knot of far-reaching complications.
Formerly the bulwark of Christendom against the infidels, it now
sundered European States.[507] So doubtful was the attitude of Paul and
Francis that Pitt, in October 1798, twice wrote despondingly as to any
definite decision on their part. All that was clear was their inordinate
appetite for subsidies. These he of course withheld, knowing full well
that neither would Paul tolerate for long the presence of the French at
Malta, nor Francis their occupation of Switzerland. In any case he
resolved not to give more than L2,000,000 to the two Empires for the
year 1799.[508] For the time his hope lay only in the exertions of
England, Europe being meantime "left to its fate." In order to humour
the Czar, who was about to become Grand Master of the Knights of St.
John, Grenville, on 23rd November, wrote to assure his Government that
England renounced all aims of conquest in the Adriatic, or of the
possession of Malta.

At the close of the year Pitt proudly displayed the inexhaustible
resources of Great Britain. His Budget speech of 3rd December 1798 marks
an epoch in economic history, alike for the boldness of the underlying
conception and the statesmanlike assessment of the national resources.
Well might Mallet du Pan declare that the speech surpassed all previous
efforts in its illuminating exposition of a nation's finance. As
appeared in our survey of the Budget of 1797, Pitt then sought to meet
the year's expenses within the year. To a generation accustomed to shift
present burdens on to its successors the proposal seemed Quixotic; and
Fox blamed him for not adopting this device. Pitt held to his plan, and
outlined a ten per cent. tax upon income. Having failed to gain the
requisite tenth by means of the Assessed Taxes, he proposed to raise it
by methods which even the shirkers could with difficulty circumvent.

In order to lay a first rough actuarial basis for his Income Tax, he
made a careful study of the nation's resources in the autumn of 1798.
The results he summarized in an interesting statement. There were
available at that time only rough estimates, even as to the area of
cultivated land and its average rental. Relying upon Davenant, King,
Adam Smith, Arthur Young, and Middleton, he estimated the area at
40,000,000 acres, and the average rental at 15_s._ an acre. He prudently
fixed the taxable value at 12_s._ 6_d._ an acre. The yearly produce of
mines, timber, and canal shares he