§ Mr. Howorth.—Sir, The subject to which I am requesting your attention was under discussion in the session of 1806. I must observe however, that, although it has been discussed, parliament has not been called upon to pronounce a direct opinion upon it. The motion then made for that purpose, was set aside on a point of form: my object is, to revive the question concerning the exemption granted to foreigners, holding stock in our funds, and not resident in the king's dominions, and to place the property of such foreigners, upon the same footing with that of his majesty's subjects. By an act passed in the 46 Geo. III. duties often per cent. were granted upon the dividends payable out of the public funds. In that act a clause was inserted, to exempt the property of foreigners residing abroad, from these duties; by the returns from the tax office it appears, that the average of the annual amount of this exemption, is about 65,000l. exclusive of foreign property in bank stock, of which no returns are made. It will not be argued that a saving of 60, or 70,000l. a year, to a country already in 1019 debt upwards of 600 millions, and in me enormous annual expenditure of 80 millions, is immaterial. It is only in comparison with our debts and our expences, that this, or any other saving, can be called inconsiderable; even they who live on the public income have an interest in improving it, much more so have they, who are forced to pay it, who are harassed by the exaction, and crushed by the amount, of the taxes. The first question which presents itself is the policy of granting this exemption; that is, whether the loss the revenue suffers, and the abuse and inconvenience which attends it, is compensated for by the inducement it offers to foreigners, to invest their property in our funds. In order to weigh this correctly, we must advert to the state of our funds: we shall there find, that the interruption of foreign commerce, and other circumstances connected with it, have diverted a great part of the commercial capital of this country from its usual channel, and that an influx of idle money is forced into the stocks, for want of better employment. This, Sir, with the constant demand created by the sinking fund, has produced such a rise in our stock market, that brokers find a difficulty in executing orders to any large amount, so much greater is the proportion of buyers, to that of sellers. In illustration of this I would bring to the recollection of the house, the terms on which the Chancellor of the Exchequer negociated the last loan, at £4. 12s. 10d. per cent., a rate of interest, as he justly expressed it, at which money has rarely been borrowed by the public. Why then it appears that we derive no advantage from inviting foreigners to invest in our funds: but if we did, is there any probability of our losing it? Is any hon. member prepared to state where foreigners can deposit their property with equal convenience, with equal advantage, or with any thing like equal security? In fact, we are paying a high rate of interest to foreigners, for money which we can make no use of, with this additional injury, of paying that interest, not in exports, which might benefit our manufacturers, but in bullion, draining the country annually of nearly a million sterling in gold and silver. The exportation of bullion is a growing evil, and arrived at a height which calls for the serious attention of government. The next object for consideration, is, the abuse which attends this clause of exemption; it is true the act has provided an oath, and a 1020 penalty, to guard it from fraud, but the temptation which the facility of evasion affords, and the difficulty, I may almost say the impossibility, of detection, renders it highly probable, that under the pretended name of foreign stockholders, considerable defalcations of revenue take place. I would ask for whom are we making these sacrifices! For men who spend their property in other countries. It is curious to remark, if an alien resides in England you tax him, but, if abroad, you grant him an exemption. By this clause, you are taxing your friends to support your enemies, you tax your own subjects to throw it away upon foreigners, you harass the already over-burthened people of this country with an additional taxation of nearly 70,000l. annually, to make up the deficiency occasioned by this clause of exemption, which, as far as it goes, is a supply to the enemy; you help to fill a spunge which Buonaparté squeezes at his pleasure. What is the return you meet with for this indulgence? implacable confiscation of British property in every part of the globe. But, Sir, it has been argued, that the property of Foreigners in our funds ought not to be taxed, because the proprietors are not represented in parliament. The stockholders of this country have one common interest in the funds, and perhaps no property in this country is more fully represented: the Alien stockholder is in the proportion of about one to thirty. Can there be a doubt then that the property of Aliens in our funds, is virtually as efficiently represented, as if they were resident in this country? What is the situation in which a foreign stockholder stands? By becoming a purchaser in our funds, he places himself in the situation of the original subscriber, subject to the same conditions, liable to the same contingencies, standing precisely in the shoes of the party from whom he purchased. The incidental circumstance of an Alien's purchasing English stock, neither can, nor ought to change the condition of the stock; for, carry this to its full extent. Suppose the whole national debt was held by Foreigners, it would, under this clause of exemption, undermine the whole contribution raised by this tax; that is, you must then pay the subjects of Buonaparté eleven or twelve millions a year, to help him to carry on a war, by which he hopes not merely to conquer, but to annihilate this kingdom. With regard to justice and good faith it may be insisted on, that the principle of 1021 exemption having been in fact admitted by parliament, has produced a confidence, which ought not to be disappointed. Sir, I would not betray any confidence, I would not break any faith, I would not take them by surprize, for, considering the Alien stockholder as a mere money lender to suit his own convenience, I would give him timely notice of the terms on which I would receive his money, leaving it to his option afterwards to consult his own convenience. With this prospective view I move, "That this house should early in the next session of parliament take into consideration the expediency of discontinuing from and after the 5th day of April next 1810, so much of the clause of 40 Geo. III. as provides an exemption for the duties on the annuities, dividends, and shares, &c. &c."
