§ Order for Committee read.
said, he rose to submit some objections, which he thought ought to be valid in a free trade House of Commons. This Bill was a matter affecting the currency of the country, and a matter which he believed would have the worst possible effect upon the commercial world. If stamp duties on bills of exchange could not be taken off and replaced by some uniform tax of a small sum on all bills, of 1361 whatever amount they might be, he had no objection to the first clause. He admitted that the schedule annexed to the Bill was in itself an improvement, because it gave relief to smaller bills, which had hitherto been heavily taxed. But with respect to the second clause, imposing duties upon foreign bills of exchange, he entertained the strongest objections, because any additional restrictions upon foreign bills of exchange must be very injurious to the general commerce of the country. In his opinion by far the best course would be to impose a small tax of 3d. or 6d. on all bills, whether inland or foreign, which might be done with little loss to the revenue; but if that was not done, then the distinction which had hitherto existed between foreign and inland bills ought still to be maintained. If the tax on bills of exchange were a good tax, it would have increased proportionately with the increase of commercial transactions, but it appeared the revenue from that source, which in 1815 was about 800,000l., had actually fallen last year to 596,000l. By Sir Robert Peel's Bills of 1819 and 1845, the currency of the country was positively limited, bankers being prevented issuing notes except on metal foundation, and since the latter date banks which issued between 700,000l. and 800,000l. in notes had entirely ceased operations, so that the currency was so much deficient. Every hon. Gentleman who had attended at all to the subject must be aware that our bills of exchange were a great commercial advantage, and that there had been times when, without them, our trade would have been at a standstill, and the whole country would have become bankrupt. With a largely increased trade and a restricted currency, it was more than ever important that no new impediments should be thrown in the way of the free circulation of commercial bills. His own opinion was that an uniform tax of sixpence, or something of that kind, upon all such bills, would tend to give much greater facilities to trade than were afforded by the present system; but if they could not come to that, let them at least not lay a new tax upon foreign bills, which had never been taxed before. Free trade was making England the emporium of the world—the great depôt for the world's produce; but if they passed this Bill and imposed this duty upon bills drawn abroad, they would be limiting their own means of paying for this produce, and preventing this country from becoming the 1362 emporium of the money market, as she was already the emporium of commerce. He saw by to-day's papers, that upwards of 500,000l. sterling in dollars had been imported into this country in the course of the last week from various parts of the world. Of this large amount, probably not more than 50,000l. would remain to pay debts in this country, while the remainder would be drawn upon from France, and Germany, and Holland, and other parts of Europe; and it was easy to see that the imposition of a stamp duty upon such drafts would materially interfere with the freedom of our exchanges, and put impediments in the way of commerce. It was for this reason that he intended to propose. in Committee that the second portion of this Bill should be expunged.
§ MR. GREGSON
said, he approved of the Government proposal, and dissented from the opinions expressed by the hon. Member for Montrose (Mr. Hume) as to the effects of the duty on bills of exchange.
§ MR. THORNELY
said, he objected to the tax on foreign and colonial bills. The amount would be very considerable; for he had heard an American merchant in the City of London say that in his office alone the stamps would be 6,000l. a year. It was not, however, the amount so much as the vexatious manner in which the tax was to be imposed that the commercial world complained of; and he did wish that the Chancellor of the Exchequer, whose financial propositions had been so liberally met by the House, had refrained from laying on a new tax which he thought Would be very prejudicial to the foreign trade of the country.
§ MR. JOHN MACGREGOR
said, his objections to the difference of duty was to be found in the four schedules. To be fair, the duty ought to be uniform. He objected to the principle of taxing bills of exchange; but if such securities were to be taxed at home, he confessed he could not see on what principle of justice or consistency they should be exempted abroad.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he would suggest that as this was a Bill, not for the purpose of imposing a tax upon foreign bills of exchange, but for the purpose of amending the stamp laws in various particulars, of which this was only one, and as he did not apprehend that it was intended to take any vote upon the question "that the Speaker do leave the Chair," the better course would 1363 be to go into Committee at once, and to take the discussion upon the schedules when they came to them.
§ House in Committee, Mr. BOUVERIE in the Chair.
§ Clauses 1, 2, and 3 were agreed to.
§ Clause 4 (The holder of a bill drawn out of the United Kingdom to affix an adhesive stamp thereupon before negotiating it).
said, that as this was the clause by which it was intended to impose the duty, it was his intention to take the sense of the Committee.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he would put it to the Committee whether the more preferable course would not be to agree to the clauses, and raise the question of the hon. Member for Montrose on the schedules. It would be competent for the hon. Member to move the omission of "foreign bills of exchange" from the schedule.
§ MR. MASTERMAN
said, that these clauses involved the whole question, and submitted that the more direct and convenient course would be to take the sense of the Committee on the clause, for then the decision of the Committee would at once touch the principle of the proposal, which could not be the case if the question were merely treated as a part of the schedule.
§ MR. T. BARING
said, he took the same view of the case, for there could be no doubt that the fourth clause raised the whole question whether there was to be a stamp on foreign bills. The principle was involved in this clause.
said, he should now move that the clause be expunged from the Bill. He did not know whether the Committee was at all aware of the large amount of bills of exchange in circulation in this country. He confessed that he himself had had no accurate idea until he had inquired into the subject of the extent to which the commerce of the country was dependent on them. The amount of bank-notes in circulation was as nothing when compared with them. According to the estimate of Mr. Newmarch, a gentleman who had paid considerable attention to the subject, there were drawn for the purposes of the small farmer and the retail tradesmen bills of exchange of the average amount of 21l. 2s., having an average time to run of two months and seven days, to no less an amount than 6,325,000l. The amount of bills of the average amount of 140l., with an average time to run of 1364 three months and six days, drawn chiefly upon parties who supply themselves with goods directly from the importer or manufacturer, was 35,800,000l. a year, while the larger bills, of the average amount of 1,965l., reached to no less an amount than 51,000,000l. Of the total amount of bills of exchange in circulation in this country, estimated at 160,000,000l. or 170,000,000l., it might fairly be calculated that one-fourth were bills drawn abroad; and as he thought we ought to do everything in our power to invite trade, instead of imposing additional restrictions upon it, he hoped the Committee would mark its opinion upon the subject by assenting to his Motion to strike out the clause.
