§ Order for Third Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a Third Time."
MR. LIDDELLsaid, as he had not had any previous opportunity of addressing the House on this question, he wished to state his objections to the Bill—objections which were of so substantial a nature that he could not ride off upon the mere Amendments to be proposed. The House, be said, would recollect that the Chancellor of the Exchequer, at the very outset of his observations on the financial state of the country, had demanded and obtained a continuance of the income tax, in its present shape, for a longer period than had ever 395 been granted to that impost; and now the right hon. Gentleman proposed to impose a new tax upon landed property, which he (Mr. Liddell) conceived to be liable to the greatest objection. The Chancellor of the Exchequer had said that this new tax which he had proposed need not be regarded as a very heavy impost, for it could only be imposed once upon the owner of landed property. But he (Mr. Liddell) could submit details to the House which would show that the inequalities and injustices that would be occasioned by the imposition of this tax, ought to induce the House to reject this Bill. He certainly had known instances in which the same property had been held by the same individuals for about sixty years; but he also knew an instance, on the other hand, in which the same property had, by frequent deaths, changed proprietorship three times in three years. That instance occurred in the case of a family named Lovaine, who lived in the county of Northumberland. He could cite other instances in which successions had occurred with a like rapidity. Where, then, was the fairness of subjecting to the same tax one class of property upon succession to inheritance, which might take place four or five times in the course of twenty years, and another class, which might be in the possession of the same individuals for a period of sixty years? That objection of inequality was, in his mind, sufficient to condemn this tax. He gave the Chancellor of the Exchequer credit for the endeavours which he had made, by the tables which he had appended to this Bill, to counteract in some degree the inequality and injustice of Bill. But he must remind the right hon. Gentleman that nothing could be more fallacious than calculations contained in those tables with reference to the duration of human life. The House, in dealing with this measure, should bear in mind the difficulties connected with the transfer of landed property. The right hon. Gentleman the Chancellor of the Exchequer, before he proposed the imposition of such a burden as this, should have laid before the House some plan for the reform of the present costly mode of transferring landed property. As long as the present stamp duties were imposed upon conveyances, no such burden as that proposed by this Bill should be sanctioned by the House. Suits of the most expensive and dilatory character had frequently to be introduced to enforce the completion of a purchase of landed property. Until the manner of proving 396 title to land was rendered more simple and cheap, no such Bill as the present ought to be laid before the House. He was acquainted with a case in which the costs of stamps imposed upon deeds conveying an estate amounted to about 300l. The duties of trustees, if this Bill should pass, would be most perplexing and embarrassing, because it would be extremely difficult to say who should pay the succession duty on the decease of the owner of landed property. Another objection to this tax was, its coming at a period when the successor might be encumbered with many other payments, and when, therefore, he would have very considerable difficulty in meeting this new charge, without, in many cases, bringing a portion of his property into the market, and thus, as long as the present complication of titles existed—as long as the present stamps upon conveyances existed—you would be exposing the individual in this condition to a double burden by the operation of this Bill. There was, further, very strong ground for objection in the inquisitorial character of the Bill. At the time when a man might be most embarrassed it would require the production of every title deed, of every mortgage, of every family settlement, even of the most delicate character; and, yet after all this, there were certain properties whose value could not possibly be accurately estimated under it. Such were mines and collieries; and how were railways to be estimated, for which a large rent might be got at one time, and, in consequance of the making of a new railway, or other similar cause, little or none at another? The right hon. Gentleman, by this Bill, would make every man a ward of the Crown. It would give the Crown the right to inquire about every man's landed property, the title by which it is held, and the rents received from it; and it would be necessary for him to send out a few Empsons and Dudleys to levy the tax. It was said that, because there was a succession duty on personal property, it ought to be extended to real property. Now, when was the succession tax levied on personalty? In Mr. Pitt's time, to enable the country to carry on an expensive and ruinous war; but even in the plenitude of his power Mr. Pitt was unable to impose it on real property. When every effort was being made to levy taxes in the least burdensome manner—and it was the study of the Chancellor of the Exchequer to remove all odious impediments from trade and commerce—it was most un- 397 just to pass such a measure as the present but, judging from the majorities which the right hon. Gentleman had already obtained, he was afraid his success was but too certain. He (Mr. Liddell) believed, if the Chancellor of the Exchequer succeeded in passing this Bill, that the country would not long submit to it. He should, there fore, say No to the third reading.
§ Bill read 3°.
§ MR. SPOONERsaid, he wished to call the attention of the Chancellor of the Exchequer to the great hardship which would arise under the second clause Suppose a stranger in London to leave an estate to A for life, and for A's son in tail, A would have to pay ten per cent in the first instance, and his son would afterward, have to pay ten per cent interest. Surely the right hon. Gentleman could not intent such an estate to pay ten per cent twice? To remedy this injustice, he would propose to add to the second clause a proviso to relieve the difficulty.
§
Amendment proposed—
In page 2, line 34, after the word' derived,' to insert the words, 'Provided always, that when a father is tenant for life of a property, and his son is either tenant for life, tenant in tail, or tenant it fee, in remainder or reversion, of the same property, under the same instrument, the son shall be deemed to be a lineal descendant, and shall pay a duty accordingly.
