SUCCESSION DUTY BILL. (Hansard, 20 June 1853)

§ The CHANCELLOR OF THE EXCHEQUER
said, that a most important question was raised upon this clause, with reference to the improved value in the case of, and on the determination of, leases; and he was about to propose the addition of a proviso (not a very long one) to the clause, which he thought would leave the law in a satisfactory state, and analogous to that which now applied under the Legacy Duties Act:— Provided that no duty shall be payable upon the determination of any lease purporting at the date thereof to be a lease at rackrent, in respect to the interest accruing to the successor on such determination. That was now the law in respect to such leaseholds as were embraced under the Legacy Duty Acts; and, if he understood the point that had been referred to by the right hon. Gentleman the Member for Oxfordshire (Mr. Henley), it would be disposed of by this proviso, so far as this Bill was concerned.

§ MR. HENLEY
said, he would admit that the proviso would do away with a good deal of the ambiguity that had attached to the clause. Did the right hon. Gentleman intend to extend the same principle to leases for lives and leases for years?

§ The CHANCELLOR OF THE EXCHEQUER
said, the clause would make no distinction whatever between leases for lives and years. Another question, as the right hon. Gentleman was aware, relating to leases for lives, stood over. It related to persons now in possession, or who should be in possession before the time appointed for the commencement of the operation of this Act. That stood over to be disposed of by a separate clause.

§ SIR FITZROY KELLY
said, he wished to know what the right hon. Gentleman 432 intended to do in respect to leases on which Crown rents and Crown rents only were payable? Suppose a succession devolved upon a person of an entire street, containing some twenty houses, which at the time the succession attached was worth 1,000l., and that in ten years afterwards leases fell in which raised the amount to 10,000l., the first question on which he wished to have a distinct answer, either from the hon. and learned Solicitor General, or the right hon. Gentleman the Chancellor of the Exchequer, would be—whether, on the increased value of the property, it was to be understood that a new duty would become payable in proportion to the difference of value at the time when the succession tax became payable, and the time when the leases fell in?

§ The CHANCELLOR OF THE EXCHEQUER
said, he did not know whether the hon. and learned Gentleman was acquainted with the operation of the present law. Their intention was that the new law should operate in the same way, and therefore that the increased value into the enjoyment of which the successor came at the termination of leases should then be chargeable with duty.

§ MR. WALPOLE
said, he regarded the proviso as excluding any value which might accrue at a future period, in consequence of building leases dropping in.

§ MR. MULLINGS
said, he would beg to move that the following words be added to the proviso, "Or for a fine, or partly for a fine, and partly for a reserved rent."

§ The CHANCELLOR OF THE EXCHEQUER
said, there was a very obvious distinction between the case contemplated by the proviso, and that contemplated by the proposed addition. In the former all the tax that was justly due would have been paid; whereas in the latter case the duty on the increased value would remain unsatisfied.

§ MR. FRESHFIELD
said, it struck him that difficulties would arise as to whether a lease had or had not been at rackrent.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the same point arose under the existing law, and was to be determined by the simple fact whether or not there was any other consideration named in the lease. If there was not, it would be assumed that it was at rackrent.

§ MR. MULLINGS
said, in that case he would suggest the words, "Or as to a lease granted after the commencement of this Act."

The SOLICITOR GENERAL
said, he was willing to accede to this latter suggestion.

MR. HEADLAM
said, the two classes of leases which had been referred to were very different. In the one case the increased value on the renewal of a lease would be very small, having arisen only from cultivation or similar causes, and the tax ought not to be charged. In the other case, the increased value arising from the falling in of building leases would be very great, and ought to be taxed.

§ MR. MALINS
said, he did not agree with the hon. Member (Mr. Henley) that the proviso was sufficient. If a landowner granted a piece of land upon building lease, at a rackrent, at the expiration of the lease succession duty would not have to be paid in proportion to the increased value; but if he were to grant the same plot of ground for a fixed sum of money at first, it would become liable; now, it appeared to him that there was no reason why one should pay any more duty than the other, and he objected to such fine distinctions being drawn.

§ MR. BARROW
said, he must complain of the difficulty of understanding the exact meaning which words introduced into the clause would convey from only hearing them read at the table, and considered explanation would be desirable.

The SOLICITOR GENERAL
said, the Committee would recollect that a proviso had been introduced into the clause by his right hon. Friend (the Chancellor of the Exchequer) upon the suggestion of the right hon. Member for Oxfordshire (Mr. Henley) to obviate the difficulty which might arise between the Commissioners and the owners of property, in the case of estimating the value of the property as higher than represented by the lease; and the object of the proviso was to guard the possessor of land against being charged with duty for any value which was not indicated by the rent reserved. It provided that where land was let upon lease, at a rackrent—that was, upon the consideration of the rent alone—no increase of duty should be made proportionately to the increased value of the land.

§ SIR FITZROY KELLY
said, he would suggest the propriety of further consideration before the entire language of the clause was settled. As it stood at present it would give rise to difficulty in every case in which property let upon lease had increased in value, and become subject to the 434 duty. The case had been referred to of land let upon lease at an actual rackrent; and in that case, however much the property might increase in value, no additional duty would be charged. Now, that appeared to him to be perfectly just; but if the land were let at even a less rent, and any sum of money were paid in consideration at the commencement, it would be liable to the increased duty, and he could see no reason for that. If any large increase of value in property upon rackrent were to be allowed without increase of duty, it should not be alone the case with' regard to this description of property. The language of the clause ought, in his opinion, to be rendered more definite.

The SOLICITOR GENERAL
said, he considered that it must be allowed that wherever it became necessary to draw a line there were several cases which came very near the line on either side; and why the line had been drawn as it had been in the present case was, that the two descriptions of property came under different categories of law; and, in his opinion, if in the exemption leases held otherwise than uponrack rent were to be included, it would be perfectly impossible to determine where the limit should be fixed.

§ The CHANCELLOR OF THE EXCHEQUER
said, the principle of the Bill was this, that where there had been an alienation of a property, and in consequence of the alienation the alienee became liable to the succession duty, the succession duty which he would have to pay would be determined by the relation in which the alienor stood to the property.

§ SIR JOHN PAKINGTON
said, he wished to put a question to the hon. and learned Solicitor General. He (Sir J. Pakington) had received a letter from a gentleman who inherited an estate from his uncle, subject to the life of the uncle's wife. The aunt was now in possession of the estate; but the future convenience and comfort of that gentleman required that he should build a mansion house on the estate; and he had actually completed all his arrangement for building such a house, when the newspapers informed him of the views of the Chancellor of the Exchequer in this respect. He (Sir J. Pakington) wished now to ask the hon. and learned Gentleman, whether in the event of his correspondent spending his money in build- 435 ing a house, he would be called upon, on the death of the widow now in possession, to pay a succession duty on such expenditure?

The SOLICITOR GENERAL
said, if the right hon. Gentleman would do him the favour to give him a copy of the case, or a statement of the circumstances to which he had referred, he should endeavour to give him an answer. In the meantime he might say, by the Bill, as he understood it, any addition made to the value of the property in the form stated by the owner, of the reversion not accruing to the benefit of himself, would not be felt as a new acquisition of property by the reversioner on the death of the party in possession. As he understood the right hon. Gentleman, a remainderman, who was now entitled to an estate, subject to the life estate of a widow, proposed for his own benefit alone to build a house on the estate. He would thereby, with his own money, greatly augment the value of the property; but he did not intend that that augmentation of value should enure to the benefit of the widow; it was probably a thing done under an arrangement with her. It would not, in that case, accrue to the widow as part of her estate, and would not, therefore, be included in the value of the succession on the determination of her estate.

§ SIR JOHN PAKINGTON
said, there might possibly be such an arrangement with the widow. He was not prepared to say that that lady might not be allowed to reside in the house after it was completed, with the permission of the remainderman. But he wanted to know whether or no, if she was excluded from the occupation of the house, the duty would be payable in respect of such house on her decease by the remainderman?

The SOLICITOR GENERAL
said, in the case put by the right hon. Gentleman, it would be easy, by the mere stroke of a pen, by an agreement between the widow and the owner of the reversion, to prevent the possibility of any duty attaching; because, if the widow was willing to surrender any right of property she might have in the house proposed to be built on the estate, nothing more was requisite than to reduce that to writing, and it would operate, pro tanto, as a surrender of that part of the estate by the widow, and, of course, would prevent the possibility of any duty being payable by the reversioner in respect of such augmented value.

§ SIR JOHN PAKINGTON
said, the case he had mentioned, and the answer it had elicited from the hon. and learned Gentleman, made him the more doubt the wisdom of extending this tax to real property merely because personal property was now liable to a similar duty.

§ MR. W. WILLIAMS
said, he could not but admire the care taken to protect real property under this Bill. Real property, it should be remembered, paid only half the duty that would be paid by other property. If the gentleman referred to by the right hon. Baronet had invested his money in funds or the shares, he would have been taxed much more heavily. There was not a servant in the right hon. Baronet's employ who would not have to pay on a legacy of 20l. left him by a stranger in blood—twenty times as much as the gentleman whose case had been referred to.