§ MR. GLYN
said, he might well agree with the opinion of his hon. Friend the Member for Montrose, that all stamp duties were in some degree impediments to commercial transactions, and under some circumstances he might probably concur with him in thinking that an uniform rate of duty might, perhaps, be expedient. Considering, however, that these were questions which involve the loss of a very large amount of revenue, and considering that these were not times when they could call upon the Chancellor of the Exchequer to give up any tax, which was collected without much difficulty, he could not support his hon. Friend in the view which he took of the measure now before the Committee. He did not think that the reasons which had induced the right hon. Gentleman the Chancellor of the Exchequer to propose that measure had been quite accurately stated. As he understood the object of the Bill, it was intended to obviate two great evils which existed under the present system. The first was a legal difficulty which had arisen, and which materially affected the holders of foreign and colonial bills; and the second was the grievance which had been felt for many years by the holders of small bills of exchange, not only on account of the pressure of the tax as it stands, but on account of the disadvantage at which they were placed with reference to their neighbours who were holders of foreign bills, and who were able to use them without being subject to any tax at all. With respect to the first difficulty, his hon. Friend (Mr. Hume) had very truly stated the total amount of bills in circulation in this country at about 160,000,000l., of which he (Mr. Glyn) estimated that about one-fifth were foreign or colonial bills; but his hon. Friend had 1365 omitted to speak of a third class, upon which this proposition of the Government mainly rested—of those bills which, purporting to be drawn in the Colonies, were in fact drawn in this country, and the innocent holders of which had, in a great number of instances, sustained severe loss, against which it had been wholly impossible for them to protect themselves. He spoke in the presence of Gentlemen who had suffered from this system, which had been carried on to a much greater extent than hon. Members probably had any idea of, and which penalties had been found altogether ineffectual to repress. With respect to the second point, he had himself presented petitions from several places relative to this subject, and he knew that there was a decided objection on the part of small dealers in the country to the manner in which this tax was at present levied. They complained, and justly complained, that it was unfair in its proportions, and bore very heavily upon them. Referring to the petition which had been presented against this Bill by his hon. Friend opposite (Mr. Masterman) the Member for the City of London, he was sure his hon. Friend would not deny that, upon this question, he did not represent the interests or the opinions of those large dealers in bills of exchange in the City of London, and elsewhere, who were so largely interested in it. They had caused it to be communicated to his hon. Friend that they disagreed with his views upon this subject. There might be something in the objection which was made upon the score of "trouble" if the Government had proposed that the holder of the bill should be compelled to send it to the Stamp Office, and to part with it out of his possession for the purpose of the stamp being affixed; but this difficulty was effectually disposed of by the simple provision in the Bill for affixing an adhesive stamp. He was quite aware of the complaints of trouble and inconvenience that were made when the postage stamp was first introduced, but he never heard of any complaints nowadays on that subject. If there was any ground for apprehending that the measure would materially interfere, as his hon. Friend had suggested, with the foreign operations of the country, he should be very sorry to say anything in its favour, or to take any steps to promote it; but what could be the effect of a duty of 1s. per cent upon the foreign bills of exchange negotiated in this country? At the very outside it would 1366 be only a small deduction from the commission, and would not, be felt confident, have the slightest effect upon the general transactions of the country. They knew that in the case of marine and fire insurances, although much heavier duties were imposed than that which was here proposed, foreigners still came to this country to insure; and so they would continue to do as long as England sustained her credit and her character for industry, integrity, and capital. Considering that the Chancellor of the Exchequer proposed to remove a grievance from the holders of foreign bills of exchange, and to relieve the internal trade of the country from a very heavy impost, he had the greatest pleasure in supporting the proposition.
§ MB. MASTERMAN
said, he differed entirely from the statement of the hon. Member for Kendal (Mr. Glyn), that the great majority of the merchants of the City of London regarded the proposal of the Government with favour. He believed, on the contrary, that they were altogether opposed to the imposition of a tax upon bills drawn out of the United Kingdom. Nor could lie agree in the principle that long and short dated bills should be taxed to the same extent. It had been the policy of Parliament of late years to unshackle foreign trade in every possible way, and now they were called upon to legislate in an opposite direction, and to place a tax upon that which had never been taxed before.
§ MR. W. BROWN
said, that believing that it had been the aim of Parliament by recent legislation to make London, if possible, the money market of the world, he must regard this proposal to tax foreign bills of exchange as an interference with that most desirable object. Nor could he help thinking that it was a most severe blow against the manufacturing and agricultural industry of the country.