§ Mr. A. Baringcontended, that the saving of the comparatively trifling sum of 60,000l. a year should not be put in competition with the character which this country had always maintained for honour and good faith, and which enabled it to draw its resources even from those nations with which it might be at war.
§ Sir T. Turtonmaintained that the taxing of the funded property of foreigners, was perfectly consistent with justice and policy. The only point upon which there could be a doubt was, whether the funds ought to have been taxed at all; but this having been determined in the affirmative, there was no reason why foreigners should not be placed on a footing with the subjects of this country.
§ Mr. Fullerthought, that as the property of these foreigners was protected, as well as our own, at an immense expence of blood and treasure, it was but fair that they should bear a share of the burden. There were a number of foreigners who got their living in this country; and some who were even said to make their 6,000l. a year by warbling and pleasing people's ears: in God's name let them have it, if people chose to give it them; but when we were compared to a ship in distress, and not knowing where to look for new taxes, he thought we should make them pay something for the protection of their property.
Mr. Hawkins Browneconsidered that imposing this tax would be a breach of public faith, and that even taxing those who should hereafter purchase in our funds would be impolitic and unwise. He could only consider foreigners as liable to personal taxation.
The Chancellor of the Exchequerfelt himself bound to oppose the motion. Such a Resolution as was now moved, to undertake a future consideration of the subject, would not be binding on the house, or a sufficient warning to the stockholder, and therefore he could see no necessity for now entertaining it. Whenever this question came to be discussed, it would not be on the point of conveniency to the revenue, but of justice. When the subject was formerly agitated, the difficulty that occurred to him was, what distinction ought to be drawn between the British subject and the foreigner, and he could not see why the latter ought to be exempted from bearing a part of the public burden with the former. The pledge of parliament had been misunderstood. It was that the funded property, which was most easily come at, should not be made the prominent object of taxation, and not but when it was taxed in general with every other species of property in the country, he could see no ground for imposing it altogether on British subjects. He would not however enter into the discussion of the subject now. At this late period of the session, when it was said the house ought not to be called on for a decision, he thought it equally inconsistent to call on them for a pledge, which was to bind them next session. It was therefore the impropriety of the time, which called on him to oppose the motion.
§ Mr. Tierneysaid this question had frequently been agitated, and always decided in favour of the foreigner. The foreigner would think, if we made him pay the income tax now, we only spared him formerly, because, when property was only taxed at the rate of five per cent. it was not worth while to make him liable to its operation. But now that it amounted to ten per cent. it appeared to us an object of importance, and that circumstance annihilated our pity. Fie thought such a change in our conduct would operate to our disadvantage, as a similar step did formerly against France. He did not think the foreigner who had placed his fortune in our funds, relying on the good faith of the country, ought to be forced to pay the income tax, or sell out at a great loss; but he had no objection to the duty being imposed on all future purchases.
§ Mr. Dentthought foreigners, in depositing their money in our funds, consulted their own interest only, and therefore ought to be liable to the income tax
§ Mr. H. Thorntonspoke on the same side.
§ Mr. Howorthin reply said: The hon. member on the same bench (Mr. Baring) having admitted (and few are more conversant in business of this nature), that it is not to our advantage to grant these exemptions, and having expressed his belief, that should they be removed, it would not occasion any change of stockholders, has granted the impropriety of continuing them on the score of policy; but the hon. member's opposition to the present motion, and indeed the whole objections made by those members who have spoken on the subject, are grounded on the supposed injustice, and breach of faith to foreigners, in now withdrawing these exemptions. I had hoped that I had met objections of this nature in the terms of the motion, and that by giving timely notice of our intentions, we could not fairly be charged with injustice or illiberality. In truth we have never been bound to foreigners, any more than to British subjects, and if upon a plea of necessity, you have broke through the acts and provisions made in the reign of queen Anue, if you have violated all the acts from that time to the present day, which have uniformly provided for the payment of the dividends at the bank of England, without any deduction whatever, I would ask upon what principle of justice it is, that foreigners should be exempted from the effect of a financial resource, raised for the support of government, and the protection of that property in which they have voluntarily, and for their own convenience, become proprietors; their property is protected, and they are bound in justice to contribute their share of the expence of that protection. The right hon. the Chancellor of the Exchequer seems indisposed to commit himself to any pledge on the subject, at this late period of the session, and as the subject is important, I am not desirous of pressing it to a decision now. I shall therefore beg leave to withdraw the present motion, intending again to bring it forward at an early period of the ensuing session.
§ The motion was then withdrawn.