§ MR. DRUMMOND
said, he must complain of Gentlemen speaking without understanding the operation of the clause.

§ MR. W. WILLIAMS
said, his observations were in reply to the remarks of the right hon. Gentleman (Sir J. Pakington), and were not intended to apply to the clause itself.

§ MR. DRUMMOND
said, if the hon. Gentleman (Mr. W. Williams) had favoured the Committee with his attendance on Friday evening, when they were in discussion on the provisions of this Bill, he might possibly have understood something of the meaning of the clause now before them; and he would have found it was very likely that, without some explanations on the part of the Government, the very transaction mentioned by the right hon. Gentleman (Sir J. Pakington) would have come within the meaning of the words "fraudulent evasion of the duty," though he (Mr. Drummond) did not mean to say that that was the construction to be put on it.

§ MR. W. WILLIAMS
said, he must explain, that his remarks had been addressed, as he had previously stated, rather to the observations of the right hon. Gentleman (Sir J. Pakington), than to the clause itself.

§ MR. J. PHILLIMORE
said, it was clear the hon. Member for Lambeth had misunderstood the case referred to by the right hon. Gentleman.

The SOLICITOR GENERAL
said, he could imagine a great evil that would arise if the alterations of this Bill were to prevent the remainderman or reversioner from making improvements in an estate during 437 the contingency of a particular interest. Therefore, it should be taken into consideration whether the case might not be met by inserting a clause to the effect that moneys laid out by the successor in the improvement of property, pending the duration of a particular estate, should not be charged in the computation of the value of the succession occasioned by the cessation of that particular estate.

§ SIR J. PAKINGTON
begged to thank the hon. and learned Gentleman. Nothing could be more satisfactory than the answer he had given to the question.

§ The CHANCELLOR OF THE EXCHEQUER
said, what he had observed all along was this—that a great number of provisions of law which were now in operation without the slightest mitigation, and of which he had not heard one word of complaint from the right hon. Baronet or his friends, but which fell upon the poorer classes of the community, were now found to be particularly oppressive. The truth was, the case which the right hon. Baronet supposed was a case that might happen to leasehold property under the present law. He did not want to use this fact as an argumentum ad hominem, but to show that these difficulties were not peculiar to this Bill, but that they existed under the operation of the existing law, and in an aggravated form.

§ SIR JOHN PAKINGTON
said, the right hon. Gentleman would have it inferred that the injustice of the legacy duties was passed by without complaint by hon. Members on that (the Opposition) side of the House, so long as it bore only upon other classes of the community. Why, they had never been called on to express an opinion upon the existing legacy duties. If they had, he, for one, should certainly not have hesitated in the opinion which he should have expressed. He should have said that no sort of tax was more oppressive, more painful, or more objectionable than that tax. He would have appealed, as he had done before, to the language of the highest authorities with regard to it. He would have appealed to the Dutch law, which altogether exempted direct descendants. He would have appealed to the highest political authorities, who, in the strongest language, had dilated upon the cruelty of imposing a tax on direct succession where the property came from father to son. He would have appealed to Lord Grey, who had characterised the tax as "a tax upon misfortune." He had no 438 hesitation in saying, in answer to the right hon. Gentleman, that he condemned, disliked, and disapproved of the legacy duty; and one of his reasons for objecting to the Bill now under discussion was, that it sought to extend this tax, because it had an existence at present, to all classes of property; whereas his opinion was, that, existing at present, it was a bad tax, unsound in its principle, most painful and objectionable in its operation—therefore, a tax which they ought rather to repeal than to seek to extend it to other classes. At the same time he must say that it was a tax more easily obtainable from personal than from real property.

§ MR. WILLIAMS
said, that if a poor widow had been left 20l. by her father-in-law, she would be liable to a tax of 12½ per cent. They had heard a good deal of late of rateable property; but the right hon. Gentleman (Sir J. Pakington) did not seem to be aware that more than one-third of the existing rateable property paid legacy duty and probate duty also.

§ SIR FITZROY KELLY
said, the substance of this clause was—that the whole amount of the tax to be assessed in respect to the interest of a successor should be payable by eight equal half-yearly instalments—the first upon the expiration of twelve months after the succession. Whatever might be the precise period at which the first payment was to take place, the whole aggregate amount of the tax was to be paid in five, or at most in six, years from the time of succession. [An Hon. MEMBER: Or in four years and a half.] Or, as an hon. Member suggested, it might be wholly paid in four years and a half. Now, he considered that this clause, as it stood, went to introduce and to apply to this new law inequalities as unjust and as mischievous as the worst of those that were to be found in the income tax, of which he had repeatedly, though in vain, complained. He would take a case under this clause, and consider it with regard to the tables in the schedule. He would suppose that an estate of the net value of 1,000l. per annum devolved upon a person whose life was, according to the tables, to be calculated at the greatest possible duration—that was to say, at four years of age, where 100l. a year was valued at upwards of nineteen years' purchase—but 439 which he would assume to he twenty years. Then suppose an estate of 2,000l. a year to devolve upon two persons, each at four years of age. Their interest was valued at nearly twenty years' purchase, consequently the interest of each of those persons would he valued at 20,000l. He would suppose these persons to be in that degree of relation to the predecessor which would render them liable to the tax of 5 per cent. They would, therefore, each of them be taxed to the amount of 1,000l. As the clause stood, each would have to pay 1,000l. in the space of five years, by instalments of 200l. a year. One of these persons, he would suppose, lived for five years and a half. When he had just paid the entire sum of 1,000l. by instalments of 200l. a year, he died—the life estate was at an end—the property passed away from him, and perhaps from his family. But the other person, who had derived the same amount of property, and who had paid the same sum of 1,000l. in the same period of five years, might live for fifty or fifty-five years after that time. That person would then have enjoyed an estate of 1,000l. a year for fifty-five years, and have paid exactly the same amount of taxation as he who had enjoyed it for five years only. Now, he wanted to ask whether this was just? It was to this striking inequality, and to this striking injustice, that he wished to call the attention of the Government, while there was yet time to prevent it, by the substitution of a very simple hut a very different mode of imposing and levying this tax. He might be told it was impossible to proceed but by averages. The averages might be just in themselves; but he doubted the fact. He believed that there was a mode of levying the tax by which much of its injustice and inequality might be remedied. For example, 1,000l. had to be levied from every person of four years of age, who became entitled to property of the value of 1,000l. a year. Then, instead of levying this 1,000l. by instalments or payments of 200l. a year for five years, why not levy it in payments of 50l. a year for so long as the individual who was to take possession should live? Instead of levying the tax upon the years of life on which the averages were calculated, they should make all lives equal, and calculate the duration of life in proportion to the enjoyment of the property. He might be told that 1,000l. levied over five years was worth more than 1,000l. levied, over fifty-five 440 years; hut he asked the Government why they should persevere in a system of averages which, though just in themselves, were unjust in their application, when the injustice might be remedied by levying the tax according to the enjoyment of the property? The principle, indeed, had already been admitted in this very Bill, by the provision that if a person having only a life estate, liable to the payment of 1,000l., died after paying the first or second instalment, the liability to pay the remainder was at an end. In such a case the party paid the tax just so long as he enjoyed the property; and why should not this just rule be allowed to prevail throughout the whole time that the annuitant enjoyed the property? By making the payment of the tax coextensive with the life of the party enjoying the property, perfect justice would be done; whilst, when the whole was taken together, the long payments and the short payments, if the averages of the Bill were correct, the result would be that the State would receive the same amount of taxes, but with more regularity, year by year. He would suggest, therefore, that the clause should be amended to that effect.

§ The CHANCELLOR OF THE EXCHEQUER
said, he could not comprehend from the observations of the hon. and learned Gentleman whether he proposed to include personal as well as real property in his proposition or not.

§ SIR FITZROY KELLY
said, that he had confined his suggestions to the clause; but if there were personal property of any description whatever, which could be enjoyed under the same circumstances, he meant his suggestions to apply equally to that.