§ MR. J. WILSON
said, this had been denominated a new tax, but so far from that being the case, it was in the main a great reduction of an old tax, in fact it was a proposal to bring about an equalisation of duties upon home and foreign transactions. At present all bills drawn in the United Kingdom on places out of the United Kingdom, and therefore representing the whole of the exports of the country, were subject to rates in the following proportions:—All bills under 100l. were chargeable with a stamp duty of 1s. 6d., but by the new scale they would be chargeable 1367 only with a stamp of a penny. Bills drawn on foreign countries up to 500l. were chargeable with a 4s. stamp, but now they would be chargeable with a stamp varying from 1s. to 1s. 8d., and it was not until bills reached the amount of 3,000l. that the duty would rise to the existing scale. The only new element in the Bill was, that foreign bills drawn out of this country and payable in this country would be subject to the same reduced and moderate stamp which would be charged on bills drawn in this country and payable out of it. In making this great reduction on the whole mass of bills circulated in this country, it was but fair to ask that all bill transactions should, as far as possible, equally contribute to the tax. When bill stamps were first introduced there could be no doubt that it was a great trouble to the merchants sending bills out of the country to have to send them to the Stamp Office for the purpose of getting them stamped, but the introduction of an ad valorem stamp rendered that arrangement practicable which was not practicable before. He was at a loss to understand why a large amount of tax should be thrown on bill stamps in one class of transactions and why another class of transactions should be entirely relieved from such an impost. If money was to be raised on stamp duties, the duty ought to be imposed as equably and lightly as possible on the whole transactions of the country, whether those transactions were home transactions or foreign transactions. He was surprised to hear the assertion that the proposition would be injurious to the agricultural interest. When he considered that the present amount of duty on bills up to 20l. was 1s. 6d. instead of the proposal of the Government of 2d., the present duty was an entire prohibition of that means of settling accounts; and the regularity in the settlement of small monetary affairs was a matter of no slight consideration, for nothing tended more to the uniformity of conducting business. The way in which the great warehouse-keepers of London had been able to conduct their business on small profits arose from the circumstance of their having the opportunity of drawing up their accounts at the end of each month. By reducing the rates of small bills, the same facility would be given to tradesmen in regard to small transactions that now existed in regard to large transactions. The advantages to be derived from the arrangement now proposed would not be con- 1368 fined to mere financial operations, but would have a material influence on the regulation of small transactions in business. The objection that no difference was made between long-dated bills and short-dated bills was one which he never expected would have been urged, for if there was one advantage greater than another in drawing bills, it was simplicity; and so far as he had had communication with the traders of the country, they regarded that as one of the most advantageous elements of the Bill. Then with regard to the supposed evil which this Bill would have on our foreign operations. In his opinion, so far from having a prejudicial effect on such operations, its effect would be beneficial. Although this was the first time of imposing a stamp on bills drawn abroad, the reduction on bills drawn in this country would be very great, for the duty would be reduced to one-twentieth per cent of the amount. It should be recollected that from time immemorial stamps had been chargeable on all bills circulated in France and Holland—in the chief monetary markets next to London. The imposition of stamps had not prevented Paris and Amsterdam from becoming large money markets; and, considering the greater facilities which this country possessed, he did not apprehend a consequence here which had not followed in those places. There could be no doubt that in monetary operations bills might be multiplied on one transaction to a great extent; but those multiplications would be for the convenience and profit of the parties concerned, and if there were separate profits and separate commissions on each transaction, he did not see why they should not bear a small tax. Seeing that the objections to the proposition were so slight, and the advantages to be derived from it so great, he trusted that the Committee would have no hesitation in giving it their assent.
MR. J. B. SMITH
said, he approved of that part of the Bill which made the stamp an ad valorem duty, but he objected to the new tax about to be imposed on foreign bills drawn abroad. The hon. Gentleman (Mr. J. Wilson) said, that such bills were taxed in France and Holland. Now that was the very reason which gave England an advantage over those countries. There was a time when this country was the great centre of marine insurance for the world, as it was now the great centre of the monetary transactions of the world. Why did we lose the profitable marine in- 1369 surance? By imposition of a stamp duty on marine insurances. How did that duty operate? It operated as a bounty upon the establishment of marine insurance companies in every country in the world, and not only did those companies do the business of foreign countries, but a very large portion of the business of English merchants. The Government were now proceeding on the same principle which was acted upon at that time, instead of inviting as much trade as possible to the country. It was impossible to tax foreigners without driving their business to other countries. The extent of the present evil was known, and if the money could not be spared at that moment, it would be much better to let affairs remain in their present state than run the risk of creating a greater evil.
§ MR. JOHN MACGREGOR
said, he thought it would be much better to have only one schedule, and to make the tax as moderate as possible until it could be entirely removed. If a tax was to be imposed on bills or promissory notes, it ought to be imposed without reference to the place drawing or the place of payment.
§ MR. T. BARING
said, he thought every one would admit that, if there was not some great evil to be remedied, or some great advantage to be obtained, it was most unwise to disturb fiscal regulations, and even then any alteration ought to be considered with reference to the extent to which it might be made convenient or inconvenient and injurious to the trade of the country. The evil complained of was, that there were bills of exchange purporting to be drawn from abroad upon places in England, which in reality were drawn in England, and which, when brought forward as evidence of a claim of debt, were not considered legal documents. Now, that difficulty might be got over by allowing such documents to be stamped if the holder could show himself innocent of fraud. But the object of drawing these bills was not to evade the tax of a few shillings, but to have documents which could be discounted, and upon which money could be raised, and he considered that the proposed small stamp would not prevent the creation of these fraudulent bills of exchange. If it answered the purposes of parties to draw bills in London, dating them from New York, Madras, or Calcutta, without a stamp, they would carry on their business in exactly the same way if a stamp should be imposed, because it was not a question of the payment of a few shillings, but 1370 whether hundreds and thousands of pounds could be raised. If the object was to make such a bill a legal document, it could be effected without the imposition of this novel tax. It was not correct to say, that a similar system was adopted everywhere else. It was not the case in Hamburg, in Holland, in Prussia, or Amsterdam. It was true there was a stamp one way, but the present plan was to impose a stamp both ways. In the United States, our great commercial rival, such a stamp would not be imposed. If the object of the Bill was to do justice to this country, it could be done by reducing the rates upon inland bills of exchange, without exposing the foreign trade to a new and a novel tax. It had been said that the plan would not give any additional trouble, but the affixing of the stamp would be productive of a great amount of vexation. If the clerk should make an error in the ad valorem amount of duty, it would vitiate the bill of exchange and relieve the endorsees from their liability, and the bill would be equally vitiated, if in the course of circulation the adhesive stamp should be rubbed off. The effect of the proposition would be to place a tax upon the banking operations of the country, and he could not conceive a more unwise proceeding. Was it right, when the object of Parliament had been to remove every shackle from foreign trade, to say we will now tax foreign bills both ways? The tax would not fall on the foreigner alone, but on the commercial transactions of this country. He saw no necessity for the tax. It would throw a difficulty in the way of foreign negotiations and exchanges, for, without the aid of men dealing in foreign exchanges, the greatest difficulties would arise in effecting payment for the transfer of foreign produce. He therefore objected to the proposition upon principle, and should give his vote against its adoption.
