therefore reduced to the alternative either of accepting it as it stood, or of refusing to concur in any provision for the public service of the year. This masterly stroke succeeded. Although the removal of the tax was finally carried in the House of Commons by the small majority of fifteen, the lords did not venture to interfere, and on 7 June they adopted without a division the customs and inland revenue bill, which included the abolition of the paper duty. From this time date the cheap press and the publication of penny or halfpenny papers.
The excessive expenditure of which Gladstone complained was mainly due to the large sums which Lord Palmerston demanded for the fortification of the coasts and of the seaports. Against these heavy grants Gladstone more than once protested, and his protests went to the verge of resignation. He agreed rather with Cobden than with his chief; and when the subject was under discussion his absence from the house was observed.
The budget of 1862, introduced on 3 April, was comparatively prosaic. The civil war in America and a succession of bad harvests had interfered with the growth of the revenue, and no great remission of taxation was possible. Gladstone, however, repealed the hop duty, a very unpopular impost, and substituted for it a readjustment of brewers' licenses, which made the larger brewers pay more, and the smaller brewers pay less. He also modified the scale of the wine duties, giving a further advantage to the light as against the strong sorts of wine. It is to this budget and to the budget of 1860 that is due the name of 'Gladstone claret.' To this budget there was little opposition.
An unfortunate utterance, in some respects the most unfortunate of Gladstone's life, was made in a speech at Newcastle on 7 Oct. He then said that Jefferson Davis, leader of the confederate rebellion, had made an army, had made a navy, and, what was more, had made a nation. He also expressed his opinion that the reunion of the north and the south, as a result of the war, was impossible. These views were held at the time by the vast majority of the upper and middle classes in England, though the working classes, who suffered most by the war, never subscribed to them. The prophecy, however mistaken, was repeated in even stronger terms by both Lord Russell and Lord Derby in the following year. It has to be remembered that the war was not ostensibly begun for the extinction of slavery, but for the maintenance of the union, and that even Lincoln declared himself at the outset to be no abolitionist. But it was really against slavery that the troops of the north fought; and in 1867 Gladstone had the manliness to avow that he had entirely misunderstood the real nature of the struggle.
On 15 April 1863 Gladstone, for the first time, supported the burials bill, then in the hands of Sir Morton Peto [q. v.], which proposed to give dissenters the right of being buried with their own ceremonies in the parish churchyards [see Morgan, Sir George Osborne, Suppl.] The next day, 16 April, Gladstone brought in his annual budget. There was a large surplus, and Gladstone was enabled to take twopence off the income tax, reducing it to sevenpence in the pound; he also raised the limit of partial exemption from incomes of 150l. to incomes of 200l. a year, and he abolished the penny a packet duty on registration, which he had himself imposed in 1860, but which had proved a failure; he also lowered the tea duty from seventeenpence to a shilling. So far the budget encountered no opposition, though a proposal to license clubs was withdrawn. But another proposal, to remove the exemption from income tax enjoyed by charitable endowments, excited a furious controversy. On 4 May Gladstone received the largest deputation which had ever waited on a minister. It was headed by the Duke of Cambridge, and attended by both the archbishops as well as by many bishops, clergymen, and philanthropic laymen. Gladstone declined to argue the matter with them, and reserved what he had to say for the House of Commons the same evening. Upon that occasion he delivered what has been described by competent judges as the most convincing piece of abstract argument ever addressed to a legislative assembly. He pointed out that the exemption was not really given to charities, but to charitable bequests, which, as they did not take effect till after the death of the testator, were not really charity at all. Every penny given by a man to charitable objects in his lifetime, though it might involve not only generosity but privation, was taxed to the uttermost. He asked whether it was right and just that parliament should specially favour wills which might endow a charitable institution and leave the testator's family destitute; he asserted that an exemption from a tax was a grant of public money, and he denied the moral right of parliament to grant money without retaining control of it. No serious attempt was made to answer this speech. But it had no effect upon the house; no independent member on either side supported the chancellor of the ex-