§ The CHANCELLOR OF THE EXCHEQUER
said, it appeared to him that the hon. and learned Gentleman did not seem to have well considered the nature and consequences of his own suggestion. He said he proposed it in the case of realty, but he did not object to treat personalty in the same manner under similar circumstances. The hon. and learned Gentleman said, he thought it most urgent that, on the ground of injustice, as the Bill now stood, this change should be made. But if it were urgent with respect to realty, surely it was much more so as to personalty. The hon. and learned Gentleman had represented the case of two children, one of whom lived only five years and the other fifty, as a piteous case of inequality; but if the hon. 441 and learned Gentleman was moved to compassion by his own narrative, what must he say to the case of two other children coming into the enjoyment of personalty when he recollected that, under this Bill, the succession to personalty was saddled with more than double the amount of realty, and, consequently, with more than double its inequality? Was the change, then, to be made with regard to personalty or not? The hon. and learned Gentleman said, "Yes, with regard to principle, and under the same circumstances as a life annuity." But this Bill did not apply to life annuities alone—it applied to cases where parties came into possession of the capital value of a life interest. Now, he wanted to know how the suggestion of the hon. and learned Gentleman would answer in the case of a person who had just come into the possession of unsettled personalty, and who last year had the satisfaction of paying 10 per cent legacy duty, and 2½ per cent probate duty? The hon. and learned Gentleman proposed that this person should immediately have the privilege of starting on the payment of an annual tax. The truth was, he (the Chancellor of the Exchequer) did not think it would be possible to come nearer equality by any such proposal. The hon. and learned Gentleman must see that, whatever the inequality, it was severe in proportion to the rate of the tax; and as, on the average, the rate of the tax on personalty would be double that on realty, if a change were effected as to realty, it must also be made as to personalty; and if it were made as to personalty, then they must break up the existing legacy and probate duties, and call upon those persons who had just paid the legacy duties immediately to pay that which was, in fact, a commutation. He (the Chancellor of the Exchequer) confessed that he was not shocked by the case the hon. and learned Gentleman had put of two children succeeding to property when four years old, and whilst the one lived five years, during which he just paid the tax, and was then removed from this shifting scene; and the other enjoyed the property for the full term of human life. For his part, he did not see any great political or social evil, or personal injustice, in the matter. The inequality of life might he a good or a bad arrangement; but it did not depend upon us to settle that matter. There were many tenures of property. There were copyholds; there were also leases for lives. 442 What did the hon. and learned Gentleman think of these? But, taking the case the learned Gentleman had put, did he think that the wants of the child of four years old —his demands and necessities — were the same as they would be when he was thirty or forty years old, and had, perhaps, a family to maintain? [Sir F. KELLY: No!] The hon. and learned Gentleman did not think so; but if he did not think so, what became of this inequality? The care of the hon. and learned Gentleman was enlisted for that class whom the late Sidney Smith described as little legislators, who received their plum-pudding and cake after dinner. The substitute the hon. and learned Gentleman proposed appeared to him (the Chancellor of the Exchequer) a most dangerous measure. It was the adoption of an annual tax as a substitute for a succession tax; and if an annual tax were to be substituted for a succession tax, it must be with respect to personalty as well as realty. Then, when they came to apply that annual tax to personalty, what would they have? Why, that which was called a property tax. And he frankly owned he did not know how a property tax was to be worked; though even if it could be worked it would he most dangerous. Let them observe the extreme inequalities in the rates of the tax they wore about to levy. The range of those inequalities would be from one to twenty. Upon the average length of life they were going to lay a tax which would fall upon one man with a severity measured by twenty, and upon another man with only one-twentieth part of that severity. Upon direct succession to land the tax would press with a severity measured by the figure 1; whilst upon a stranger succeeding to personalty it would fall with a severity measured by the figure 20. Did the hon. and learned Member think that the annual tax should be graduated in the same manner; so that this annual tax, in commutation for the succession tax, should be paid by one man at the rate of 1s., whilst it was paid by another at the rate of 1l.? Would that he a safe basis on which to found the tax? Bid he suppose it would remain long undisturbed on such a basis? And if the foundation of the tax came to be unsettled, who did he think would be the sufferer—the man who was to pay twenty shillings, or the man who was to pay one shilling? Who was the class who would pay the one shilling? Why, the great bulk of the successors to landed pro- 443 perty. The proposal of the hon. and learned Gentleman was simply a proposal to put the tax in such a form as must positively lead to some mitigation and relief, so far as regarded succession to a stranger; but would infallibly lead to a multiplication of the tax four or five fold, or more than that, as far as regarded the direct succession of children to the possession of landed property. He did not know if it had presented itself to the mind of the hon. and learned Gentleman; if not, he seriously commended it to his meditation. But how were they to deal with the mass of property which was engaged in trade and commerce? Were they to have continual inquisition from year to year—every twelve months—into the amount of every man's capital? [Sir P. KELLY: No, no!] Why, that was the proposal of the hon. and learned Gentleman; and he (the Chancellor of the Exchequer) held that there was no inequality in the mere amount of the tax that would be one-half so grievous and oppressive to the commercial and trading classes of England, as the inquisition renewed from year to year proposed by the hon. and learned Gentleman, to ascertain the amount of capital on which the commutation of succession tax was to be paid. But, independently of one class or another, he did not think that that House was prepared for the principle of a property tax at all. This, he granted, was analogous in principle to a property tax, but differing in this respect, that a property tax was levied from year to year, whilst this was to be levied but once in a generation. An annual property tax was a very different matter. The very fact of its being so high made a difference—a property tax being always low in its amount. That was his fundamental objection to the proposition of the hon. and learned Gentleman. It was a property tax which necessitated an inquisition from year to year, and involving all the dangers of such a tax. Therefore it was quite impossible that the Government could agree to the Amendment.

§ SIR FITZROY KELLY
said, he must beg to explain that in selecting the case of a child of four years old, he was governed merely by the convenience of dealing with round numbers, the life interest being calculated at about twenty years, but the principle was the same; and he might just as easily have illustrated his argument by taking a person at the age of thirty-three, and thus got rid of what had been so facetiously urged by the right hon. Gentleman. 444 He proposed to apply the Amendment to property of every description, whether real or personal, in which a life interest devolved upon a person under this Succession Bill, and where the tax was assessed and estimated as upon a life interest. If when the tax was assessed it were possible to foretell how long the person would live, it might be assessed on the precise duration of each life. It was only because no one could foretell how long a person would live, that they were obliged to resort to averages, which being unequal, must be unjust. He would at once give notice, that, subsequently, he should bring the matter under the attention either of the Committee or of the House.

§ MR. W. WILLIAMS
said, the hon. and learned Gentleman had admitted one very important principle, namely, that personal ought to be placed on the same footing as real property. He (Mr. Williams) decidedly objected to the clause, though for a very different reason from that of the hon. and learned Gentleman. The right hon. Gentleman (the Chancellor of the Exchequer) had brought on himself this factious opposition to the proposed tax, by giving landowners a concession of 50 per cent. Had he placed real property on precisely the same footing as personal, such opposition could not have been offered. The amount of duty in the case of the first degree of consanguinity was only half per cent, and that would be the case of nine-tenths of the real property which would come under the operation of the Act. A distinction of half per cent between the two kinds of property appeared to him most unjust. He ought not, perhaps, to make any complaint against the Chancellor of the Exchequer; he knew the right hon. Gentleman's difficulties, and was sensible that he had exhibited a degree of courage to be found in few public men. Still he hoped he would reconsider the clause with a view to amendment. It should be recollected that personal property would pay probate duty, 3 per cent for all property under 30,000l., and 1½ per cent above 30,000l He objected to the extension of time allowed for the payment of the paltry and miserable amount of tax under this Bill. Personal property was not only obliged to pay probate duty, but must also pay the legacy duty within twenty-one days after the right to possession was established. Was it not strikingly unjust that one class of property should be obliged to pay legacy duty within twenty-one days, while another class of pro- 445 perty was allowed four years and a half for the payment? He entreated the right hon. Gentleman, if he could not make this property pay in twenty-one days like personalty, that at least he would make the duty payable within twelve months; and if he could not get the landholders to agree to thai—if they were too strong for him— let him allow them 17½ per cent discount.

§ MR. DRUMMOND
said, if a "factious opposition" had any meaning at all, which he very much doubted, it meant the taking advantage of some technical phraseology to throw out a clause. There had been no such opposition to this Bill. The discussions had been directed to discover exactly what the Government meant, and to see that the Bill expressed exactly what they said it meant. He merely rose to inquire if the words "equal to the annual value of such property," were to be taken in conjunction with the clause following?

§ The CHANCELLOR OF THE EXCHEQUER
said, the one clause was intended to lead to the other.

§ SIR JOHN PAKINGTON
said, he thought it incumbent on them to be correct in statements, and to avoid the appearance of exaggeration. He did not wish to imply that the Chancellor of the Exchequer would intentionally be guilty either of inaccuracy or exaggeration; but the right hon. Gentleman had been led into a statement which might lead to misapprehension on the part of many persons not conversant with the details of the Bill. The right hon. Gentleman drew a comparison between payments by realty and payments by personalty—in the ease of realty taking direct succession at 1 per cent, and in the case of personalty taking the case of a stranger at 10 per cent. The hon. Member for Lambeth (Mr. W. Williams) had still further exaggerated the comparison, by stating the comparison at 20 per cent against half per cent. He felt bound, therefore, to express his opinion that it would be fairer to compare direct descent in the case of land with direct descent in the case of money, and inheritance by strangers in the one case with inheritance by strangers in the other.

§ The CHANCELLOR OF THE EXCHEQUER
said, he concurred in the principle laid down by the right hon. Baronet, and assured him that in every syllable he had uttered he had been strictly and rigidly accurate. What he said was, that the extremes of payment were represented by twenty and by one—the one meaning the direct succession to land, and the twenty 446 meaning the succession of a stranger; and if he were inaccurate at all, it was in the way suggested by the hon. Member for Lambeth, that he ought to have added the probate duty on personalty, which would make the difference more than as twenty to one.

