It was the Irish question which became at once the most important, and which ultimately caused the fall of the ministry. It was understood that some measures of coercion would be necessary to restore tranquillity in that country, but that they should go hand in hand with measures of reform and relief. As though to render the coming Coercion Bill more palatable, Lord Althorp, on the 12th of February, introduced a Bill for the regulation of the Irish Church. Since the Catholic Emancipation Act the state of Ireland had been becoming constantly worse. Instead of accepting the Act in a conciliatory spirit, O'Connell had used it as a stepping-stone for further demands, and had continued his course of agitation. He had been prosecuted in 1831, had pleaded guilty to holding illegal assemblies, but by the carelessness of the Whig Government he had escaped without punishment. His present demand was repeal, but the outrages which filled Ireland were either agrarian or connected with the tithes; and O'Connell skilfully managed, while by his agitation he continually kept up the discontent, to keep clear himself of any participation in the violence of his countrymen. Of course the repeal of the Union could not be for a moment thought of, but the Government could not deny that the position of the Irish Church and the collection of tithes for its support were real grievances.

In a country of which the population was somewhat over seven millions, there was established a dominant Protestant Church, the members of which numbered 853,000 only. It had a staff of no less than four archbishops and eighteen bishops, many of them with very large incomes, and a body of clergy supported principally by tithes, exacted not only from its own members, but from the six million and a half Catholics. To make matters worse, the tithe was paid by the tenants, and, as the land was infinitely subdivided, in minute sums which rendered its forcible exaction most irksome and ridiculous. In many instances a man's tithe was a farthing, and in some cases not more than seven parts of a farthing. So vexatious and unjust a tax was certain to cause exasperation. In 1831 the collection of tithes became almost impossible; the collectors were murdered, the police who came to their rescue fired upon, cattle driven off that the tithe might not be paid, and the clergy were consequently reduced to such a miserable plight that some of them were actually brought to the verge of starvation. But in spite of the glaring anomaly of the existence of the Church at all, and of the ill-feeling and violence excited by the exaction of the tithes, neither Lord Grey nor Mr. Stanley, his Secretary for Ireland, could bring themselves to think of any wide measure of reform, so great was their dread of touching property or vested interests, or of in any way injuring the Church. In February 1832 committees were appointed to inquire into the system. They reported that the complete extinction of tithes by a commutation or charge upon the land was absolutely necessary. The Irish took this as an authorization of their proceedings; the outrages increased, and a system of terrorism was established, which precluded the possibility of bringing the assassins and rioters to justice. In June the Government had adopted a plan which in fact made matters worse. They authorized the advance of £60,000 to the Irish clergy, who were unable to collect their tithes, and took upon themselves the duty of collecting former arrears, at the same time promising that the tithe commutation should be undertaken. A Bill to this effect was passed, rendering commutation necessary for a term of twenty-one years. Other Bills providing for the redemption of the tithe were unfortunately allowed to stand over to the next session. But Government had now made itself a tithe collector, and was so inefficient in that capacity that it had subsequently to allow that of £104,000 due £12,000 only had been levied, and that with some loss of life.

In the year 1833 a new arrangement was consequently attempted. The whole amount of arrears for the last three years amounted to about a million. This sum the Government proposed should be advanced by an issue of Exchequer bills, to be repaid gradually by a general land tax. As there seemed only too much probability that the land tax would be refused with as great determination as the tithes, most people regarded this sum as a mere gift to the Irish clergy. The Government was, however, able to pass the Bill. The final settlement of the tithe question was postponed for several years; meanwhile the violence which attended the attempts at collecting the tithes were the chief cause of the necessity of the Coercion Bill.

