§ The House then went into Committee on this Bill.
819§ MR. HENLEYwished the right hon. Gentleman the Chancellor of the Exchequer to state what alterations he had made in the Bill.
§ The CHANCELLOR OF THE EXCHEQUERsaid, that he thought the more convenient course would be that he should state the alterations when he came to the schedule. He stated it the last time, and they got into interminable confusion, the clauses and the schedules were so totally distinct. At the same time, if it was convenient to the House, he would state it now. The first alteration that he proposed was, that the Act should take effect from the 10th of October instead of the 5th of July.
§ Clauses 1 to 6 agreed to.
§ Clause 7.
§ MR. MULLINGSproposed to insert the word "fraudulently." He thought if this word were not inserted, innocent persons might be made to suffer. The Crown would still have the power of calling on the parties liable to the duty. It would be a very hard case to make a solicitor a Crown debtor when after he had received the money he was served with a notice countermanding the directions to pay the stamp duty.
§ The CHANCELLOR OF THE EXCHEQUERsaid, this clause stood exactly as it passed in the former Bills. The point was raised and discussed, and it was settled that it should pass as it stood now. It was intended to meet the case of a party paying money over to a solicitor, and the solicitor detaining the money. It was perfectly true that the Crown had a remedy against the party, and in order not to be defrauded of the duty the Crown exercised that power, and the consequence was that the innocent party was called on to pay twice over. Now the attorney might, when he obtained the money, intend to pay it for the purpose intended, and if the word "fraudulently" were in the Bill, it might throw a difficulty in the way.
§ MR. MULLINGSsaid, it was in consequence of what took place on the last occasion that his attention was drawn to the point. The right hon. Gentleman had not taken into consideration the case of executors and administrators. There might be a dispute about a residue, and they might not choose to pay it over till they saw whether there were any of these claims. Having a remedy against the party, he thought they ought not to make 820 a third party liable unless there was clear fraud.
The ATTORNEY GENERALsaid, the word "fraudulent" that it was proposed to introduce was really not desirable. The object was to make the person liable who had received the money and not paid it over. It not unfrequently happened that after the lapse of a great number of years the Stamp Office proceeded against the person who was originally liable for the stamp duty, the legacy and probate duty, which the party believed had been paid, because an account of it had been delivered in his solicitor's bill. He had seen no solicitor of respectability, no solicitor at all, who objected to the clause giving the remedy against the solicitor. But if they put in the word "fraudulent," the effect would he this: The solicitor received the money with the intention nine times out of ten of paying-it over, but he retains it perhaps till the next day, and then some payments come due in his office, and he makes use of the money. After a little time it becomes inconvenient to pay over the money, and after a little further time it becomes impossible. But they could not say that was fraudulent. What they wanted was, that the party who received the money should be made liable, but the introduction of the word "fraudulent" would defeat the object.
§ MR. HENLEYsaid, the word "improperly" might be inserted. As the clause stood, the mere omission for an hour to pay over the duty made a man a Crown debtor.
The ATTORNEY GENERALshould not object to the word "improperly," but he thought the clause would be better without it, because an attorney who received the money was a Crown debtor if he neglected for an hour to pay the money over. You paid your solicitor 1.000l. to pay probate duty, and the moment he received it he was a Crown debtor. That was a right state of things; he knew his responsibility when he received the money; and, therefore, he did not think that the word "improperly" would suit, because it would not be "improperly" till a reasonable time had elapsed.
§ MR. HENLEYsaid, the position of an attorney of large business, who might receive money every day in the week, would he this—that he would be constantly a Crown debtor, and could not convey an 821 estate. He thought the word "improperly" ought to be inserted.
The ATTORNEY GENERALsaid, that the insertion of the word "improperly" would be destructive of the effect of the clause. It was proper that he should mention that the seller would not be debtor to the Crown until it was found by inquisition. The Barons of the Exchequer would not allow that until it was found by inquisition.
§ MR. WALPOLEHere by Act of Parliament you are making him a Crown debtor.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clause 8.
§ MR. MULLINGSsaid, that the clause provided that where the transfer of a mortgage with a further advance of money should be made by the person originally borrowing, then the duty should be the same as on the original mortgage. He proposed an Amendment to correct that. He thought it a hardship, if a person owed a sum of money, the party being doubtful whether the security would be enough to cover the sum, he went to a person and said, "Join me in the security," that he was to be subject to another duty.
The ATTORNEY GENERALsaid, that it was, in fact, a new transaction and a new mortgage. He admitted that cases of this description ran into very fine distinctions, but this way of acting was only an evasion of the tax. Where a new person was brought in to give new security, that was a fresh arrangement of money. He thought the proposal of the hon. Member for Cirencester was not admissible in this clause.
§ MR. CARDWELLsaid, that, as far as he had heard the argument of the hon. and learned Attorney General, he thought that every transfer of a mortgage might be made out to be a new transaction—every time a man received money from A to pay off B.
§ MR. WALPOLEsaid, that the principle was, that where there was one loan of money, and only one loan of money, only one duty should be paid.