The SOLICITOR GENERALsaid, he did not think there was any hardship it the case suggested—that of a settlement in which a father is tenant for life with remainder to his son. Now the principle of the Bill was this. When an estate was derived from a person, the relation it which he stood to the giver of the bounty ought to govern the extent and character of the tax, and the tax would be measured according to the enjoyment of the estate and the relation of the giver. Supposing a will to be made under which the first taker should be eighty-five years of age, with remainder to his son, who might be only thirty-five years of age, the father's interest would be valued on the principle of its enduring probably not more than one or two years, and ten per cent would only be paid for that limited amount of enjoyment which would be measured by the value of the life interest of the first taker, If this exemption should be introduced, a great number of others must follow, and the Act would in fact become a mass of exemptions. The matter had received the most mature consideration, and he should vote against the proviso.
§ MR. MULLINGSsaid, he was glad his hon. Friend the Member for North Warwickshire (Mr. Spooner) had again raised the point, because it was desirable the public should become acquainted with the oppression to which they would be subjected.
§ MR. MALINSsaid, the case was one of considerable hardship, and he had hoped that the Chancellor of the Exchequer would have made some relaxation. On each succession ten per cent would have to be paid, and in some cases the Chancellor of the Exchequer might soon rejoice in having possession of the whole property.
§ The CHANCELLOR of THE EXCHEQUERsaid, it was impossible to accede to the proviso, if it were only on the ground that the hon. Member had not laid down in his Amendment any distinct principle on which the exemption could be brought in without incurring other exemptions. The Amendment would leave the Bill in a state of great inconsistency, and would prove most unsatisfactory if it should be adopted in the case alluded to—that of illegitimate children.
§ SIR JOHN PAKINGTONsaid, until the Amendment was moved he was not, aware that the Bill contained such an injustice. This was not the case of illegitimate children, but the case of all bequests by strangers in blood. He did not see why a legitimate child should have to pay ten per cent after the death of the father to whom the property was originally bequeathed.
§ Question put, "That those words be there inserted."
§ The House divided:—Ayes 100; Noes 138: Majority 38.
§ MR. FRESHFIELDrose to move an Amendment upon the 4th clause. He said, that under the General Legacy Act of 1796, the cases of persons to whom legacies were given to be enjoyed for life, or during some limited time, with a power to appoint the capital of the legacy for the benefit of any person or persons especially named or described, and of persons having any limited interest, and a general and absolute power of appointment, were provided for with an obvious intention on the part of the Legislature, that the legacy duty should attach equitably and fairly to the property as it passed into different hands according to the beneficial interest taken by each; and by the Act of 1805, 45 Geo. III., chap 28, which extended the duty to any legacy given to a child, or the descendant of a child, whether 399 charged upon real or personal estate, and exempted from duty the husband or wife of the deceased. A further proviso was inserted, Section 4, exempting any specific sum or sums of money or any share or proportion thereof charged by any marriage settlement or deed upon any real estate, in any case in which any such specific sum or sums, or share or proportion thereof, shall be appointed or apportioned by any will or testamentary instrument, under any power given for that purpose by any such marriage settlement or deed or deeds.
This latter provision being a further affirmance of the same just principle, that the mere carrying into effect, even by a will of that power by which another was to benefit, should not be regarded as a part of the property of the persons entrusted with the exercise of a power of appointment; and that the benefit derived from the appointment should not be considered a legacy, as it really was not; but he (Mr. Freshfield) regretted to say, that the spirit of this Succession Act took a different direction; and Clause 4, which he sought to amend, enacted that—
Where any person shall have a general power of appointment under any disposition of property taking effect upon the death of any person dying after the time appointed for the commencement of this Act over property, he shall, in the event of his making any appointment there under, be deemed to be entitled at the time of his exercising such power, to the property or interest, thereby appointed as a succession derived from the donor of the power.The clause so proposed would render the party possessing the power, no matter how he exercised it, liable to the succession duty, notwithstanding that person should from a grateful sense of the confidence reposed in him, so appoint the property, as from altered circumstances, or further knowledge of the wishes of the donor of the power, practise the most generous self-denial, by making the appointment as to the whole or part of the capital or income to be derived from it, in favour of some third person, who would clearly acquire a succession and pay the succession tax; and this he would pay because he acquired a succession, and the possessor of the general power would pay under this clause not because he did in fact acquire any direct advantage to himself, but because he might have done so had he chosen to act a selfish part; and thus the same property would at one and the same moment pay the tax twice. This 400 was the spirit in which the power of the majority was used in carrying out the succession principle, not as to real property—the great object of taxation with a section of hon. Members—but as to personal property also, which would be found to bear more than was generally supposed by the change of the character of the tax from a legacy to a succession duty. He therefore proposed an Amendment which would leave the last branch of the 4th clause, namely, the provision relating to a succession derived under a limited power of appointment, untouched; but as to persons having a general power of appointment it would cause the tax to be paid by the parties deriving benefit under such power, and strictly and without favour or exemption to the full extent of that benefit; and with that view he moved that the clause be amended by inserting in line 12, page 3, after the word "power," as follows:—In case the power shall be so exercised as to vest the said property wholly or in part for his own benefit, and in case the person having such general power of appointment shall exercise the same in whole or in part in favour of any other person, the property so appointed as last mentioned shall be deemed a succession derived by snch last mentioned person from the donor of the power.
The SOLICITOR GENERALsaid, the clause was in strict conformity with the principle and tendency of the Act, and was nothing more than an importation into the Bill of the rule which had been acted upon for nearly sixty years.
§ The CHANCELLOR OF THE EXCHEQUERsaid, the principle of this clause as to the duty payable, was precisely the same as that of the Legacy Acts.