But the tithes, though the immediate cause of the disturbances, were only a part of the whole Church system; it was the Church itself which was the primary cause of the evil, and in the measure Althorp's Irish Church Bill. Feb. 1833. for the relief which was to accompany the Bill for the repression of disturbance, the ministers addressed themselves to lessen the more glaring defects of that institution; but at the same time they were as little disposed to injure the Church as the Tories themselves, and one of the chief objects of the proposed legislation was the improvement of the position of the clergy. It was thought that while the lessening of the hierarchy and the removal of some of the anomalies exhibited by the Church would be pleasing to the Irish, the Church would itself gain strength by the proposed changes. Besides the payment of tithes, a church cess, for the support of the buildings and expenses of the services, was paid indiscriminately by members of all religions, but managed by Protestant vestries. The annates, or first-fruits of livings, had been originally employed for these purposes, but in process of time had almost disappeared; such benefices as were still subject to them were to be now freed, a graduated tax to be laid upon all livings, and with the produce the Church cess was to be extinguished. This was a direct boon to the Catholics. Another common complaint was the disproportion between the number of bishoprics and the Protestant population; it was now proposed to destroy ten of these bishoprics, or rather, as the ministry was careful to explain, not to destroy but to consolidate them with those which remained. The incomes of some of the larger bishoprics were also curtailed; the surplus money thus arising was to be paid into the hands of ecclesiastical commissioners. Thus far there was not much objectionable in the Bill, though the Tories and High Churchmen of England disliked the destruction of so many sees. But there was a further measure, which opened the door to grave opposition. It was proposed to change the terms on which church lands were let so as to improve the position of the tenant without injuring the clergy. The tenant would be willing to pay for this advantage, and the sum thus gained was calculated at between two and three millions. This money would, as the mover of the Bill expressed it, be available for the purposes of the State. This had all the appearance of an act of confiscation, the property of the Church was to be taken and applied to purposes not ecclesiastical. But the Irish Secretary had as strong a view as the Tories of the sanctity of Church property, and the danger of tampering in ever so small a way with the rights of property. It was therefore found necessary by the supporters of the Bill to invent a theory to secure unanimity in the Cabinet; it was argued that the sum derived from the change of tenure did not exist before, but would be created by the present act of the Legislature, that it was therefore not Church property at all, and might be applied to the purposes of the State. The Bill in this shape was introduced by Lord Althorp on the 12th of February. It at once appeared open to objections on two sides. While O'Connell and the Irish scoffed at the relief, which consisted only in removing the church cess, and the English Radicals declared that instead of twelve bishops one was amply sufficient for the needs of the Irish Protestants, the Tories, refusing to recognize the delicate line between Church property and money gained by the Legislature from Church property, raised the cry that it was but a first step in confiscation, and threatened not the security of Church property only, but that of all other property. It appeared necessary to choose between the views of one or the other of these sets of critics, and in spite of his own views, Lord Althorp consented to be governed by the Conservative element in the Cabinet and to withdraw what was called the Appropriation clause. The removal of this clause, which contained the only important principle in the Bill, the right, namely, of Parliament to apply Church property to the wants of the State, rendered it so like a Tory measure, that with the assistance of that party it passed without difficulty in both Houses (July 30).

