tax on the passenger traffic is reduced from 5 to 3 per cent, while the exemption at present enjoyed by parliamentary and excursion trains is abolished. His proposal to levy the Income-tax upon the revenues of corporations which are expended in charity, and on the income of endowed charities, is more open to question; and so are some of his other minor proposals; but the interests affected are not sufficiently powerful to offer much opposition to the Government.

The main facts of Mr Gladstone's financial statement are briefly as follows. Warned by the strong expression of opinion on the part of the House in favour of a reduction of expenditure, the Government resolved to anticipate farther opposition by curtailing the estimates which the House had so reluctantly voted, and last year spent about £800,000 less than they had taken power to do. In respect to the Revenue, Mr Gladstone's estimates were singularly at fault. As on previous occasions, his estimate of the Excise greatly exceeded the actual return, which this year has fallen short of his estimate by more than a million sterling. But the Income-tax yielded nearly half a million more than he calculated, and so have the Customs; and the total produce of the national taxes has been so favourable as to leave a surplus of about £400,000 above the estimate, and an excess of £1,300,000 above the expenditure. The revenue of the past year amounted to £70,603,000, the expenditure was £69,302,000: surplus £1,301,000. If the taxes were to remain on the same footing this year, they would yield (according to Mr Gladstone) £71,490,000; and he proposes some trifling new taxes amounting to £133,000: together equal to £71,623,000. And as the estimated expenditure for the ensuing year is only £67,749,000 (£1,553,000 less than last year's), the surplus at the end of the ensuing year, if the taxes were kept

The surplus which Mr Gladstone thus reckons upon this year is far below the amount which our best financiers consider requisite for the maintenance of a sound system of finance. It is true, and we attach great weight to the consideration, that the present depressed state of an important branch of national industry renders it desirable that the taxation of the country should be reduced as low as possible. But this argument, unhappily, cuts two ways. For the same depression of trade, which calls for a minimum of taxation this year, to at least a similar extent places in jeopardy the surplus which the Chancellor of the Exchequer reckons upon. In his estimate of the produce of the excise, especially, we believe that he commits his usual mistake of being too sanguine. But the really hazardous feature of his Budget consists in this: That only a part

of the proposed reductions of taxation will take effect during the ensuing year; and, therefore, the estimates which suffice for the financial year, upon which we have entered, will be inadequate for the year following. The reductions of taxation which will take place before April next will, as we have said, amount to £3,343,000; but the total yearly loss of revenue consequent upon the reductions proposed by the Chancellor of the Exchequer, is £4,242,000; so that if they took entire effect during the present year, instead of a surplus of £531,000, there would be a deficit of £368,000. But of the loss on the Income-tax, £850,000 will only fall on the following year (1864-5), and £49,000 of loss from the abolition of some petty taxes will like wise be passed on to next year. Thus we obtain a surplus of £531,000 for the present financial year only by passing on to next year a loss of £900,000. If the finances had been in a thoroughly good condition, and if the state of the country promised to be prosperous, and our relations with other Powers peaceful, the heavy legacy of loss for the year 1864-5 might be contemplated with less alarm; for the experience of late years shows that, in ordinary times, the productiveness of the revenue tends to augment at the rate of £700,000 a-year. But this is not the case. And, more over, as Mr Gladstone's estimate of the miscellaneous receipts for the present year embrace half a million sterling of the China indemnity money—a payment which will not take place again-the deficit which we are preparing for the year 1864-5, is an exceedingly formidable one= £1,400,000.