§ Amendment negatived.
§ SIR JOHN PAKINGTONsaid, he wished to move the omission of all the words in the 21st clause, from the 35th line. The clause related to the interest of a successor in real property. The Amendment had for its object the prevention of the tax proposed to be levied in certain cases. He thought the provisions to which he objected most unjust and oppressive. But his objection applied most strongly, not to the bearing of the tax upon the wealthy, but upon the humbler classes of possessors of property. He appealed to the House against the infliction of this cruel hardship of the provisions in question, which, if allowed to stand, would, in many cases, amount to positive confiscation.
§ Amendment proposed, in page 8, line 34, to leave out from the word "payable" to the end of the Clause.
§ The CHANCELLOR OF THE EXCHEQUERsaid, the right hon. Baronet had discreetly abstained from attempting to demonstrate the truth of his assertion—that this tax would amount to confiscation. There was no foundation whatever for such a statement. The right hon. Baronet, on that as well as on former occasions, seemed to forget the mitigated burden which was to be enforced upon real property as compared with personality. How did the matter stand? For the sake of giving to the tax the most lenient form of which it was susceptible, he had proposed, instead of coming down upon the successor with the whole tax at once, which was done in other cases, to give him the power of spreading it over four years and a half; and, therefore, because he had proposed to grant him that very great indulgence, he was now told it was cruelty to deny the other gift of the whole unpaid residue of the tax. If the successor had only a life interest in the property to which he succeeded, he would not be required to continue payment of the installments due at the death of his predecessor; but if he had a continuing interest in the property, and if he was able to leave it behind him, there could be no reason why a tax due to the State should be remitted in his favour rather than any other debt to which he was liable. Was a tax to the State a legitimate debt or was it not? If it was, then he could only say that nothing could be more just than the clause as it stood.
§ MR. CROSSLEYsaid, he was astonished at this opposition to the clause. If the right hon. Gentleman (Sir J. Pakington) had moved, on behalf of the land, a vote of thanks to the Chancellor of the Exchequer for the consideration shown in this arrangement, he (Mr. Crossley) would not have been surprised; but he was puzzled to know on what ground they could complain of a most extraordinary indulgence and act of grace.
§ MR. MALINSsaid, that they (the Opposition) were not struggling for the great but for the small proprietors, and in this instance the small proprietary would suffer enormously. He predicted that the day would come when there would be an unanimous admission that this tax was in this respect a great blunder.
§ MR. HADFIELDsaid, he had consulted his constituents as to the Budget, and they 402 had given a direct and distinct approval of the Budget as a whole; and of no portion of it did they more approve than of this succession tax.
§ MR. VANCEsaid, he represented, like the hon. Gentleman (Mr. Hadfield), a large civic constituency; and their opinion was the direct reverse of that conveyed by the hon. Member for Sheffield. They regarded this succession tax as a tax from which the farmers and small proprietary of Ireland would suffer a heavy blow. The capital of Ireland was in land, not in manufactures, and this tax would cramp the rising energies of the country. It was all very well for the hon. Member for Halifax (Mr. Crossley), who was a prosperous manufacturer, to look lightly on the consequences of this impost. The hon. Member very likely turned his capital two or three times over in a year, but the farmer only turned his capital over once a year.
§ MR. EVELYN DENISONsaid, it was a mistake to suppose that that was a tax which would be peculiarly burdensome to the smaller proprietors. The fact was, that small landed properties were usually divided equally among the different children of the owner, and when they were sold out for the purpose of meeting the charges so created, the successors became subject to the legacy duty. He believed that if the opinion of the smaller proprietors were taken with respect to the Bill, it would be found that they were not so hostile to it as hon. Gentlemen opposite seemed to imagine.
§ MR. MULLINGSsaid, that the hon. Gentleman who had preceded him appeared to labour under a mistake. He had to inform the hon. Gentleman, that if a property were equally divided among the children of the owner, it would not be subject to the legacy duty.
§ Question, "That the words proposed to be left out stand part of the Bill," put, and agreed to.