But three days after the introduction of the Irish Church Bill in the House of Commons, Lord Grey introduced into the House of Lords its complement, the Coercion Bill. Here again the absence of broad liberality in the ministry was apparent. It was conceived in the spirit of the most absolute government, and implied a distinct determination to make no attempt at pacification by liberal concessions. It was the work of Mr. Stanley, the Irish Secretary, a man of great ability and vigour, but without much sympathy for the Irish character, and, as his subsequent career proved, at heart a Tory. There was no difficulty in making out a case for the Bill. A narration of a few of the crimes which had of late filled Ireland with horror made it evident that something must be done. In the province of Leinster alone, in the three months July, August, and September, there had been 1279 crimes, in the following three months the number had risen to 1646. During the year the catalogue of Irish crimes contained 172 homicides, 465 robberies, 568 burglaries, 454 acts of houghing cattle, 2095 illegal notices, 425 illegal meetings, 796 malicious injuries to property, 753 attacks on houses, 280 arsons, and 3156 serious assaults: in all upwards of 9000 crimes connected with the disturbed state of the country. Well might Mr. Macaulay say that he "solemnly declared he would rather live in the midst of many civil wars he had read of than in some parts of Ireland at this moment." It was not the number of crimes alone which rendered them terrible; they were carried on upon a system by which such terror had been excited that it was impossible to get juries to convict even after the clearest proof, or witnesses to give evidence as to what they knew. At the same time, the leaders of the people were teaching them, in public meetings and in assemblies of the so-called Association of Volunteers, to regard themselves as the victims of every form of oppression. To meet such a state of things it was proposed to place in the hands of the Lord Lieutenant, in accordance with the Proclamation Act of the 8th of George IV., 1828, power to suppress every meeting or association which he regarded as dangerous to the preservation of peace, under whatever name it might call itself, and further to declare any district to be in a disturbed state, which was then to be regarded as a proclaimed district; its inhabitants were to be confined to their houses from an hour after sunset till sunrise, the right of meeting and petitioning was withdrawn from them without leave of the Lord Lieutenant, and they were placed under martial law. The Bill further gave power to enter houses in search of arms, forbade the distribution of seditious papers, and suspended the Habeas Corpus in the proclaimed districts. The Bill passed without difficulty in the House of Lords, where it was in harmony with the general feeling. In the Lower House it was introduced on the 27th of February by Lord Althorp, who, while corroborating the accounts of the outrages in Ireland, could not help showing his dissatisfaction at the extreme severity of the Bill. Not so Mr. Stanley, who, with the fiery vehemence which characterized him, turned upon O'Connell, and overwhelmed him with a flood of bitter invective, carrying the House completely with him, and securing the passage of the Bill, which was also most ably supported by Sir Robert Peel and his friends. Its effect was immediate and most satisfactory. Within a week of its passage the Marquis of Anglesey, who had returned to his office on Grey's accession to the ministry, had suppressed the Association of Irish Volunteers, the town and county of Kilkenny were then proclaimed, but so effective was the mere dread of the measure, that it was never found necessary to hold a single court-martial in the district, and within two months there was a decrease of two-thirds in the general list of crimes. A rapid rise in the funds showed that the moneyed public at least were pleased with the vigorous measure.

Mr. Stanley's share in the Bill, the severity of his views with regard to Ireland, and the personal bitterness between himself and O'Connell, rendered his further tenure of the office of Secretary undesirable. He was moved to the Colonial Office, from which Lord Goderich, now become Earl of Ripon, withdrew to accept the Privy Seal, while Lord Durham, who had hitherto held that office, retired from the ministry (March 12). Mr. Stanley was succeeded by Sir John Cam Hobhouse, who however only held the office for two months, and was in turn succeeded by Mr. Littleton (May). The withdrawal of Lord Durham, although attributed and partly due to ill-health, was probably caused principally by the growing divisions in the Cabinet. The Conservative tendencies of the Prime Minister and the severity of the Irish Act were not in accordance with Lord Durham's advanced liberalism. The shortness of Hobhouse's tenure of office may be traced to somewhat similar causes, or at least to the decrease of the popularity of Government. In company with several others he had at the late elections pledged himself to vote for the repeal of the house and window tax. In April the Chancellor of the Exchequer, Lord Althorp, brought in his budget. By careful economy, the abolition of sinecures, and the reduction of the public expenses, he was able to show a surplus of about a million and a half after replacing the deficit of the former year. This surplus he intended to employ in reducing some taxes which he regarded as particularly heavy, such as those on soap, on marine insurances, and some of the assessed taxes. But he impartially refused to listen either to the outcry of the towns for the abolition of the house and window tax, or to the clamours of the agriculturists against the malt tax; he regarded them both as necessary sources of revenue. The carelessness of Government subjected it to a temporary defeat on a subsequent motion for the reduction of the malt tax to one half. Though the defeat caused great irritation to the ministers it was speedily retrieved. A motion against the house and window tax was also brought in, and Lord Althorp, in opposing it, argued that the removal of either tax alone would be an unfair advantage to one or other of the rival interests, and that the removal of both was impossible; he introduced an amendment to the effect that the reduction of the malt tax and the repeal of the house tax would necessitate a general property and income tax, and a change in our financial system. As this amendment was carried, both the taxes were retained; but the ministers could not but feel that they owed their success to the support of their enemies, and the popular indignation was great. Hobhouse, unable to vote against Government, and thus to redeem his pledge, felt it incumbent on him to resign both his place and seat. On appealing again to his constituents at Westminster he was rejected for Colonel de Lacy Evans, a more advanced Liberal. The same thing happened in the cases of Dr. Lushington and Mr. William Brown in the Tower Hamlets and Southwark. A great indignation meeting, attended with some violence, was held near Coldbath Fields, and several great towns passed resolutions to the effect, that the ministers, by violating the constitution of Ireland, refusing to inquire into the public distress, continuing the house and window tax, and by forcing the whole malt tax, already once repealed, upon the nation, had betrayed the confidence of the people.

