1862] COMMERCIAL PROSPERITY 391 produced. Yet it proved by no means unsatisfactory. Already the Commercial Treaty with France was beginning to show its effect. Within a single year our export trade with that country had increased with gigantic strides; while in spite of the enormous loss on American trade, the general prosperity of the country Budgets of was such that there was an increase in the revenue of 1862 and 1863. not less than £2,000,000. The additional expenses incident upon the war had, however, eaten up this increase. With only £150,000 in hand, and with the probability of the continuation of similar expenses, there was no possibility of introducing any important changes in the Budget. In fact the seed had been already sown, and for the next few years there was little to do but to reap the harvest. In 1863, the estimated surplus was £3,741,000, caused partly by increased receipts, partly by diminished expenditure upon the army and navy, and the Chancellor of the Exchequer was able at last to diminish the taxes on which he had relied to supply the deficiency arising from the great reductions in the customs. The duty on tea, the reduction of which the Opposition had always urged against those reductions actually made, was brought down to 1s. in the pound, and a penny was taken off the income-tax, which thus fell to the same rate as when originally proposed by Sir Robert Peel. These alterations, which were the chief propositions of the Budget, were most favourably received. They had indeed been generally expected. Some additional propositions by the Chancellor of the Exchequer did not find the same general favour. Those whom he addressed were too closely interested in the club-life of London society to confess the justice of classing clubs with other places for the supply of wines and liquors, and the proposal to tax them had to be withdrawn. Nor did the public approve of including under the action of the income-tax charitable property. Mr. Gladstone's exposition of the wasteful expenditure which often attended the possession of such property, and the strong assertion of his disbelief in the supposition that taxation would limit their efficiency, failed to convince his hearers. The alterations made by the Budget were therefore restricted to its two main features, the reduction of the income-tax and of the duty upon tea. It was the exposition of the state of the country rather than the originality of the Budget which gave it its interest. Mr. Gladstone was able triumphantly to point out the success of the system he had followed. Both the import and the manufacture of paper in England had largely increased, and the export had in one year risen by 34,000 cwt. An increased revenue of £30,000 had been derived from the lessened wine-duties, while the Commercial Treaty, the effect of which upon a whole year's revenue was now for the first time visible, had been successful almost beyond belief. It had more than compensated for the loss of the American trade; for although we had by a strange change of fortune been supplying the United States with cotton, the loss in the value of exports to America had been £6,000,000 during the past year. If with the export of British goods the indirect export of colonial produce into France was included, our trade with that country showed an increase of more than £12,000,000 in the same time. But looking beyond that single success the increase of the wealth of the country, as shown by the income-tax, was even more extraordinary. In 1842 the assessed income was £156,000,000; in 1861, upon the very same area, the assessed income was £221,000,000, and that increase had arisen during the latter part of the period. "In ten years, from 1842 to | 1852, the taxable income of the country increased by six per cent., but in eight years, from 1853 to 1861, the income of the country again increased by twenty per cent.; that is a fact so strange as to be almost incredible. . . . The real and new cause which has been in operation has been the legislation of Parliament setting free the industry and intelligence of the British people." Mr. Gladstone thought himself able to add that he had reason to believe that the average condition of the British labourer had improved during the last twenty years in a manner unparalleled in the history of any country. Budgets of ... The Budgets of the two succeeding years were little more than repetitions of those of 1863. On both occasions in intro1864 and 1865. ducing them, Mr. Gladstone emphasised the extraordinary advance of national wealth, and traced it directly to the system which he had pursued. In each case he had a surplus of more than £2,000,000 to deal with; in each he was enabled to reduce the income-tax, till in 1865 its rate was only 4d. in the pound. Originally established as a temporary tax to cover deficiencies and allow of great alterations in commercial legislation, the income-tax might now be regarded as a fixed source of revenue; and although Mr. Gladstone frankly pointed out its faults and dangers, its rough justice, its inquisitorial character, the temptation to extravagance in Government which it afforded, he concluded that at this low rate, and sparing as it did the income of the labourer and the artisan, it was a just and valuable piece of fiscal machinery. In 1864 this reduction was coupled with a reduction of the sugar-duties, in 1865 with a still further reduction of the duty upon tea. In both years the Opposition pressed the 1865] DEATH OF PALMERSTON 393 superior claims to reduction of the malt-tax, which was said to press heavily upon the agricultural interest. But on this point Mr. Gladstone was firm. Its repeal would cost the revenue a very heavy loss, the advantage to the consumer would be scarcely perceptible, nor was it desirable that spirits and beer should be freed from tax if any indirect tax at all was to be preserved. A concession to the agricultural interest was however made by freeing from duty malt used as food for cattle. these years. Successful finance such as this, the maintenance of peace the fruits of which were already to be seen in the lowered military Political estimates, the absorption of general interest in the critical apathy during condition both of Europe and America, and the constant growth of material wealth, satisfied the wishes of the governing classes, and checked all tendency to move exciting questions. This quiescent feeling was still further fostered by the certain prospect that before long the veteran statesman, who was thus peacefully closing a career marked at one time by extreme activity and pugnacity, must soon retire from the management of affairs. Burning questions might wait till he had passed away, and his more ardent successor had found freer opportunity to give effect to his own