§ MR. MALINSsaid, he wished to propose an omission in Clause 23—the "timber clause." A great deal of confusion and irresolution had been manifested in their mode of dealing with that clause. No man of taste wished that the timber of the country should be cut down. It was now clearly evident that the Chancellor of the Exchequer had abandoned the original intention of his Bill, because as the Bill now stood, any nobleman or gentleman entering on the possession of his estate would pay nothing whatever for his 403 timber. If timber was kept for the ornament of a demesne and the general beautification of the country, it was manifestly unjust and impolitic to tax it as though it were a source of profit. The duty on timber was either profitable or not. An estate might produce 20,000l. a year, and of that sum 1,000l. a year might be the produce of timber. If this were so, why should timber be made an exception to grass, corn, or any other crop? If the land produced 1,000l. a year in timber, it could not produce any other crop, and, therefore, if the successor were an honest man, he would make his return at 1,000l. a year, upon which sum the Chancellor of the Exchequer could get the duty. Timber was now actually excluded from the value of an estate; but then the Chancellor of the Exchequer said, "When once timber is cut, I will charge the duty upon it." By this magnificent scheme of taxation, whenever a son succeeded his father, and felled 10l. worth of timber, he would have to pay 2s., and if he felled 100l. worth, he would have to pay 10l., and so on. It was said that England could not bear a little war. She could not bear a little scheme of taxation, and this was one. Parliament had been removing small duties. They had taken off 1,500,000l. a year for the soap duty—a duty which, by the way, he did not think was any great boon. [Cheers.] He had no wish whatever to depreciate the importance of the manufacturing interests. They were not a greater, but he should concede they were as great and important a class as the landed interest. So in the case with bricks; the great thing appeared to be to get rid of the exciseman. When the right hon. Gentleman the Member for Buckinghamshire, when Chancellor of the Exchequer, wanted to get rid of the malt tax, the present Chancellor of the Exchequer objected to the proposition, alleging that it would do no good, as the expense of collection would still be kept up, and the exciseman could not be got rid of. But by the present proposition, the Chancellor of the Exchequer would retain something in the capacity of an exciseman, whose duty it would be to prowl over every estate in the kingdom to see what timber had been cut and disposed of by the proprietor, in order to levy a tax, which, when collected, would be utterly insignificant. He assured the House that he did not propose the omission in anything like a factious spirit; but he must say that the Chancellor of the Exchequer, in persisting with the 404 clause, showed that he was not free from the infirmity of noble minds. His infirmity appeared to be, far too great a pertinacity with respect to every clause which had been proved in argument to be wholly unsustainable. It was one of the misfortunes connected with the proceedings of that House, that it rarely happened that the decision of a question was left to the Members who had listened to, or taken part in, the debate. If this question could be left to the Members present, he would leave it with confidence in their hands; but, as soon as Mr. Speaker rose to put the question, a number of Members would rush in who knew nothing whatever of the question, and who merely voted with the party with whom they were in the habit of acting. He believed, that, even on the ground of prudence, the Chancellor of the Exchequer would gain nothing by this tax, but would be a loser. If the successor were allowed to include timber in his return, in the usual way, the chances were, that in 999 cases out of 1,000, the return would be an honest one, and the Chancellor of the Exchequer would have the benefit of the timber duty; but by the proposed plan, the cost of watching and collecting the 2s. and the 20s. would be more than they were worth, while the question of determining the duty would have to be left open during the whole life of the successor. He saw no reason why timber should have any ground of exemption, or why it should be made the subject of a special enactment. He hoped, therefore, the right hon. Gentleman would consent at this the last stage of the measure, to the omission he proposed.
§ Amendment proposed, in page 9, line 1, to leave out from the beginning of the clause to the word "which," in line 4.
§ MR. W. WILLIAMStrusted the House would not give way to the clamour of the hon. and learned Gentleman opposite. He would ask the hon. and learned Gentleman to descend with him to the humble cottage of the labouring man—to look at the old arm chair, in which, perhaps, his father died, and to contemplate the ancient oak chest, inherited, perhaps, from his grandmother. The value of these, and of everything else in the place, must be assessed at succession, and, if the sum amounted to 20l., 2½ per cent of probate duty and 1½ of legacy duty must be paid; whereas but 1½ was to be imposed on the valuable hereditary property in question; and the injustice of the hon. and learned Member's 405 observations was therefore at once apparent.
§ LORD JOHN MANNERSsaid, his object in rising was not to reply to the observations of the hon. Member for Lambeth (Mr. W. Williams), so much as to express his astonishment at the manner in which some hon. Gentlemen opposite, who represented agricultural constituencies, had dealt with the whole Budget of the Government, and especially the present Bill, and the clause more immediately under discussion. In endeavouring to account for the conduct of those Gentlemen in supporting this Bill, and more particularly this clause, he had been compelled to fall back on an explanation of similar conduct given many years ago by the celebrated Adam Smith, with reference to the political ancestors of Gentlemen opposite. He explained the matter in a very philosophical manner. When contrasting the success that attended the moneyed classes with that of the landed interest, he said—
Their—the moneyed interest's—superiority over the country gentlemen is not so much in their knowledge of the public interest, as in their having a better knowledge of their own interest than he has of his. It is by this superior knowledge of their own interest that they have frequently imposed upon his generosity, and persuaded him to give up both his own interest and that of the public, from a very simple but honest conviction that their interest, and not his, was the interest of the public.He believed that in those words of Adam Smith was to be found the true solution of the success, so far, of the scheme of the Chancellor of the Exchequer. He would in a few sentences state his objections to the Bill. He objected, in the first place, to the clause now under consideration, because it treated timber, a product of the soil, in a manner in which no other product of the soil was treated, and subjected it to an unfair, odious, and inquisitorial system of taxation. Another objection to the clause was, that even if it taxed timber in accordance with, instead of antagonism to, the system of taxation hitherto prevalent in this country, there were peculiar circumstances connected with the timber of England which might induce the Government, on public and national grounds, to make exemptions in favour of rather than against it. With respect to a not considerable class of timber in this country—hedge-row timber and isolated field trees—it was unjust and unfair to subject them to any taxation. As the Chancellor of the Exchequer did not 406 mean to tax hedge-rows when removed for agricultural