Cabinet. We were to have talked about Irish education, but more important matters intervened. There is a motion on Friday of Mr. Davenport's for a Committee on the internal state of the country. Peel thinks there will be a union of parties in favour of it. He feels it must be opposed. Some of the friends of Government have said they must vote for it. He proposes that Goulburn should to-morrow give notice of his intention of explaining his views as to taxation on Monday week. Peel thinks that he can procure an adjournment of the debate till after Goulburn's expose.

Goulburn suggests taking off the whole of the beer tax, and remitting the hop duty for this year, as well as remodelling it. He likewise proposes lowering the duties on East and West India sugar, the former from 37_s_. to 25_s_., and the latter from 27_s_. to 20_s_.

As the revenue is decreasing, these reductions cannot be taken from it.

There must be a commutation. This he proposes to be a modified property tax, to apply to landed property, all fixed property, and the funds as well as all offices, but not to the profits of trade.

_March 2._

There seems to have been some incivility last night on the part of Sir Charles Burrell and Sir E. Knatchbull against me, with reference to my opposition to the Duke of Richmond's motion on the wool question last year.

_March 3._

Peel's. Met Bankes, Graham, and Ashley. It was, after talk, agreed that the papers asked should be refused, unless in the course of the debate it should appear that the granting of Grant's pet.i.tion and the report of the Privy Council would improve the division. I expect a regular attack upon myself from all quarters. I would give a year of the House of Lords to be there to throw grape-shot amongst the small lawyers.

Cabinet room. Read despatches relating to the expedition to Algiers, which is certainly going.

Cabinet dinner at Peel's. The affair of the vacated offices becomes serious, for it seems certain that it is necessary to take the declaration again upon any new patent, and the Board of Admiralty should have taken the declaration as well as Castlereagh--the Board of Control as well as me.

The Chancellor continues to have no objection to reducing the salaries of the Supreme Court Judges.

_March 5._

Chairs at 11. I got rid of them as soon as I could, as I wished to go to the Committee.

Loch showed me a letter from Lord William Bentinck, by which it appears that the officers of the Cawnpore division of the army wished to have a general meeting for the election of delegates to England. Sir J.

Whittingham forwarded their request to Lord Combermere, highly disapproving of it. Lord Combermere directed the Adjutant-General to write a letter coinciding with Sir J. Whittingham's opinions, and adding that he would be the advocate of the army both in India and in England. Lord William (Bentinck) is going up the country with the _Government_ and wishes to take Lord Dalhousie with him. He expects very uncivil treatment, and says the discontent is deep-seated. The same account is received from other quarters.

The debate was adjourned last night. R. Grant made a speech in a moderate tone, but disingenuous. Lord Ashley spoke good stuff apparently, but Henry says he could not hear him. Lord Graham was unembarra.s.sed and did well; but the 'Times' hardly gives him ten words.

I sent a note to Peel to-day observing upon the disingenuousness of Grant's speech. He told me he had been reading the papers, and saw it was no question of judicial independence, but of judicial aggression, and he thought the tone of the Governor who was in the right much better than that of the Judge who was in the wrong. So I hope he will make a good speech.

_March 6._

Read letters from Sir J. Macdonald. They came by Constantinople. The only news they contain is that the Russians certainly have the intention of conquering Khiva and Bokhara. This comes from Chasanes Murza. I told the Duke, who seems disposed to make it an European question.

I showed the Duke a most atrocious libel on royalty which has been published in the 'Calcutta Gazette.' If the King saw it he would recall Lord William by the Sign Manual. A letter must be written immediately in the press. It is in such a state that our Government cannot stand if it be permitted to go on uncontrolled.

I asked the Duke as to taxation. He said he thought it could be done without income tax. To lay on income tax would be to weaken ourselves in the opinion of all foreign Powers. Besides, it would prevent our reducing the Four per Cents.

He calculated the loss of the beer duty at 3,500,000. and, marine insurance, cider, remission of hop duty, &c., would make the loss 4,500,000.

To meet this he expected

Surplus of last year 1,700,000 Additional from general improvement 400,000 Additional malt by reducing beer duties 500,000 Increased duty on spirits 500,000 Reducing Four per Cents 750,000 Savings 1,400,000 Ireland, soap, &c. 450,000 Stamps 200,000 --------- 5,900,000 4,500,000 --------- 1,400,000

There may have been more; but he spoke, and I write from memory.

I told him I thought that with a diminished duty on beer and an increased duty on spirits he could not expect an increase of 500,000 on spirits. He admitted that was the weak point. He said he was sure we could not carry an income tax while we had a million surplus. If we have a good harvest, I have no doubt the increase on malt will be great; but I apprehend there must be a repayment of beer duties, and if there should be, the loss will be enormous.

_March 8._

Sent Mr. Elphinstone a letter giving an account of the travels to the North of the Paropamisan range into Cabul.

The Duke said we really must look out for a new Governor-General. I suggested Hardinge. He said Hardinge had not as yet station enough in the opinion of the public, in the army, or in Parliament. He wished him to be Secretary in Ireland. It would have been much better if he had gone there instead of Lord F. Gower, and Lord P. to the War Office. To be sure, then we should not have had the reductions Hardinge had effected. He had, as I knew, always wished Hardinge to go to Ireland.

I observed that Hardinge was rising every day in public estimation, which the Duke acknowledged, and I added that I was sure none would do the duty better, for he had firmness and habits of business. The Duke seems to think of Elphinstone. He said he was a very clever man. I told him I had been an hour and a half with Elphinstone last night. I told the Duke all my notions respecting individual responsibility, members of Council, &c., and that I had begged Elphinstone to think of them. The Duke seemed generally to approve of them. It seems Lord Wellesley never would go to Council. I do not wonder at it; but the Duke used to tell him he was Governor-General _in Council_--that he ought always to go there.

_March 10._

Dined with the Duke. Cabinet dinner. Only the Peers there. The others detained by Lord Palmerston's motion on Portugal, on which there was a majority of two to one, 150 odd to 70 something. Huskisson made a very bad dull speech. We talked about a successor to the Speaker. They seem to think he will not resign now, as he would not get a good pension in the present temper of the House.

The candidates are Sir J. Beckett, Littleton, G. Bankes, Wynn of course. I mentioned Frankland Lewis as a good man, which he would be. I dare say the Chairs will think he should be elected unanimously.

It seems there must be a Bill of Indemnity for not taking the declaration, two Bishops, Chester and Oxford, not having taken it. The Duke finds he has at Dover, as Lord Warden.

We had some little conversation about the income tax, which the Duke is very hostile to, and I am glad we shall not have it.

_March 11._

The Russians have at last sent their reply to our expostulatory note. I have not had time to read it. Lord Heytesbury calculates that the last war cost them 12,000,000, but they endeavour to conceal the amount.

Peel told me the House was quite excited against the Bombay judges, and that the division fairly represented its real opinion.

_March 12._

There was but one black ball in the election of Lord Clare, and the Chairs think that was put in by mistake; no one objected.

_March 13._

Read Sir H. Parnell's pamphlet on taxation.

Cabinet room at two. I had only got half through the Russian answer when the Cabinet met for the subject of taxation.

I rather expected to find that the Duke had had communications with Goulburn, and that the idea of a property tax was given up. However, that seemed not to be the case. It was determined the whole beer duty should be given up in any case.

The expected revenue 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, 3,200,000, 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.