§ MR. CRAWFORD said, he rose to ask the question of which he had given notice: but he would first say that he thought he had reason to complain of the manner in which his name had been mentioned by the hon. and learned Gentleman. Because he happened to sit upon that (the Ministerial) side of the House it was assumed by the hon. and learned Gentleman that on undertaking a public duty he would cast aside all sense of duty to the public and become a blind follower of the views of 2079 the Government. He thought the hon. and learned Gentleman had no right to take that great liberty. The reason he had been placed on the Commission was that he happened to hold a public position in connection with the City of London; perhaps a further reason was that he happened to be a director of the Bank of England; and the business of the Court of Chancery with the Bank of England would form one of the subjects of inquiry. The hon. and learned Gentleman, from his forensic eminence, might, perhaps, look down on him with contempt for presuming to take part in any inquiry into any matter connected with the Court of Chancery; but he should now proceed to the question of which he had given notice, and he would explain, in as few Words as possible, the reasons that had induced him to bring it forwards The legislation of last Session introduced great changes into the mode of levying the duties on wines. Instead of a fixed duty of 5s. 3d. on all wines imported, without reference to quality, a duty of 3s. per gallon was imposed on all wines until the 1st of January, from and after which period a scale of duties was levied, graduated according to the quantity of proof spirit each sort of wine contained. Wines were divided into four classes; on those containing less than 18 per cent of proof spirit the duty was fixed at 1s. per gallon; above 18 per cent and less than 26, 1s. 9d. per gallon; above 26 per cent, and under 40, 2s. 5d.; and above 40, and under 45, 2s. 11d.] per gallon. Now, when the right hon. Gentleman the Chancellor of the Exchequer introduced his proposal to the House, many hon. Members, himself among the number, expressed a strong opinion that the system was erroneous in policy, and would be found inconvenient and impracticable in operation. He had reason to believe that in every respect those predictions had been fulfilled. Not only had great inconvenience been felt, but there was much inequality in the mode of assessing the quantity of proof spirit the wine contained. He knew that in the last two or three months the Chancellor of the Exchequer had received innumerable communications from persons engaged in the wine trade in the City of London, pointing out in detail the manner in which the merchants suffered from the unequal and inequitable mode in which the quantity of proof spirit in wines was ascertained. He (Mr. Crawford) had copies of some of those letters, and he would refer 2080 to one or two of them. A friend of his, for instance, wrote to tell him that on a recent occasion he received an order for a quarter cask of wine, but not having a quarter cask by him at that moment, he transferred a hogshead of wine into two quarter casks, and sold them to two different individuals. But he found that he had to pay on the one quarter cask a duty of 2s. 11d. and on the other a duty of 2s. 5d., so that the same wine, out of the very same cask, and tested by the same scale, was charged at those two different rates! Why, the difference between those two charges was all the difference between a profit and a loss on the sale of the wine, and he would put it to any one whether business could be carried on under such a system as that? He could produce many other instances of the same kind; he could show how wine in one port had been charged with one class of duty, and that the same wine in another port had been charged with a different duty. If the Chancellor of the Exchequer called on him to do so, he could produce within one day not less than a hundred instances of the same wine having been tested in the same place, or in different places, by the Custom House authorities, and found to be of different strength, according to the places where it was tested. The right hon. Gentleman had informed some gentlemen who had referred to him, that difficulties might reasonably be expected at the commencement of a new system; but what he complained of, on the part of the wine trade, was this—that the process of testing wine to assess the duty was a difficult one, of a highly scientific kind, requiring great chemical knowledge and skill in manipulation to arrive at proper results. And the effect upon the trade of a variation in those results was important. All wines containing less than 18 per cent of proof spirit were chargeable with 1s., and all wine of more than 18 per cent up to 26 per cent was charged 1s. 9d. Now, he could mention some instances at that moment in which the same identical wine had been found to contain 17 9–10 per cent at one time, and 18 3–10 at another time, and although in that case the difference was only a few tenths in the proportionate quantity of proof spirit, it might affect the amount of duty payable to the extent of 9d. a gallon. He had seen a letter from a highly scientific gentleman, who had been employed to make a chemical analysis. That gentleman said that a 2081 sample of wine was brought to him on the previous evening, with a request to have the per centage of alcohol in it accurately determined by noon on the following day. He commenced with