336 LAISSEZ FAIRE 4D, oe seriously on the revenues; the deficit in 1838 was about a "million and a half; in 1839 nearly half a million; in 1840 a million and a half; and in 1841 a million and three quarters; and in 1842 more than two millions’. Under these circum- " . ~ - stances it was necessary that financial affairs should be thoroughly overhauled, and this was done by Sir Robert Peel in his great budget of 1842. In imitation of the policy of Pitt, he determined to make a temporary provision for the expenses of government, until the new changes had had time to operate’. With this view, he desired to re-impose an income tax of sevenpence in the pound for a period of five years, so that he might be free to deal in earnest with the reform of the tariff. This was a great task; but it was one for which there had been considerable preparation. The principles on which it should proceed had been worked out in 1830 by Sir Henry Parnell, in his treatise On Financial Reform, and a Select Committee of the House of Commons had considered the subject in 1840% Peel hoped to revive our manufacturing interest, by abolishing or reducing the taxes on raw materials, and half-manufactured goods. For the first two years the expected revival did not occur, but the reduction of import duties continued; in 1845 matters were pressed still further. There was a great simplification of the customs, and the duties on four hundred and thirty articles of an unimportant kind, which produced bus little or 1 Northeote, Twenty Years, pp. 6, 12. 1 Northcote, pp. 17, 61. % This report contains some severe criticism: ‘The Tariff of the United Kingdom presents neither congruity nor unity of purpose; no general principles seem to have been applied. * * * The Tariff often aims at incompatible ends; the duties are sometimes meant to be both productive of revenue and for protective objects, which are frequently inconsistent with each other; hence they sometimes operate to the complete exclusion of foreign produce, and in so far no revenue can of couise be received; and sometimes, when the duty is inordinately high, the amount of revenue becomes in consequence trifling. They do not make the receipt of the revenue the main consideration, but allow that primary object of fiscal regulations to be thwarted by an attempt to protect a great variety of particular interests, at the expense of the revenue, and of the commercial inter- course with other countries. Whilst the Tariff has been made subordinate to many small producing interests at home, by the sacrifice of Revenue in order to support these interests, the same principle of preference is largely applied, by the various discriminatory Duties, to the Produce of our Colonies, by which exclusive advantages are given to the Colonial Interests at the expense of the mother conntry.” Reports, 1840. v. 101. Onder reduced rates