sugar duties (2,000,000l.), took a penny off the income-tax, applied one half-million to the reduction of the national debt by terminable annuities, and another half to the relief of local taxation. He also argued (speech at Liverpool, 25 Jan. 1877) that the surplus was `got up to a certain extent by putting off claims and charges which would ultimately have to be met. His second budget (15 April 1875), which showed a small surplus of 496,873l., was remarkable for the application of an annual sinking fund of 28,000,000l. to the reduction of the national debt. On 7 May and 8 June Mr. Gladstone attacked the idea, because it had `taken a flight into the empyrean,' and implied an annual surplus of 500,000l. until 1905. Northcote, however, carried the sinking fund by 189 votes against 122, and subsequently expressed his belief in the prudence of the step (speech at Edinburgh, 9 June 1881). Professor C. F. Bastable (Public Finance, 1892, pp. 559-60) praises the scheme, but adds that 'it is easy to find plausible excuses for cutting down the sum so fixed. Under Mr. Goschen the 28,000,000l. became, first 26,000,000l., and then only 25,000,000l., a sum which leaves a very small margin over the interest and terminable annuity payments.' In the same year he carried a Savings Bank Bill, which (27 May) he defended against Mr. Gladstone and Professor Fawcett. He was much annoyed by the ministerial blunders in connection with the Merchant Shipping Bill, and on 25 July offered apparently to take a less important office (Life, ii. 81), but Disraeli did not accept the suggestion. Northcote was privately opposed to the purchase of the Suez Canal shares (25 Nov.), on the ground that we `meant quietly to buy ourselves into a preponderating position and then turn the whole thing into an English property.' He defended the transaction, however, at Manchester (7 Dec. 1875), and in the house against Mr. Gladstone (14 and 21 Feb. 1876). The budget of 1876, while remedying a deficit of 800,000l. by an extra penny on the income-tax, placed the line of exemption at 150l. instead of 100l., and took 120l. instead of 80l. off incomes between 160l. and 400l. (speech of 3 April). The financial statement of 12 April 1877 contained little of moment; that of 4 April 1878 acknowledged a deficit of 2,640,000l., mainly due to the vote of credit of 6,000,000l. for military preparations against Russia, and it was met by the issue of exchequer bonds for 2,750,000l. Another deficit of 2,291,000l. in 1879 (speech on 3 April) caused by commercial depression and the Zulu war, produced a formidable impeachment of Northcote's finance by Mr. Gladstone on 18 April (see also Nineteenth Century for August 1879). Northcote, however, defended his policy, which was to throw a portion of the payment upon the following year rather than add to taxation. In the same year he placed a wholesome, though hardly sufficient, check upon local indebtness by his Public Works Loans Bill. On 10 March 1880 he confessed that the revenue had fallen short of the estimates by more than 2,000,000l., and that the fioating debt amounted to 8,000,000l. Of this he proposed to extinguish 6,000,000l. by the creation of terminable annuities to end in 1886. To that end he appropriated 600,000l. from his new sinking fund, but he repudiated (16 March) Mr. Gladstone's contention that he was `immolating' that contrivance.
Apart from finance, Northcote (16 March 1876) delivered a spirited speech in defence of the Royal Titles Bill, and obtained the rejection of Lord Hartington's amendment by a majority of 105 votes. When the rebellion in Herzegovina reopened the eastern question, Northcote thought that the British government on refusing to accept the Berlin memorandum of 18 May should put forward an alternative policy, but he was overruled by his colleagues. At the end of the session, on Disraeli's elevation to the peerage, Northcote succeeded him as leader of the house. At Nostell Priory (26 Sept.) and at Bristol (13 Nov.) he endeavoured to counteract the `Bulgarian atrocities' agitation, and during the following session he made two important speeches on eastern affairs (7 Feb. and 14 May), in the last of which he laid down the government's principle, namely, a strict neutrality provided the route to India were neither blocked nor stopped. Though he entertained grave doubts as to the expediency of Lord Lytton's interference in Afghanistan, Northcote spoke (13 Dec. 1878 and 14 Aug. 1879) in defence of the Cavagnari mission, and of the war entailed by its massacre [see Cavagnari, Sir Pierre Louis Napoleon], He also (31 March 1879) accepted full responsibility, on behalf of the government, for the proceedings of Sir Bartle Frere [q.v.] in Zululand, which also led to war.
In domestic affairs Northcote was much hampered by the beginnings of parliamentary obstruction, as perfected by Pamell and Biggar, in the debates on the South African Confederation Bill. His two resolutions of 27 July 1877 for altering the rules of the house, in the matters of 'naming' and suspending a disorderly member and the suppression of dilatory motions, were followed by the twenty-six hours' sitting of 80 and 31 July. Neither his rule of 24 Feb.