it that morning at ten o'clock, but found it would be impossible to obtain a satisfactory result by the time required. So that the operation required could not be performed by a scientific man within three hours. Now he (Mr. Crawford) had visited the Custom House, and seen the process going on there, and he knew that at the Custom House they boasted that they could do it in ten minutes. And so they might; but then it was done with such precipitancy as to cause the numerous errors and different results of which he now complained. Another grievance inflicted on the wine trade was this—When the system was first established, a wine merchant could ascertain at the Custom House what was the particular strength of the wine on which he had duty to pay, and he was told that it contained of proof spirit so much per cent. But in consequence of the numerous reclamations then made, and to put an end to those opportunities of showing the mode in which this business at the Custom House was performed, this information was now withheld, and the person was simply told that his wine was in class A, or class B, or class C, and that he must pay so much duty; but if it were returned under class A he could not tell whether it contained 18 or 26 per cent of spirit. The consequence was that the merchant was unable to advise his correspondents abroad how to deal with the wine in future, because he could not get information as to the quantity of spirit it contained. Now, for all these inconveniences there was, in his opinion, but one remedy, and that was to return to a fixed duty on wine of all qualities and descriptions. He apprehended that the right hon. Gentleman, the Chancellor of the Exchequer, did not yet concur in that. But he still hoped that his right hon. Friend would be induced to alter his judgment; for he could assure him there was such an amount of dissatisfaction in the City on this subject that it would be necessary for himself, if no other Member did it, to take the sense of the House on this subject during the present Session. He was convinced that, however satisfied the right hon. Gentleman, the Chancellor of the Exchequer, might be with the process as now carried on, it would be utterly impossible to continue 2082 this system of assessing the duty. Some gentlemen in the City, who had forwarded a complaint on this subject, were informed in reply that the Chancellor of the Exchequer "differed entirely from their views as to the alcoholic test, and that Her Majesty's Government had every reason to be pleased with its operation." What, he asked, could the pleasure consist in? If they took results they would find that wine was sometimes charged more sometimes less than the proper duty. Surely the Government could not be pleased at a loss of revenue; nor could be suppose they were pleased at having made an overcharge. People in the City looked, he must repeat, to only one remedy—an abandonment of the present system. But they had been told that under the French Treaty there would be a difficulty in charging wines at an uniform rate, since the French could claim, under the Treaty, to import their wine at a duty of 1s. a gallon. Well, if any difficulty arose under the French Treaty he should regret it; but the amount of wines paying only 1s. that came from France was very small in proportion to that which came from France paying a higher duty. He apprehended that an uniform duty of 1s. 6d or 2s. would be sufficient for all purposes: it would secure the Chancellor of the Exchequer a fair revenue, and would not be found, taking the French wine growth as a whole, to press unfairly or unduly on the wine interest in France. Another necessary consequence of the differential duties was that the privilege of bottling in bend in the private cellars had been withdrawn. This caused the wine merchant inconvenience and loss, especially in the case of many delicate and variable descriptions of wine, such as the valuable sherries which were bottled for exportation to the East. They must now be bottled at the docks, with much less care and supervision than if it were done in the merchant's own cellars. For these reasons, without anything like a threat, he must say that the wine trade would not be satisfied to leave things in their present state, but would press the House of Commons to review its decision of last year, and to place the wine duties on a permanent and satisfactory footing, by the establishment of an uniform rate. He would, therefore, beg to ask the Chancellor of the Exchequer, whether Her Majesty's Government intend to propose to Parliament a compliance with the prayer of the wine trade for an uniform duty on foreign 2083 wines, or whether they intend to adhere to the principle of classification by means of the alcoholic test at the different rates now in force of 18, 26, 40, and 45 per cent of proof spirit by Sykes's Hydrometer? Also, whether he has any objection to lay upon the table of the House a copy of a memorial addressed to the Lords Commissioners of Her Majesty's Treasury on the 7th instant, by Mr. Sandiman, on behalf of a public meeting of the wine and spirit trade?