purposes, he ought to exempt the timber forming a component part of the hedge from duty. With regard to isolated field trees, they grew either in arable or grass lands. Now, he presumed that no one would deny that the removal of timber from arable land was pro tanto an improvement of the estate. Then, the Chancellor of the Exchequer, in estimating the net value of a tree removed from such land, ought also in fairness to estimate the detriment to the property caused by the tree having stood so long there, and it would be found that the latter would balance, or more than balance, the net value of the tree. He, therefore, conceived himself justified in asking the right hon. Gentleman to exempt timber growing on arable land from the tax. In grass land, again, no one would contest that the maintenance of an isolated tree was a benefit to the field in which it stood, for it formed a protection to the cattle against storms and rains in winter, and against scorching heats in summer; and when the Chancellor of the Exchequer estimated the net value of such a tree on removal, he ought also to estimate the diminution in value of the grass land by the removal of the tree. Without speaking of great forests, such as the New Forest, he asked the House to look at the case of ordinary woodlands scattered here and there throughout the country. Let the House consider the moderate value of those woodlands, and the competition to which that property was subject with foreign timber, and then say whether it was fair and just now, for the first time, to impose a new excise duty on home-grown timber—for, disguise it as they might, such was the effect of the law. The argument used in favour of the reduction of the duty on the importation of foreign timber was, that it was just and right to diminish as much as possible the cost of that timber, which was used by the artisans, the peasants, and the shipowners of this country in the construction of their implements, workshop, cottages, and vessels. Then, upon what poinciple could hon. Members now call on the House to impose an excise duty on timber the product of their own soil? From the time of Charles II., when Evelyn published his treatise, with the direct sanction of the administrators of the King's Navy, to the days when a great modern authority, Mr. M'Culloch, denounced all timber duties, whether on foreign or home- 407 grown wood, he ventured to say no Chancellor of the Exchequer ever proposed to impose an excise duty on timber. Mr. M'Culloch said—If there be one article more than another with which it is of primary importance that a great commercial and manufacturing nation like England should be abundantly supplied on the lowest possible terms, that article is timber. Timber is not to be looked upon in the same light as most other commodities. It is against all principle to impose duties on materials intended to be subsequently manufactured; but timber is the raw material of the most important of all manufactures—that of the instruments of production. Suppose it were proposed to lay a heavy tax on ships, waggons, looms, or workshops, when completed; would not such a monstrous proposal be universally scouted? And yet this is what is being really done.Upon such considerations it was, that though a duty was nominally on all foreign timber, the exemptions made by the Legislature were extremely numerous, as the following heavy list would show. At the present moment the following timber and wood goods were admitted duty free: Birch and fir wood imported for making barrels for the use of fisheries; poles, being imported for shovel hilts; teak and Cuba timber, admitted for shipbuilding; locusts, trenails, greenheart, and morawood; all furniture woods, except ash, beech, birch, elm, fir, oak, or wainscoat, and all dye woods. If it were right and just, then, that these articles should be imported duty free, upon high and national considerations, would the House of Commons set the example of taxing corresponding articles the produce of the English soil? In justice, the Chancellor of tire Exchequer must either discontinue these exemptions in favour of foreign timber, or he must permit similar English-grown articles to be exempt from the operation of the present Bill, and then the tax on the remaining timber would not be worth the collection. There was, to be sure, a third course, contrary to all justice and equity, and that was, to continue the exemptions which foreign timber enjoyed, and at the same time to impose this succession tax in all its rigour, annoyance, and injustice on timber the produce of the English soil. If the Chancellor of the Exchequer did that, he would but confirm the suspicion which the landed interest had hitherto reason to form of the insincerity of right hon. and hon. Gentlemen opposite, as freetraders. The Chancellor of the Exchequer would then give ground for belief that Vœ victis! was the only rule of legislation as 408 applied to the landed interest of the country, and would create the conviction that at the hands of the present Government that interest had no reason to expect either justice or fair consideration. For the reasons he had stated, he should most cordially support the Motion of his hon. and learned Friend (Mr. Malins).
§ MR. DRUMMONDsaid, he was surprised that the noble Lord did not perceive the fallacies of his own argument. The duty which was about to be imposed had nothing of the nature of an excise duty, but was only a duty on successions to property, including timber. Not only the timber, therefore, which the noble Lord mentioned, but all those herring barrels and shovel hilts, and all the other articles, would be included for payment in like manner. The argument, therefore, of the noble Lord was wholly futile. It was not his desire to have made a single remark on that occasion if it had not been for the course of observation pursued by the noble Lord with regard to the landed interest. He deprecated these appeals to separate interests. Selfishness was bad, but it produced no public evil; but the separate interest of particular classes, if exclusively considered, went far to bring Government altogether to an end. With regard to this Bill he must say that he disliked it as much as any one else; but could they give him a reason why real property should be exempted from a duty to which personal property was liable? No doubt there would be great difficulty and expense in collecting it—expense and difficulty beyond anything that Parliament could see. They had reason to admire the great abilities of the Chancellor of the Exchequer and the Solicitor General in dealing with the Bill against the objections of hon. Gentlemen opposite. They made many objections; and it was very easy for captious men to object. However, the lawyers were equally ignorant as the rest of them, for they rose and debated continually. Nevertheless, this was called a well-drawn Bill. He had no doubt it was so, for to him it was quite unintelligible. But, indeed, the Judges would not care a single rush for anything that was said in that House; and he believed that, until they had a judgment on every clause of the Bill, it would continue to be impossible to know what they were to do under the Bill. But the expense of these actions would create great irritation in the country. It was not with the great landed interest, but among 409 the small landed proprietors, who would not be able to find money enough to pay the succession duty, that the difficulty occasioned by this Bill would arise. But with the prospect of so admirable a harvest in the Courts of Law, it was not likely that the noble Lord the Member for Middlesex (Lord R. Grosvenor) would have any great chance of bringing in his Bill during the present Session.
§ Question put, "That the words proposed to be left out stand part of the Bill."
§ The House divided:—Ayes 112; Noes 77: Majority 35.
