§ Mr. Hutthaving presented a petition from certain tea-dealers and others in London, against the new Tea-duties,
§ Mr. Crawfordrose to offer a few observations upon the petition. It was from the tea-dealers, brokers, and others in the City of London, interested in the tea-trade, praying that one uniform rate of duty might be imposed on all kinds of tea imported into the united kingdom. The petition claimed the serious attention of the House and the Government, not only on account of the number and respectability of the signatures attached to it, but from the vast importance of the subject, and the suggestions the petitioners had felt it to be their duty to submit to the House, which, in his opinion, involved considerations of the greatest importance to the Revenue of the country. The petitioners had no object inconsistent with the interest of the public Revenue, nor did they seek a reduction of the duty on their own account, or on the ground of conferring a benefit on the consumer of the article; but they sought protection against the fraud they apprehended would be committed, the evasion of duty which would necessarily take place, and the vexation which would be experienced by the operation of a system of rated duties imposed by the Bill, which passed with such inconsiderate rapidity through that House at the termination of the last Session. The duty paid upon public sales was ninety-six per cent upon the lowest class of tea, which was bohea, and 100 per cent upon all others, according to their value. The duty was assessed by an officer selected by the East-India Company, and the money was paid forthwith into the Exchequer, free from all deductions. That system appeared to him a most excellent one; but it had been admitted by common consent 273 that such a system would not be practicable under the altered state of the trade to India. Two alternatives had presented themselves—a rated, or a uniform duty; and the Government had, in his opinion very unwisely, adopted the former course. It was only fair, that he should state the reasons which induced him to come to such a conclusion. To render a system of rated duties beneficial, there were two most important requisites. The first was, a certainty and facility in distinguishing the different qualities of the article taxed, without which there arose impediments to the free and convenient course of business, and to the due collection of the Revenue; and the second was such an adjustment of duty to the relative value of the various kinds and qualities in the market of consumption as would not destroy the prevailing and free operation of the taste of consumers; for any violent action on prices, occasioned by the imposition of unsuitable relative duties, would alter the course of consumption, though it might not extensively affect the aggregate quantity consumed, and thereby greatly reduce the amount of Revenue. The scale of duties was deficient in each of these requisites. His objection to the want of certainty in distinguishing the various qualities was, because the sorts described in the several classes were not distinguishable by any defined or acknowledged tests, particularly as between bohea and congou. The black teas were all believed to be the produce of the same plant, variously acted upon by soil, culture, aspect, season, harvesting, and subsequent progress of preparation for the market. For these and numerous other reasons, as well as the vast varieties set forth in a trade catalogue of the East-India House sales, he asked how it was possible for a Revenue-officer to determine, on any well-established ground of confidence, the precise difference between bohea and congou, or congou and souchong, on occasions when there occurred anything like a close approximation of quality? Correct discrimination was utterly impossible. In establishing the force of his second objection, he was compelled to trouble the House with a reference to figures. Bohea, which now paid ninety-six per cent, was to be charged with a duty of 1s. 6d.; congou, now paying 100 per cent, with 2s. 2d. The difference of the duty, therefore, would be forty-four per cent, while the difference of value to 274 the importer (the short price without duty) was from two to six per cent, and the difference of value in the market of consumption—that value being the long price, having the duties added to it—between the bulk of bohea and congou was about ten per cent. Therefore,
The relative value of these teas for consumption, as ascertained by public sales, was shown, in the first statement, to be as fifty for congou to forty-five for bohea. Then, when congou was worth 3s. 9d., bohea would be worth 3s. 4½d.; and, therefore, bohea, in the hands of the importer, would be worth 1s. 9½d., when congou was worth only 1s. 7d. The operation of the altered duty would be to make bohea which was two to six per cent cheaper than congou, thirteen and a-half per cent dearer in the importer's hands, or short prices. This scale of relative value would continue, in spite of any fiscal regulations of the noble Lord, just so long as taste continued the same, and the same relative quantities were brought to the market. The immediate effect of the scale of rated duties, in his opinion, would be, the relinquishment of so much duty which would go into the pockets of the first importer, while the consumer paid the same as before. It would also disturb the present settled course of demand, by means of the premium offered for the introduction of low qualities into consumption. Congou would be readily transformed into bohea, by deteriorating its quality four to six per cent, when it was admitted to consumption at forty-four per cent less duty. It had been considered somewhat paradoxical that any lowering of duty (all other things remaining the same) should not produce an equivalent fall of price in the particular article relieved; but this seeming paradox was easily explained by an illustration in corn, which was a subject every one claimed to understand in the present day. Contrasted with the measure of rated duties, which, being founded on an unsound basis, was, he would say, unfortunately impracticable in its details, 275 was the simple principle of one fixed rate of duty. What the amount of that duty should be it was not necessary to discuss; it was enough to say that as it need not, so he believed it would not, bear with any increased weight on the poorer class of consumers. It would render unnecessary the whole of that corps of tasters and inspectors otherwise about to be enrolled. It would prevent the necessity for, and, therefore, save the merchant from the trouble and vexation which would attend a Custom-house examination of every chest to be imported, and would at the same time protect the Revenue from fraud, and, in his judgment, promote its productiveness.