§ SIR HUGH CAIRNSsaid, he wished to explain that he had not intended to say a word that could be considered disagreeable by the hon. Gentleman. He had referred to the hon. Gentleman being a supporter of the Government only for the purpose of suggesting that it was convenient that the Committee who had to take such a question into consideration should be taken from both sides of the House.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that before giving a reply to the hon. Gentleman who spoke last on the subject of the wine duties, he would advert to the other topic which had been opened by the hon. and learned Gentleman (Sir Hugh Cairns)—namely, that of the Suitors' Fund in the Court of Chancery. He had not heard from any quarter, except from the hon. and learned Gentleman and from a question put by the right hon. Gentleman, the Member for Buckinghamshire, any of those alarms which had acted so powerfully on their minds, and he was, indeed, sceptical as to their prevalence. He was not conscious of having any such longing after the Chancery Fund as the hon. and learned Gentleman had suggested, nor did he know that any Chancellor of the Exchequer had ever had such a longing. His feeling was entirely of a different description as regarded judicial funds; for whenever any defalcation took place in them recourse was always had to the Chancellor of the Exchequer to replace them. A burnt child dreaded the fire, and it had been his unfortunate lot to ask the House six or seven years ago to vote between £60,000 and £70,000 for the purpose of making up a defalcation in a judicial fund—namely, that of the Court of Admiralty. Then, when they complained of the insufficiency of the arrangements under which such funds were managed, they were told that judges were not financial officers, and that it was the fault of the State and the House of Commons for not having taken wiser measures to pre- 2084 vent these defalcations. In point of fact, it was the State which was ultimately liable for all these funds; that, at least, was the practical working of the system. Therefore, although with respect to the possession of the funds he, as Chancellor of the Exchequer, entertained no such feeling as the hon. and learned Gentleman evidently supposed, yet he could not help confessing that he did feel great anxiety that the management and security of them should be placed in the best position, and that he felt it his duty in the office which he had the honour to hold, to provide against a recurrence of any such disagreeable incidents as that to which he had just referred. With respect to the appointment of the Chancery Funds Commission, he wished it to be distinctly understood that it undoubtedly did not arise from a suspicion in the mind either of the public or of the Government, of any neglect or deficiency on the part of the Accountant General or the officials in his department. On the contrary, he believed the duties devolving upon that department were performed with perfect integrity and accuracy. But the hon. and learned Gentleman had been but partially informed as to the nature of the answer he had given to the right hon. Gentleman, the Member for Buckinghamshire (Mr. Disraeli), on a former occasion. The hon. and learned Gentleman had quoted two reasons he gave, but omitted a third, which was more general in its character and quite sufficient to justify the appointment of this Committee. The hon. and learned Gentleman admitted that the most important recommendation of a Select Committee had been entirely unfulfilled, but he said the matter was one that might be settled by an order from the head of the Court. If that were the fact, why had it not been so settled? His belief was that there would be considerable difficulty in getting rid of these transactions in the market, and that it would require a larger change than the head of the Court would be disposed to make consistently with those principles of prudence on which he usually acted. The hon. and learned Gentleman had heard a report that the Government had a plan for the creation of Chancery stock in which it would be obligatory upon the suitor to have these moneys invested. He had great satisfaction in assuring the hon. and learned Gentleman that he was entirely misled. So far as he was cognizant of the individual opinion of Members of the Govern- 2085 ment, the subject not having come before them in their collective capacity, there had never been, on the part either of the Lord Chancellor, the Attorney General, or himself, any dream or notion of any such scheme for the creation of Chancery stock, still less of interfering with the liberty enjoyed by the suitors. The hon. and learned Gentleman referred to the legislation of last year, and said he hoped the Government would not recede from that. [Sir Hugh CAIRNS: On the contrary, I said I hoped it would be receded from. He was glad to find he had misunderstood the hon. and learned Gentleman, because he was bound to say that with regard especially to its hearing on private trusts, that was the most extraordinary legislation he had ever witnessed, and showed great error on the part of Parliament. The Commission alone would construe the instructions which they received, but the hon. and learned Gentleman had a perfect right to ask with what views the Commission had been appointed, and to state the general circumstances out of which the appointment of the Commission arose. There were, however, very important questions which he had omitted from his statement. The immediate occasion of the Commission no doubt arose out of the proposal for the concentration of the law courts, but if reference was had to that circumstance alone, the Government would not have been justified in issuing the Commission. There were, however, other considerations which would render the inquiries of the Commission highly seasonable and useful. The hon. and learned Gentleman, in