HC Deb 11 May 1820 vol 1 cc297-305
Mr. Maberly

rose for the purpose of making the mo- tion, of which he had given notice. But before he did so, he hoped the House would indulge him in a few observations on the present financial system. It would be in the recollection of the House, that in the last parliament the chancellor of the exchequer had stated his intention of proposing a permanent system of taxation for the support of the public credit. Now he could not help saying that the system then adopted by the right hon. gentleman turned out to be a complete failure. It was, in fact, a departure from what the right hon. member proposed to do, and particularly as to the issue of exchequer bills. His decided opinion was, that the present system of temporary expedients ought to be put an end to. The welfare of the country required the adoption of a permanent system of finance. The right hon. member had last year stated, that there would remain of the old revenue a sum of two millions, which, with the new taxes, would make a sinking fund of five millions. Such a sum as a sinking fund, would, in his opinion, be sufficient to support the public credit. But was there such a sum actually applicable to this purpose? And how did the right hon. gentleman last year propose to raise it. He levied new taxes in such a way as to throw the pressure on the working classes of society, not only by taxing the articles which they consumed, but also by that most impolitic tax, the duty on wool. He should always oppose any tax on the raw material. This one in particular was of an injurious tendency, as by preventing the importation of the article it deprived the labourer of employment. The right hon. gentleman was told of this when the tax was imposed, but he was of a different opinion. This tax, however, had failed. He did not blame the chancellor of the exchequer for any failure of the revenue. He believed the right hon. gentleman expected, when he proposed the new taxes, that they would be productive. But he was surprised that he should have come down in February last year, knowing, as he must have known at the time, that the revenue was deficient, that the imports were less by 6,000,000l. and the exports by 10,000,000l. than they were the preceding year; he was surprised that, knowing this, the right hon. gentleman should have come to parliament with a statement that we were to have an effective sinking fund of 5,000,000l. The imports and exports might have increased or decreased, but the right hon. member, with such a prospect before him, must have known that there could not be an available sinking fund to that amount. The total revenue, ordinary and extraordinary, up to 5th April, 1819, was 53,388,248l.—The expenditure of that year was 69,448,899l. leaving, after making good the deficiency, a sinking fund of 919,340l. From this it would be seen that the boasted sinking fund of 5,000,000l. was merely nominal. He believed he had mistaken in his calculation. The real sinking fund would be found to be no more than 395,316l. The House would see, on comparing the revenue of last year with that of this year, up to the 5th Jan. 1820, that there was a falling off. In the former year the revenue up to 5th Jan. was 49,056,593l. This year, up to the same period, it was 48,208,175l. leaving a deficiency of 848,418l. and if the deficiency of Ireland was taken, he believed it would be 1,000,000l.—This was a matter of the most serious importance; and called for the consideration of the House. The right hon. member said there was a deficiency of 13,400,000l. and for this purpose a loan was provided to reduce the unfunded debt. A sum of 10,400,000l. was advanced, but, notwithstanding this, the debt was not reduced. He would not, however, detain the House on this part of the subject. But he was surprised to find, that notwithstanding the advance of 10,400,000l. the increase of the outstanding and unredeemed debt from the 5th January 1819, to January, 1820, was 9,698,000l, This was a system of expedients which could not last. Yet this was not the only inconvenience arising from this system. The right hon. gentleman had last year a sum of 2,000,000l. to pay oft* the interest of outstanding exchequer bills, but for twenty months he had forgotten, as appeared by the accounts to pay any interest. If the right hon. gentleman wished to support the public credit, he would at least, pay the interest of these bills regularly. He believed, that at no former period was it known that the interest on exchequer bills had remained so long unpaid. Last year the right hon. member brought in a bill, enabling the Bank to advance 6,000,000l. on the growing pro- duce of the consolidated fund. It was never intended that the Bank should, upon all occasions, be called upon to make good such deficiencies. If this system was to be carried on, it would lead to most dangerous results. He believed the consolidated fund was now in arrear 8,000,000l. If the revenue went on as it had done, there would be an additional deficiency probably of 2,000,000l. on the July quarter. This would add considerably to the advances to be made by the Bank, which would then be 10,000,000l. If the deficiency was to continue, then the Bank must be called upon again in October. Supposing this system to go on, and that the alteration of our currency, or any other circumstance, were to cause a run on the Bank, what would be the consequence? The Bank would, of course, be obliged to take care of their own interests, and that of their friends. They could not issue 10,000,000l. or 15,000,000l. of their own notes, as they would be liable to be called upon to pay in gold, or in bars at 3l. 17s. 10½ which was the same thing; the consequence would be, that the public creditor would remain unpaid. A system likely to produce such results was notoriously a bad one. It was the duty of parliament to take care that this period did not arrive. He was sure the bank directors would not do this, unless from necessity; but it was the duty of the House to prevent their being placed in a situation of such difficulty. He would not detain the House much longer. He had clearly shown the danger of making up by loans from the bank the deficiencies of the revenue. They must firmly meet the dangers which surrounded them. The remedy was not by taxing the lower orders, nor by depriving them of labour by taxing the raw material. The only remedy, in his view of the question, was a tax upon property. If a tax of ten millions was levied on real property, and the assessed taxes were given up, it would be a boon to the people which would do more to calm their minds and make them rally round the constitution, than any other measure which could be adopted. If ever there was a time when property could be taxed with propriety, it was this. Were not the corn laws a real tax on the people? This could be shown if the corn bill was removed—The difference between the price actually paid for corn in this country and that for which it could be imported, were it not for the corn bill, was a tax on the people. Supposing this difference to be 1l. per quarter, and supposing the quantity of corn consumed annually to be fifteen million quarters, then there was a tax on the people of fifteen millions annually going, not to the revenue, but to the landed proprietor. This was a fact which no man could contradict. The landed proprietors were better able to pay taxes than the lower classes of society, and therefore, if new taxes must be imposed, and they must be imposed, unless the public credit was to be abandoned, which he supposed the blouse would not readily consent to, they must fall upon properly. He did not mean an income tax, nor a tax upon any profession or trade—no man detested such a tax more than he did; he meant a tax upon landed property. He had before said that the lower classes were unable to bear any additional taxation; he knew also that the middling classes of society were in a similar situation. Before, however, any such tax was proposed, he would recommend the most rigid economy in every branch of the public expenditure. The right hon. gentleman when he last year spoke of placing the financial system on a permanent footing, gave a hope that considerable saving would be made in bounties and drawbacks, and in the collection of the revenue. It appeared, however, from accounts on the table, that there was a sum of 10,000,000l. expended under those heads. Our great political economist, Adam Smith, had laid it down, that the great source of wealth was the employment of the labourer by the capitalist, on the soil and in manufactures; it was by the productive power of persons so applied, that provision was made for the unproductive classes of society. He would conclude by moving "That there be laid before the House an account of all Exchequer Bills and Irish Treasury Bills outstanding on the 5th of January, 1819, together with the interest due on each class of the same, separating the amount of Principal from Interest, and specifying the acts under which they were issued, and for what service, including deficiency bills."