§ MR. MALINS
said, he was not one of those who would contend that landed property ought to be exempted from this tax, but he considered that it ought not to pay so much, because of the great difficulty of raising it. As a proof that he was not actuated by factious opposition, he was totally unable to assent to the suggestion of the hon. and learned Gentleman the Member for East Suffolk (Sir F. Kelly), because the case he put was fully answered by the Chancellor of the Exchequer, that the difference arose from the accidents of human life; and if the principle were applied to this tax, it must be extended to the existing tax on personal property. He was no admirer of the legacy duty. If the revenue would allow it, he should be glad to see it taken off altogether. He thought the length of the discussion on the proposed application of that tax to real property must have made the right hon. Gentleman regret that he had not had recourse to some other means than the succession duty. [The CHANCELLOR of the EXCHEQUER made a gesture of dissent.] However that might be, he thought he might possibly shorten the present discussion by intimating, on the part of himself and several hon. Members near him, that they did not concur in the views of the hon. and learned Gentleman (Sir F. Kelly), and hoped he would not press his Amendment to a division.

§ MR. PHILIPPS
said, he considered that the land ought to be less heavily burdened than personal property, as it decreased so much in value under a forced sale, which would be often necessary to meet the tax.

§ MR. APSLEY PELLATT
said, he must complain that successors to real property would only pay half the percentage which successors to personal property would be called on to pay, and that a remission of instalments due, if the person died, should be made in the one case and not in the other.

§ The CHANCELLOR OF THE EXCHEQUER
said, in cases of annuities payable out of personalty the same favour was granted.

§ MR. AGLIONBY
said, he was of opinion that no undue concession was given to the land. A measure for the efficient and 447 cheap transfer of land should have been concomitant with, if not precedent to, this Bill; but he feared the Registration of Assurances Bill, which was now before a Select Committee, would increase rather than diminish the expense of those transfers. He did not like the Succession Bill: he had many misgivings about its effects. Though in theory it might be right, in many cases it would produce hardship, and the only class it would benefit would be the attorneys.

§ MR. MICHELL
said, he thought he had a right to complain that the tables were too high; that Mr. Trevor had calculated them at seventeen years: that the tables in the Bill were not the same tables, but were computed at least five years higher. In some instances the effect of this change would be very nearly to double the rate of duty which otherwise would be paid.

§ The CHANCELLOR OF THE EXCHEQUER
said, that this charge, with regard to the tables, was quite a mistake. The fact was, that the Northampton tables were out of date, and were superseded by the tables lately constructed at the National Debt Office; the last report from that office stated, as a remarkable proof of the accuracy of their tables, that the identical number of deaths which were computed for the last few years had actually taken place.

§ MR. W. WILLIAMS
said, he would not oppose the Bill going through Committee; but when the Report was brought up, he would attempt to remove the inequality of the Bill in levying the duty within twenty-one days on personal property, and on real property extending the payment of the duty over four and a half years.

§ MR. DRUMMOND
said, he wanted to know how it was intended to value such houses as Castle Howard or Woburn Abbey. Then, again, he wanted to know what was the meaning of ornamental timber. He did 448 not see how timber could be valued at all independent of the ground. Take, for instance, the Leasowes of Shenstone: they were the admiration of the world; but the value of the timber depended upon the picturesque nature of the ground. So it was with those beautiful beeches that Lord Grenville bought solely for the effect they had in their situation. But he knew a case where a noble friend of his, in Scotland, had 17,000 trees blown down in one night, and nobody would have them even for the taking them away. In such cases, it seemed to him to be absurd to attempt an estimate of their value.

§ The CHANCELLOR OF THE EXCHEQUER
said, he did not imagine that the words "ornamental timber" admitted well of any definition further than was conveyed by the term itself. He thought, perhaps, however, that "timber left standing for ornament," was a better definition than "ornamental timber." With respect to the valuation of land and houses, that was an old perpetual standing difficulty, but it was not in any sense a difficulty peculiar to this Bill. Houses would be valued for the purposes of this Bill as they were now valued for the purposes of the Legacy Duties Act, or as they were valued for the house duty.

§ SIR JOHN TROLLOPE
said, that there had always been considerable difficulty in assessing the house tax on large mansions, and the rule had been not to assess them at the rent which they might be expected to let at, if they could have been let. There would be no difficulty in this case, because the valuation would be taken on a nominal value, and not with reference to the expense of their erection. With regard to timber, he should like to know whether the vast ranges of plantation in Scotland, which had been planted for the purpose of affording shelter, and also whether the old oaks in the parks of England, were to be considered as coming within the exception. He thought the right hon. Gentleman would find some difficulty in carrying the ornamental-timber clause into execution.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the timber which was to be excepted from valuation as timber under this clause as it stood printed, was "timber planted or left standing for the shelter or ornament of a mansion-house, and valued therewith." He proposed to substitute for these latter words the words, "and entering into the valuation thereof 449 for the purposes of this Act." It would he observed that there were already two tests provided. It was not merely to be timber planted for the shelter or ornament of the mansion-house, but also which entered into the valuation with the mansion-house.

§ MR. HENLEY
said, he wished to know what was meant by the words "necessary outgoings" in the clause. The right hon. Gentleman had admitted that repairs and insurance were necessary outgoings; but he had said nothing about agency or cost of drainage or fencing. Some clear definition ought to be given, for the taxpayer would have one opinion, and the tax-gatherer another.

The SOLICITOR GENERAL
said, that the Legislature were compelled on various occasions to adopt phraseology which, though vague in itself, had already received a judicial and recognised interpretation in the Courts of Law and Equity. In the present case, the phrase "necessary outgoings" was one which was in common and familiar use, particularly in Courts of Equity, which settled the accounts of trustees. The phrase might he explained to mean those outgoings which would be allowed as between a trustee in the possession and management of an estate, and the beneficial owner to whom he was responsible. Take the case of draining, for instance. That might be a speculative improvement, and would not, therefore, be regarded as falling within the ordinary power and authority of a trustee. "Necessary outgoings" might, therefore, be defined as those outgoings which were necessary to the due and ordinary administration of property; and the rule which already existed in the Courts of Law in corresponding cases would readily be resorted to in order to determine the meaning of the words.

SIR JOHN HANMER
said, he could not help thinking that the explanation which had just been given by the hon. and learned Gentleman the Solicitor General was a great deal more ingenious than satisfactory. For himself, he had not yet been able to get over the difficulty of understanding what was really meant by "ornamental timber," or whether or not it was to be exempted from taxation at all. He, for one, objected to the taxation of timber under any shape or for any reason whatever; but since it was acknowledged that only some species of timber, for some reason or other, was to be exempted, it was important that they should understand clearly and exactly what that 450 timber was. It was by no means satisfactory to him to be told that certain phrases were in common and familiar use in Courts of Law. He wanted the phrases clearly and distinctly defined. It was not the mere taxation he objected to, so much as the frightful prospect of litigation which the clause would be certain to open up, if they did not take care what they were doing. Every one knew that landed property was sufficiently entangled with legal nets already, and he did not think it would be wise to spread any more. He believed that this clause, if it really became an enacting clause, would bring in least to the Exchequer in the way of money, while, at the same time, it would create the greatest amount of dislike and dissatisfaction—he did not think he went too far in using even the word hatred—against the Bill. Why should they confine the exemption to "timber planted, or left standing for the shelter or ornament of a mansion-house?" It was well known that there were thousands of acres of land in this country that were incapable of occupation, except for the belts of trees that were planted near them to keep out the sea breezes and the like. As, then, the rent of such land depended on there being such plantations, he could not see why they, taxing the rent, should also tax the trees. Trees were of all sorts, sizes, and ages; and timber itself would be difficult to define. How was it to be defined, and what was meant by "capable of yielding income?" Hon. Members would probably recollect the letters of Mr. Caird in the Times, and the graphic descriptions which he gave of the state of landed property in various counties of England. Mr. Caird, it would be remembered, criticised—and he (Sir J. Hanmer) had elsewhere seen continual criticisms upon the conduct of landlords in not planting belts of trees on their estates more frequently than they did, with the view at once of adding to the comfort of large districts of country, and bringing in profitable returns. Well, then, if trees for shelter were to be exempted from the tax, why not exempt these? He repeated his earnest deprecation of the inclusion of any kind of timber in the tax. The Legislature were taking the duty off foreign timber: why, then, should they put it on home-grown timber?

§ The CHANCELLOR OF THE EXCHEQUER
said, it was not difficult to explain what was meant by the words "property capable of yielding income." A house in 451 Grosvenor Square, inhabited by its owner, instead of being let to another party, would not be property yielding income, although it would be capable of yielding income. He most anxiously deprecated the mode of discussion that was now going on. Here was a clause including three or four subjects of great importance, and it would be entirely hopeless to expect that they should make any progress until they separated the one of those subjects from the other. He thought it desirable that they should first of all dispose of that part of the clause which referred to necessary outgoings, and after they had satisfied themselves upon that point, they could then proceed to take up the very important question with respect to timber. With regard to the allowance proposed to be made for all "necessary outgoings," the Government had been desirous of adopting a mode of working this portion of the Bill which would neither cause litigation, inconvenience, nor alarm; and, as there was an established usage in the matter, though it might not be perfectly certain and uniform in all parts of the country, they had thought it better on the whole to trust to that usage, rather than to attempt to frame specific definitions. He had been asked what were "necessary outgoings;" but he must remind the right hon. Gentleman (Mr. Henley) that he (the Chancellor of the Exchequer) and the Members of Her Majesty's Government were no more competent to fix the definition of that phrase than any Members of that House. He thought it would be very unsafe to enumerate these necessary outgoings, because they would run great risk of excluding items which, in particular cases, might he just and legitimate. He considered that the words used in the Bill were the safest and simplest that could have been selected for describing the general rule of valuation; and he might remind the Committee that the section of the present Legacy Duty Act, regulating the valuation of leasehold property, was in terms far more loose and general than the words of the clause they were now discussing. Under these indeterminate and general terms, a system of valuation of the most complicated description for the purposes of the legacy duty had been carried on for fifty-six years, and he believed that in no case had parties availed themselves of the appeal provided by the measure.