referring to the plan for the consolidation of the law courts, naturally viewed it from the position of a most distinguished advocate, and failed to regard it in the light in which it must present itself to a Minister of Finance. The proposal not only contemplated the appropriation of suitors' money, but likewise involved large though undefined public liabilities. If they set out with the idea of paying for the construction of these new courts with the funds in the possession of the Court of Chancery, who was to answer for their sufficiency? Hon. Members would remember that the estimate for the new Houses of Parliament at first was only £750,000; but the cost had grown to £3,000,000 and was not yet completed. What he might call the residuary liability of the public, therefore, became a very important matter, and it was his absolute duty, before consenting 2086 to the introduction of a Bill to concentrate the law courts, to take the best measures in his power to ascertain that the management of the Chancery Funds was as econonomical and prudent as was consistent with the civil rights of the suitors, and so that no unnecessary burden might be laid upon the public. Such was the nature of the connection between the concentration of the law courts and the issuing of the Commission; but he did not hesitate to say that, so far as his opinion went, there were ample grounds in the general question as to this vast fund, entirely apart from any liability of the State, actual or possible, to recommend a careful inquiry into the whole subject. There were many persons who entertained the opinion that the suitors of the Court of Chancery were very hardly used—he did not mean in respect of fees, the arrangements with reference to which would be brought to a greater or less extent under the notice of the Commission—but with reference to the fruit and benefit of their moneys while deposited in the Court of Chancery. It was said that there was British property to the extent of £50,000,000, to the owners of which they said—
We give you this option, and this only, either to forfeit all the fruits and interest of your money whilst it remains in the Court, or to consent to place your money in a fund where the value of the capital is varying, and consequently subject to heavy loss.Now, the reason why such a state of things had been borne so long was that if they took the value of the public funds for the last sixty or seventy years it would be found that, with rare exceptions, their tendency in price was upwards, and that what was worth in 1795 £50 or £55, and which afterwards fell to something lower, had been since moving upwards, so that that investment had been one in which the capital was almost sure to increase. But those who were conversant with the state of things which existed 100 years ago, knew that a cruel grievance was then inflicted upon those who had invested in Mr. Pelham's Consolidated Fund when the Three per Cents were at par, and who on selling out during the American war found that that fund had fallen some 30 or 40 per cent lower. It was quite plain that they were in that state of things when they could no longer expect a progressive increase in the value of the public securities, if the rate which had existed for the last eight or ten years was maintained, it 2087 was as much as they had a right to expect. The factitious and accidental advantage which had hitherto induced suitors to bear their position, consequently was likely to be lost. If the option could be given them of having their money invested in other kinds of funds or public stock with this condition, that it should be an investment without risk to their capital, and at the same time yielding a fixed moderate rate of interest. That was a question which to the suitors was far more important than any question of the reduction of £10,000 or £20,000 a year in the fees of the Court. He held in his hand a pamphlet, purporting to be a speech of Lord St. Leonards, a very high authority on the question, in which he said—In my own view the Court of Chancery stands in the light of a trustee, and the suitors of a cestuique trust, and I think that there might be given a certain small interest—2 per cent for example—while the funds will admit of it.The noble, Lord, however, dismissed in a sentence what was really a financial question of the greatest complexity, for it was clear that whatever rate of interest was given to one suitor should be enjoyed by all. If it is to be the practice it must be regular, definite, and equal. There were other questions no doubt that might come under the view of the Commission, for instance the whole system of keeping accounts of the funds in the Court of Chancery, which was no doubt an antiquarian curiosity, for it was regulated under an Act which passed in 1727, and he did not suppose that there was any other instance to be found from John o'Groat's to Land's End where sums of money were governed by a process fixed in 1727. That was a matter very proper for review. There was no audit of accounts, but there was a process of fitting and welding the operations of two bodies who carried on the same operations in parallel lines. There was another important question as to the effect of the system upon the market. In speaking of transactions in the market the hon. and learned Gentleman had made a mistake in supposing that the principal question was that of brokerages. The turn of the market, as everybody conversant with the subject knew, was a very important item, and it was no easy matter to determine whether any change could wisely and safely be introduced. As regarded the composition of this Commission it was in his power to give some satisfaction to the hon. and learned Gentleman. 