Thus in all directions the power of the Government was decreasing; they were divided among themselves, and gradually losing the popularity of the country. Yet they were still able to carry out successfully some of the duties they had set themselves to perform; before the close of the session they had renewed the Bank charter, settled the affairs of the East India Company, and completed the emancipation of the slaves.

The last renewal of the Bank charter had been in 1800; since then events of the greatest importance with regard to currency and credit had taken place,—the resumption of cash payments at the close of the war, and the great commercial crisis of 1825 and 1826. It was felt that the system of the Bank required close examination, and in May 1832 a very influential committee had been appointed to examine it preparatory to the renewal of the charter, which came to an end in August 1833. Upon the information gained by this committee the ministerial propositions were based. On the whole it appeared clear that a single bank of issue was better than several competing banks. The Bank was therefore to retain its monopoly. The principle of the Directors, that a third of the value of their obligations should be kept in hand in specie, was considered sound; but that the public might in future have control of the issue of notes, the Bank was required to publish a weekly account of its notes and deposits, and a quarterly average showing its general condition. No other bank of more than six partners, within sixty-five miles of London, was to be allowed to issue paper, while notes of the Bank of England and its branches were made legal tender, except at the bank from which they were issued. It was hoped by this means that country banks, being able to meet their demands with bank notes, would be saved from the necessity of making large and rapid demands upon the Bank of England, and thus dangerously lessening the supply of gold. The whole sum due from the Government to the Bank, and from which that institution derived its great credit, was fourteen millions. This was regarded as too much; it was to be reduced to eleven millions, twenty-five per cent., being at once repaid to the Bank, while to balance its advantages the Bank was to receive £120,000 a year less than hitherto for the management of the National Debt. On these terms the charter was to be renewed for twenty-one years, but with an option allowed to Government for breaking it off on a year's notice after eleven years. The two points which met with the greatest opposition were the terms which the Government had made with the Bank and the compulsory currency given to bank notes. On the first of these points it seemed almost unanimously felt that the Bank had made too good a bargain; on the second it was hastily urged by many that it was a partial resumption of the inconvertible currency. It was shown without much difficulty that this was not the case, as the Bank of England was bound ultimately to meet its liabilities in gold; but even Sir Robert Peel objected to the measure, avowing his fear that it would cause a depreciation of the paper. Experience has proved that this fear was groundless, and although the arrangements with the Bank had subsequently to be somewhat modified, the Bill passed, and was a distinct advantage.

But, if it had been thought well to continue the monopoly of the great banking corporation in England, the whole force of the commercial feeling of the time set directly against the perpetuation of the monopoly of the East India Company. The necessity for corporate trading had disappeared. The restrictions it laid upon free trade had become only so many obstacles in the way of extended commerce. Already, in 1813, this had been so clearly felt that the merchants of the great trading centres, Liverpool, Glasgow, Paisley, and Manchester, had succeeded in procuring the admission of traders to the territories of the Company, and to India generally, but the corporation still retained the trade with China. The accounts of the Company after this renewal of its charter rendered it plain that it could not compete with private merchants. It seemed clear that in China, as in India, the destruction of the monopoly would extend commerce. It was therefore determined to destroy the Company as a commercial body, allowing it to keep its territorial position. After April 1834 its commercial property was to be sold. It was, however, to retain the government of India, and to receive for forty years an annuity from the Indian revenue of £630,000, at the close of which period Parliament might redeem it by the payment of £12,000,000. It was further arranged that all restrictions in the way of the settlement of Europeans in the East should be removed, that natives and Europeans should have equal opportunities of employment and office, and should be under one law. The Bill was vehemently opposed by Lord Ellenborough, but was carried by large majorities, and proved to be the means of opening, in accordance with the principles of free trade, an enormous market for English commerce, so that in ten years the Chinese trade had doubled, and British exports to India and Ceylon had increased from two to six millions.