§ The CHANCELLOR OF THE EXCHEQUERYes, if all transactions were really honest. The object of this clause was to prevent the evasion of the duty in a case in which a perfectly new security was given.
§ MR. MULLINGSsaid, that all the solicitors were constantly falling into the mistake of not putting on an additional stamp. 822 Securities had frequently been bad in consequence of that. There was no part of the Stamp Act which had led to so much litigation and difficulty as the clause on this subject.
The ATTORNEY GENERALmaintained that there could be no question about the construction of this clause. It was necessary, whenever taxes were imposed, to provide against various attempts at evasion. Not only was the law constantly evaded, but courts of law had determined that every mode by which you could evade was not only not fraudulent, but it was proper and right. He submitted that the clause was distinct and clear, and hoped that the Committee would abide by the clause as it now stood. The great object of conveyancers and solicitors was how they could avoid the Stamp Acts, and their utmost ingenuity was constantly exercised for the purpose of evading them. His hon. Friend was aware of that of which he was now speaking, and he had exerted his ingenuity and power of mind successfully for the purpose of evading the Stamp Acts.
§ The CHANCELLOR OF THE EXCHEQUERpromised to undertake to consider the matter, and the Amendment was withdrawn.
§ Clause agreed to.
§ Clause 9.
§ MR. MULLINGSsaid, that he had no Amendment to propose, but he wished to call the attention of the House to the fact that at present it was the practice of the Stamp Office to affix a stamp to a deed six weeks after the date of execution. By the clause now before the Committee, a penalty of 10l. was imposed if the deed or instrument was executed before the proper stamp was affixed; but he had been assured at the Stamp Office, in the presence of the right hon. Gentleman, that it was not intended to depart from the established practice. For the information of the public, however, he wished to have that pledge repeated by the right hon. Gentleman.
§ The CHANCELLOR OF THE EXCHEQUERsaid, that it was not intended to make the slightest alteration in the present practice.
§ Clause agreed to, as were also the remaining clauses.
§ The CHANCELLOR OF THE EXCHEQUERthen said, that before the Committee took into consideration the schedule of the Bill, he wished to state that there was one great alteration which he proposed to 823 make as to the duty on conveyances. The House might remember that when he first brought forward this Stamp Bill, he stated his opinion that it was desirable to give relief in the way of a reduction of duty, rather more in cases of transfers than of mortgages. When the House, however, came to deal with the subject of mortgages, they voted to reduce the duty on mortgages to a very considerable amount; and, he must add, to a most inconvenient amount in all ways, which put him under the necessity of withdrawing that Bill, and submitting new resolutions to the House. In those new resolutions, to which no objection was taken, the duty on mortgages was raised to a small extent above that which the House had voted, the opinion being by that time pretty general that their former conclusion was rather ill-considered. He apprehended that all parties were now agreed that the duty on mortgages should be charged at a uniform rate per cent. He found, however, that the loss by this arrangement was such that it was impossible for him to give the full extent of the boon which he had intended on transfers and conveyances, and therefore he had been obliged to raise the duty to a uniform charge of 1 per cent throughout. One of the first results of that was to bring to his knowledge a way of avoiding the full duty on the transfer of railway shares, which was believed to affect the revenue to a very considerable extent. According to the existing law, the duty on the transfer of 1.000l. would be 12l.; but he found that, by a process of dividing the amounts, the parties transferring the property would get off with the payment of 6l. 10s. Thus, by making three transfers, two of 499l. each, and one of 3l., they would pay but 3l. duty for each sum under 500l., and 10s. for the 3l., while honest people would pay 12l. [Mr. MULLIGS: Foolish people!] Well, he would not dispute that point. At the time when he brought forward his original proposition, it was early in the Session, and he was not very confident of what the probable amount of the revenue would be. He was happy, however, to say, that the prospeets of the revenue had greatly improved; and as this Bill would not come into force before the 10th October, the Act would only be in operation during the first half of the present financial year. He proposed to reduce the duty on all conveyances to one-half per cent instead of 1 per cent, which was paid at present. He calculated the loss which would arise to the revenue 824 when the whole Bill came into operation would be 500,000l. The Act would take effect on the 10th of October, and with the loss which had been sustained on the past quarter as well as the present, which he also took at 40,000l., there would be a probable loss on the whole of the present financial year of 330,000l. He had been assured that it was probable the surplus revenue would be greater than he had calculated in March last, when he had stated it would probably be 1,547,000l. From this must be deducted the brick duty, amounting to 456,000l., and the loss which would arise from the stamp duties, which would leave him 760,000l. Then there was 200,000l. to be deducted, which had been applied to the purchase of the equivalent duty. He apprehended, from the present state of things, he should be about 11,000l. better off than he had supposed on the former occasion. With this rise in the revenue, and with every probability of its going on, he regretted that he had hitherto not been able to lay the balance-sheet on the table, but he hoped it would be ready in a few days. He had evaded the Amendment of his hon. Friend the Member for Evesham by proposing that half per cent should be substituted in the Bill for 1 per cent; and he trusted the course he had pursued would give satisfaction. Hon. Gentlemen who had defeated him on two subjects must allow him to say, that if the House had persisted in repealing the duties on attorneys' certificates, and reducing that on Irish spirits, he should not have been able to have made this reduction in the stamp duties. He believed this would be an infinitely greater boon to the attorneys and solicitors than removing the certificate duty. He hoped he might be allowed to say that he had done for that class by his measure more than they proposed to do for themselves. He also proposed that when there were several covenants annexed to a deed, they should be considered as part of such deed, and that there should be a progressive duty of half per cent on deeds or certificates, as if they were followers.