2088 In the first place he would doubtless, admit that one of its members (Mr. Crawford) had that night given proof of his independence, for, not only had he come to the House fully prepared, without giving him notice of his intention to discuss the question which he had raised, but he had likewise undertaken to revive the subject and to elicit the opinion of Parliament with reference to it. It was not alone on account of his independence that he had been chosen as a bank director, even more than as a representative of the Metropolis, it had been thought desirable that he should give the benefit of his experience to the Commission. This he felt bound to say, that he had not the smallest conception of what his hon. Friend's opinions were upon any question connected with the Chancery Funds Commission, and he did not believe that his hon. Friend had any notion, except from what he had heard that night, of what his (the Chancellor of the Exchequer's) opinions were, for there had been no communication between them upon the subject. The politics of his hon. Friend were an entire accident; for if he had sat on the opposite side of the House he would have been requested to serve upon the Commission in precisely the same way. The hon. and learned Gentleman (Sir Hugh Cairns) had also complained that no Judge of the Court of Chancery had been placed upon the Commission, but the Government in appointing Lord Kingsdown felt they were selecting one who not alone was intimately acquainted with the constitution and working of the Court but was likewise remarkable for an intelligent mind and for great sagacity and impartiality. He (the Chancellor of the Exchequer) knew nothing at all as to what Lord Kingsdown's opinions were, but they would be able to see ultimately whether he agreed or not with the majority of his colleagues upon this subject. The hon. and learned Gentleman had asked whether there would be any objection to appoint a Judge of one of the equity courts. He (the Chancellor of the Exchequer) could not answer that question without consulting the Lord Chancellor; but he confessed that he did not see any particular connection between the office of a Judge of the equity courts and the management of these funds. It was not their specialty at all, nor did their position bring them into particular connection with the manipulation of these funds. Then there was upon the Commission a gentleman belonging to the es- 2089 tablishment of the Court of Chancery, Mr. Rogers, who no doubt was considered qualified by the particular attention which he had paid to the subject, and by his intimate acquaintance with the practice of the Court in reference to the fund as the registrar in the Accountant General's department. Now, as to the case of Mr. Anderson—and here he must complain of the right hon. Member for Bucks (Mr. Disraeli) and also tender an apology to him for having replied to him the other night with a certain sourness, caused by an expression used by him, he was sure unintentionally, where he described this very distinguished public servant as "a clerk in the Treasury." The name "clerk in the Treasury" was in letter and in spirit entirely misapplied; for the name was retained in the Treasury for civil servants of the highest quality in point of respectability and responsibility. No civil servant was charged with duties of greater weight and importance than Mr. Anderson; but it would be asked, why put him upon this Commission; the Accountant General's department was that department which had to deal with the management of £50,000,000 of property, subject to an infinity of details and complications, and Mr. Anderson was the man who of all men alive had had the greatest share in all the reforms in keeping accounts which had taken place in the administrative system of this country during the last thirty years. He was discovered by Sir James Graham in 1830 when a clerk in the Admiralty. When comparatively a young man he was the right-hand of Sir James Graham in reference to the reforms introduced by him, and ever since Mr. Anderson had had much acquaintance with accounts. His natural gift and skill, in addition to his immense experience, would have rendered it almost absurd to have appointed the Commission without having given them the benefit of his aid. There remained the names of two Cabinet Ministers and two solicitors. The right hon. Gentleman the Member for Bucks seemed to think that there was something improper in the appointment of two solicitors; but he (the Chancellor of the Exchequer) looked upon solicitors, if properly chosen, as almost the backbone of a Commission of that kind. They were conversant with the forms of the Accountant General's Office; they knew where the shoe pinched, and were best qualified to suggest improvements. He knew nothing of the po- 2090 litics of either of the solicitors who had been selected, but Mr. Cookson had been appointed upon the simple ground that he was the representative of the entire body of solicitors, he being the President of the Incorporated Law Society. With regard to Mr. Field, he had heard that that gentleman was in favour of the business being transferred to the Bank, and that there should be some fixed system under which the suitors might receive interest for their money in a manner