§ MR. CAYLEYsaid, he would now beg to move the introduction of a proviso of which he had given notice. He contended that timber land did not, generally speaking, pay a higher rent than amble or pasture land.
§
Amendment proposed—
In page 9, line 12, after the word 'accordingly,' to insert the words 'or at the option of the successor, such timber or woodland shall be estimated for the purposes of this Act at the same rate of value as the arable, pasture, or other land of similar quality immediately adjoining or nearest thereto.'
§ The CHANCELLOR OF THE EXCHEQUERsaid, he could not agree to the insertion of these words. There was a large department of timber which was not applicable to the proviso, such as hedgerow and park timber, and there would be great difficulty in the assessment of the duty. How would they act with regard to Scotland? The wood there was the boundary between the arable on the one side, and the moorland on the other. But the main ground of his objection was, that he did not think the hon. Gentleman had shown that any successor would endure hardship under the Act, as he had the option of having his timber assessed in whatever way was most favourable to himself.
§ Question, "That those words be there inserted," put, and negatived.
§ SIR JOHN PAKINGTONsaid, he would now move, pursuant to notice, an Amendment in Clause 34, the object of which was to prevent the charge upon encumbrances created or incurred by the succession taking effect till "after the time appointed for the commencement of this Act." He could not allow this Bill to pass without again expressing the strong objection he entertained to the excessive injustice of its retrospective effect. He had already stated that in his opinion it 410 was an unjust measure altogether—not, as the hon. Member for Lambeth (Mr. W. Williams) and others had argued, because it placed a tax on landed property; for he had the strongest possible opinion that all the property of the country ought to be equally rated to the public burdens, but because rateable property was already so heavily taxed, as compared with other kinds of property, that it would be exceedingly unjust now to increase it. He still entertained that opinion; but be especially objected to the enactment of this particular clause, because, whatever might be the opinion of the House with respect to the general injustice of the measure, he really thought there could not be a difference of opinion with respect to the injustice of ex post facto legislation. The effect of it in this case would inevitably be to deprive mortgagees of the securities on the faith of which they had made their advances, and would fall heavily and unjustly on reversioners who had burdened the property they were to possess on the faith of the law continuing as it was at the time they created the burdens. He feared that the opponents of the Bill were not numerous enough in that House to prevent its passing into a law; but he was glad that they had, at least, been able to open the eyes of the public to the oppressive and unjust nature of the burdens which the present Government were attempting to impose upon them. He was sure that the public would feel exceedingly grateful to the hon. and learned Member for Wallingford (Mr. Malins), and the hon. Member for Cirencester (Mr. Mullings), for the part they had taken in exposing the details of a Bill which went to enact a tax which he sincerely believed would be one of the most detestable and detested imposts that was ever thrown on the kingdom. Unless in another place the proceedings of that House were reversed, it would remain for the country to say what view they took of the course which Parliament had pursued on this question. He believed now as firmly as ever he did that the burden would be found intolerable by the country—that it would be found so oppressive and inquisitorial in its operation that not many years would elapse before the country would protest against it, and declare in terms which neither Government nor Parliament could mistake, that, whatever funds were required to meet the public expenditure, they must be raised in some other mode than that proposed in the present Bill.
§ Amendment proposed, in page 11, line 36, after the word "successor," to insert the words "after the time appointed for the commencement of this Act."
§ MR. MALINSsaid, he wished again to call the attention of the right hon. Gentleman the Chancellor of the Exchequer to the hardship and unfairness of the 34th clause, which would compel the son who had joined his father in encumbering the estate to pay the full tax upon succeeding to the property, although he would be only the nominal successor. He knew a case in which property to the value of 50,000l. per annum was encumbered to the extent of 45,000l. or more, and the successor in that case was only in receipt of 4,000l. or 5,000l. per annum, although he would have to pay upon the entire rental. He must complain that the right hon. Gentleman had not answered that objection.
§ The CHANCELLOR OF THE EXCHEQUERsaid, that his reason for abstaining from taking part in the discussion on the timber clause was, that in the course of four debates on this subject he had already spoken on it to the best of his capacity; and having trespassed so often and so long upon the time of the House, he felt that he should be doing injustice to its patience if he entered any further upon the question. The hon. and learned Gentleman opposite inquired if he (the Chancellor of the Exchequer) thought the clause on which the present Amendment was moved, a just clause? He had no hesitation in saying that he thought it was just; but they must judge of its operation, not by an exceptional case, but by its general effect. The hon. and learned Gentleman had said that the principle of the clause was to make a man pay upon that to which he did not actually succeed; but that was not a correct description of it. The principle of the clause was to make a man pay upon that which it was in his own choice or option to succeed. If a person, having expectations of a succession, should spend any portion of that succession before coming into its actual enjoyment, he ought not to complain, if, upon coming into possession, he was made to pay upon the whole. Extreme cases might, no doubt, be conceived, but it was impossible to frame a Bill which was to touch property at all without harshness in some instances. He asked the hon. and learned Gentleman, was it desirable, in the general interest of the country, or for the individuals themselves, that those who had pledged the 412 greater portion of their properties should continue to be the nominal proprietors? This was the whole case which had been put. But it was a principle, not only of policy and prudence, but a principle absolutely required by justice, that successions which were made away with beforehand, by a course of anticipation, should not be placed in a position more favourable than those of parties who had waited for their successions till the time appointed by nature and Providence.
§ MR. MULLINGSsaid, he could only repeat that he entertained a strong objection to the measure, because there were many persons who had advanced sums of money on mortgage without at all anticipating any such enactment, and it would press upon them with undue severity.
