say that it has realised or is likely to realise the ideal of a Hibernia pacificaior. It has, however, satisfied a wrong and redressed a grievance. The occupants of the Irish soil are not yet reconciled to England, probably they are not grateful to the English Government; but if they are strangers to the sentiment of gratitude, they are not deaf to the promptings of self-interest. They know well that the time has come when they have nothing to hope, and much to lose, from actively supporting a policy of continued irritation and disturbance. Mr. Parnell has lost his leverage, and the very extravagance of his denunciations betrays a knowledge of the fact and of the hopelessness of his case. One thing, indeed, there is which might evoke a dangerous response on the part of the Irish people to Mr. Parnell's dangerous irritation. The attempt to limit the extension of the franchise to Great Britain would go far to restore to Mr. Parnell and his friends the pernicious power which they feel has departed from them. There is something else to be said against the exclusion of Ireland. If the Reform Bill of next session is carried in the only shape in which it is worth having, it will for the first time bring the Irish labourers into the electoral field. That fact is at once a conclusive argument in favour of the Ministerial course, and a plausible explanation of the attitude now taken up by Mr. Parnell. The interests of farmers and labourers on the other side of St. George's Channel are no more identical than they are in England. One of the most probable if not immediate results of reform would be to range the tillers of the land in opposition to the occupants, and to introduce division into the ranks of the so-called national party. Mr. Parnell is sufficiently acute and far-sighted to be aware that such a contingency, if realised, would be serious to himself. It is, therefore, perfectly intelligible that he should be desirous to place impediments in the way of extending the county franchise to Ireland. How, he might argue, could he more effectively do this than by alienating English opinion from the sister island, and by inducing and nursing an intolerance of Irish demands which would render it impossible for the Government to give Ireland equal justice, and which, as a consequence, would present him with an opportunity of renewing his agitation? This is perhaps his last chance; and those who read between the lines of his Rotunda speech may see in it evidence of a design to play into the hands of the Tories with a view of thwarting the full development of the coming Reform Bill, and then, when Ireland is smarting under the sense of a new injustice, of resuming his old position. Nothing can be more certain than that, if the Conservatives or the moderate Liberals were successfully to protest against the inclusion of Ireland in the Reform Bill, they would be making a precious gift of political capital to Mr. Parnell. There is one other matter in the political history of the month to which it may be worth while to advert. Mr. Marriott has displayed

master.

a curious alacrity in following the lead of Lord George Hamilton, and in emulating the controversial amenities of which the latter is a The result is edifying, even though the effort may not be original. In the indictments recently levelled against Mr. Chamberlain there are two points worth perhaps a moment's consideration. The gist of Lord George Hamilton's and Mr. Marriott's charges is not that the President of the Board of Trade has been successful in the commercial enterprise which, as a private English citizen, he carried on, but that, having been successful, he has retained his sympathy with the people, from whom he sprung, and is a conspicuous advocate of popular rights. Cannot these gentlemen perceive that their invectives pushed to their logical conclusion would mean that the acquisition of wealth disqualifies those who obtain it from vindicating the claims of the poor? "Who drives fat oxen must himself be fat," and according to Lord George Hamilton and Mr. Marriott, the plan of improved dwellings for labourers and artisans can only with propriety be urged by one who is an artisan and a labourer. Secondly, it is to be observed that Mr. Chamberlain is at this moment the representative of the great constituency among whom his life has been passed. Now if he had been guilty of the offences of which he is accused, assuredly the electors of Birmingham, as they would have been the first to know the fact, would have been the first also to resent it. Instead of doing this they have successively accorded him every proof of confidence and regard which it is possible for a constituency to confer on any one of its citizens.

Incomparably the most important event in foreign politics is the visit of the Crown Prince of Germany to Rome. His presence in Spain has elicited much enthusiasm, and his personal popularity has overcome many prejudices against Germany. But though it may have paved the way for the entrance of Spain into the great European league, which already includes Italy as well as Germany and Austria, it is certain that nothing more has yet taken place than the interchange of ideas between King Alfonso and the heir to the Imperial throne of the fatherland. A Liberal Spanish Cabinet would never lend its hand to the conclusion of an offensive and defensive union chiefly directed against the power which is pre-eminently the representative of European Liberalism-France. On the other hand, the ministry of Señor Posada Herreras is evidently in a critical state. The Spanish Liberals are distracted and weakened by internal dissensions which render it impossible for them, notwithstanding their majority, to govern the country. It may therefore be anticipated that a Conservative Ministry under Canovas will ere long come into power, and if this should prove the case we are likely to hear more about the admission of Spain into the triple alliance of mid Europe. Meanwhile the present cabinet will endeavour to secure the

ratification of the pending commercial treaty with England. There is probably no considerable section of Spanish politicians which is opposed to a compact that it is generally believed will confer at least as many advantages upon Spain as upon England. The Conservatives, however, cannot openly make it a part of their programme, partly because of their protective principles, partly because of their obligations to the iron producers of Catalonia.