§ MR. HENLEY
said, He did not think 452 the statement of the Chancellor of the Exchequer was satisfactory, and he would repeat his objection to the use of the general terms in the clause. He begged to remind the right hon. Gentleman that many estates in England, and still more in Scotland, were mortgaged to the Crown for advances under the Drainage Acts; and this charge upon the estates would entitle the holders to a reduction in respect of the succession duty; but the provident landlords, who had laid out their own money in draining and improving their estates, would not have the benefit of a farthing's allowance. He conceived that this subject deserved the serious attention of the Government, because persons who drained their own lands with their own money should be placed in at least as advantageous a position as men who had mortgaged their estates to the Crown. He (Mr. Henley) would be better satisfied if the different outgoings were specified, in order to avoid disputes and litigation between taxgatherers and taxpayers. He would, therefore, move the insertion, after the words, "necessary outgoings," of the words "such as repairs, insurance, drainage, and agency."

The SOLICITOR GENERAL
said, that the right hon. Gentleman's proposal was to make an allowance to the successor to an estate for the money he might expend in drainage. The estate, however, would be valued at the time when it came into his possession, and it was upon that valuation that he would he taxed under the operation of the measure which they were then discussing. He (the Solicitor General) did not deem it, therefore, a reasonable proposal to make a deduction in favour of the successor to a property in consequence of any expenditure which he might incur in making improvements by drainage upon his estate, the fruits of which improvements he would enjoy some four or five years after the period of his succession

§ The CHANCELLOR OF THE EXCHEQUER
said, he objected to the proposal of the right hon. Gentleman opposite (Mr. Henley). He could not see, with respect to the case of "agency," for instance, how any rule making deductions with respect to it could be laid down beforehand. The law did not contemplate that a man should not manage his own estate, or that he should engage the services of another for that purpose. There was no better illustration of the danger of enumerating de- 453 ductions that could be found than the proposal of the right hon. Gentleman opposite. He objected to that proposal because, on the one hand, it included items which should not be allowed as deductions; and because, on the other hand, it excluded others, which should be allowed. Take drainage, for example. There were two kinds of drainage: one description was performed by the landlord with the view of securing the rent—that was a necessary outgoing anterior to rent, and without which rent could not exist—and nothing could be more clear than that this should be allowed as a deduction. But it was different where the tenant covenanted to pay 4, 5, or 6 per cent upon the capital expended by the landlord in drainage. There the drainage was more in the nature of an improvement than a necessary outgoing. It was, in fact, a fresh outlay of capital, like a purchase of new lands, and therefore, while the interest of the money should be allowed as a deduction, the principal itself should not be included among the deductions. Accordingly, no allowance would be made for the sums borrowed under the Drainage Acts.

MR. VERNON SMITH
said, he was disposed to support the insertion of the words suggested by the right hon. Gentleman opposite, provided he would consent to leave out the last—"agency."Agency was only a charge upon large estates, and its deduction would be extremely invidious and partial.

§ MR. HENLEY
said, he was quite willing to agree to the request of the right hon. Member.

§ MR. ROUNDELL PALMER
said, he could hardly conceive anything more injurious to the landed interests than the proposal of the right hon. Gentleman the Member for Oxfordshire. The effect of inserting the proposed words would be that the Courts of Law, when they came to construe and interpret the Act, would only allow the deductions enumerated, though there might be many other necessary outgoings for which allowance ought to be made. One of the most fertile sources of litigation in connexion with the construction of wills and settlements consisted in general terms, fitted to serve every useful purpose, being cut down and denned by subsequent enumeration. The same would be the result here if the proposed words were inserted in the clause.

§ SIR THOMAS ACLAND
said, he could not approve of the Amendments of the 454 right hon. Gentleman the Member for Oxfordshire.

§ MR. G. BUTT
said, he willingly admitted the difficulty of framing the clause so as to meet the objection. A Court of Equity would not have to construe the Act, but the Court of Exchequer would have to try the issue of facts. The meaning of "necessary outgoings" would vary according to circumstances, and the addition of any words, as proposed, would not lead to any precise construction.

§ MR. AGLIONBY
said, he entertained strong doubts as to the latter part of the clause. With regard to the words under discussion it was proposed to add, after the words "necessary outgoings," the words "such as insurance, drainage, and repairs;" he could not conceive any words more calculated to cause litigation. The words might enable the successor to lay out money at a larger interest than the outlay was worth, by arrangement with his tenant, and yet he would be entitled to a reduction under the Act. He preferred the words "necessary outgoings" to the vagueness of the terms of the Legacy Act.

§ MR. MALINS
said, he concurred with the hon. and learned Solicitor General that the words "necessary outgoings" had, to a considerable extent, been well defined by the Courts of Law and Equity, and there would be very little difficulty in determining what could be deducted under those words. He recommended the right hon. Gentleman the Member for Oxfordshire not to press the Amendment.

§ MR. HENLEY
said, that his sole object in proposing the additional words was to raise a discussion upon them, and elicit the opinions of hon. and learned Gentlemen on both sides of the House. Under the present Legacy Act there had not been much litigation; and if the Bill now under discussion was administered in the same way, he trusted the result would not be so different as he at one time anticipated. He therefore would not press his Amendment.

§ MR. HILDYARD
said, he would request the Chancellor of the Exchequer to say what was to determine the annual value. Clearly it was not intended that it should be the rent. He believed that a larger sum would be paid to surveyors and valuators for a certain number of years, than would find its way into the pocket of the Chancellor of the Exchequer.

§ The CHANCELLOR OF THE EXCHEQUER
said, that with reference to this part of the Bill, more safeguards had been taken than had ever been had recourse to in any former Bill. Everything that came under the operation of the present Legacy Duty Act was valued without any precise test of value being laid down by which it should be tried. But in the present Bill they had fixed that it was the annual value that should be taken, and that the party himself should be the one to render an account of the value, and a guide was provided that he might know what deductions he was to make, namely, necessary outlay. He (the Chancellor of the Exchequer) could not conceive in what way it would be possible to be more distinct and specific as to the mode of finding the annual value.

§ SIR WILLIAM JOLLIFFE
said, he must complain that it was impossible to discover upon what principle the value was to be ascertained, or the deductions were to be made.

§ SIR JOHN TROLLOPE
said, he should propose that the remainder of the clause, after the word "outgoings," be left out entirely. The Levitical law subjected such articles as "mint, and anise, and cummin," to payment of a tithe, but he had never heard that it was proposed to tax the cedars of Lebanon; and though the fathers of our Church took care to tax the smallest articles, he never found they attempted to lay a tax or a tithe upon timber. Nobody had ever attempted, either, to rate growing timber to the relief of the poor, and, therefore, the same principle as had always applied to it ought to be applied to it now. From what he knew on the subject, he thought it would be very difficult to lay down any possible principle which could govern this tax. Besides, it would be exceedingly difficult to define what was taxable timber, or to say what was for ornament and what was for shelter. There were places where the cutting down of trees would render the land utterly valueless. If, for instance, the timber were removed from places on the coast of Norfolk, the soil would be absolutely blown away. There were, moreover, insuperable legal difficulties in the proposed mode of assessing the tax. Great injustice would be done by this clause, and discouragement shown to those gentlemen who now took a pride in improving their estates and ornamenting the country, by planting timber.