§ MR. W. WILLIAMS
said, there could be no doubt that a tax upon foreign bills, as well as upon all bills of exchange, was objectionable; but, as he understood the matter, the object of the Bill was to reduce a most oppressive and heavy tax upon inland bills of exchange, and he considered that object a most desirable one.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he was very desirous, before the Committee divided, that they should understand clearly the real meaning and effect of the vote which they were about to give, because the speech of the hon. Mem- 1371 ber for Huntingdon (Mr. T. Baring) had placed the real points of the case entirely out of the view of the Committee. No doubt, if they could dispense with the tax upon foreign bills of exchange, it would be most desirable to do so; but the hon. Member who had just sat down (Mr. W. Williams) was prepared to vote for the measure on account of the great relief which it would afford with respect to home bills. He could not subscribe to the proposition that this was the imposition of a new tax. It was the uniform and equal application of the existing tax by the removal of exemption with respect to foreign bills of exchange, which they had no title whatever to enjoy. It proceeded on the principle that all trade—whether a trade between this country and other countries, or whether a trade between the agricultural districts of the country and the manufacturing districts of the country—it proceeded on the principle that all trade was barter. The exchange of commodities was the basis of trade. That was a consideration as applicable in all cases to foreign as to home trade. He should be happy, if possible, to dispense with the duty on all bills of exchange; but at the present time the finances of the country would not allow of such a proceeding. He proceeded on this principle—that it was eminently desirable for all parties concerned that the basis of barter, the exchange of commodities, should be worked, whether in the home or foreign trade, through the medium of bills of exchange. This was not a mere fiscal matter, but one of the greatest commercial importance. He would appeal to those connected with agriculture whether anything could be harder than the case of the retail dealers, who, in this respect, were labouring under a scale of duties absolutely prohibitory. The hon. Member for Huntingdon had intimated that the object of that House had been to remove shackles from the trade of the country. He was not aware that that had altogether been the object of the hon. Member. The hon. Member seemed to be of opinion that the House was now retracing its steps. Now, Parliament had removed the shackles from foreign trade in order to place it on a footing of equality with the home trade, and he (the Chancellor of the Exchequer) now asked the Committee to remove the shackles from the home trade and to place it on an equality with the foreign trade. He wanted to know why the retail trader in a town was to be pre- 1372 cluded from the advantage of raising money bills of 20l., 30l., or 40l., which was the case at present, in consequence of the prohibitory duties now in existence, and which had the effect of checking, hampering, and restricting commerce—a tax, not of one-twentieth per cent, but a tax amounting to 2, 2½, 3, 4, 5, and even 6 per cent—a tax that doubled the rate of interest? That was the system now in operation with regard to the home trade—that was the system which he now asked the Committee to destroy. It was said, "Destroy that system if you please, but don't lay a tax on foreign bills." Now, his answer to that was plainly this—it was impossible at the present moment to undertake the reformation of the law of stamps on bills of exchange, except upon principles which would allow the Government to derive the same amount of revenue from that source. Moreover, he was not willing to be a party to the continuance of an exemption in favour of trade with foreign countries which was not enjoyed by our trade at home. He agreed with the hon. Member for Glasgow (Mr. John Macgregor) that if a bill of exchange were to be taxed, it ought to be taxed irrespective of the origin of the transaction. He should be perfectly willing to see the tax reduced when the revenue of the country would afford it; but he maintained that the principle upon which he proposed this alteration was similar to that on which the House had last year reformed the assessed taxes, and on which it had made other fiscal reforms, namely, that of reducing the taxes so as to make them moderate in amount, and uniform and fair in their application, and of removing invidious exemptions which rested upon no just principle. This matter was considered by persons engaged in trade to be one of great importance. He held in his hand a memorial which had been forwarded to him by the hon. Member for the City of London (Mr. Masterman), who had himself borne testimony to the great respectability and weight of those by whom it was signed. These persons, without entering into the abstract question of the merits of the duty or of its extension to foreign bills, felt that a system of equality and uniformity ought to prevail, and that the removal of the prohibitory duties, which now prevented the use of small bills in the home trade of the country, was a matter of vital importance, and of vital importance, not only as an abstract and theoreti- 1373 cal question, but because, by facilitating the settlement of accounts, by substituting definite and fixed engagements for mere vague, open credits, it would give more stability and more respectability to the whole mass of the small transactions of the country. These were the grounds upon which the Committee was asked to affirm this proposition, and it must be distinctly understood that if that House continued to the foreign trade the partial, and, as he thought, unjust exemption which it enjoyed, and which he proposed to remove by imposing a duty of 1s. for each 100l., it would be impossible for him to proceed with the great and important change which he proposed to make in the stamps upon inland bills of exchange, because the state of the Treasury would not, under such circumstances, permit it to be proceeded with. He would not trouble the Committee, after what had been said by the hon. Member for Kendal (Mr. Glyn), with any observations upon the state of the law in regard to innocent holders; but he must say that he did not think that a matter of 1s. per cent was that which was to turn the scale as between London and any market on the Continent, especially when he was aware that France, with Paris the second money market of the world, and Holland, with Amsterdam the third money market, both at this moment adopted this very principle. [Mr. T. BARING dissented.] At the mention of Amsterdam the hon. Gentleman (Mr. T. Baring) shook his head, but he (the Chancellor of the Exchequer) had in his hand an official report from Holland, which showed that in that country the tax was laid upon both home and foreign bills. His hon. Friend the Member for Montrose (Mr. Hume) seemed to think that the whole matter of the resort of money to a particular capital was determined by the existence of a stamp of this kind. Upon this point he (the Chancellor of the Exchequer) would supply his hon. Friend with a single fact. At this moment there was a stamp on foreign bills in Amsterdam, but none in London. In London the rate of discount was 3 per cent. In Amsterdam it was 6 per cent. The object of this measure was not to make additional resources for the Exchequer, but to effect a reform applicable to the internal trade of the country, which, though he granted there was a difference of opinion about it in the City of London, yet in Glasgow and Manchester, and by the great body of the traders of this coun- 1374 try, the success of the measure was regarded with great eagerness and anxiety.
§ MR. MASTERMAN
said, he must beg to explain that the petition to which the right hon. Gentleman the Chancellor of the Exchequer had referred as having been presented by him made no reference to the imposition of a stamp on foreign bills of exchange, to which he was opposed. He did not object to the reduction of the duty on inland bills, but he thought that the Chancellor of the Exchequer had better abandon that than persevere with his other alteration.