ideas. The dissolution in July of the Parliament, which had now been sitting for six years, would alone have reopened the discussion of the political questions which had been slumbering so long. But the advent of a stormier time was rendered still more certain when in October Lord Palmerston, whose health had been for some time fading, died at the ripe age of eighty-one; and thus the cessation of party warfare, and the apparent political apathy caused by the general acquiescence with which his government had been received, came to an end. Death of Lord Palmerston. Effect of the death of Prince Albert. The death of Lord Palmerston was the more important because there was every probability that the Prime Minister would in future be more completely master of the Government than had of late years been the case. In December 1861 the Prince Consort had died in the full vigour of his age. Occupying no official position, and unrecognised in any theory of the Constitution, the Prince as confidential adviser and secretary of the Queen had for many years exercised a paramount influence. Although at times the object of considerable popular jealousy, there is every reason to believe that the influence thus gained was beneficently and wisely employed. Full of the best German traditions, he held, in common with the greatest rulers of the Prussian House, that the possession of the Crown, on the importance of which he laid great stress, brought with it corresponding duties of the severest kind. The constitutional government of England appeared to him but a somewhat modified expression of the same view. He mastered the system with an ease rarely found in foreigners, and fully accepted its principles. The permanence of the Crown in the midst of shifting administrations he considered of peculiar importance in supporting the continuity of foreign policy, while at home the possession of the traditions of government, and the knowledge of precedent which its experience gave, were fitted to render it a most useful element of stability. The Prince used his power to give reality to these advantages; and undoubtedly under his guidance the political importance of the Sovereign was largely increased. The unanimous testimony of all who came in contact with him bears witness to his unflagging industry in mastering the political questions of the day, to the constant assistance which his knowledge and experience afforded to the Foreign Ministers of both parties, and to the completeness with which the Queen acted in every difficult crisis upon his advice. Nor was it only politically that the loss of the Prince Consort was felt. He had devoted himself with rare success to the improvement and culture of the people, and most of the advance in artistic taste, in love of music, and in general appreciation of what is beautiful, on which the country can justly pride itself, is due directly or indirectly to his influence. To the Queen his loss was irreparable. It is impossible as yet to estimate her influence upon public affairs since her husband's death, but it may be safely said, that while she has borne herself so as to win the respect of all parties, and attempted to follow the line of conduct which he would have advised, the severe shock which his death caused her, and her consequent partial withdrawal from public life, have lessened the political power of the Crown, and directed the love and respect of her people rather to her qualities as a woman, than to her ability as a reigning Queen. The questions which were apparently to assume prominence in the new Parliament were the reform of the representation, and the position of the English Church. In May 1865 Mr. Disraeli, in view of the impending dissolution, had issued an address to the electors of Buckinghamshire. Ignoring the quiescent period which had since elapsed, he narrated the failure of the last Conservative Government to pass measures on Church rates, and on the enlargement of the Parliamentary suffrage. The present Administration had been formed, he said, pledged to the Disraeli's election speech. May 1865. 1865] CONDITION OF THE CHURCH 395 total abolition of Church rates, and to a measure of Parliamentary Reform which should secure the lowering of the borough franchise. Implying, though not distinctly asserting, that neither of those pledges had been redeemed, he indicated these two subjects—the one involving the maintenance of the National Church, and the other the maintenance of the ancient Constitution of England—as the chief topics of party discussion in the new Parliament. He would not have thus emphasised the importance of the Church, had he not known the efficiency for electoral purposes of the cry of "the Church in danger," and recognised that there were circumstances which would give it a certain plausibility. Effects of the movement. For the English Church had been passing through a very critical period. The great Tractarian movement had been for a time productive of complete anarchy. The tenets of its supporters, the stress which they laid upon the authority of the Church and tradition, excited the bitter hostility of the Evangelicals, who regarded the Bible as the sole paramount authority. The discussions which necessarily arose upon this point, far from weakening the liberalism against which the Tractarian movement was Tractarian at first avowedly aimed, gave rise to a party within the Church which rested its creeds on critical inquiry, and was characterised as the Broad Church. At the same time, the æsthetic tastes and love of medievalism of the Tractarians drove many of them to excesses of ritual, which separated them from the older High Church party. Four or five distinct sections thus arose in the Church. Yet in the midst of this disintegration, the teaching of the Tractarians had produced a decided effect. The theory of the importance of the Church was so acceptable to the clergy that it speedily made its way among them, and High and Low joined in the stoutest defence of orthodoxy. The aesthetic teaching which had accompanied the Tractarian movement was also so reasonable and attractive, that its effect was universally felt. There were, no doubt, certain extremes adopted by a few who became known as Ritualists. But setting these aside, great and valuable reforms were very generally adopted. Old churches were restored, and stripped of the galleries and pews which defaced them, new Gothic churches were everywhere built, and surpliced choirs and musical services introduced. With regard to the relation between Church and State, there was more diversity of opinion. Yet the greater number of the clergy, even though many of them were convinced of the justice of the claims of the Church to independence, and were eager to support its spiritual authority, contented themselves with |