§ MR. NEWDEGATEdesired to show the House the erroneous manner in which the public mind was impressed with regard to this question by some of the public journals. In one of the leading journals an article on this question appeared on Saturday, which commenced with—"The project of substituting a tax on successions for one upon income has met with but little opposition, or even criticism, in Parliament, and is not unpopular out of doors." That was the comment of the Times on what was doing in that House. The Times had taken care not to convey to the public in its columns the able objections urged against the measure by his side of the House, and was now taking advantage of that circumstance; and the public were consequently led to believe that the Bill was passing through the last stage with but little opposition, or even criticism, from that House. He had heard a good many Bills discussed in that House, but never with more ability than the present measure. He felt that the thanks of the Members opposed to this Bill were eminently due to the right hon. Member for Droitwich, and he must add a tribute to the hon. Member for Cirencester, and the hon. Member for Wallingford. If this Bill was considered tolerable by the country, it would be made so by the resistance and amendments of those hon. and learned Gentlemen. The hon. and learned Member for Wallingford had commented on the fact that the right hon. Gentleman the Chancellor of the Exchequer had never attempted to reply to the speech of the right hon. Gentleman the Member for Droitwich. The right hon. Chancellor of the Exchequer had now, as 413 on a previous occasion, observed a discreet silence: he was silent now, as before, after the right hon. Member for Droitwich had, in a most able statement, shown that of the whole taxation of the country, local and general, real property was taxed to the extent of 17,000,000l. in excess of personal property—that personal property was exempted from those taxes—and that if this excess of taxation on real property were set against exemption from the legacy duty, it would be found that real property contributed far more in proportion than personal property to the taxation of the country. The right hon. Gentleman the Chancellor of the Exchequer had never ventured an answer to the statement that there were 17,000,000l. of annual taxation to which real property was subject, and from which personal property was exempt. The reason was obvious. The right hon. Gentleman, when detailing his measure for the renewal of the income and property tax, candidly admitted there were about 14,000,000l. of taxation which exclusively pressed on real property; that under Schedule A real property paid 9d. and personal property but 7d. in the pound of annual income. The right hon. Gentleman was quite right in not attempting to answer himself, for he must have done so, had he attempted to answer the statement of the right hon. Gentleman the Member for Droitwich. They had had another species of injustice, which, indeed, was the characteristic tenor of the Bill. This was, that successors were to be taxed for property which they never would have; and mortgagees, who had never contemplated the interposition of this tax, would not only find their capital taxed, but the security on which it rested invalidated in many cases. But the right hon. Gentleman was going to do more by this Bill. He was going to show his predilection for mediævalism, by going back to the feudal tenure. The right hon. Gentleman proposed to invalidate the absolute title to all real property, which now by law exists, in favour of the possessor, by creating a debt to the Crown, and levying fines on the transmission of real property. Feeling, as he did, the injustice, the inequality of taxation, which already pressed on real property, he could not help saying, if additional taxation were to be imposed, that this injustice was rendered more unbearable by the necessity for such inquisition into the title to property as would probably invalidate the title as between man and man, and by 414 the establishment of the principle that the Crown had the first right to all real property—by this re-establishment of the basis of the feudal system, abandoned years ago—abolished by statute, and condemned by public opinion. If it was right to impose additional taxes, why not resort to the income and property tax, and the machinery by which that tax was levied, which had been re-enacted this very Session? Why did not the right hon. Gentleman the Chancellor of the Exchequer use that machinery for his purpose? If he wanted additional revenue, he had only to add an additional 3d. in the pound under Schedule A until 1860, and 6d. after that, if the existing income and property tax were not renewed, when the term for which it was this Session re-enacted had expired. He might then easily adjust the irregularity complained of in the case of leasehold property, by including it under this additional taxation, but excluding it from legacy duty. But the right hon. Gentleman would not listen to what reason and justice pointed out; for the sake of reverting to a mediæval system condemned by statute, the last vestiges of which the Legislature were about to abolish by dealing with copy-hold tenures, he preferred to revive the feudal title of the Crown to all real property throughout the country.
§ MR. DISRAELIsaid, be wished the right hon. Gentleman the Chancellor of the Exchequer to reconsider the case, as it appeared to him that the hardship it would occasion would be very severe. The right hon. Gentleman partly acknowledged that it was doubtful the amount which would be gained by this clause. It would be very desirable for the right hon. Gentleman to give the House some idea of the amount he expected. It would be, in his opinion, much smaller than the House imagined. With regard to the case which had been mentioned by the hon. and learned Member for Wallingford, he could not help fancying that he was acquainted with that case, and if he were, he did not consider that it was met by the observations of the right hon. Gentleman the Chancellor of the Exchequer. If the case were the one with which he was acquainted, an estate had been left to a person who had a life interest in it; it was not an entailed estate, nor could father and son by combination alienate any part of the property. In such a case the present would be about as severe an act of legislation as could be devised by man. All the cases under this 415 clause would be exposed to great injustice; and if the right hon. Gentleman, on consideration, should not feel convinced that he was likely to obtain a certain sum from this clause, he trusted the right hon. Gentleman would make it more in consonance with the soundest and purest principles of legislation by causing the Act to be prospective, and not retrospective.