MR. J. B. SMITH
said, he wished to inquire what sum was expected to be produced by the stamp on foreign bills?
§ THE CHANCELLOR OF THE EXCHEQUER
said, that he did not believe that any man in England could give a reliable estimate on that subject. According to the best authorities, the amount of foreign bills circulating in this country was 200,000,000l., and the duty upon them would be 1s. on the 100l.
§ MR. SANDARS
Sir, as a representative of a mercantile community largely engaged in the foreign trade of the country, on their behalf I object to the novel and vexatious tax proposed by this Bill to be put on all foreign bills of exchange. To some houses the amount is considerable, to all it is a vexatious and annoying impost. And although, Sir, I quite agree with the proposal to reduce the stamp on all small inland bills of exchange, I do object, on the part of the manufacturers and merchants, to the great increase proposed to be levied by this Bill on the large bills of exchange. The Chancellor of the Exchequer has called it a mere transfer of duty from inland to foreign bills of exchange. Sir, it is no such thing, as it proposes a much heavier tax on all bills beyond the amount of 750l., and, in fact, on amounts from 2,000l. to 3,000l., the amount proposed is double, raising the duty from 15s. to 30s. And, further, the present maximum rate is but 25s., and it is proposed to increase this to 45s. Sir, I repeat, on behalf of the mercantile classes of this country, I protest against this increase. I have no objection to the reduction in small sums, but I do object to the levying of that deficiency on the larger bills of exchange.
§ MR. JAMES MACGREGOR
said, although the right hon. Gentleman the Chancellor of the Exchequer said it was impossible to give anything like a reliable estimate as to the amount he expected 1375 to derive from this duty, he (Mr. Macgregor) thought the least they could expect from him was to state upon what estimate he brought forward this measure. He agreed in the measure so far as to the propriety of the reduction of the duty upon inland bills of exchange; but he entirely objected to the tax proposed in relation to foreign bills of exchange. That was a tax which would amount to 2½ per cent per annum. He would certainly vote against the proposition.
said, that the Committee ought to understand correctly upon what they were going to vote. The Chancellor of the Exchequer had altogether perverted—had altogether misstated the object of the vote. He agreed in the opinion that the proposition in respect to inland bills of exchange was a great advantage; but he objected to taxing now, for the first time, foreign bills of exchange. He did not think that the right hon. Gentleman had treated the question fairly. He (Mr. Hume), and those with whom he acted, said, and firmly believed, that the right hon. Gentleman would endanger the foreign commerce of the country by placing a tax upon foreign bills of exchange.
§ MR. MUNTZ
said, he also approved of the alteration in regard to inland bills, but he thought that the proposed impost upon foreign bills, though not large in amount, would be troublesome and vexatious, and would cause much loss to gentlemen who did not understand it. He considered that injustice would be done to foreign transactions if foreign bills of exchange were to be taxed, and recommended those who had no experience in regard to such bills to suspend their judgment, and not to imagine that because the tax was small it would be less onerous.
§ Motion made, and Question put, "That the Clause stand part of the Bill."
§ The Committee divided:—Ayes 173; Noes 110: Majority 63.
§ Clause agreed to, as were also the four succeeding clauses.
§ Clause 9 (Exemption from Receipt Stamp Duty by letters acknowledging receipt of bills, &c., repealed).
§ MR. J. WILSON
said, the law at present was in a most unsatisfactory state as regards this subject. The exemption according to law was by no means the exemption that was generally understood. The exemption from stamp duty, according to law, only applied to a person acknowledging the safe arrival of a letter containing bills of exchange or cash; but if he stated to what purpose such inclosures were to be put he was liable to stamp duty. If, in fact, a person acknowledging the receipt of such remittances said that he placed them to the credit of another, he became liable to the stamp. That was the state of the law for many years past, although he admitted it was not so understood. When this exemption was first granted, the postage was very high. Now, however, we had a uniform penny postage, and there was not the same reason for exempting from the receipt stamp letters sent through the Post Office acknowledging the receipt of bills or cash. He ought to add, that this exemption still prevailed in reference to bankers, because they have an exemption under the Stamp Act of last year, and it was not necessary for them to stamp their letters acknowledging the receipt of any moneys placed for the use of their customers.
§ MR. G. BUTT
said, that the hon. Secretary for the Treasury had just stated what appeared to him (Mr. Butt) to be contrary to law; he therefore thought it a pity that such a statement should go forth without contradiction. The hon. Gentleman said that a letter merely acknowledging the receipt of bills of exchange or cash would not require a stamp; but if the person receiving them added that the inclosed would be placed to the credit of a party, it would, by the existing law, be liable to a stamp. Now, he (Mr. Butt) had had some experience in the law; but be confessed it was the first time he ever heard such a law laid down. He should be much surprised if the hon. Secretary to the Treasury could produce any law to that effect.
§ MR. VANCE
said, he would propose the omission of the clause altogether. He believed that the hon. Member for Kendal (Mr. Glyn) was about to oppose the clause until he heard that there was an exemption in favour of bankers. He (Mr. Vance) 1377 did not see why bankers should enjoy an exemption in this matter.
§ Clause 10 agreed to.