The Chancellor of the Exchequer

said, he should not discharge his duty to the country by prematurely entering into an explanation of his financial arrangements. he was aware that much anxiety existed in the public mind to know what those arrangements were, but no feeling of that kind should induce him to deviate from what he conceived to be his duty. He must therefore pass by all which had been said by the hon. member on that head. The hon. member, in referring to the new taxes had taken it for granted that they had failed. On this head, he had only to refer to accounts which had been laid on the table. In the last three quarters of the year, the increase in the Customs and Excise was 1,921,000l. being only 100,000l. short of the estimate on the whole year. There was also a difference in the malt duty of 454,000l. so that the increase fell but little short of the whole estimated revenue of the new taxes. It might be asked how it happened, that notwithstanding this increase, there was a deficiency on the whole revenue? To this he would answer, that there was a deficiency in the October quarter of last year, arising from a deficiency of Trade and other causes, to the amount of 1,000,000l. He, however, had great satisfaction in stating, that this year he entertained a strong confidence that the Customs and Excise would produce the calculated amount, exclusive of the wool duties, which produced little or nothing. The hon. member had complained of the nonpayment of interest of exchequer bills. The hon. member must know, that the interest on exchequer bills was paid with the principal, and that it was allowed to accrue up to the period of such payment. It was true there was an arrear respecting these bills, but he would, when the proper period arrived, explain that arrear to the satisfaction of the House; but the interest had been paid upon all the exchequer bills, paid off or exchanged.