But the most important measure of the session was the Bill which was passed on the 30th of August for the emancipation of the slaves. The abolitionists had been successful in 1807 in putting an end to the traffic in slaves, but though raised in value and lessened in number, by means of smuggling and of the natural increase of the race the supply of human cattle had been kept up and slavery had continued. The Resolutions of 1823 had aimed at the gradual extinction of slavery, at alleviating its worst horrors, and raising the slaves to a fitting condition to receive freedom; but they had practically been inoperative: not Condition of trade in the West India Islands. only had they been continually thwarted by the planters, but the discovery that they had rights, and that those rights were acknowledged, caused a very natural uneasiness among the slaves, and had added greatly to the difficulties under which the planters laboured. Their position was constantly becoming worse. Injudicious protection had been afforded to sugar, their chief production. Enormous duties had been laid on it, with a preference always to the West Indian and slave-grown article. During the war the monopoly of production had fallen chiefly into their hands. They had been able to make enormous profits. As a consequence, just as in the case of corn in England, the cultivation of the sugar-cane had been carried on in the most reckless fashion. Plantations were temporarily occupied only to be exhausted or sold at a heavy loss, and fresh land taken in. In the midst of this false prosperity, a wasteful expenditure and a total want of economy, the natural consequences of easily-gotten wealth, had become prevalent; the planters as a body had become deeply involved. The cessation of the war had admitted other competitors to the market. The commercial crisis in England had seriously affected the planters' credit, and just as the greatest efforts would have been necessary to restore them at all to their old state of prosperity, their supply of slaves was diminished, it became more difficult to work their exhausted land, and the Resolutions of 1823, and subsequent orders in Council, made the employment of slave labour, which economists had long known to be really an extravagant form of labour, more and more difficult. These evils were naturally attributed to the abolitionists in England and to the Government which had even partially listened to them. As long as the unreformed Parliament existed, the West Indian interest was very strong in the House, and the planters, who believed that with some help from England, and with the management of the slaves left in their own hands, they might yet retrieve their position, were not without hopes. The accession of the Grey ministry was a heavy blow to them, for a large section of the supporters of the Government were almost as anxious for the abolition of slavery as for the passage of the Reform Bill, and it was impossible that a ministry of which Lord Brougham was the Chancellor, who had owed his last election chiefly to the abolitionists' votes, should postpone the settlement of the question long.

With the change in the character of the House all prudential reasons for opposition on the part of the ministry disappeared, and The Emancipation Bill passed. Aug. 30, 1833. the pressure brought to bear upon them had become much stronger. They therefore now undertook the question, and the appointment of Mr. Stanley to the Colonial Office insured the success of the measure. It was not wholly satisfactory to the abolitionists. It still bore traces of the lingering wish for gradual emancipation. All children of slaves born after the passing of the Act, and all children of six years of age and under, were declared free, but the rest of the slaves were to serve a sort of apprenticeship; three-fourths of their time was for a certain number of years to remain at the disposal of the masters, the other fourth was their own, to be paid for at a fixed rate of wages. The complete failure of the Resolutions of 1823 should have taught the Government the impossibility of this scheme. The period of apprenticeship was shortened from twelve to seven years, and subsequently, after a four years' trial, the plan was given up. The second part of the Government scheme was the remuneration of the planters by a loan of £15,000,000; but as Parliament regarded this as much too small a boon, it was subsequently changed for the enormous gift of £20,000,000. The vastness of the sum was held by many as totally disproportionate to the loss of the planters; by others it was thought that, as slavery was in itself contrary to all right, the planters deserved no compensation for the loss of what they should never have possessed. On the whole, however, it was thought better that so great an act of justice should be generously completed, and the great sacrifice was willingly made. Wilberforce, the father of the movement, lived just long enough to bless God that the object of his life had been reached; he heard the success of the second reading of the Bill, and died a few days afterwards, on the 29th of July.