different from the present system. Then there were two Cabinet Ministers went into the Commission without any foregone conclusion upon the matter. The Government had no plan framed upon the subject, and he believed that those two Gentlemen would discharge their duty with great impartiality. Hon Gentlemen would ask, "Why put them upon the Commission?" And to that he would give a distinct answer. On a Commission involving important financial questions it was material that the State should be represented. There had been of late years examples of the mischief resulting from the omission to act on that principle. There had been Commissions appointed under the authority of the Crown to examine questions involving matters of finance without any one representing the Treasury or the State being upon them, and Reports had come forth recommending, perhaps, an expenditure of £3,000,000 or £4,000,000 or £5,000,000 of public money, and the Government then found itself in conflict with an authority appointed by the Crown. That was a state of things which it was desirable to prevent by placing on the Commission some of the responsible advisers of the Crown. The Commission, he believed, had held its first formal meeting that day.Passing to the subject mentioned by the hon. Member for London, said that the letter referred to by the hon. Member would have been written with a fuller explanation if intended for publicity; but the meaning desired to be expressed was that relatively to the state of things and the stage of the process he was content with the working of the test. The hon. Member stated that he could produce a hundred instances of erroneous classifications of wine; still it was important to consider whether there were not 10,000, or 20,000 other instances in which there was no error. It was not by particular instances but by the general operation that a decision should be arrived 2091 at. But his hon. Friend only 'produced one instance where two portions of the same wine were differently charged with duty, one being rated at below 40 degrees of strength and the other above 40 degrees. That distinction was introduced at the special request of the wine trade, and had it not been for the change in the law wine above 40 degrees of strength would have been rejected by the Customhouse officers altogether or made subject to the spirit duty. The hon. Gentleman had said that this process would occupy three hours; he (the Chancellor of the Exchequer) had never heard that from any other quarter, and he believed that it would not have taken a Custom-house officer more than twenty minutes to complete this inquiry. His hon. Friend had summed up by describing the wine trade as having been thrown into a state of great confusion and excitement owing to the present state of the law; but how did the matter really stand? Under the old system we imported 6,000,000 gallons of wine in the year, whereas in the first two months of the present year we had introduced as much wine as we had formerly done in five. The fact was that immense facilities for bringing in wine into the country was now afforded, and it was only yesterday he had received one of many letters which had reached him from merchants, and in which the writer expressed a hope that the alcoholic test would not be altered, adding that he was now selling good sound wine at the rate of 14s. a dozen. [_A laugh.] Hon. Members might laugh; but he should like to know, when they thus express their incredulity on the matter, whether they were really conversant with the wine trade. For his own part, he believed that the hindrances imposed on the importation of wine by the old system amounted to ten times that caused by the duty, inasmuch as there was then a monopoly of the sources of supply, which, now that the breath of free competition was let in upon it, would be destroyed. More respectable gentlemen than those engaged in the wine trade did not exist; but their habits had been formed under the system to which they had been long accustomed, the demand for wine having been confined to limited selections. They had now, however, produced a system which would leave the wine trade free. A new class of wine merchants had sprung into existence, who were selling-wines at half, and less than half, the price 2092 for which the same wines were sold two or three years ago. That was a great shock to the habits and practice of the trade—hinc illæ lachrymæ. In conclusion he had simply to say that the Government did not intend to accede to the prayer of the petition and propose an uniform duty on foreign wines, but they did intend to adhere to the principle of classification, by means of the alcoholic test, at the different rates now in force. Though he did not pretend to deny that the present system had faults and inconveniences, these were yet less than other evils that might be substituted in seeking to remove them. As to the scale, it was not the intention of the Government to propose any change in the present Session; he thought they should have fuller experience of the system before they considered any specific modification. He had no objection to produce the memorial addressed to Her Majesty's Commissioners of the Treasury, and he should probably accompany the document with the report and comments of the officers of the Customs. He might add that he had heard it stated that negotiations had been set on foot with the French Government with the view of affecting a negotiation on the wine duties, but that no such negotiations were pending.