This is the weak point of Mr Gladstone's Budget. Suppose his expectations are fully realised suppose he have a surplus at the end of this year of half a million, and that the productiveness of the taxes increase next year to the extent of £700,000 (which is not likely), there would nevertheless

be a deficit in the year 1864–5 of £200,000. Such a result, the most favourable that can be expected, cannot be regarded with indifference. But this is not all. Is it not a fact that the balances in the Exchequer in March last year were £2,684,000 less than they were in 1860, when Mr Gladstone began his present financial administration? And as he does not take any account of that deficit in his new Budget, the deficit remains unprovided for, and of course renders his present financial programme doubly hazardous. It was only by the help of the two and a half millions abstracted from the Exchequer balances, and also by creating new Debt to the extent of £461,000, that he escaped bankruptcy during the two first years of his financial administration: and if he had been a Minister of ordinary prudence, he would have felt bound to replace those sums before he proceeded to make further reductions of taxation. But he is determined to produce popular Budgets, however dear a price the country may have to pay for them in the long run. He justifies anew the censure which Mr M'Culloch has passed upon such a system of finance. He makes the show of a surplus for the ensuing year, only by ignoring nearly three millions of deficit which he has accumulated in past years, and by preparing a new deficit for the year 1864-5.

Every proposal to reduce taxation is sure to be popular,—we are equally sure that the present reductions are exceedingly dangerous. It is one thing to cut down expenditure-and this, we conceive, was what the Conservatives last year urged upon the Government: it is quite another thing to dispense with a real surplus, to resign ourselves to a past deficit, and prepare for ourselves a new one. The errors of Mr Gladstone's previous Budgets now begin to weigh heavy upon the national fortunes. The abandonment of the paper-duties has rendered our present financial

position one of no ordinary embarrassment. Had these duties still been in operation, the present reductions of taxation, so desirable in themselves, and so repeatedly called for by the Conservative party, could have been effected without any risk. As it is, we think the financial position of the country eminently unsatisfactory and unsafe. Not only must we experience a deficit in the year 1864-5, but we are totally unprepared for any untoward contingencies in the present year. The peace of Europe (if peace it may be called) is obviously insecure; hostilities seem impending between this country and Japan; and our relations with the Federal States of North America are such as, unhappily, and from no fault of ours, to render the occurrence of war between the two countries a contingency which cannot entirely be overlooked. But if any exceptional expenditure be forced upon us, how are we to meet it? Under Mr Gladstone's management, the taxation of the country has been so concentrated upon a few articles of universal consumption, and the duty upon some of those commodities (such as spirits) has been so obviously carried to the highest possible point, that to increase the revenue from its present sources would be extremely difficult and unpopular. We cannot reimpose the old duties on wines, silks, gloves, and other articles embraced in the French treaty, for in respect to these we

have sold our freedom of taxation to a foreign power. The paper duties are irretrievably abandoned; for, however impolitic may have been the abolition of those duties in times like the present, their reimposition would be a great hardship and injustice to the manufacturers who have made new arrangements in accordance with the abolition. A few months hence the same will be the case with the Tea-duties. A large increase of the Income-tax, and an issue of Exchequer bonds, are the only means by which we can hope to make head against an emergency. The surplus is merely nominal-the balances in the Exchequer cannot be further reduced, and even the issue of Exchequer bonds can be resorted to only to a small extent, in consequence of Mr Gladstone's repeated postponement of paying off, as they fell due, the amounts already in circulation. Over the term of Mr Gladstone's present financial administration, as over his previous one, the country will yet have to write the words, so damnatory of the reputation of a statesman, Improvidus futuri. In the present aspect of affairs, we begin to think anew of his Budgets before the Crimean War; and we can only hope that the year 1864 will not be like 1854, and that the country will not find itself again in straits and embarrassments like those which proved wellnigh overwhelming ten years ago.

Ir at this moment the questions of Poland and Greece, by their imminence, have stronger claims on our interest than that of Italy, still the interval is by no means unfavourable to inquire into the relations of that country, and answer, if we can, how is it that the Italians have done so much?-why have they not done more? The inquiry obliges us to go somewhat back upon the past few years, but almost centres in the life and intentions of one man, Count Cavour. To that great statesman, who combined within himself qualities the most remarkable and most opposite, all that Italy has acquired is due, and which nothing could have won for her but his mingled sagacity and boldness, his prudence, his patience, his craft, and his audacity.