Of the great questions of the day there still remained the all-important one, the condition of the labouring classes, but it was to another Prime Minister and to a modified Cabinet that the honour of the introduction of the new Poor Law was to belong. In spite of their large majorities, no single measure of the Government had been passed without important modifications, no scheme had been introduced that did not bear upon it the marks of compromise, and afford a distinct proof of the inherent weakness of a Cabinet divided against itself. The speech from the throne in the opening of the year 1834 did not give any hope of a firmer and more united Government. The Duke of Wellington was not wrong in complaining that there was no definite promise of a single Government Bill, that the foreign policy of the Cabinet had not produced European peace, that in spite of its majorities the Church policy of the Government had failed, and that it had carefully avoided, even while vaunting the success which had attended it, to state whether it intended the Coercion Bill to be renewed in Ireland or not. Nor was it doubted that he was uttering the opinions of some at least of the Cabinet itself when he warned the Lords against the tendency visible in several of the late proceedings of the Government towards tampering with property and the introduction of the beginnings of the policy of confiscation.

In the Lower House both the strength and weakness of the Government were shortly to be displayed. O'Connell, who had talked so long about the repeal of the Union, and had thus kept up the agitation which was so lucrative to himself, was compelled at length to make good his promises and to introduce a substantive motion for repeal. A lengthened debate followed, but terminated in a most complete victory for the Government; the division showing a majority of 485 in favour of an amendment exactly contradicting O'Connell's motion. The central position occupied by the Government enabled it, when it occasionally joined heartily with one side or the other, still to command the House of Commons, but when questions arose of a more doubtful sort its weakness became visible. Measures for the relief of Ireland had been promised, and Mr. Ward, a private member, determined to bring these promises to a test, by introducing a motion (May 27) with regard to the difficult question of the Irish Church, which the ministers would gladly have left quiet. Mr. Ward's resolution stated that the Protestant Episcopal Establishment of Ireland Ministerial difficulty on Mr. Ward's motion on the Irish Church. much exceeded the spiritual wants of the Protestant population, that it was the right of the State and of Parliament to distribute Church property, and that the temporal possessions of the Irish Church ought to be reduced. This motion put the Government into the greatest perplexity; to uphold the direct negative was to resign its pretensions to be the party of progress; to accept it was to shock some of its most important members. The ministers determined to adopt a middle course, and appoint a commission of inquiry. They hoped thereby to induce Mr. Ward to withdraw his motion, because the question was already in Government hands, but they seemed at the same time to pledge themselves to act in accordance with the recommendations of the commission. Armed with this compromise, Lord Althorp went to the House to meet Mr. Ward's motion. But the seconder, Mr. Grote, had advanced but a short way in the speech when the Chancellor of the Exchequer rose and said, that since the beginning of the debate information had been brought to him which induced him to beg for a postponement. His personal influence was so great that the House at once granted his request. The news he had received was the resignation of Mr. Stanley, the Colonial minister, and of Sir James Graham, First Lord Resignation of the most conservative ministers. of the Admiralty, who regarded any interference with Church property with great abhorrence. They were followed by the Duke of Richmond, Postmaster-General, and by Lord Ripon, Privy Seal. The more conservative members of the Cabinet had thus openly retired from it. It might have been expected that Lord Durham, who had previously left it upon opposite grounds, would have now returned to office, and the Government have assumed a more distinctly radical character. He was, however, personally obnoxious to such members of the party of Canning as still remained in office, and his influence was dreaded by Lord Grey, who, though he continued as yet to hold the Premiership in accordance with the generally expressed desire of the Liberal party, sympathized at heart more with the Tories than with the Radicals. He expressed his feelings in his answer to an address which Lord Ebrington got up intreating him to retain his place. "In pursuing," he said, "a course of salutary improvement I feel it indispensable that we shall be allowed to proceed with deliberation and caution; and, above all, that we should not be urged by a constant and active pressure from without to the adoption of any measures the necessity of which has not been fully proved, and which are not strictly regulated by a careful attention to the settled institutions of the country both in Church and State. On no other principle can this or any other administration be conducted with advantage or safety." No difficulty was found in filling the vacant places; Mr. Spring Rice, who had distinguished himself in the debate on the Union, became Secretary for the Colonies, and Lord Auckland succeeded Sir James Graham.