§ Clause 11 (Stamp duties on duplicates and progressive duties to be chargeable on conveyances described in 16 & 17 Vict. c. 63),
§ MR. HADFIELD
said, he begged to propose to add to the clause the words—And, further, the duty charged in the said Act of last Session (16 & 17 Vict. c. 63) on conveyances in England and Ireland, and charter, disposition, or contract containing the first original constitution of feu and ground annual rents in Scotland, in consideration of any annual sum payable in perpetuity, or for any indefinite period, whether for farm rent, feu duty, ground annual or otherwise, shall be abolished; and in lieu or substitution for such abolished duty there shall be a duty on the same scale as on a lease or tack of any lands, tenements, hereditaments, or heritable subjects at a yearly rent, without any sum of money by way of fine, premium, or grassum paid for the same, or, where the same shall be with such fine, premium, or grassum, and also of a yearly rent, amounting to 20l. and upwards, then both the ad valorem duties payable for a lease in consideration of a fine only, and for a lease in consideration of a rent only of the same amount; and, further, that in computing the rent chargeable with conveyance duty by the said last-mentioned Act, a due allowance and deduction shall be made from such rent for any original rent or rents that the premises conveyed shall be subject or liable to.In point of fact, there was practically no distinction in the interest conveyed by a lease for 1,000 or 10,000 years and a conveyance of the fee simple, and it was therefore unjust that the duty charged in the latter case should be twenty-five times as heavy as that paid in the former, as was at present the ease. This unjust distinction was at present acting very injuriously upon the operations of freehold land societies, which had been established for the purpose of enabling the working classes to build houses upon their own land. He trusted that the Committee would agree to the adoption of a similar scale of charges in the case of both the species of conveyance to which he had referred.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he thought the considerations by which he had been governed with reference to this question were of a character which must lead the Committee to come to the same conclusion as that at which he had arrived. It was said that this was a question in which Scotland was concerned, and it was in order to meet the wishes and interests of the people of Scotland that a change in the law had been 1378 made last year. It was stated at that time, that whereas a bit of land of the value of 25l. might be conveyed out and out for the sum of 2s. 6d., or of the value of 50l. for 5s., or of the value of 100l. for 10s., yet that if anybody chose, instead of purchasing out and out, to purchase, subject to a payment of chief rent, in that case he must pay 35s., whatever might be the amount of his purchase. That was the practice throughout the whole of Scotland, and, no doubt, it operated with extreme severity there. It was not, therefore, for the purpose of raising revenue, but of acceding to a claim which he thought eminently just, that he made certain proposals to the House, of which they had six weeks' notice, and which had occupied fully a month in going through that House. If the hon. Member made his appeal on the part of persons purchasing for small amounts, he begged to remind him that the present law was adapted to meet their case, and to relieve them from the great injustice to which they were subject. So far as the purchasers for small amounts were concerned, they were by no means prejudiced or damnified, but, on the contrary, were greatly relieved by the law as it stands. The objection of the hon. Member related to cases where the purchases were for such an amount as to make the duty greater than 35s. That was a question that must be determined upon principle, and they must proceed upon general rules. It might be very convenient to certain parties if it were said that so long as the amount of the purchase made the duty below the old duty of 35s., they should charge according to the principle of 10s. per cent; but when it was more than 35s., then they should not charge it upon that principle, but make it a uniform 35s. But the effect of that would be to reintroduce, in a most odious and offensive form, the principle of which they were endeavouring to get rid by their fiscal policy, namely, the preference of large money purchasers over purchasers for small amounts. The hon. Member's main proposition was, that they should not charge conveyances which were subject to chief rents as they charged conveyances out and out, but simply as leaseholds. But to such a proposition as that it was quite impossible for the Committee to accede. Moreover, he held that if they were prepared to adopt the principle that all conveyances which were subject to chief rent should pay duty as leaseholds, they must also be prepared to part with their 1379 revenue on conveyances out and out. For who was there, with such a change in the law, that would not reserve the payment of sixpence a year or some trifling or nominal amount upon the purchases they might effect? The House of Commons, then, must either determine to act upon some principle which would be conformable to the distinctions embodied in the existing law, or else part with those distinctions. Now, they had enacted that all leasehold conveyances should be subject to a duty at the rate of 2s. 6d. per cent, and that all conveyances of the fee should be subject to a duty at the rate of 10s. per cent. The hon. Member (Mr. Hadfield) would charge conveyances made under a chief rent as leaseholds, and not as conveyances in fee. But was that just? What was the real legal character of the interest acquired by a conveyance subject to a chief rent? Was it like a leasehold interest? Was not a 1,000 or 10,000 years' lease, with a nominal chief rent, as good for all practical purposes as a freehold? And ought a conveyance subject to a chief rent to be treated as in the nature of a leasehold interest, or in the nature of a freehold interest? Why, surely, in the nature of a freehold interest. The interest was in effect a freehold interest, and the Committee had no course to adopt but to charge it as a freehold interest, and that was done by the law as it stood. If the hon. Gentleman had made any proposal of an admissible character, he should be perfectly ready to consider it; but as to his addition to the clause, he felt he had no course to take but to meet it with a negative.
§ MR. BRIGHT
said, he did not think the right hon. Gentleman understood the proposition of his hon. Friend (Mr. Hadfield); or, if he did, he had discussed it so as to make the Committee not understand it. A conveyance was made of a piece of land from one man to another, at a given rent—say 100l. a year—and it was a conveyance for that chief rent for ever, and it became a freehold. Another person took an adjoining piece of land of the same value, for a term of 999 years. Now, how did the Chancellor of the Exchequer tax the two persons making those two arrangements? He said to one of them, "You pay 100l. for a piece of land which you took for 999 years, and your tax shall be 10s.;" and he said to the other, "You took a piece of land for precisely the same rent, but not, for a time 1380 that is fixed, and you shall pay 12l. 10s." one the tax was fixed upon the annual rental, and in the other on the multiplied annual rental for twenty-five years. The Chancellor of the Exchequer was endeavouring to persuade the Committee that he was acting upon some principle, though he admitted himself that, as regarded two properties equal in value, he charged in one case 10s. tax only, and in the other 12l. 10s. He (Mr. Bright) maintained the proposition was altogether wrong, because there was no difference of interest, and in levying a tax they should be guided in those matters, as in everything else, by the actual value of the thing taxed. Consistently with his own reputation, he asked the right hon. Gentleman to reconsider this question; and if he did so, he would find that the proposition which had been made by his hon. Friend (Mr. Hadfield) was perfectly just.
