nue 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, L3,200,000, 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