Under Lord Grey's leadership the Government was enabled to continue its course, because it was recognized at the time as the only possible Government; the Conservative feeling in England was far too strong to allow the success of a Radical Government with Durham at its head. On the other hand, on the great questions of the day it was impossible to go back. Sir Robert Peel clearly understood this position of affairs. He saw that a Tory Government would have no hope of permanence if it rested only on the support of the extreme members of the party. If the party was ever to be reconstituted it must loyally accept the changes which had been made, admit within its limits the more conservative-minded of the reformers, and take its stand on the great Conservative instincts of the nation—the love of the State Church, and the dread of any attack upon property. For the formation of a Liberal Conservative Government the time had not yet arrived, and the present Government of compromise was therefore allowed to continue. But the difficulties of the Premier, from the divergence of his opinions from those of his colleagues, soon became overwhelming. It was necessary to determine whether the Coercion Bill should be renewed or not. But it was possible to renew it in a softened form, and to omit the most objectionable parts—the suppression of the right of petition and the establishment of military courts. Such a course seemed advisable to Mr. Littleton, the Chief Secretary, and recommended itself also to the more liberal members of the Government, Lord Brougham and Lord Althorp. The mischievous activity of Lord Brougham led him to suggest to the Lord Lieutenant, Lord Wellesley, who had succeeded Anglesey, the advisability of officially informing the Government that he could do without these stringent clauses. Wellesley had already expressed himself privately to the contrary effect, but was overpersuaded, and followed the advice of Littleton and Brougham in his official despatches. These contradictory opinions from the chief of the Government were naturally very embarrassing to Lord Grey. To make matters worse, Littleton had attempted a personal reconciliation with O'Connell. Lord Althorp had known and approved of this step, but had warned Littleton against making any pledges. The Secretary unluckily allowed himself to be drawn into an admission that neither himself nor the Lord Lieutenant nor Lord Althorp approved of the renewal of the obnoxious clauses. To complete his blunder, he did not inform Lord Althorp what he had done, and trusted to a promise of secresy on the part of O'Connell, the most untrustworthy of men. So strong was Lord Althorp's opinion on the subject, backed as he believed it to be by that of Wellesley and of Littleton, that after being outvoted in the Cabinet, he in fact tendered his resignation, but was overruled by Lord Grey.

On the 1st of July the Premier introduced the Bill in its full form, asserting, as from Wellesley's private letters to him he had a right to assert, that it was considered necessary by the Irish Government. On this, O'Connell, forgetful of his promise, disclosed in the Resignation of Grey's ministry. July 1834. Lower House his conversation with Littleton, which was in fact a direct contradiction of Lord Grey's assertion, at the same time implicating Lord Althorp in the deception played upon him. The Government seemed convicted not only of internal division, but of duplicity. Lord Grey reiterated his assertion in the Upper House with regard to the feelings of the Irish Government as expressed to him, while Lord Althorp admitted that he disliked the clause, and that Mr. Littleton was justified in telling O'Connell that the question was unsettled at the time of their conversation. The divergence of opinion in the Cabinet was thus fully brought out, and Lord Althorp was made to appear as guilty at once of having held out false hopes to O'Connell, and of having waived his own opinions for the sake of retaining office. Nothing could have been more alien to his nature than this charge, especially as, far from having really pledged himself to O'Connell, he had particularly warned Littleton against committing himself. But there seemed no way of escape without rendering still more glaring the weakness of the administration. On this ground, Littleton's offer to resign, which he felt in honour bound to make, was rejected; but, when in their eagerness to embarrass Government the Opposition moved for the production of the private letters of the Cabinet, Lord Althorp, in disgust at his equivocal position and at the attempted introduction into Parliament of matters which he held to be wholly beyond its jurisdiction, determined to resign. Lord Grey, by no means wedded to office, and feeling that Althorp's personal influence was the main security of the Government, at once declared the administration at an end. The King had already shown, when giving an answer to an address from the Bishops, a strong feeling against any attack upon the property of the Church. This known division between the sovereign and his advisers, and the evident weakness of the Cabinet itself, rendered the resignation of the ministry less surprising than it otherwise would have been.