§ MR. G. BUTT
said, he could not give his assent to the Amendment, as he read and understood it. There was no doubt that in certain cases a leasehold interest would be of much more benefit than a freehold interest, according to the terms of the contract for one or the other. But he looked upon this as dealing with taxation upon a principle. Now the law recognised a distinct difference between chattel interest and interest in fee. Even if the hon. Gentleman were about to propose some large measure for doing away with all distinctions, and for putting the system of taxation in matters of this kind on a new footing, he believed it would be difficult to do what he wished—namely, meet the justice of all cases—indeed he thought it would be practically impossible. Therefore, the law of taxation had followed the general rule, and had recognised the distinction to which he had referred, and in the matter of taxation it came to be about fair upon the whole. The question that now arose was, whether the interest described in the first six or eight lines of the Amendment was to be treated as a freehold interest or as a chattel interest. Now that it was in law and in fact not a chattel, but a freehold interest, and an estate in fee, there could be no doubt; consequently, according to the law, that taxation should be upon the principle of the Bill, and he could see no reason for dealing with this exceptional case in the way proposed by the Amendment.
§ MR. KIRK
said, be trusted and hoped the clause would be postponed, and that 1381 relief would be afforded to the parties affected by it, who were by no means a small class, there being about one-tenth of the landed property of Ireland held under the Church or under ecclesiastical corporations. This property was necessarily held under leases, which were renewed every two or three years, and upon every 4l. of rent paid there was a stamp duty of 10s., or 12l. 10s. upon every rental of 100l. a year. He hoped that some relief would be afforded to persons who were subjected to this amount of taxation.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he was making a proposal in reference to certain duties, and saw no reason for postponing the clause. He was sure the law of last year had relieved the working classes, and he was prepared to prove it by bringing it to the test of figures. Where a party was subject to a chief rent of 4l. a year, the duty on the transaction under the old system was 35s.; but according to the new system, the duty formed upon a valuation of the rent for twenty-five years, at 4l. a year, would be 10s. instead of 35s. At the sum of 350l., the duty became equal to what it was under the old system, and above that sum it became higher than it was under the old principle, in consequence of the application of the ad valorem system. The cases mentioned by the hon. Member for Newry (Mr. Kirk) were entirely distinct from that to which the hon. Member for Sheffield (Mr. Hadfield) had referred, and had not been brought before him (the Chancellor of the Exchequer). It would be impossible for him to take any step, or to give any answer upon that subject, unless the matter was fully placed before him. He could only say, with regard to the objection that his proposal would interfere with the laudable desire of working men to possess small plots of land for building purposes, that the object of his proposition last year was to afford relief to the working classes under those circumstances.
§ MR. HADFIELD
said, that the proposed scale would press heavily on the purchasers of small freeholds. A lease for 10,000 years at a rent of 5l. was subject only to a duty of 6d., but a conveyance of the fee, subject to an equal chief rent, was charged 12s. 6d., or twenty-five times as much. The Bill showed the absurdity of keeping up the distinction in this country between realty and personalty, which was productive of the greatest inconveniences 1382 and anomalies. A large quantity of land was let in Manchester for buildings at chief rents, and no distinction ought to be made between them and other classes of rents.
§ MR. MULLINGS
said, that in Cheltenham, Bath, and other towns, land was let on leases for ever, as in Manchester. If the land was not built on at the time, a provision was inserted that the rent should be increased sometimes as much as six or seven fold in the event of its being devoted to building purposes. He wished to know what provision was made by the Bill for such contingent increase? He would not discuss the question whether the distinction between freehold and leasehold interests was a wise one, but so long as the difference of tenure was retained, they should keep up the distinction between freehold and chattel interests. He could not support the Amendment of the hon. Member for Sheffield, though anxious, if possible, to relieve the class of persons referred to in Manchester and other towns.
§ MR. DUNLOP
said, he would support the Amendment. Although they might not be prepared to do away with the technical distinction of tenures, yet, when they came to lay on taxes, they should look to the real value of things, and not to some fanciful division of the lawyers. An interest for 10,000 years was, in point of fact, the same as the fee, and no difference ought to be made between the two in matters of taxation. In Scotland leases for years were heritable interests, and not chattels.
§ MR. BROTHERTON
said, he hoped that the Chancellor of the Exchequer would be able to find some remedy for the evil complained of. It was hard that when two parties purchased land of equal value, one should be taxed ten times as much as the other. He regretted he was not able to point out a plan, but he hoped the right hon. Gentleman would consider the matter; it was a subject of much importance, as the present scale would prevent the acquisition of land by the working classes.
§ MR. BRIGHT
said, he would beg the Committee to observe that the only two speakers who supported the views of the Chancellor of the Exchequer sat on the opposite side of the House, and of these the hon. Member for Cirencester (Mr. Mullings) had offered no opinion on the financial point, but only advocated the legal distinction. The Bill now before the Committee was intended to correct some errors in one passed last year; the Amendment 1383 went to correct another. The question materially affected the extension of the franchise. If a man took land on lease to build a cottage he would not be entitled to a vote unless it was of the clear annual value of 10l.; but if he took the fee to the value of 40s., it gave him the franchise. This was the most honourable franchise known to the law, and it ought to be encouraged. He was sure it was only necessary to call the attention of the Chancellor of the Exchequer to the facts. He had great confidence in the right hon. Gentleman's opinion on financial points. He placed more confidence in him on such matters than he did in all the rest of his Colleagues on other matters. He was sure that when he understood the evil, he would be the first to propose a remedy; he begged therefore to press on the right hon. Gentleman the necessity of reconsidering the question.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he could not depart from his former statement, although it was very difficult to resist the compliments of the hon. Member. The Amendment proposed to deal with a most difficult matter, but he would consider the question, and see whether it might not be possible to adopt some mode of dealing with this class of conveyances. He had started on this principle, that they had two classes of conveyances, of freehold and of leaseholds. Two rates were to be levied, and a line must be drawn between them. He was inclined to think that the conveyances in question approximated to freehold, but he would consider the question.
§ Clause agreed to, as was also Clause 12.
§ Clause 13.
§ MR. MULLINGS
said, he wished to suggest that words should be inserted to the effect that when, in any trial at law or in equity, a deed was put in question, no advantage should be taken of the insufficiency of the stamp without previous notice to the opposite party.
§ MR. G. BUTT
said, he thought there was no necessity for altering the clause to meet the suggestion of his hon. Friend. It would, however, in his opinion, be very advisable, in cases where deeds were stamped and a question arose as to their efficiency, to admit such deeds in evidence, upon a proper undertaking being given which would have the effect of a recogni- 1384 sance, or by the deposit of the difference between the actual stamp and that alleged to be requisite; so that parties should not lose the advantage of having these deeds put in evidence where it was clear there had been a mistake.
