CUSTOM HOUSE FRAUDS. (Hansard, 8 August 1843)

HC Deb 08 August 1843 vol 71 cc394-401 394

§ On the motion that the report of the committee of supply be brought up.

§ Mr. Hume
was anxious to call the attention of the House to the frauds on the revenue committed in the Customs department. The report of the commissioners appointed to inquire into the extent of those frauds had been laid upon the Table, and it disclosed such an extent of frauds committed by the very men who had been appointed to control that part of the public revenue as could scarcely be believed. It was admitted that the revenue had been defrauded to the amount of millions of pounds, and if the system in which the fraud originated had been checked when the effects of it first became known, it would have been unnecessary now to impose the income-tax. He regretted that the evidence collected by the commission- 395 ers, on which the report had been founded, was not placed upon the Table, and that a commission had not been issued to inquire generally into the state of the revenues, for there was no doubt that the present high rate of duties formed a strong temptation to smuggling and all kinds of fraud. Up to the present moment they were ignorant of the facts proved before the commissioners; the report threw the blame on the inferior officers of the Customs; but he would prove that the fault lay with the commissioners themselves. In no department was so little regard paid to the fitness of persons appointed; of the nine commissioners, as an instance, he stated that only one was supposed to know any thing about the business of the office. The whole was an affair of patronage; if there was a son of the Chancellor of the Exchequer, who was fit for nothing else, he was made a Commissioner of Customs. Millions of money were trusted to the management of persons utterly incapable of the duty. For 10 years past the merchants of London were aware of what was going on; the only persons ignorant of it were the Commissioners of Customs. The public press teemed with denunciations of the system; and if the Chancellor of the Exchequer had done his duty, he would have suspended the whole board. Individual officers had been suspended, but they heard nothing of the suspension of a commissioner. He wanted the evidence that had been given. The objection that the production of it would interfere with the courts of justice was to trifle. Ministers should have attended to this subject instead of wasting the time of the House upon an Arms Bill and a Coal-whippers Bill. The frauds discovered were principally in the department of light goods. There were extensive frauds also, in teas, tobacco, and other articles. In one case cigars had been passed as marble. Could this be believed possible? Could anything be more convincing that the commissioners could not have done their duty, for every department of the Customs appeared to be a mass of corruption? He believed that the evidence was withheld because its publication would compromise certain parties in high places. If those high in authority in the Customs had been as observant of their duties as was incumbent on them, such frauds would never have occurred. Let them look also to the consequences of the present system. Not 396 only was the public defrauded, but the honest dealer, who paid the high duties levied by the Legislature, was made to suffer most serious losses. They might be assured that no board, nor any officers could ever prevent smuggling while the present high restrictive duties were kept up. The best protection, both to the revenue and to the honest trader, would be a moderate and fair duty, which would take away from the smuggler the temptation to fraud. No attack made upon the Customs by The Times newspaper, or by any other portion of the public press in in the country, was half so unfavourable to the commissioners or so conclusive a proof against them as the report he then held in his hand. At the same time he must say that the reports and articles in The Times with respect to these frauds and the mode in which the public business in the Customs department was conducted, he felt indebted to that journal. The report said, So long as the high duties were kept up, no salary could could secure the officers from the temptations which were held out to them. These gentlemen were not very favourable to free-trade in their general views; but on this subject they could not avoid giving their adhesion to the principles which he had insisted upon for years. The hon. Member concluded by moving, That an humble address be presented to Her Majesty, that she will be graciously pleased to direct that a copy of the evidence taken before the Commissioners appointed to inquire into the frauds in the collection of the revenue of Customs be laid before this House, in order that the extent and nature of the frauds may be known, and measures adopted by Parliament to put an end to such proceedings, which are injurious both to Her Majesty's revenue and to the fair trader.

Mr. Williams
considered his hon. friend's motion one of the most important that had been made during the session, and he was satisfied that if there were time for a free and searching inquiry into the facts, it would lead to the most important results. He considered the right hon. Gentleman the Chancellor of the Exchequer greatly to blame for having so long neglected the subject, after the malpractices had been detected and exposed. If any gentleman detected a domestic servant in the habit of defrauding him, would he not, at least, discharge him from his service? Why should not the affairs of the public be as 397 properly attended to? Why should not the servants who had defrauded the public be discharged and punished? Why was there nothing done to render the Board more effective? It was very well known that the inefficiency of the Board, and the neglect of duty on the part of the commissioners, had been the principal cause of the abuses. It was a principle founded upon common sense and reason, that where the heads of departments, whether private or public, neglected their duty, their example had not only an effect upon all who were subject to them, but was, unfortunately, too frequently followed by them. The hon. Gentleman supported the motion.