s. d. s. d. When bohea sold for 1 11 and congou for 2 1 The duty 96 per cent 1 10 and 100 per cent 2 1 The wholesale cost was 3 9 and 4 2 When bohea sold for 1 5 and congou for 1 7 The new duty 1 6 and 2 2 The wholesale cost was 2 11 and 3 9
§ Lord Althorpsaid, he felt the petition to be one of the greatest importance, and one that deserved the serious consideration of the House. It was impossible to hear the very able speech that had just been addressed to the House without giving the hon. Gentleman credit for great knowledge of the subject. The graduated scale of duty which had been imposed by the Government was not with a view to force a change in the consumption of tea. The hon. Member was well aware that an ad valorem duty had been paid by the old law, and it was admitted on all hands, that a fixed duty could not be continued. The great object of the Government in the course they had pursued was, that the poorer classes of the country should be supplied with the commoner teas at a low rate of duty, and that those consumed by the higher classes should be subject to a greater duty, in proportion to the quality of the tea. A great objection had been made by the hon. Member as to the practicability of making a distinction between the qualities of the various teas which were imported into this country. With that view an experiment had been made at the Board of Control. Several persons were called in who had an extensive knowledge and experience of the value of tea, and they were called upon to decide upon the quality of the different samples placed before them. The result was, that out of all these individuals, who perfectly understood their business, only one instance of mistake occurred. This circumstance led the Government to suppose that no difficulty could occur in distinguishing the varieties of the teas. The experiment had been made in America, and had been found to work most successfully, and this 276 circumstance was a strong inducement to try it here. It was material for the House to observe that the hon. member for London had taken the lowest price of congou in comparing it with bohea, and he had certainly made a statement which showed that the varying duties were a great temptation to fraud. He perfectly agreed with the hon. Member, in reference to the collection of the tax, that no doubt could exist so far as a simplification of the machinery was concerned, that the interest of the Government would be greatly affected by a fixed duty. Upon the whole, however, he thought it of such vital importance that the lower classes should obtain cheap tea, that he should feel very reluctant, notwithstanding the forcible arguments that had been used by the hon. Member, to abandon the system without having made a trial.
§ Sir Robert Peelsaid, there could scarcely be a subject of greater importance brought under the consideration of the House, than that which had been introduced by the presentation of this petition. The House was discussing what was to be the future duty, and the mode of levying it, on an article of general consumption, which yielded last year a revenue of 3,300,000l.—a source of revenue which was collected at less expense than any other, and imposed a smaller burthen on the public than any other tax of one-third its amount. They were about to try a most important experiment with respect to the mode in which that duty was in future to be collected. Let the House bear in mind, that by the regulations about to be adopted, tea could be imported into any portion of the kingdom. Let the House also recollect, that this was an article, the amount of revenue derived from which was subject to the greatest possible fluctuations. Previous to the alteration of the Tea-duties made by Mr. Pitt, in 1784, a great portion of the teas imported into this country was smuggled. To such an extent did this practice of smuggling prevail, that Mr. Pitt found it necessary to introduce the Commutation Act, in order to put it down; for at that period, 13,000,000 lbs. of tea were consumed in the United Kingdom, and yet but 5,500,000 lbs. of tea were furnished by the East-India Company, the rest being secured by illegitimate means. The duty on tea, at that time, amounted to between 700,000l. and 277 800,000l.; but, in order, if possible, to prevent smuggling, Mr. Pitt diminished the duty to such a degree, as to have only 170,000l. revenue collected on the article. Was it wise, then, when they were on the eve of a great experiment in the whole trade to China, to adhere to that change in the Tea-duties which was introduced in a Committee of Supply, on the 15th of August;—in fact, in the dog-days, when the duties of the Legislature had devolved upon a very small number of the Members of that House? Who could deny, that the measure which was now proposed by his Majesty's Government, was a hazardous experiment? Free trade might, perhaps, counteract all the disadvantages incidental to the proposed alterations; but it became of peculiar importance, now that the Legislature knew the dangers by which the proposed system was beset, and was aware of the complications by which it would be attended—to see that no regulations were adopted which were not perfectly simple, which did not exclude every temptation to fraud, and which did not prevent, as far as possible, the injurious consequences of smuggling. The noble Lord said, that the effect of the intended plan would be to lower the rate of duty on the tea used by the poorer classes, and to raise the amount of duty on that consumed by the rich. It was certainly a plausible and a strong argument in favour of levying such a duty, that the amount of the revenue necessary to be raised, was apportioned to the means of the different classes by whom this article was consumed. He greatly doubted, however, that the measure of the noble Lord would have that effect. He would take the liberty of stating, for the information of those Gentlemen not conversant with the tea-trade, the principle upon which the