FOREIGN PROPERTY IN THE FUNDS. (Hansard, 15 June 1808)

Mr. Magens
opposed the measure in contemplation, as contrary to our established policy. He was persuaded that if the property of foreigners was to be subjected to this tax, it would prove extremely injurious to the prosperity and wealth of this country.

§ Mr. Sharp
was sorry that the subject had been mentioned at all. The sum was extremely small, but the sacrifice of principle would be great. No advantage could be derived from such a measure as this, that would be at all equal to the injury which it would produce.

§ Sir T. Turton
said that the income tax was in its operation altogether unjust and oppressive; but there was no part of it more unjust than this exemption. It was fair, reasonable and proper, that foreigners who had property in the funds should equally with the subjects of this country pay for the security of that property.

§ Mr. W. Smith
did not think the measure unjust; but at the same time, he thought that it was impolitic to press it at present.

§ Lord H. Petty
observed that the tax in question was not a property tax, but one on the profits derived from property. It would have been impossible to have got 899 at the profits of foreigners, till the arrangement with the bank for detaining the lax upon the dividends. But it was not the intention of that arrangement to include foreign property. He maintained that, we had no right to meddle with it; and if we had, it would not be expedient.

§ Mr. Bankes
denied that there could be any injustice in this measure, as the state had certainly an eminent dominion over the property, and the utmost that foreigners could expect was, to be placed on the same footing with the natives of this country. He asserted that the exemption originated, and had been continued, in prejudice and delusion. Foreigners placed their money in our funds for their own advantage, from the superior security and profit which they afforded. There was no reason why they should not pay for this. They were generally aliens; and though this country owed them justice, they were entitled to no favour from it.

§ Mr. Windham
thought, that good policy was in favour of the exemption, as the advantage we derived from foreign property, as it stood at present, was greater than any we could have from the tax imposed on all that would then remain.

The Chancellor of the Exchequer
said, that he had attended much to this subject, and felt much embarrassment how to give his vote. If he voted against the motion at present, he confessed that he should do so from a deference to character, and to what had been done before, contrary to the inclination of his own opinion. He took a review of the arguments on this subject, and observed that he did not see any reason in point of justice that would exempt foreigners more than the people of this country. But there were considerations of policy that appeared to him to render it inexpedient to alter the system at the present moment, though he did not conceive that the imposition of the tax would withdraw any material portion of this property from our funds. But the principal reason that induced him to oppose the measure at the moment, was, that it might produce a very bad effect, by persuading our enemy, that his measures against us had in some degree succeeded.

§ Mr. Hibbert
said, that from the tenor of the debate, he conjectured that the subject would not be brought forward very soon again for discussion; and he was anxious, by more than a silent vote on this occasion, to express his decided opposition to the 900 measure proposed, and more especially after the hesitating negative given to it by the right hon. gent, who had just sat down, and whose speech was not calculated to add confidence to foreigners who either had embarked or might embark their capital on the credit of this country. There was a plain and familiar distinction which had not been noticed, but which yet applied, in his opinion, both to the justice and policy of the case. The foreigner who resided here, or who purchased land in this country, became, in common with all British subjects, a partner in the general risks of the state; but the foreigner who resided abroad and sent his capital hither was a mere money lender, and could not be considered as a partner. The former we could justly subject to his proportion of the cost of the common security; but we could not, with equal propriety, say to the latter, "We have had a bad year, our affairs are not prosperous, and we must, therefore, deduct a part of the interest which we contracted to pay upon the money you lent to us." We might say, indeed, if it should suit us to say so, "your money is a burthen to us we do not want it, you have forced it upon us against our inclinations; take it away, or we will reduce or withhold the customary interest;" but we could not in justice, without any such notice, surprize the foreign money lender by a tax. The same distinction applied to the policy of the case; those embarked in the same risk with us had not the power, even if they had the wish, to withdraw themselves, and we were sure of their co-operation by the durable tie of a common interest. It might happen that, in order to preserve our independence against the great oppressor of Europe, we might find it necessary to sacrifice not merely a tenth, but a quarter or even a moiety of our income in the form of a property tax; and while the expediency of levying such a tax generally and impartially upon all that were in the same concern with us was indisputable, it was surely questionable how far we should attempt to extend it to those who could withdraw their aid at pleasure, and whose confidence, however occasionally useful to us, was not likely to be increased by the unprosperous situation of our affairs. He was unwilling, at so late an hour, to enter into the consideration of the expediency and utility of inviting and retaining foreign capital in this country. It was a question which should be considered 901 relatively to our character as a commercial country, and not merely as it would affect us under a temporary flux of capital finding its way into the funds, the consequence of a casual and lamentable interruption of our foreign commerce. The great advantages which, under ordinary circumstances, were to be derived from a capital thus obtained in the support of our funds and the encouragement of the various departments of our national industry were, in his mind, too obvious and considerable to be treated with indifference, he gave, therefore, to the proposition of the hon. gent, in this first and preparatory stage of it, an opposition, not grounded on a regard to times and circumstances, but most decisive and unqualified.—The motion was then put, and negatived.