THE SOLICITOR GENERAL
said, he looked upon the suggestion which had been thrown out by his hon. and learned Friend (Mr. G. Butt) as one which was very well worthy of consideration, but it would be found that in the Common Law Procedure Bill, now before the House of Commons, this point had been anticipated, and, he hoped, provided for. With regard to the suggestion of the hon. Gentleman (Mr. Mullings), he agreed with his hon. and learned Friend in thinking that an alteration in the clause to that effect was hardly requisite.
§ Clause agreed to, as was also Clause 14.
§ Clause 15.
§ MR. HENLEY
said, he thought that the clause would increase the expenses of the parties. The officer of the Crown might very well count the words, without putting the parties to the expense of an affidavit.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he did not think the clause had been inserted upon light grounds. Under the Act of 1850, when the question was first brought before the Commissioners of Inland Revenue, of whether a deed was duly or improperly stamped, they were obliged to judge of this according to the contents of the instrument. In many cases they might have a presumption, amounting sometimes to moral certainty, that the true consideration was not set forth in the instrument, and the object of this clause was to give to the Commissioners of the Board of Inland Revenue power to require parties to make an affidavit in cases where they had reason to presume that fraud or evasion of duty was intended.
§ MR. HENLEY
said, the affidavit was to be called for in order to show, to the satisfaction of the Commissioners, among other matters, "the quantity of words contained in any such deed or instrument." Now, upon a matter of fact of that kind, which could be so easily decided by a clerk of the 1Commissioners, he did not think parties should have to run the risk of being put to the expense of an affidavit.
THE SOLICITOR GENERAL
said, he considered the provision in the clause to be of more benefit to the parties themselves than might be at first imagined. Ought 1385 the rights of parties to depend upon the accuracy of a clerk to the Commissioners? Then, again, who was to pay the expense of the employment of that clerk? He thought that an affidavit as evidence upon the subject, would be infinitely safer to the parties than any other arrangement which could be provided.
§ MR. G. BUTT
believed that, practically, the clause would not operate, and that parties would stamp their own deeds. Would any man who had committed a fraud state upon his affidavit that he had so done, and thus subject himself to a penalty of 5001.? The provision in the clause relative to the counting of words was likely, he thought, to give rise to a great deal of needless trouble.
§ Clause agreed to, as was also Clause 16.
§ Clause 17.
§ MR. VANCE
said, he wished to ask, why the duty upon the Dublin pawnbrokers was not altogether done away with? In Dublin, pawnbrokers were subject to an impost which none other in the kingdom had to pay; they were obliged, under an old Act of Geo. III., to contribute 100l. in Irish money to the police taxes of the city. Upon complaining of this to the Government some time ago, they were told that they paid no income tax, and were therefore not in the position of their fellow-tradesmen in this country. Now, however, they paid a double income tax, and he hoped therefore they would be released from the payment of the 15l. altogether.
§ MR. J. WILSON
said, the hon. Member did not appear to understand the difference between local and Imperial taxation. It was true the pawnbrokers in Dublin had to pay 100l. a year in Irish money for the privilege of carrying on their trade in that city, but to whom did they pay this amount? Not to the Imperial Exchequer, but purely for local purposes; and then, because, forsooth, they paid this, they asked to be relieved from their share of Imperial taxation! He did not see why, because the Dublin pawnbrokers suffered under a high local burden, they should ask to be relieved from a tax which every pawnbroker in the United Kingdom paid.
§ MR. J. WILSON
said, the pawnbrokers in London paid 15l. a year duty, while those in the country paid but 7l. 10s. Dublin had hitherto been treated as a capital, but, as some concession to the pawnbrokers there, it had been determined to put them on the same footing as those of provincial towns.
§ Clause agreed to, as were the remaining clauses.
§ On the Schedule,
§ MR. M'MAHON
moved, after the words "inland bill of exchange, draught, or order for the payment to the bearer, or to order, at any time otherwise than on demand of any sum of money," to add the words, "not exceeding 5l., ld. duty; not exceeding 10l., 2d. duty." And, after the words "promissory note, for the payment in any other manner than to the bearer on demand of any sum of money," to add, "not exceeding 5l., ld. duty; not exceeding 10l., 2d. duty."
§ MR. T. BARING
said, the effect of reducing the stamp upon small bills of exchange would increase the number of such instruments. It would transform small book debts into small bills, and to the extent that such bills obtained currency they would be a circulating medium. If it were desired to increase the circulation, be thought it should not be by means of small bills. If a man sold goods to the amount of 10l., instead of the buyer being a debtor upon the books of the seller, the seller would draw a bill, and the bill would go as far as it could into circulation. His opinion was, that those parties who required to draw bills of 5l. or 10l. at long dates ought not to have much encouragement. The reduction of duty, however, would encourage such bills; it would increase the circulation of promissory notes, and not at all add to the security of trade. To those who desired additional facilities in circulation, other and better means might be adopted.
§ THE CHANCELLOR OF THE EXCHEQUER
said, he heard with very great regret the unfavourable opinion of the hon. Gentleman upon the use of bills of exchange by persons of moderate means. For his own part, he looked upon the change now proposed as one of the greatest importance, and he considered it as likely to be attended with the greatest possible advantage. He was not in the least afraid of such bills constituting, in any objection- 1387 able sense, an addition to the circulation. No doubt all bills of exchange constituted, in some sense, part of the circulation, but he could assure the hon. Gentleman it was not with the view of escaping from the question which appeared to be involved that the proposal had been made. On the contrary, it had been made under the influence of a strong conviction that nothing could be conceived more desirable to small traders, than that they should be got into the practice of dealing upon credits of a fixed and precise character—a system which would bind them to payments at fixed dates, and lead them to make exact calculations of their means and liabilities, instead of the present comparatively dangerous system of open credits.
§ MR. FRENCH
said, few measures would be attended with greater advantage to small traders in Ireland than this, and he cordially supported it.
§ Schedule agreed to. House resumed.
§ Committee report progress.