The Treaty, along with the changes in taxation which it would involve, was explained by Mr. Gladstone in the House of Commons on the 10th of February. His Budget estimates showed a deficit of over £9,000,000, to meet which he not only continued the tea and sugar duties, but levied an Income Tax of 10d. in the pound on incomes over £150 a year, and 7d. on incomes under that amount. One part of his scheme was to abolish the Paper duty, but in this he was thwarted by the House of Lords. The French Treaty compelled him to lower the duty on French spirits and wines, and to abolish duties on manufactures not subject to excise in England. He struck 370 articles out of the Tariff list, and reduced and readjusted those that he retained, which were forty-eight. “The whole of our recent fiscal history,” according to a high authority on financial questions, “is a complete vindication of the policy of remitting and reducing duties, so that nothing should remain on the tariff which did not contribute a substantial sum to the revenue, and in order that it might do so, should bear no duty high enough to preclude its passing into general consumption. By the remissions of 1860 that ideal was nearly attained. As an example of how the remissions worked, I may mention that the imports of French wines increased at once by 127 per cent. on the reduction of the duty. On the whole of the articles on which the customs duties were repealed in 1860 the immediate increase on the import duty was 40½ per cent., although the year 1861 was in some respects a highly unfavourable one in which to judge of the purchasing capacity of the nation.”[60] This brilliant and successful policy, however, was opposed bitterly by the Tories and a few Peelites, like Sir James Graham; and some Whigs, like Lord Clarendon, [Illustration: THE ROYAL EXCHANGE, MANCHESTER.]