§ The Chancellor of the Exchequer
said that there was no desire or intention on his part to keep back any part of the evidence. But the premature publication would prevent the prosecution of the offenders; and if he had so frustrated justice, the Hon. Member for Montrose would be the first to condemn him for it. He thought, however, then when the time came, the publication was not only necessary, but that it would be attended with great advantage to the public; and he believed that the exposure of the nefarious transactions that had taken place would be more effectual even than punishment to prevent the repetition of them. With regard to the commissioners he should not be just to honourable men, if he allowed this opportunity to pass without expressing his perfect confidence, that as far as anything had yet appeared, nothing had occurred to shake the opinion entertained of their integrity and honour. A reference had been made to the extensive fraud committed by an individual high in his own department; but he denied that it was in the power of any Government to have taken precautions against such a fraud. He had received a plan for detecting the fraud by which he must have been a party to corrupting the officers still farther, but he refused to resort to such a means of discovery. The consequence had been that more time had been necessary to bring the evidence together. The whole transaction was of a most painful kind; nothing could be more painful than to find that men, in whom confidence was placed, were ready to yield to temptation, except the fact that among the trading community of England, so many supposed to hold a high position in the honourable 398 order to which they belonged, could be found to bribe and corrupt the public officers to such an extent, with the view of obtaining an advantage over their competitors. This was painful to those who had thought that the honour of English merchants stood higher than that of those of any other country. The hon. Gentleman had spoken of the improper mode of appointing the officers, and had given a description of that mode which was more in accordance with his own imagination than with the fact. He said that the Gentlemen appointed as commissioners of the Customs were unqualified for their office; he would give him leave to say that several of them had a knowledge of the law which was likely to be useful. As to their being connections of the aristocracy, he believed that if they looked at the men in that House who distinguished themselves, they would find that very many of them belonged to the aristocracy; from the manner in which they were educated, he believed, ceteris paribus, that they were in general fitter for the position than men of humbler birth. He lamented that these things had not been known to the public, but if the public, who were in possession of the facts, would not communicate them, the public must be blamed. He was most anxious that the House and the public should know every fact connected with this unfortunate transaction. The attention of the Government was anxiously directed to the circumstances stated in the report, and such arrangements would be made that every precaution human means could afford would be taken against the recurrence of similar malversation.

§ Dr. Bowring
said that the hon. Gentleman had raised but one solitary objection to the motion of his Friend the Member for Montrose—viz., publicity. The Custom-house department, like too many other portions of the Executive, was subject to abuses from its being too independent of the Treasury; and as to its own internal management, there were few instances of men rising therein through the lower regions to the Board of Commissioners. Looking at the statistical reports of the imports to this country, and the exports from abroad, the latter exceeded the former by one-half. Brandy was said to be an exception, but that arose from the fact that the quantity of it exported here was not preserved. The notion in the city certainly was that the Board of Commis- 399 sioners was a very inaccessible body of men, both to persons in business who wished to see them, and to their immediate subordinate. The responsibility of the Customs' department should be made to depend upon one person, and all the duties collected therein should in the first place be paid into the Treasury, before defraying, as at present was the case, the expenses of the establishment.

Mr. S. Wortley
was so confident in the ability and integrity of the Chancellor of the Exchequer in investigating these frauds, that he would oppose the motion of the hon. Member for Montrose. He concurred, however, with that hon. Gentleman in his remarks upon the Board of Customs, and regarded them, from the report before the House, to be just and well founded.

§ Mr. F. T. Baring
agreed with the Chancellor of the Exchequer, that it was advisable that for a time the evidence of the Customs' frauds should not be made public. Publicity was a very good thing, and ultimately it was right that the facts of the present case should be made public; but in the mean time, till the evil was fully detected, it was proper that the information should be withheld. The hon. Member for Bolton spoke of the bad effects of allowing the Custom-house to defray the expenses of its own establishment before paying the duties collected by imports into the Treasury, and if it had been so he would have concurred with him; but for the smallest sum expended in the Customs the Treasury was responsible, and much more responsible than for the expenditure of money granted by vote of Parliament.

§ Mr. T. Duncombe
said, that although it was stated that it was at present inconvenient to place before the House the evidence in question, yet the Chancellor of the Exchequer had not pledged himself to give it at a future time. The suspicion of the public was, that there were high parties who were culpable as well as those who had been openly accused; and if such was the case, why should they receive protection which Mr. Candy was denied? The report and enquiry of the Board of Commissioners of Customs had not given satisfaction to the public. The report then before the House contained upon the face of it reflections upon the conduct of the commissioners, and their irregularity in attending during business hours, From the 10th of August to the 400 end of September, for a period of six whole weeks, while the public press was ringing with the subject of these frauds, the Commissioners had remained contentedly in ignorance upon the subject, without any knowledge that these frauds had been discovered beyond what they collected from the daily newspapers. Their numbers ought to be reduced to three; for surely, if that number sufficed for the management of the English and Irish Poor Laws, it ought to suffice for the Customs. The Board, as at present constituted, was a very nice piece of Government patronage; and, indeed, it was known that the landing-waiters and other officers of this department almost invariably received their appointments for electioneering services, He would ask the House to look at Burnby, who was screened by the Chancellor of the Exchequer from the punishment he merited. Burnby, on the discovery of the frauds, had fled for safety to France, and had returned only on the assurance of the Chancellor of the Exchequer that he would be protected. Burnby had got his appointment for his assistance at an election at Canterbury. He had some time ago written to Mr. Dean, the chairman, for a copy of the orders from time to time issued by the Board of Customs' Commissioners. That application had been refused, and from what he had seen in a copy obtained elsewhere, he was not surprised that the Board were disinclined to produce such a mass of absurdity. Yet the publication of that work had cost the country 1,500l. The country expected that the whole evidence as to these frauds would be laid before it, and without delay.

§ Lord G. Somerset
said, that Mr. Burnby, before going to France, gave the information to Government which led to the exposure of the Customs' frauds. He had been obliged to go to France, not as Mr. Duncombe had said, but to avoid certain threats of personal inconveniences by parties since proved to have been guilty of gross corruption, and the Chancellor of the Exchequer would have neglected his public duty if he had not re-called Mr. Burnby, and assured him that the protection of Government would be extended to him. He (Lord G. Somerset) would consider it to be a great objection indeed, if the evidence of the facts connected with these frauds was not, when the Government could conveniently do so, laid before Parliament. If the House insisted on the 401 production of the evidence at present, it would go far to assist the fraudulent parties.

Mr. Hume's
motion withdrawn.

§ The report of the Committee of Supply received and agreed to.