The domestic policy of the Government was not of much interest in 1863. Very early in the Session Mr. Gladstone introduced his Budget. The American War had sent the price of cotton up from 7d. to 2s. 1d. a pound, and trade was prostrate and stagnant in Lancashire. The agricultural wealth of Ireland from 1856 to 1860 had been, on the average, about £39,437,000[166] a year. But in 1863 it had fallen to £27,327,000--a decrease of £12,000,000, a sum not far short of the established annual valuation of the country, which was but £13,000,000. Ireland and Lancashire ought therefore to have made havoc with Mr. Gladstone’s estimates for the past year. So far from that being the case, the revenue, under the expansive influence of Free Trade, had risen to £67,790,000, or £805,000 over the estimates.[167] The expenditure had been £69,302,000, or £806,000 less than the estimates. For the coming year Mr. Gladstone accordingly estimated a revenue of £71,490,000 on the existing basis. Hence he had in view a surplus of £3,741,000, so that he saw his way to lessen the pressure of taxation on the people. He therefore reduced the Income Tax from 9d. to 7d. in the pound, readjusting its incidence so as to give more relief to small incomes. He reduced the tea duty to 1s. in the pound, and equalised the duties on chicory and coffee, but his attempts to levy Income Tax on public charities and trust corporations were defeated[168] after a somewhat acrid controversy. Mr. Gladstone’s argument was that their corrupt management really deprived most of the rich incorporated charities of a right to an appeal _ad misericordium_. He, however, pressed his point too far. His lurid picture of their administrative abuses tempted people to doubt whether the penal imposition of a sevenpenny Income Tax was the best means of dealing with such gigantic evils. The lamented death of Sir George Cornewall Lewis in April not only brought confusion into the Cabinet, but it deprived the Queen of a valued [Illustration: GENERAL GRANT.] friend, whose services she could ill afford to lose. “To me, dear Lady Theresa,” the Queen says in a letter to Sir George’s widow (15th April), “this is a heavy loss, a severe blow! My own darling had the very highest esteem, regard, and respect for dear Sir Cornewall Lewis; we delighted in his society; we admired his great honesty and fearless straightforwardness. We had the greatest confidence in him, and since my terrible misfortune, I clung particularly to characters like his, which are so rare. I felt he was a friend, and I looked to him as a support, and a wise and safe counsellor. He is snatched away, and his loss to me and to the country is irreparable. How little did I think, when I talked to him the last time here, and he spoke so kindly of my popularity, as he so kindly expressed it, that I should never see his kind face again.”[169] He was leader of “the Court Party” in the Cabinet, and was succeeded at the War Office by Earl de Grey.