duke of Devonshire), was carried by the narrow majority of thirteen. Gladstone voted silently with the government.
Thereupon Palmerston formed an administration. He offered the chancellorship of the exchequer to Gladstone, who accepted it. This was one of the strangest incidents in Gladstone's career, and he felt the necessity of an explanation. Having twice voted in favour of Lord Derby's government, he had immediately taken service with Lord Derby's rival and successor. Not being able, as a university member, to address his constituents, he wrote a long letter on the subject to Dr. Hawkins, the provost of Oriel. No one could accuse him of being an office seeker; he had three times refused office and twice resigned it. There can be little doubt that he felt himself to be the man best capable of managing the national finances, which were by no means in a satisfactory state. To Dr. Hawkins he pointed out that most of the new cabinet, which contained only one radical, Milner-Gibson, were the men with whom he had acted in the government of Lord Aberdeen. But feeling at Oxford was much excited by what appeared to be his permanent enlistment in the liberal ranks, and his seat, vacated by his appointment, was keenly contested. The tory candidate was Lord Chandos (afterwards duke of Buckingham), but he only polled 859 against 1,050 for Gladstone.
Gladstone's first official duty in 1859 was to introduce the budget, which had been unduly delayed by the general election. He had to provide for a deficit of nearly 5,000,000l. He did so mainly by raising the income tax from fivepence to ninepence, the whole of the increase to be paid in the first half of the financial year.
Gladstone's budget next year (1860) was one of his greatest and most memorable achievements. It had been preceded by the commercial treaty with France, which Cobden, holding no official position, had, under Gladstone's superintendence, concluded in the autumn with the emperor of the French. By this treaty, which was to last for ten years, England agreed to abolish all duties on manufactured goods and to reduce the duties on brandy and wine. France agreed to lower her tariff on English goods and to treat England on the footing of the most favoured nation. In his budget speech of 1860, which was a brilliant success, and revived the memories of 1853, Gladstone met the arguments of those who said that a commercial treaty was an abandonment of free trade. He showed that the duties abolished were essentially protective, so that his scheme was in effect the completion of what Peel had begun in 1842, and continued in 1846. The reductions, he said, would have been advantageous to this country even if France had done nothing, and the concessions made by France rendered them doubly profitable. Before closing that part of his great speech which dealt with the treaty, he paid an eloquent tribute to Cobden. The budget also made further reductions in the taxes upon articles of food. It imposed a registration duty of a penny a packet upon imported and exported goods, and a duty of six shillings upon chicory, which was largely used in the adulteration of coffee. An excise license was granted to the keepers of eating-houses, enabling them, for the first time, to sell beer and wine on the premises, and thus affording an alternative to the public-house. The paper duty was repealed. The income tax was raised to tenpence upon all incomes above 150l., and to sevenpence below that amount. To illustrate the effect of his proposals in promoting the freedom of commerce, Gladstone explained that while in 1845 the number of articles subject to customs duties was 1,163, and in 1853 460, it was now brought down to 48. The first opposition to this historical budget was raised on 20 Feb., when Disraeli moved that the assent of the house should be obtained for the treaty before they discussed the items of the budget. Gladstone's reply was chiefly founded on precedent, especially the precedent set by Pitt in 1798. The majority for the government was sixty-three. The next day Charles Du Cane moved an amendment hostile to the whole principle of the financial scheme. But this was defeated by 116, and with one exception the proposals of the budget were now safe. To the bill providing for the repeal of the paper duty a much more serious resistance was offered. It came partly from the manufacturers of paper and partly from the proprietors of the more expensive journals, who were afraid of the competition which it would encourage. But the second reading was carried by a majority of fifty-three, and the House rose for the Easter recess.
On 16 April Gladstone, who had been elected lord rector of the university of Edinburgh, delivered an address on the function of universities, now chiefly interesting as being the first of the kind which he was called upon to give. When parliament met again after the recess a very formidable campaign was opened against the paper bill, and the third reading was carried only by a majority of nine. In a letter to the queen, for which it would be difficult