§ The CHANCELLOR OF THE EXCHEQUER
said, he was glad that the right hon. Gentleman had made this Motion, because it fairly raised a question which ought to be considered by the Committee. The right hon. Gentleman had said that there would be difficulties in levying the tax on timber, and that great injustice would be done. He (the Chancellor of the Exchequer) agreed that there would be a great deal of difficulty, and also considerable injustice, if the tax were levied with rigour; but he ventured to predict that the injustice would be done, if at all, to the Exchequer. Although at this moment the bulk of the real property of the country was not subject to the legacy duty, yet a great part of it was; and all estates that came under the operation of the duty had had their timber valued and taxed. But it was never heard that injustice had been done in such cases; and the truth was, that the tax on the timber was very little more than nominal. In this he founded his opinion upon the practice which had hitherto prevailed in the present valuation of timber, in which he was not aware that it had ever been found that injustice had ever been done to individuals. But the question was not at the present moment what particular provisions the Committee should adopt as to the valuation of timber. That was a matter open to debate, and he was perfectly ready to receive suggestions upon that subject; but the right hon. Gentleman's broad proposition was, that timber ought to be exempted altogether from the operation of this tax. Now, he (the Chancellor of the Exchequer) did not mean to say that it was vital to the financial efficiency of this measure that timber should be taxed, for he had already stated that only a very small sum would be derived from it; but this was more a question of principle than anything else. The Committee were not now considering whether the tax should be levied upon timber planted as an ornament or a shelter to land, and in which it might be essential to its letting value, nor how far growing timber should be subject to the tax. They were not now considering any point of detail whatever. The question before them was—should they strike out of the Bill timber altogether? Without exaggerating the importance of the question, he would call upon the Committee not to allow this to be struck out of the Bill, It would be better to insert 457 such provisions as might be thought necessary to prevent any abuse of the law as to the liability of timber to the tax. It must be remembered that, however uncertain timber might have been in former times, considered as a marketable commodity, it had, of late years, become a commercial commodity to a very great extent. There were many cases in which timber was just as good a portion of an estate as any other portion whatever; and, both in England and in Scotland, he knew of cases in which it had become, to a great extent, a marketable commodity, having a regular mercantile value. This being the case, he did not think it would be wise, or consistent with the impartiality which ought to be preserved in this tax, to exclude timber from the operation of the Bill. There were no "peculiar burdens" upon timber, being at the same time a valuable commodity; and the question, therefore, was— would the Committee determine to create an exception in favour of that description of property, and that alone, in a measure which purported to equalise the burdens in regard to all descriptions of property? He was quite of opinion that they ought not to be harsh in levying the tax as regarded timber; but the Committee would, he hoped, give a negative to the proposition of the right hon. Gentleman to exclude timber altogether from the operation of this Bill.

§ MR. THOMAS ACLAND
said, he agreed with the right hon. Gentleman in thinking that if all property, real or personal, was to be taxed, he did not know what exemption any man had a right to claim in respect to timber. On that ground, therefore, he was not prepared to support the Amendment; but he was not much better pleased with the mode in which his right hon. Friend (the Chancellor of the Exchequer) proposed to assess the tax upon timber, than his right hon. Friend near him (Sir J. Trollope. The system proposed would be one full of inconveniences, both to those who paid the tax and those who levied it, and it would also entail considerable injustice. When he sold his timber, he was willing to pay his proportion of the tax; but he was not willing to pay beforehand, when, in order to ascertain the value of the timber, he was exposed to so many difficulties. All these would be avoided if an assessment were made at the time of every sale of timber, and a declaration were required from the owner.

§ MR. AGLIONBY
said, he thought it rather extraordinary that after the matter had been the subject of serious discussion, and that further consideration of the subject had been postponed, so many hon. Gentlemen who had heard nothing of the debate should come in and discuss it over again, and get up an opposition. As a deliberative body he did not think that was creditable to them. He should be glad to know whether the right hon. Gentleman the Chancellor of the Exchequer would accept the proposition of the right hon. Baronet opposite. He believed the clause as it was framed would form a serious stumblingblock in the progress of the measure. The idea of putting a succession duty upon that ornamental timber which grew in parks was repugnant to his feelings. The timber of the parks of our nobility and gentry was not only an ornament and shelter to the mansion, but an ornament to the whole of the country, and it was abhorrent from his feelings to make it the subject of a succession tax.

§ The CHANCELLOR OF THE EXCHEQUER
said, the question had been so broadly raised, that he at first thought it best to take the sense of the Committee upon it. But, upon consultation with his hon. and learned Friend the Solicitor General, he thought that it might be some improvement to the clause if, after the words "computed value of such timber," they inserted the words "as is fit and proper to be cut." His own view was, that the tax on timber ought to be made so as to work easily, and, above all, not to involve the necessity of resorting to these expensive valuations.

§ MR. CUMMING BRUCE
said, that an English sage, Dr. Johnson, when he visited Scotland, reproached that country with its want of timber. Scotchmen since that time had been endeavouring to remove that reproach by raising plantations; and now the right hon. Gentleman opposite had the conscience to point particularly to Scotland as a country where profit was made out of timber. The object ought to be to cover the waste lands of that country with plantations. Anything more impolitic, unstatesmanlike, and unfair, he was at a loss to imagine. He hoped the Chancellor of the Exchequer would consent to expunge the latter part of the clause.

§ MR. H. HERBERT
said, he did not see much advantage in adding the words proposed by the Chancellor of the Exchequer. He came from a part of the country where 459 opinions differed very much upon the question when a tree was fit to he cut. It was thought by some that an ash tree was fit to cut as soon as it was big enough to make a spade handle, and a young plantation cost more than it was worth to watch and take care of it. He feared the clause as proposed by the Government would do a great deal of harm, for if there was one thing more desirable than another, it was planting in Ireland, which was liable to the reproach that had formerly justly been thrown upon Scotland.

LORD SEYMOUR
said, he did not think that the modifications just proposed by the Chancellor of the Exchequer would help the Committee very much. He also doubted whether the Amendment proposed by the right hon. Gentleman (Sir J. Trollope) would answer the purpose he had in view. If the latter part of the clause were expunged, all property yielding income would still be liable, and he was afraid that timber would come in as property yielding income, If it were intended to exempt timber, that should be done by express words.

§ MR. DRUMMOND
said, he was afraid that the difficulty belonged to the subject itself, and he doubted whether he could devise words that would meet the justice of the case. Generally speaking, timber was worse managed than any other description of property, and the Crown lands worse than all. He did not know what was meant by trees being fit for cutting. He had timber in his possession which had not increased an inch in thickness in thirty years. There would be the greatest difficulty in giving an estimate of the value of timber. Why were not hop-poles to be included in the valuation as timber? In many cases, if the timber were taken away, the land would be perfectly useless. If the Chancellor of the Exchequer said that all timber that was sold should pay, that would be something tangible, but on what principle could they tax the value of the land and the value of the crop together? He would rather trust to the ingenuity of the right hon. Gentleman to modify the clause.

§ SIR ROBERT PRICE
said, he wished also to leave the matter for the consideration of the Chancellor of the Exchequer. They had always been told it was desirable to encourage the growth of timber, and now it was proposed to lay a special tax upon it. He recommended the right hon. Gentleman to see how far it was possible to modify the clause. He could not vote for doing away altogether with the duty 460 upon timber, for in acceding to the tax upon successions-a part of the financial scheme which many hon. Members did not very much approve of—he did not see why timber should be exempted. He was, however, of opinion that the duty upon timber was a subject which required more consideration than it had as yet received; and he hoped that the Committee would not then be pressed to a division, but that the subject would meet with further consideration.

§ SIR JOHN TROLLOPE
said, he coincided in opinion with the observations of the hon. Member for West Surrey (Mr. Drummond). He hoped that the Chancellor of the Exchequer would give way upon this point, and that there would be no necessity for dividing the Committee.

§ SIR JOHN SHELLEY
said, he felt that if he voted for the propositions of the right hon. Baronet, he should be voting that timber should not be taxed, whereas there were many, and he himself was one, who had derived an annual income from timber and underwood, and therefore he could not conscientiously say that those who succeeded him were not bound to pay a succession duty on that as well as any other portion of the estate. It was therefore impossible for him to vote for the Amendment of the right hon. Baronet; but at the same time he felt great difficulty in voting for the clause as it stood, because injustice would be done under it in many instances. The great proportion of timber left standing on farms was as essential to the growth of stock and the thriving of crops, as the large woods raised to break the force of the wind were to the shelter of the mansion-house. To avoid any question as to the word shelter, he would suggest that the words "but standing in coppices" should be added. Wishing to see the succession duty fairly adjusted, he hoped the right hon. Gentleman the Chancellor of the Exchequer would reconsider this question, and would postpone the clauses regarding timber for the present.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the question upon which the Committee had to decide was not as to the particular words, or the particular manner in which timber should be taxed, but as to whether it should be taxed at all. It was too late to postpone the clause, as an Amendment had been moved. After the clause then before them had been disposed of, the form in which the tax should be imposed still remained for consideration. On that point he had already said that the 461 proposition made by his hon. Friend (Sir T. Acland) appeared to him to be unobjectionable in principle, although the precise words by which it should be carried into effect required consideration. It was for the Committee to vote upon the question then before them as they thought fit; but he must say that he did not think that the Government would have done their duty had they not proposed to make timber liable to the succession duty. He did not think they could have vindicated the justice, equality, or fairness of their plan, if they had hesitated or shrunk for a moment from making the proposal they had done. It related to an article which in many parts of the country was as purely merchantable a commodity as anything that was brought to market; and when it was not merchantable, what was it? It was above all things the sign of wealth, of luxury, and of grandeur. ["Hear, hear!"] That was his opinion; and if he were told that the magnificent woods that stood in the great parks of this country were not a sign of wealth, of luxury, and of grandeur, he need not enter further into the discussion. Timber, then, being as he had stated, he would say, let the Committee take with respect to it what course they pleased. He did not say that the duty to be imposed on this article was either insignificant as a tax, nor, on the other hand, that it was of vital importance; but he was sure that Government would not have done their duty had they not proposed its imposition.