Mr. J. Smith

expressed his disapprobation of the system of finance lately adopted by the right hon. gentleman. It had fallen within his knowledge, that considerable sums had been vested in foreign countries, in consequence of the alarm felt from the insecurity of our present system. There was nothing more necessary than the establishment of a permanent system of finance; as long as our present system was persevered in, so long would surmises, doubts, and alarms exist in the public mind. If it should be found necessary to impose any new tax, he hoped it would be levied on those who were best able to pay it. He could not help saying, that more doubt and alarm had existed during the last two years respecting our financial system, than at any former period, and this feeling was a considerable injury to the country.

Mr. Baring

was as anxious as any other honourable member could be to see a definite and permanent policy adopted; to see, indeed, the country in an independent situation, which it never could be in its present financial circumstances. We were, however, so peculiarly placed, that it was very difficult to estimate correctly, our own resources. He made this remark in candour and fairness to the right hon. gentleman. Though sorry to learn it, as a matter of information, he could easily conceive why a deficiency should have taken place upon the last quarter. What he dreaded was, lest the same uncertainty should attach to every future estimate of our revenue. Nothing, however, could be calculated on, without a greater degree of quiet and subordination than at present existed. In the present unfortunate state of the country, he was averse to any decisive measure, till he could see the strength of our means. Labouring, as we did, under a want of credit and of confidence, from the state of the country, he did not think that any decisive measure could at present be proposed. There was, indeed, plenty of money in the country; but would there be such a depression of stock, if there was not a want of confidence? If there were a sinking fund of 5,000,000l.—he meant a real sinking-fund—it might be said that that would restore credit, and bring stocks to their proper price. The shaken state of the great interests of the country made it extremely difficult to adopt any decisive financial measure. Some other expedients, he understood, were to be adopted, which he thought highly dangerous. He had understood that there were large draughts for long periods of credit drawn on the English treasury, and circulated abroad. He had been informed that there were draughts of this kind for three months in Paris. This was an extremely objectionable expedient: it was of the same description as that of Mr. Pitt with Boyd, which Mr. Pitt was so much blamed for. If the right hon. gentleman would give the amount of such draughts, or consent to a motion by him on the subject, he should advert no farther to it at present; but it was an expedient practised only in the greatest distress, and for the purpose of raising money. He must say that he thought it extremely discreditable.

The Chancellor of the Exchequer

said, that Mr. Pitt's draughts in Hamburgh were of quite a different description. The draughts at present circulated abroad were made applicable to funds abroad. In a few months he would wind up the whole account, and then present to the House regular accounts of all.

Mr. Grenfell

said a few words respecting large quantities of silver imported into this country, and large draughts on the treasury of this country, arising from such imports.

Mr. Baring

said, that it was quite sufficient for him to hear the intention of the right hon. gentleman to present the accounts. If the right hon. gentleman had general bonds for money outstanding on the continent, he would say, as far as he knew the subject, that it was a measure extremely objectionable; and he had heard that there were draughts at three months circulated all over the continent.

The Chancellor of the Exchequer

said, that those draughts were for silver imported into this country.

Sir John Newport

said, that he could never consent to the strengthening of the funds at the expence of the community. If the funds were improved by fresh burdens on the country, that would be improving them at the expense of the other interests of the community. The stockholder already received increased value, for be had become a stockholder during a depreciated currency, and now he received increased value by means of the meliorated currency. No sacrifice ought to be made of the great interests of the country for the benefit of the stock-holder. The commercial and agricultural interests were already in great difficulty, and their difficulties seemed not to be diminishing. He therefore must protest against any improvement of the funds, at the expense of the landholder.

Mr. Maberly,

in reply, assured the House that his observations were not made with a view to profit the fundholder, but to benefit the country at large. He was anxious to see a permanent sinking fund established, and our financial system placed on a sound and permanent footing. He begged to assure the Chancellor of the Exchequer, that he had no wish to pry into his financial arrangements; on the contrary, he was aware that any premature disclosure of them would be injurious, rather than beneficial to the country. The motion was put and agreed to.