founded within the last hundred years, the period named in the bill being fifty years. But the amendment was lost on a division, and this valuable measure soon afterwards became law.

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Pictures for Chapter XXXI, of Cassells Illustrated History of England, Volume 9

Mr. Chichester Fortescue, M.P.
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