§ LORD HARRY VANE
said, he could not deny that there was some justice in taxing timber when they were imposing a succession duty upon every species of property; but at the same time there were objections to the mode in which this clause dealt with the question; and he hoped that the right hon. Gentleman the Chancellor of the Exchequer would take the suggestions of the hon. Baronet (Sir T. Acland) into his serious consideration, as he (Lord H. Vane) thought they in a great measure met the justice of the case. The Chancellor of the Exchequer, in assigning as a reason for taxing timber that it was a sign of wealth, luxury, and grandeur, had gone infinitely beyond the principle of his own Bill, which proposed to exempt merely ornamental timber from taxation.

MR. VERNON SMITH
said, though they adopted the Amendment of the right hon. Baronet (Sir J. Trollope), timber would, under the early part of the clause, be still subject to the duty. His right hon. Friend the Chancellor of the Exche- 462 quer admitted that the tax, if strictly levied, would be a harsh tax. He wished, therefore, that his right hon. Friend would introduce words which would ensure its being lightly dealt with. His right hon. Friend was introducing into taxation by this proposition property which was not subject to rate, and was thereby opening a new door to local taxation. They could not exempt timber, he admitted; but at the same time this tax would be one of the most difficult to be levied, and great frauds would be practised on the Exchequer. He would suggest that they should go through with the clause, and the Amendments proposed; after which it would be competent to the right hon. Baronet (Sir J. Trollope) to move that timber be altogether exempted.

§ SIR JOHN WALSH
said, the right hon. Gentleman the Chancellor of the Exchequer had made so many admissions, and agreed to so many alterations, that it was impossible to know what the Government really intended. Did the right hon. Gentleman mean to assent to the words "fit and proper to be cut?"["No, no!"] Then what was the position of the clause? No Amendment had been carried, so that the clause could be postponed; and it appeared to him that the postponement would be the best course to pursue.

The CHAIRMAN
said, that a question had been put upon the Amendment, and that question must be put. If the Amendment were withdrawn, the clause could be postponed, otherwise it could not be.

§ MR. HENLEY
said, the question before the Committee on the Amendment was, not whether timber should be taxed, but whether it should be taxed in the mode proposed by these clauses. He did not deny that timber should be taxed, but it was not wise to impose on taxpayers so much inconvenience and expense as the proposed method would. He asserted that it would not be possible to levy the tax as imposed by this Bill. When woods were not fit to be cut, how could they be valued? He was prepared to vote against the clause as it stood, though perfectly ready to consider the question with reference to a better and less unfair mode of raising a tax upon timber. He had known timber on a property which was now worth less than it was thirty years ago, and from which no profit had during all that time been acquired. Upon the whole he thought the proposition of the hon. Baronet the Member for North Devonshire (Sir T. Acland) the best that could be suggested.

§ The CHANCELLOR OF THE EXCHEQUER
said, he must remind the Committee that the question on which they were going to vote was, whether they would allow certain words to stand part of the clause. In these words there was not comprised anything objectionable, if there was anything objectionable in the Government proposition. His hon. and learned Friend the Solicitor General had employed his labour during the last hour to devise a remedy, and he proposed to introduce words which he thought would give effect to the principle that had been contended for by one of his hon. friends. He did not propose, however, that it should be the exclusive mode of proceeding, but that a person should have the option, if he thought fit, to elect to pay on the average value.

§ SIR THOMAS ACLAND
said, there was following the words "But there shall be included," these words, "in such estimate." Now he objected to these latter words. He could not agree to any estimate, which he was persuaded would be impracticable.

The SOLICITOR GENERAL
said, he was prepared to leave out the words requiring an estimate. Still the assessor ought to have an option. If, however, that were objected to, the clause might run thus:—"There shall be included, in the case of timber, the monies actually received on the sale of such timber trees only as shall be held and sold during the term of such possessor."

§ SIR JOHN TROLLOPE
said, that these words would not meet his objection, for how were those persons to be dealt with who had only periodical and not annual sales of timber? By what machinery did the right hon. Gentleman propose to levy the tax on them? He should be willing to add a proviso to his Amendment, which would meet the objections of the noble Lord (Lord Seymour) and the right hon. Gentleman (Mr. V. Smith).

§ LORD JOHN RUSSELL
said, it was very desirable that the Committee should know what was the nature of the question they were going to vote upon. The right hon. Gentleman (Sir J. Trollope) said it was not enough to leave out certain words, but that there should be words introduced for the purpose of excluding timber from the tax; whilst the right hon. Gentleman the Member for Oxfordshire (Mr. Henley) understood it differently, and admitted that it might be very proper to subject timber to taxation. The right hon. Baronet proposed that timber should be ex- 464 cluded from the tax. Was that a reasonable proposition? The hon. Baronet the Member for Westminster (Sir J. Shelley) said that the timber as well as underwood on his property was cut down every year, and that it formed part of the annual income of the estate. Now, suppose a man with 2,000 acres, of which 1,000 was arable and pasture land, from which he derived a certain income every year, and the other 1,000 acres of underwood, from which he derived also a certain income, he could not understand why the income arising from the latter should be exempted from the tax, and the income arising from the former subject to it. If the successor came into possession of the property, he would have income from the one source as well as the other; if he sold the estate, he would receive value for the part containing the timber as well as from the rest. That was a simple case, and in that case he owned he could not see the justice of excluding timber altogether from the tax. There were other cases of infinitely more difficulty. With regard to one class of cases, he had no doubt that the proposition of his hon. Friend the Member for North Devonshire (Sir T. Acland) would be found to answer —that if there were a sale of timber, and in that case only, should the tax be paid. He could not, however, but gather from the debate which had taken place that evening, that there were other cases of more difficulty. The position of the matter reminded him of something which occurred some years ago, when he had the conduct of a Bill with respect to the commutation of tithes. On that occasion it was found that the question of tithes for hops was infinitely more complicated than all the rest of the Bill; and accordingly he agreed to have separate clauses with regard to hops, of course not taking away from the tithe-owner his property, but making special provision for the case. So with regard to this tax on timber, he thought his right hon. Friend would be obliged to have more clauses or more words in order to lay down the manner in which the tax should apply in particular cases. He could not, however, see the justice of the House coming to a decision that in no case whatever should a tax be imposed on timber; and he hoped, therefore, they would all understand that the proposition before them was, that no such tax should be levied. Then, that question being disposed of, he hoped they would have such a proposition made to them as would enable the Committee to see clearly 465 hat would be the actual effect of this tax so far as timber was concerned.

§ MR. ROBERT PALMER
would venture to say, that if the clause remained in its present form, there was no case in which a valuation would not take place. The successor to an estate, when called upon to make a return, would be able to form a good idea of the value of the land from the rent-roll; but the value of the timber was almost sure to be disputed by the officer employed to collect the tax, and nothing could be more obtrusive than such a valuation. The only way which he saw out of the difficulty was to exclude the clause altogether.

§ SIR JOHN PAKINGTON
said, as the hour was late he would not enter into the main question, whether timber should be taxed, further than to say that the noble Lord (Lord John Russell) had fallen into a mistake by mixing together timber and underwood. He considered the division which was about to be taken to have reference to the latter part of the clause; and in the event of that being negatived, it would be open to his right hon. Friend (Sir J. Trollope) to move his proviso, and to the Chancellor of the Exchequer to make any proposal he pleased.

§ SIR JOHN SHELLEY
said, the noble Lord appeared to have entirely misunderstood what fell from him. He had alluded particularly to his own case as one in which there could be no difficulty, as his successor would clearly be liable to pay duty for the timber; but he also put the case of those who had an annual sale, and remarked that timber standing in the middle of grass lands was part and parcel of the farm. As regarded the question whether timber should be liable to the tax or not, he had no hesitation in saying that he should vote in the affirmative, because he held that what produced income ought to be taxed. Believing that the difficulty could be got over, he should propose hereafter to make timber standing in woods liable to the tax, and to exempt other timber.

§ SIR JOHN TROLLOPE
then proposed the following proviso to the clause:—"Provided always, that the value of any timber growing or standing on the said lands should not be included in the said estimate."

§ MR. MULLINGS
said, he thought that 466 they could not go into the question to-night; he therefore moved that the Charman report progress.

§ LORD JOHN RUSSELL
said, he thought that as the Committee had been discussing the point all night, it ought not to adjourn without coming to some real decision. The proposition now made by the right hon. Baronet (Sir J. Trollope) was a very fair and distinct one; and if that was agreed to, then there would be an end of the question as regarded whether the tax was to be imposed on timber. On the other hand, if that proposition should not be acceded to by the Committee, then progress would properly be reported, and it would remain for the Government—it might be by means of the Resolution of the hon. Baronet (Sir J. Shelley)—to arrange the manner in which it might be necessary to alter the plan of the tax.

§ SIR JOHN PAKINGTON
said, he conceived, as there was already in reference to the present clause one proposition before the Committee, as another was given notice of by the hon. Baronet opposite, and as in all probability the Government would suggest a proposition of their own, the Chairman had better report progress, and before the next sitting of the Committee the various propositions should be printed on the notice paper.

