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THREE:Before this, however, the financial statement for the year had been made, and for awhile the Corn Law question was suspended for the country to recover from its astonishment at finding in the Minister of the Conservative party one of the boldest reformers of our tariff who had ever occupied the Ministerial benches. But yesterday his position had appeared one of the greatest difficulty, in which a cautious hold upon the established sources of revenue, with some well-balanced proposals for additional taxes, was all that could be expected. He had not the good fortune of Mr. Goulburn or Lord Althorp in having a surplus to dispose of. The Whig Government had bequeathed to their successors a deficit, which had been increasing from year to year, with a revenue falling off even in the face of new taxes. How[488] was the deficit to be met was the question which filled the mouths of public men; a question which was answered by the famous financial statement of Sir Robert Peel on the 11th of March. After showing that the deficiency for the coming year would be little short of ��2,500,000, and that this deficiency might be expected to be considerably augmented by the position of affairs in India and China, the Minister declared that he would not consent to resort to the miserable expedient of continual loans. He declared that he would not attempt to impose burdens upon the labouring classes, and that if he did, recent experience had shown that they would be defeated. In fact, the country had arrived at the limits of taxation upon articles of consumption. After ridiculing the various suggestions of people who were constantly sending him projects for taxes on pianofortes, umbrellas, and other articles, accompanied with claims of very large percentages upon the proceeds, he acknowledged the principle laid down by financiers that increased revenue may be obtained by taking off the taxes which pressed upon industry, but declared that the first effect was always a diminution in revenue, and that time was found necessary to restore the amount. In these circumstances, he stated what the measure was which, under a deep conviction of its necessity, he was prepared to propose, and which, he was persuaded, would benefit the country, not only in her pecuniary interests, but in her security and character. His scheme was this: he proposed, for a period to be limited, an income tax of not more than 3 per cent., from which he would exempt all incomes under ��150, and in which he would include not only landed but funded property. Sir Robert Peel calculated that the tax would yield ��3,350,000 a year, a sum which, with an addition to the spirit duties in Ireland, and an export duty of 4s. on coals, would not only cover the existing deficiency, but enable him to remit indirect taxes to the amount of ��1,200,000. The sliding scale had brought little credit to the Minister, and the income tax was in its nature an unpopular measure; but the proposal to reduce the custom duties on 750 out of the 1,200 articles in the tariff��to remove prohibitions altogether (in itself a vast concession to Free Trade doctrines)��to reduce the duties on raw materials of manufactures to five per cent. or less��to keep the duties on articles partially manufactured under twelve per cent., and on articles wholly manufactured under twenty per cent., was a scheme which excited general admiration. The measure was, indeed, contested by the Whig Opposition at every stage. The preliminary resolutions were debated for eight nights. There were many of Sir Robert Peel's old supporters who looked on the financial plan with distrust, as being founded, in a great measure, avowedly on those principles of political economy which they had been accustomed to sneer at; but, in truth, it was not unfavourable to the interests of their party. We have already seen that the new tax��at least, if a temporary one��was calculated to impose a far greater burden upon the manufacturing and moneyed class than upon the landowners; in fact, by exempting incomes under ��150 a year, and assessing land only upon its net rental, the burden was imposed almost entirely upon that middle class which was the especial object of the dislike of Tories of the more advanced kind. At the same time, by cheapening articles of general consumption, the Minister did something towards securing popularity among the working classes, who, as exemplified in the Chartist agitation, were not always disposed to take part against the landowners. The Income Tax Bill passed, after considerable opposition in the Commons. An amendment proposed by Lord John Russell was rejected by a vote of 302 to 202, and another amendment, proposing the reading of the Bill on that day six months, having been thrown out on the 18th of April by a vote of 285 to 188, the third reading was carried by a majority of 130 on the 30th of May. No debate took place in the Lords until the third reading, when the Bill passed by a majority of 71.Such were the difficulties under which Congress and Washington had been struggling through this winter to raise and keep together any considerable force; whilst General, now Sir William Howe, had been completely dozing at New York. The first movements of Howe were to execute several detached evolutions, and a vast quantity of stores were destroyed. As a retaliation, the Americans sent Colonel Meigs over to Long Island, to a place called Sag Harbour, where the English had a great quantity of provision stores, which they learned were very remissly guarded. Meigs, who had been trained under Arnold, conducted the enterprise very adroitly. He passed the Sound in whale-boats in the night, landed without much difficulty before the break of day, and began to fire the magazines. He met with a brave resistance from the crews of the merchants' vessels; but, having two hundred men, and there being no soldiers to oppose him, he destroyed twelve of the trading vessels, took ninety prisoners, and returned triumphantly without the loss of a single man. In the meantime, Washington had quitted his encampment at Morristown, and taken up a strong position at Middlebrook, about twelve miles from Princeton. On the 13th of June[238] Howe at last marched out of New Brunswick to attack him. On this, Washington called to his assistance a great part of the troops in the highlands, the whole force of the Jersey militia, whilst Arnold, who had the command at Philadelphia, was actively engaged with Mifflin in preparing defences for the Delaware. The object of Howe was to draw Washington from his entrenchments, certain that, on fair ground, it would require little exertion to totally dissipate his army; therefore, after marching up almost to the American lines, he commenced a retreat, evacuated even New Brunswick, and fell back to Amboy. Washington fell into the snare; he sent a strong force in pursuit of Howe, who, keeping up the ruse, threw a bridge over the narrow strait which divides Staten Island from the mainland, and sent over part of his baggage and a number of troops. Satisfied then that Howe was bent on resuming his old quarters at New York, Washington quitted his camp, which had cost him so much labour to create, and descended with his main body to Quibbletown. On seeing this, Howe advanced again, and dispatched several bodies of soldiers by different routes, to get, if possible, between Washington and his old post on the hills, so as to bring him to an engagement on the plain. Washington instantly became aware of his design, and retreated with all speed. Lord Cornwallis, who led the British van, notwithstanding, managed to come up with him, and fell upon a division of three thousand strong, advantageously posted, and defended with cannon. Cornwallis's charge, however, threw him into confusion, the rout became general, and the British pursued them as far as Westfield, when, coming to a woody country, and the heat of the day being intense, they halted for the night. This halt was the salvation of Washington: it enabled him to regain his old fortified post in the hills, leaving behind him part of his cannon, and about two hundred men killed.