If we turn from the Spanish to the Italian journey of the Crown Prince, its significance is at once apparent. His three-quarters of an hour interview with the Pope is likely to prove an event in the modern history of Europe. Yet it would be a mistake to suppose that the ecclesiastical peace is firmly established between Berlin and the Vatican. The only condition on which Germany will consent to go to Canossa is that the Archbishops of Cologne and Posen shall not be reinstated in their places. Both Paul Melchers and Cardinal Ledochowski are personæ ingratissima to the German Government, not so much on account of their Jesuitic proclivities as of their avowed hatred of German unity. Ledochowski is a Pole rather than a German, and would willingly side with his countrymen in an attack on Prussia. Upon the assumption, therefore, that the ecclesiastical relations between the German Government and the Papacy were discussed, it is inevitable that these two prelates should have occupied a large place in the conversation. We venture to think that we shall not be wrong in stating that the Crown Prince's visit to the Pope was intended to pave the way to another project-the visit of the Austrian emperor to Rome. Nearly two years have elapsed since King Humbert and Queen Margaret proceeded to Vienna, and the Austrian Kaiser has not yet reciprocated this act of courtesy. The conviction grows in Italy that a thorough understanding between the two powers is dependent upon an acknowledgment on the part of the Emperor of Austria, expressed at his presence in Rome, that the seven-hilled city belongs to the power domiciled in the Quirinal, and not that which resides in the Vatican. The Crown Prince may prove to have acted as the herald of the Emperor Francis Joseph II. He has shown that a prince may be the guest of King Humbert, and be received with courtesy and kindness by the Holy Father. When once the Austrian emperor has followed the example of the German prince, he will not merely have discharged a duty of politeness, but will have established a modus vivendi between the Vatican and the Quirinal which is likely to dissipate the fiction that the Pope is a prisoner in Rome. The compromise of the ecclesiastical strife in Germany will thus not improbably coincide with the termination of the struggle between the Italian Government and the Papacy.

December 28, 1883.

THE

FORTNIGHTLY REVIEW.

No. CCVI. NEW SERIES.-FEBRUARY 1, 1884.

LIBERAL VERSUS CONSERVATIVE FINANCE.

EVERY one who feels any interest in our national finances will have read Sir Stafford Northcote's recent article on that subject. It is characterised by his usual clearness, and the dry and technical details are relieved by several excellent anecdotes and witty illustrations. I have studied it with the respect due to so great an authority, but though of course there is a great deal in the article with which every one must agree, still as regards the main points at issue Sir Stafford fails, it seems to me, to make good his case, and I have therefore accepted an invitation from the conductors of this Review to give my reasons for that opinion. So far indeed as finance is concerned I may say at once that most of Sir Stafford's principles as laid down in his article appear to be unanswerable, but, unfortunately, he did not act up to them himself when he was in office.

For instance, one of his first and most important measures was an Act to provide for the more rapid reduction of the National Debt. He proposed in an admirable speech to set aside a certain annual sum for that purpose, and theoretically no doubt he did so, but then, unfortunately, he borrowed the money to do it with.

Again, in his article he points out very forcibly the evils arising from frequent changes in taxation. The only satisfactory way, however, to avoid frequent changes, is to arrange for a good margin between income and expenditure; but in practice the Conservatives so conducted affairs that, beginning with a surplus of £6,000,000 inherited from their predecessors, they ended with a series of deficits amounting in three years to over £7,000,000.

In discussing the management of our national finances during the last few years, the whole subject naturally divides itself into three heads the amount of the expenditure, the character of the expenditure, and the manner in which it has been met. As regards the first branch, namely, the amount of expenditure, Sir Stafford Northcote justly observes, that "comparative statements of gross expendi

ture cannot be accepted as conclusive evidence." This is very true; but though not conclusive they raise a presumption, unless the increase of expenditure can be satisfactorily accounted for. Now let us look at the expenditure of the country up to and during the rule of the late Government. It will be remembered that the national accounts are made up to the end of March, so that if a new Government comes into office during a year, and unless it materially alters the financial arrangements of their predecessors, the expenditure is that of the outgoing Government.

From 1861 to 1866, under a Liberal administration, the expenditure of the country was steadily and substantially reduced, namely, from £72,800,000 to £65,900,000. In June, 1866, the Conservatives came into power, and it rose in 1866-7 to £66,800,000, in 1867-8 to £71,200,000, and in 1868-9 to £75,000,000.1 At the close of 1868 the Liberals returned to power, and the expenditure was again considerably reduced, ranging from £69,600,000 to £71,000,000, except in one year, when it was swollen by the Alabama payment. In 1874 the Conservatives again came into office, and the expenditure at once. began to increase by "leaps and bounds."

In a country with a rapidly increasing population, and one demanding every year more and more from the Government, expenditure must necessarily tend to rise, but the growth under the late Conservative administration was enormous and alarming.

Moreover, in any comparison of Conservative and Liberal Finance we must remember that we are contrasting the financial history of an administration which did not meet its expenditure, with that of one which has not only paid its own way, but also the debts of its predecessors. Sir Stafford admits that, "whereas the cost of the preparations consequent on the Russo-Turkish war, and of the South African wars, had amounted to about £12,285,000, the amount raised by borrowing had amounted to only (?) £8,100,000, showing that £4,185,000 had been provided by taxation." He rather prides himself on having paid for 34 per cent. of this expenditure, but I confess I should have thought that the word "only" was misplaced. Moreover, in addition to this £8,000,000 we must add £5,000,000 for our contribution towards the expenses of the Afghan war, which, as was also the case in the Abyssinian war, was immensely under-estimated. Thus the Afghan war, though estimated in February, 1880, at £6,000,000, really cost £17,500,000, without including the loss on frontier railways. Mr. Childers maintains that we must also add (1) Greatly due to the Abyssinian war.

(2) The actual deficiency proved to be only £7,850,000.