§ The CHANCELLOR OF THE EXCHEQUER
said, that the last vote had placed the Government in this difficulty—that they could not make a proposal as to plan until they knew the general view of the Committee as to principle. It had been distinctly stated by numbers of those who had subsequently voted for the right hon. Baronet's (Sir J. Trollope's) Amendment, that it was not their intention to vote against a tax on timber, but that their intention was merely confined to a partial condemnation of the plan of the tax; and, that being so, this fruit ought at least to be reaped from the prolonged discussion— that it should be known what was the view of the Committee on the principle. If the proposition now made by the right hon. Baronet was agreed to, then the Government would know that the meaning of the Committee was to put a negative on the tax on timber. If the Committee rejected this proviso, the Government would know what form to give to the proposition. Certainly if progress was now reported, the whole evening would have been lost.

§ MR. HENLEY
said, that this proviso would leave its supporters in exactly the same position that they were before. It 467 provided that timber should not be here included,

§ MR. AGLIONBY
said, that in the late division he had both spoken and voted against his party. Hon. Gentlemen opposite might think they had achieved a party triumph; but the vote had been obtained by the assistance of those who sat on his (Mr. Aglionby's) side of the House. Not being concerned with either party, he desired no party triumph. He denied that several of those who voted with the hon. Baronet voted against the tax on timber. For himself he approved of a tax on timber, but not of the plan proposed by the Government. He would suggest to the noble Lord to withdraw the clause, and quietly consider what words he should substitute in lieu of the present ones. If the right hon. Baronet (Sir J. Trollope), however, should press his Amendment, he should vote against it; but if, on the contrary, an Amendment was produced which defined the timber to be taxed under the Bill to be that only which produced profit, it should most certainly receive his support.

§ MR. MULLINGS
said, he would beg the Committee only to consider the position of trustees and executors, who would be obliged under the provisions of this Bill to have an account kept open of all the timber cut from time to time.

§ LORD JOHN RUSSELL
said, the drift of his hon. Friend's (Mr. Aglionby's) statement was, that they ought that night to come to some decision. Well, the right hon. Gentleman opposite stated as fairly as possible that his object was to prevent timber being liable at all under this tax; but his hon. Friend's vote was given with a totally opposite intention. Now, what he would submit to the Committee to decide was, not whether the tax should apply to this or that particular description of timber, but whether timber should be included at all under its operation. All he wanted the Committee to decide then was, whether timber was to be taxed.

§ MR. NAPIER
said, he must confess that his difficulties would be very much cleared away if he saw the question of the practicability of taxing timber at all distinctly determined. He had understood that the hon. and learned Solicitor General had been considering this very clause, and he (Mr. Napier) must own he was very anxious to see the plan produced by so eminent a hand. For himself, he would tell the Committee at once that he was utterly Unable 468 to come to anything like a satisfactory conclusion as to whether it was possible to tax timber or not. Stock in trade, for instance, was exempt from poor-rates, because it was impracticable to tax it; and he believed timber must be dealt with in a similar manner; but if they could show him how to tax it, he was prepared to do so. He believed, therefore, that the question was one to be settled by calm and deliberate consideration, and not to be determined by slippery majorities.

§ SIR JOHN SHELLEY
said, he agreed that the question at present before the Committee was, whether timber ought to be taxed or not. He believed, however, that the only proper course was his Amendment, namely, to make a difference between ornamental timber and timber capable of being turned to a mercantile account.

§ SIR JOHN PAKINGTON
said, he thought that the noble Lord (Lord J. Russell) had for gotten the circumstances under which the proviso of his right hon. Friend (Sir J. Trollope) was proposed. His right hon. Friend had suggested, that if the latter part of this clause were omitted that timber would remain to be taxed without specification as to how it was to be levied; and in order to get over that difficulty, and not to induce the Committee to come to a decision not to tax timber, he introduced his words. Now, he (Sir J. Pakington) would submit to the Committee that they could not come to a decision whether timber was to be taxed or not, unless they had before them the specific proposition, or manner according to which it was to be taxed. The measure was the measure of the Government, and they were responsible to the Committee for its details.

§ MR. FREWEN
said, that at such an hour (ten minutes to one) the Government ought to consent to report progress.

The EARL of MARCH
said, he hoped that upon a question like this, involving interests of the gravest importance, and upon which there was great difference of opinion, the noble Lord would not refuse to allow the Chairman to leave the chair. He should move that the Chairman do now leave the chair.

§ MR. LABOUCHERE
said, he thought 469 the fairest way was, for the right hon. Baronet to withdraw his Motion, and to leave the field clear for the Government to bring forward any proposal which they might have to make.

§ SIR JOHN TROLLOPE
said, he had moved the addition of the proviso simply to make his proposition clear; but as the Government had agreed to take the whole subject into consideration, it was but fair to give them time for consideration; and he should, therefore, accede to the suggestion of the right hon. Gentleman to withdraw the Amendment.

§ MR. COBDEN
said, that much had been said on behalf of those who were the owners of timber; but he wished to say one word on behalf of those who were not so fortunate. He could not for the life of him ascertain what mysterious cause was operating to remove timber out of that category in which every other description of property, real and personal, was to be found. He wanted to caution the Chancellor of the Exchequer from attempting to conciliate his opponents by any kind of compromise; and he thought the course pursued by hon. Gentlemen opposite showed that nothing was to be gained by that kind of policy. He went further than to say that copse wood and forest wood ought to be taxed, for he saw no reason why ornamental timber should not be taxed. No arguments applied to the exemption of ornamental timber, which did not apply to other objects of luxury. Why was ornamental timber kept, but for the purpose of luxury and enjoyment? Did not the possession of a park add as much to the dignity and importance of the owner as the possession of a mansion? And if hon. Gentlemen advocated the remission in the case of ornamental timber, why not in the case of pictures and the plateau on their sideboards? He would lay down this proposition, that anything which could be brought into the Encumbered Estates Court and sold, was fairly liable to taxation under this Bill. He might be told that ornamental timber was not an article of merchandise. Why was it kept and not cut for sale, but because the proprietor preferred to enjoy the ornament and luxury, rather than convert it to purposes of utility by selling it? It argued great wealth for any one to be able to keep so large an amount for luxury and enjoyment. Having agreed that everything else should be taxed, was it desirable to make a stand on this article of timber? 470 They were fewer in number who possessed parks and timber than any other class; and they would be isolating themselves more in making a stand against taxing timber, than if they claimed exemption for their equipages, their plate, or their diamonds. He heard it said it affected entailed property; but they forgot that the Chancellor of the Exchequer had already dealt very leniently with entailed property by allowing four and a half years to pay the duty. He asked hon. Gentlemen to bear in mind that the provision to prevent the owners from parting with land was a provision calculated to sustain the feudal principle in this country. ["Oh, oh!"] Most certainly it was a provision to sustain the feudal principle, and whilst that principle was embodied in this Bill, in every other country in the world the tendency of legislation was to force the sale of landed property, and compel its subdivision. Therefore, he asserted that, when they found a spirit manifested so peculiarly favourable to entailed property in this country, it was unwise to raise discussion on this topic, and by fastening on the miserable article of timber, to revive the whole question of protection to the landed interest, and agitation between town and country. He hoped the Chancellor of the Exchequer would take his stand on the Bill as it was; and he might depend upon it, if he wished his supporters to fight his battle for him, and to be there late at night and early in the morning to meet the attacks of hon. Gentlemen opposite, they would not then desert him, but would no doubt carry him triumphantly through the contest in which he was engaged.

§ MR. AGLIONBY
said, that every word which the hon. Member (Mr. Cobden) had spoken had been as much against the clause as it stood, as against the Amendment of the right hon. Baronet. What he would now suggest to the Chancellor of the Exchequer was, that he should come down on the next occasion with a definite proposition, that would raise the whole question, that every class of timber, whether ornamental or mercantile, should be subject to taxation.

§ LORD JOHN RUSSELL
said, he rose for the purpose of ascertaining the exact position in which the Government now stood with regard to this question. The right hon. Gentleman (Sir J. Trollope) would have brought the matter to a clear issue in the Motion which he had now withdrawn. His meaning in withdrawing that 471 Motion he understood to be, that his (Lord J. Russell's) right hon. Friend the Chancellor of the Exchequer might bring forward any Motion on the subject which the Committee would be ready to consider, he having withdrawn his Motion for the total exclusion of timber from taxation. ["No, no!"] If that were not the understanding, he must ask the Committee to decide upon the question, whether the proposition should be withdrawn or not, as, otherwise, it would be impossible to understand how they stood with regard to this question.

§ SIR JOHN PAKINGTON
said, he was sorry that the noble Lord should have so completely misapprehended his right hon. Friend. It was still the intention of his right hon. Friend to bring forward the proviso unless the Government should in the meantime bring forward some plan that would prove acceptable to the Committee; and he did not think that the noble Lord was acting fairly by his right hon. Friend in refusing him leave to withdraw his proviso, which his right hon. Friend had first moved in accordance with the suggestion of a right hon. Gentlemen opposite.