scale of duties fixed by the noble Lord was regulated. Hereafter a duty of 1s. 6d. per pound was to be levied on bohea, not as an ad valorem, but a fixed duty; 2s. 2d. on congou, and 3s. on the better description of teas. These duties were fixed on the supposition that these teas were respectively consumed by the lower, the middle, and the higher classes of society. If the duties on these teas were paid exactly in the way assumed by the proposers of this measure, there might be some grounds for calling upon the House to accede to these regulations. The truth 278 of this assumption, however, he altogether denied. There was a difference of 8d. in the pound made between the lower and the intermediate description of teas, for the purpose, as it was said, of benefiting the poorer portion of the community. From levying the duty in that way, it must be presumed that the poorer classes consumed the worst description of tea. In contradiction to that assertion, he would only ask any hon. Member to inquire of those retail dealers who lived in the neighbourhood of the places inhabited by the working classes, what description of teas were generally bought by that portion of the people, and he (Sir Robert Peel) was satisfied he would find that it was not tea of the worst quality which was consumed by that class of the community. It was an incontestible fact, that the quantity of bad teas sold by them bore no proportion to those of a superior quality; and that for every chest of bohea sent from their stores, 100 chests of congou were purchased. Take Ireland, for example, as a country in which it was said the greatest poverty prevailed. He would not venture to say what exact proportion the consumption of good and bad tea bore in that country to each other; but this fact he would state, without any difficulty, that the quantity of congou sold in that country far exceeded that of bohea. To show still further the fallacy of this assumption, he would merely state the declaration of the East-India Company themselves, at their last sale, to show that congou tea was consumed by the great mass of society. The quantities of this description of tea sold were—
It would appear, therefore, from this statement, that the noble Lord, instead of bestowing a boon on the poorer classes of the community, would, by his project of a fixed rate of duty, materially increase the price of those teas generally consumed by the population of tins country. He would, in confirmation of this view, call the attention of the House to a statement of the teas sold by the East-India Company, consisting of the first class of bohea and common congou, during the last three years. It was as follows:—
Bohea 1,500,000 lbs. Congou 5,654,000 279
In 1831, the finest bohea 3,300,000 lbs. common congou tea 7,700,000 In 1832, the finest bohea 3,620,000 common congou 8,183,000 Notwithstanding so large a consumption, he would venture to say, that the difference of price at the sales was not above 1½d. in the pound. What was it they were now about to do? It was proposed to make a difference in the duty of 8d. per 1b. on these two classes of tea. What would be the consequence? A direct encouragement would be given to the consumption of a bad article. What was the course pursued by the East-India Company with regard to bad teas? Why, they destroyed all teas of a very inferior quality, because they were of opinion that if the article were brought into discredit, and strong prejudices entertained against it on the part of the public, its extensive use would, in a very short time, be seriously endangered. It would become, under the proposed regulations, the decided advantage of China to send an inferior article into this country. Now, with respect to the fine class of bohea, as had been proved by the hon. Gentleman, the member for London, in the able speech which he addressed to the House, he (Sir Robert Peel) should be glad to know how it was possible to distinguish it from congou? The plant was the same, and the difference in quality resulted from the nature of the soil on which both kinds were grown. It was proposed that there should be inspectors appointed, not alone in the port of London, where persons of long experience might, perhaps, succeed in discovering the difference between these two leaves, but in every port into which teas could under the recent change, be imported; so that to the opinion of an inspector, in one of the outports of Scotland, was to be left the decision of fixing the rate of duty, which might often involve a question of the highest importance to the trader. Suppose an inspector, though an honest man, desirous to increase the revenue, and that, for that purpose, he should fix a higher rate of duty than he was justified in imposing, what protection, in such a case, had the honest dealer against such a decision? If, for instance, a vessel from China were to bring 20,000 chests of tea, each weighing 80 lbs., it might make no less a difference than 50,000l., according as the duty were paid upon the tea, as bohea or as congou. This was, perhaps, an extreme case; but it showed the power which they were about 280 to give to the inspectors at the different ports. The noble Lord said, that he was anxious to try this plan, which he proposed as an experiment. He (Sir Robert Peel) maintained however, that they ought not to incur a risk which involved such serious consequences, without well considering the practicability and the policy of carrying the system into execution. The whole system was, in his mind, so complicated, and the danger to the revenue would be so great, that he besought the House not to come to a hasty conclusion on a measure which professed to bestow a benefit on one portion of the people, but was, in reality, fraught with the most pernicious consequences to all classes of the community.
In 1833, the finest bohea 3,404,000 common congou 9,116,000
§ Lord Althorp moved, that the House resolve itself into a Committee of Supply. The debate was adjourned.