§ SIR H. WILLOUGHBYwished to know whether the duty on lands was to go on without any maximum being stated. At present it was 25,000l.; and apparently, from the schedule, it might go on to the largest amount.
§ The CHANCELLOR OF THE EXCHEQUERthought it was only fair that large properties should pay in proportion to small 825 properties. He thought his proposal was very fair, and he could not see why large amounts of property should not be equally taxed as well as all other kinds.
§ MR. W. BROWNwas glad to find that the right hon. Gentleman the Chancellor of the Exchequer had regulated his duties on this principle. He could see no valid objection to the ad valorem principle, and he therefore hoped the Bill would pass.
§ MR. HENLEYalso approved of the ad valorem principle. He hoped it would be extended to the stamps on bills of exchange, in which the smaller class of traders largely dealt.
§ MR. CARDWELLsaid, he had presented petitions some time ago from some of his constituents, whose dealings were with very large sums of money; but he was glad most of their objections had been met by alterations made in the Bill. He was glad an ad valorem duty had been adopted. He hoped the right hon. Gentleman would not persist in exacting the highest sum named in transactions of persons who were not now in a very flourishing condition. The right hon. Gentleman, in his financial statement, said that the loss by the operation of this Bill in the two last quarters of the year would be 330,000l., and that still there would be a balance left in the Exchequer, after all deductions, of 760,000l. The right hon. Gentleman now said that he was going to lose by this Bill upwards of 300,000l., and that notwithstanding this deduction from the sums paid into the Exchequer, he should have the same balance in the Exchequer.
§ The CHANCELLOR OF THE EXCHEQUERsaid, he calculated the whole amount of surplus revenue at 1,500,000l., and he had given away 450,000l. on the brick duty, and 300,000l. on stamps. He had stated now that the amount of the whole of the deduction of the stamp duties would not be charged for the whole of the year, because the Bill would not come into operation until the 10th of October; therefore he believed that he should only lose 250,000l. The loss on the last quarter was 40,000l., and he believed there would be about the same loss in the present one.
§ MR. CARDWELLthought the right hon. Gentleman, with all submission, stood where he did before. The right hon. Gentleman, when he first introduced the subject, said the actual loss on stamps would be 300,000l., and 400,000l. from the brick duty; and he calculated the ulti- 826 mate result would be to leave a balance of 750,000l. in the Exchequer. He now said that some further loss would accrue from the recent changes he had made in this Bill, and yet he seemed to consider that he thought he should have to put the same balance on the 5th of April as he had mentioned in his financial statement. He could not help reminding the House that they were dealing not with duties which came before them every year, but with provisions of permanent Acts of Parliament. He was glad the alterations had been made in the Bill, and should give his support to it.
§ MR. MULLINGScould not agree with the Chancellor of the Exchequer as to the amount of the loss which the Exchequer would sustain by these changes. He believed there would be a large increase in the number of transactions, and there would also be an increase in deeds for larger sums.
§ Schedules agreed to. Additional clauses added.
§ MR. MULLINGS moved a clause to the effect that it should be in the power of any Judge at law or equity, where a document was insufficiently stamped, to receive it, if he should think fit, in evidence, but subject to such further stamp as would make it sufficient, and that no steps could be taken till the party paid the stamp duty, and that the document should not be available in any other suit till the proper stamp duty was attached. The Court of Chancery at present made orders subject to the payment of the stamp duty, and he wished that the same principle might be extended to the courts of law, for he had known cases of great hardship, arising from the circumstance that a document was not sufficiently stamped, although it was evident that the insufficiency of the stamp arose from the ignorance of the party.
The ATTORNEY GENERALobjected to the clause, because if they were to raise the revenue at all, by means of a Stamp Act, it was clearly inadmissible. It was true that the Court of Chancery allowed questions to stand over till the proper stamp was affixed to a document, where it was not sufficient. The consequence was, that the objection of the insufficiency of the stamp was seldom urged. If a court of law could do the same thing, the consequence would be that the objection would not be taken, and parties would not affix the stamp at all to the document. It was certainly difficult in some cases to know what the proper stamp was; but they en- 827 deavoured to provide for that case, by giving the parties an opportunity of ascertaining what the proper stamp was. If the hon. Gentleman's clause were agreed to, he was afraid it would be attended with a large defalcation in the revenue.
§ MR. MULLINGSsaid, he did not refer to documents which were not stamped at all, but to documents which were insufficiently stamped.
§ Clause brought up, and read 1°.
§ Motion made, and Question put, "That the said Clause be now read a Second Time."
§ The Committee divided:—Ayes 50; Noes 111: Majority 61.
§ House resumed.
§ Bill reported; as amended, to be considered To-morrow, and to be printed.