Seeing the impossibility of forming a distinctly Tory ministry, the King was persuaded by Lord Brougham to send for Lord Melbourne, whom he instructed to give effect as far as possible to his previously expressed wishes, and to form a combined ministry, admitting to office some Tories and some of those who had left office on Conservative grounds. The attempt was fruitless. Peel did not yet see his desired opportunity, and foreseeing the gradual reaction which must arise from the unsatisfactory character of the Whig administration, determined to await his time. The King was therefore compelled to consent to the reconstruction under Melbourne of the old ministry. There was very little change in the construction of the Cabinet. Lord Melbourne's own place in the Home Department was filled by Lord Duncannon (Ponsonby), Sir John Cam Hobhouse obtained a seat in the Cabinet as First Commissioner of the Woods and Forests, and Lord Carlisle surrendered the Privy Seal to Lord Mulgrave.

The change, such as it was, did not add to the strength of the ministry. The introduction of the Coercion Bill on the 18th of July, without the stringent clauses, seemed a confession that some of the ministers at all events were acting contrary to conviction, or that they had weakly yielded to Irish clamour. The Bill was however passed with a strong protest in the Lords. An attempt on the 29th of July again to settle the tithe question displayed still further the inefficiency of the ministry; they allowed themselves to be beaten in the Lower House upon an amendment of O'Connell, who, instead of the proposed land tax, suggested the immediate payment of the tithes, diminished forty per cent., by the landlord. In spite of their defeat, which so completely changed their Bill that out of 172 clauses 111 had to be removed, Church policy of Melbourne's ministry. they proceeded with it, but suffered a heavy defeat on the second reading in the Lords. Their Church policy was indeed throughout entirely ineffective. The feeling that the Church was in danger had begun to take hold not only of the Lords, who systematically resisted innovation, but of the people in England. The efforts of the Dissenters, excited to demand religious equality by the success of Irish agitation, were fruitless. Their petitions were indeed of a character to cause some fear. They begged for the separation of Church and State, for the exclusion of Bishops from Parliament, for the admission of Dissenters to all the privileges of the universities. On this last point a Bill was introduced. Largely signed petitions were sent in against it by the universities. All the leaders of the Conservative, or partially Conservative party, combined to oppose it, and though it passed the Lower House it was rejected in the Lords (Aug. 1). In the same way the efforts of Government to relieve Dissenters from the Church rates, and from the restrictions laid upon the right of dissenting ministers to celebrate marriage, being all conceived from a Church point of view, and assuming the form of concessions rather than the granting of rights, were distasteful to the Dissenters themselves, and came to nothing. The plan for the commutation of the English tithes met with the same fate. It was indeed a period of general ecclesiastical excitement; the introduction of the appropriation clause in the Irish Tithe Bill had closely touched the feelings of English Churchmen; the nature of the Church as distinct from an institution founded by and connected with the State began to be examined. A party in Oxford undertook to enlighten the nation upon the character of the Church in a series of tracts, which gained for the authors the title of Tractarians. In these they urged with great force all the tenets of what is now known as the High Church party—the doctrine of apolostic succession, the sole efficiency of the sacraments, the sacred nature of the priesthood, and the insufficiency of the Bible as apart from the explanations of Church tradition. Their principles rapidly spread. At the same time the Evangelical party lost several of its chief leaders and began to decline. And though three parties could still be traced, public opinion began to divide itself chiefly between the two great views of those who regarded the Church as an institution independent in itself, and beyond the reach of secular interference, and those Liberals who, attached as they might be to the Church as a political institution, regarded it as lying within the sphere of politics.