Mr. Gladstone found that Mr. Disraeli, by under-estimating his revenue and over-estimating his expenditure, had left him with a surplus, not of £461,000, but of £2,307,000.[87] Unexpected military expenditure, due to dread of a French invasion, had reduced this surplus to £807,000. The primary feature in Mr. Gladstone’s Budget was the extension of the tax on personal property devised by will to real property, and also to personal property that passed by settlement. This, Mr. Gladstone reckoned, would ultimately bring in £2,000,000, and put him in a position to deal with the Income Tax, which came to an end in 1853. He proposed to continue the Income Tax at sevenpence in the pound for two years, then to reduce it to sixpence, and in three years after that to reduce it to fivepence. He extended the tax to Ireland, but, by way of compensation, remitted the debts which Ireland had recently incurred to the Imperial Treasury. He increased the duties on Scotch spirits from 3s. 5d. to 4s. 8d., and on Irish spirits from 2s. 8d. to 3s. 4d. a gallon, and thus, he reckoned, he had a surplus of £2,151,000 to spend. How did he spend it? He abolished the duty on soap, thereby terminating the last of the taxes on the four “necessaries”--salt, leather, and candles were the other three--which Adam Smith condemned a century before.[88] He reduced the taxes on 256 minor articles of food, besides tea, advertisements, carriages, dogs, male servants, apples, cheese, cocoa, butter, and raisins. He reduced the rate of postage to the Colonies--a reduction which, it is surprising to find, had not been even suggested by Mr. Disraeli or any of his predecessors in the highest of Imperial interests. An ingenious feature in his Budget was his manipulation of the Funds. Old Three per Cent. Consols, which could be paid off at a year’s notice, sold for a little over par, that is to say, £100 of stock sold for a little more than £100. New Three per Cents, however, which were not redeemable for twenty years, sold for £103--_i.e._, £100 of stock was worth in the market £103, the difference of £3 representing the value of the State guarantee to pay interest on the stock for twenty years. Hence, he said, if he gave a like guarantee for some of the unguaranteed stock, he might lay hands on the increment of value thereby added to it for the benefit of the State. He accordingly permitted fundholders to exchange £100 of Consols, or “Reduced Three per Cents.” for Exchequer bonds,[89] or for £82 10s. in New Three and a Half per Cent. Stock, guaranteed for forty years to pay £2 17s. 9d. of interest, or for £110 irredeemable Two and a Half per Cent. Stock. Mr. Spencer Walpole has said [Illustration: PRINCE JÉRÔME BONAPARTE.]