The SOLICITOR GENERALsaid, he entirely dissented from the idea of legislating with regard to a particular case; and he must say, when a particular case had been repeatedly urged, hon. Gentlemen ought to recollect that that case might have been avoided. The father and the son, instead of alienating their estates, had chosen to preserve them. They had done this voluntarily; whereas, in their circumstances, prudence and discretion would have suggested a sale for the purpose of paying off the debts. To allow this as a reason for breaking down a general rule, would be most unjust. If it were allowed, a party succeeding to an inheritance worth 100,000l. might borrow 20,000l. or 30,000l., and either keep the money in his pocket, or lay it out upon some profitable investment. Suppose the life estate to cease, then the successor would be allowed to deduct from it, as to duty, the 20,000l. or 30,000l. he had in his pocket, or might apply in some more profitable manner. It was impossible to permit this to be done. Hon. Gentlemen opposite had spoken with much sympathy about the severity with which the tax would fall upon the small proprietors; but they were now endeavouring to exempt large proprietors from a burden which he thought was consistent with the principles of justice and equity.
§ MR. WALPOLEsaid, it had been asserted that the case had been argued with reference to a particular class. This he denied. The case had been argued with reference to this particular clause on the general rules of justice and the common interest. Hon. Members on his side of the House complained of the general injustice of the measure if the clause were to pass as it at present stood. And if it could be shown the Government were wrong, and they refused to give way, the consequence would be that first of all public opinion would be entirely against them; and next, when the measure was submitted to another House, where it would be looked at more judicially, the clause could not pass in its present form. The hon. and learned Solicitor General had said the arguments were 416 applied to the case of large landed properties. He denied it. He agreed that a particular case of a large landed proprietor was used by way of illustration, and to show the operation of the clause; but the case might equally well have been taken from a number of small landed proprietors who had already mortgaged their property, the value of which was affected by ex post facto legislation, and the surplus value of which was also affected by the same law. The hon. and learned Member for Wallingford said that the principle of the Bill was, that everybody should pay for what he succeeded to. But the right hon. Gentleman the Chancellor of the Exchequer said that was not the principle of the Bill. Then, if it were not, he said it ought to be. But the right hon. Gentleman said successors were to pay not on that which they succeeded to, but on that which they might have succeeded to, if they had not anticipated their interest. He would accept that definition, but he would not give up the definition of the hon. and learned Gentleman the Member for Wallingford, as the two definitions were not inconsistent. As a general Bill, the Bill ought to charge the duty on that which a person succeeded to, and nothing more. What was the right hon. Gentleman doing by this clause? He was taking from the creditor's security a large portion of that security, and taxing the successor on that which he never might receive, on the assumption that he was going to receive it. If he knew what justice and equity were, he should say it was the very opposite to this clause.
§ Question put, "That those words be there inserted."
§ The House divided:—Ayes 93; Noes 134: Majority 41.
§ MR. MALINSproposed an Amendment, to insert in Clause 49, after the word "documents," the words "except title deeds relating to land." He did not put forward any objection to the right hon. Gentleman the Chancellor of the Exchequer having all such power as he should think desirable and necessary to enable him to collect the new duty; but he did urge upon his attention that he should not arm himself with powers which were offensive to the owners of property, and repugnant to the feelings of Englishmen, more especially so to the lower classes of the people. He submitted that the power of compelling the production of the sedeeds was unnecessary, whilst it would be extremely inquisitorial. As this was the last time he 417 should have an opportunity of addressing the House upon the Bill, he could not sit down without expressing his regret that some clauses, which would do the Chancellor of the Exchequer no good, but would offend the feelings of the country, had been insisted upon.
§ Amendment proposed, in page 16, line 24, after the word "documents," to insert the words "except title deeds relating to lands."
§ The CHANCELLOR OF THE EXCHEQUERsaid, the hon. and learned Gentleman gave him no option but to place assertion against assertion. The hon. and learned Gentleman stated that both his (the Chancellor of the Exchequer's) hon. and learned Friend the Solicitor General and himself had not attempted to show the necessity of investigating title deeds. He (the Chancellor of the Exchequer) would not only reiterate the assertion, that he had shown the necessity of having the power they sought, but in addition thereto, he would assert that the hon. and learned Gentleman had never attempted to answer the point put in regard to the variety of interests in, and the different rates charged on, property. The hon. and learned Gentleman had not only not endeavoured to address himself to the point, but he had always eschewed the subject, and had not shown any reasons to the House against the proposition. He would ask hon. Gentlemen how it was possible to get at the amount of the tax payable, without having some such power as that now proposed, in order that an investigation might take place? He (the Chancellor of the Exchequer) wished only to add one word in explanation of something he had said on a former evening, and which he found had been misunderstood by some persons. He had been understood to say that the Commissioners of Inland Revenue would have no concern with the collection of the legacy duty. It was not his intention to convey such an impression; but what he intended to say was, that the ordinary duty of investigating the deeds, for the purpose of fixing the amount of duty, would rest with the Comptroller of the legacy duty.
§ Question put, "That those words be there inserted."
§ The House divided:—Ayes 110; Noes 146: Majority 36.
§ MR. CRAUFURDthen moved an Amendment, giving a power of appeal in cases where the difference between the assessment of the successor and of the Go- 418 vernment officer might amount to 50l., instead of, as originally provided in the Bill, in cases where the duty to be paid amounted to that sum.
§ The CHANCELLOR OF THE EXCHEQUERsaid, there was no objection to the Amendment, which was accordingly agreed to.
§ Motion made, and Question put, "That the Bill do pass."
§ The House divided:—Ayes 176; Noes 104: Majority 72.
§ Bill passed.