Stansfeld's tenure of this post was cut short by a remarkable incident. During the trial of Greco, early in 1864, for conspiring against Napoleon III, the procureur-impérial of France declared that Stansfeld had in 1855 been appointed 'banker to the Tibaldi conspirators' who sought the emperor's life, and that Mr. Flowers or M. Fiori (one of Mazzini's pseudonyms) corresponded with the would-be assassins from Stansfeld's house, 35 Thurloe Square. On 17 March 1864 the question was raised in the House of Commons, and Disraeli charged Stansfeld with being 'in correspondence with the assassins of Europe.' Stansfeld denied having ever been either treasurer or banker to the Tibaldi conspirators, though he admitted that he allowed his name to be inscribed on banknotes, which he understood were to be devoted to the Italian cause; he did not deny that letters had been addressed to M. Fiori at his house, though he was unaware of it at the time, but repudiated the idea of Mazzini's complicity in the conspiracy. He was defended by Bright and Forster, and Palmerston declared his explanation to be quite satisfactory; the vote of censure was, however, lost by only ten votes, and as it was evident that renewed attacks on him were to be made, Stansfeld sent in his resignation, which Palmerston, after some hesitation, accepted early in April. Henry Crabb Robinson [q. v.], a friend of Stansfeld, thought he gained in public estimation by his conduct (Diary, 1872, ii. 383). On 11 July 1865 he was re-elected for Halifax without opposition, and in February 1866, when Lord John Russell had succeeded Palmerston as prime minister, Stansfeld became under-secretary of state for India in succession to the present Marquis of Dufferin and Ava. Four months later, however, the government was defeated, and the tories took office under Lord Derby.
In Gladstone's first administration (1868-1874) Stansfeld was successively made third lord of the treasury (December 1868), privy councillor (February 1869), financial secretary to the treasury (November 1869), president of the poor-law board (March 1871), and first president of the local government board in August following. Here Stansfeld did his best administrative work, and he retained this post until the fall of Gladstone's government in January 1874.
Stansfeld now obscured his political prospects by devoting himself heart and soul to the movement for the repeal of the contagious diseases acts. In 1879 he was put on a committee of the House of Commons to consider the subject; and when in 1882 the committee reported in favour of the maintenance of the acts, Stansfeld issued a minority report condemning them. He also attacked the conduct of (Sir) George Osborne Morgan [q. v. Suppl.] as chairman of the committee, and Lord Kimberley for defending the system as enforced at Hong Kong. Stansfeld himself was not a member of Gladstone's second administration, and he had in 1880 declined the office of chairman of committees of the House of Commons, on the ground that he had already held cabinet rank. On 16 March 1886, however, the cause which Stansfeld had championed triumphed, and the contagious diseases acts were repealed without a division. On 3 April Stansfeld succeeded Mr. Chamberlain as president of the local government board. Regarding Ireland as an oppressed nationality, he had little difficulty in adopting home rule, of which he remained a staunch advocate to the end of his life.
Stansfeld retired from the local government board on Gladstone's defeat in July 1886. During the session of 1888 he moved various amendments to Mr. Ritchie's local government bill, and in May 1892 he carried the second reading of a registration bill, the further progress of which was stopped by the dissolution at the end of June. Stansfeld was not included in Gladstone's last administration, and he refused the offer of a peerage. Before Lord Rosebery left office in June 1895 he made Stansfeld G.C.B. Stansfeld retired from the representation of Halifax in that month, and on 15 Oct. following was presented with a testimonial from the women of England for his services to morality and female suffrage. He died at his residence, Castle Hill, Rotherfield, Sussex, on 17 Feb. 1898, and was buried at Rotherfield on the 22nd. On the 18th the Italian chamber unanimously passed a vote of sympathy, out of respect for his efforts in the cause of Italian unity. A portrait of Stansfeld was painted in 1870; a sketch from it is given in Stansfeld's 'History of the Stansfelds' and in the 'Daily Chronicle' (18 Feb. 1898).
Stansfeld's first wife died in 1885, leaving one son, Mr. Joseph James Stansfeld (b. 1852), barrister-at-law; and on 22 June 1887 Stansfeld married his second wife, Frances, widow of Henry Augustus Severn of Sydney; by her, who survived him, Stansfeld had no issue.