For years back Piedmont had been the Holland of Neapolitan Whigs. It was there that they wrote, they reasoned, and they conspired. Men of great ability and of great moderation, they never moved, nor advised a move, beyond the strictest legality. They believed that the great motive power of our age was Public Opinion; and to bring that power to bear upon Italy, it was alike necessary to dis

VOL. XCIII.-NO. DLXXII.

abuse Europe of many ancient errors with regard to that country, and to show that it could lay claim to that high place which its traditions, its position, and its population, should rightfully assign it in the first rank of Continental nations.

Travellers and tourists had, unconsciously perhaps, done great disservice to Italy. The immense prominence given in all books on this country to questions of art or antiquity, eventually led the world to regard the peninsula as a great storehouse of things beautiful or curious. They came to it as a land teeming with memories of the past, rich in the most splendid traditions-and, by the colossal remains of great monuments, able to revive that past even to minds the least speculative or fanciful. Such were the claims Italy was supposed to have upon the attention and respect of Europe; and, such as they were, they all referred to a bygone time. None, not the most ardent worshipper of her glorious monuments or splendid galleries, ever thought of speculating on a future Italy. None ever imagined a revival of that great Latin race whose civilisation had once been the day

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star of Southern Europe - -none fancied that, in a word, Italians could be a people and Italy a nation ;-none but one, and that man was Cavour.

Balbi, Gino Capponi, Farini, Ridolfi, and Ricasoli, were each and all men of considerable political eminence. Watching studiously and attentively the course of public events in Europe, they saw what constituted the elements of strength in other lands-what secured liberty, and what increased national wealth. Men of patience and moderation, they took England for their model, and believed that a well-regulated monarchy realised all that men could ask for or expect as a good government. To liberalise the policy of the State they lived in, was then their task; to teach that the age of repressions was bygone that a wide latitude should be given to the expression of opinion—and that men were not necessarily enemies to order who thought it might be maintained with less ostentation of power, or less of cost to those who obeyed it. In this sense they wrote, discussed, and talked, eagerly seeking to make a public willing to lend an ear to such themes, and give a hearing to topics of a more serious interest than usually appealed to Italian attention. Their aim was so to improve the existing Governments of Italy that men who lived under them should enjoy a larger share of personal liberty, and a wider sphere of opportunities of knowledge and of wealth. It is scarcely possible to say what success might or might not have attended their efforts, when the revolution of '48 in France led the way, so to speak, to those excesses, and subsequently to that reaction which for a while dashed the hopes and disheartened the courage of Italian patriotism. Cavour, it is said, had never expressed himself with any confidence as to those reformations of which the Grand Duke in Tuscany or the Pope were the chief leaders. He regarded these princes as men

simply fascinated by an enthusiastic popularity, and not seriously imbued with the principles they professed. He saw, or thought he saw, that what they did they did with a certain fear and misgiving; and that they would never pledge themselves to an extent which left retreat impossible, nor made a liberal policy any other than a mere matter of experiment.

So long, therefore, as Austria held her position in the north, so long must this road of retreat be left open. "Let the Grand Duke be only once led to believe that he has gone too far-that he has endangered his dynasty and perilled his throne and you will see," said Cavour, "how little weight he will give to his pledges. Let him only begin to fear Liberalism, and you will see how soon he will ask for an Austrian occupation." It has often been asserted that the crafty statesman assisted his prediction to a fulfilment, and mainly aided that show of menace which made the timorous Prince insist upon being escorted to his capital by the Imperial troops. It has been frequently declared that Cavour exulted over the discomfiture of Ricasoli and Ridolfi and the others, who, in their indignation, refused now to lend their counsels to a sovereign who had insulted his people so grossly. Cavour had so often insisted on the correctness of his own forecastings that he was not over merciful to those who were now driven to acknowledge their justice. "Fuori i Barbari” had been his watchword for years. Out with the German, was the phrase with which, with little deference to argument, he would meet the statements they made him. He recog nised no other remedy, he would discuss no other cure. "Fuori i Barbari" comprised a policy and a flag. It was alike a great scheme and a popular appeal. It was a code so simple that all could understand it; not like one of those subtle theories of government which require time to consider and