HC Deb 03 May 1858 vol 149 cc2171-7

Order for Second Reading read.

MR. T. BARING

said, he would remind the House that he had presented a petition some days ago against this Bill from a highly influential body of men, who in monetary transactions, abilities, and respectable character were inferior to no body of traders in the City of London, or indeed in the kingdom—he meant the members of the Stock Exchange. They objected to this particular tax as one that would create great inconvenience, and as being opposed to what they thought were the right principles of taxation. For himself, he was unwilling to join in any movement for the purpose of disturbing the financial arrangements for the year of his right hon. Friend, and therefore, he was not disposed to make any very strong opposition to it; but still he was much disposed to agree with the petitioners in their opinion of this tax. What had reconciled him to the measure was that his right hon. Friend had introduced it merely to give him a surplus to meet the exigencies of the year; it would not be large, he said; he could live upon little; but he appealed to the House not to leave him destitute. That was a touching appeal, and it was as if his right hon. Friend had said, "I do not want much, give me a penny." To that appeal be was inclined to reply, "oh, take twopence." Yet he could not forget the inconvenience which would be occasioned by this tax. It was said the bankers were rich, and they would pay it; but the bankers were wise as well as wealthy, and had resolved to make their customers pay it. Spread over individuals, it might not be so heavy, two or three shillings a year or so; but when every cheque that went through the clearing house must have a stamp, many of them requiring to be cancelled—checks, indeed, to keep accounts correct, where there was a mutual giving and taking of cheques—this came to be a tax on correct accounts, and a serious inconvenience. If they looked at the general trade of the country, they would find that the whole system of commerce was one series of stamps. Goods made in Manchester were forwarded for exportation. The first thing the exporter did was to draw a bill for them, and that was stamped; the charter party for the ship must be stamped, and a stamp was indispensable also to the policy of insurance. Now, however, it was hoped by the merchant, when his goods were got out of England, that he was free from British stamps. The goods were sold, the proceeds were sent back by a foreign bill, and his right hon. Friend the Member for Oxford University (Mr. Gladstone) put a stamp on that even. After all that, when he had got his money into his hands, the merchant could not put it into or take out of his banker's without submitting to a stamp, if this Bill were carried. There was great truth in what had been said by the hon. Member for Devonport (Mr. Wilson) that the ingenuity of persons would be exerted to evade the stamp. It might appear ridiculous to object to paying a penny, but every one knew how much out of the way persons would go to avoid paying a toll, and especially a new toll, and it would be the same with this tax. It would also absorb, he believed, a considerable number of bank notes from circulation, and in that respect would prove injurious to trade. He did not intend to oppose the Bill, but he would suggest to his right hon. Friend the propriety of simplifying the question, and of providing that cheques passing through the clearing house and paid on the day of issue should not be liable to the stamp.

MR. GREAVES

said, he did not rise to oppose this Bill, which formed part of what he considered a very good Budget, but he was afraid that it might tend to interfere with the circulation of notes. The country bankers bad resolved, on the whole, not to oppose the tax, and he was glad they had arrived at that conclusion, and would not combine in opposition to a proposal which seemed to meet with general approval. At the same time, he hoped certain modifications would he acceded to, the effect of which would be to exempt certain papers passing as memoranda between themselves, or otherwise the same transaction would often be liable twice to the same impost. A clause to that effect would be submitted in Committee.

MR. BAXTER

said, he thought the tax was as little liable to objection as any which could possibly he imposed on the community. He did not share in the apprehensions that its effect would be to prevent capital from being economized, to withdraw a large amount of precious metals from circulation, and afford a temptation to robbery. The public had for so long a time experienced the advantages of the cheque system that they would not be induced, for the sake of a penny, to incur the vexation, the trouble, and the danger of the old system. In Scotland cheques had been used for a much longer period and to a much greater extent than in England; yet not a remonstrance nor a petition had he heard of there against the proposition of the Chancellor of the Exchequer. On the contrary, the general feeling of mercantile Scotland was in its favour, from a belief that it would prove a hardship to no one, while it would produce a large and increasing revenue. In rural districts it might have the effect of causing a large cheque to be substituted for several small ones; and this might be the case in some commercial offices, the heads of which were more short-sighted and close-fisted than other commercial men. But he did not believe this would seriously interfere with the produce of the tax. The opposition was confined altogether to bankers, who represented, among other things, that it would diminish the number of cheques. Now, if that were the case, the measure would confer a positive benefit upon them, for it would enable them to dispense with the services of several of their clerks, and they ought, therefore, to be very thankful to the Chancellor of the Exchequer for the saving of expense he would thus effect. But was not the opposition of the bankers bused on other grounds than those which had been avowed? The hon. Member for Huntingdon (Mr. T. Baring) said this tax would fall upon the community. But he (Mr. Baxter) was not quite so sure of that. He had heard it whispered that the bankers were not much afraid of the diminished number of cheques and the hoarding of money, but dreaded rather lest some of their number, more generous than the rest, or some new banking establishment, should give away the cheques to their customers. The proposal that only a halfpenny should be charged upon cheques below £5 perhaps deserved favourable consideration; but he saw no force in the general objections which had been urged, and should therefore support the measure.

MR. TURNER

said, he had recently presented a numerously signed petition from bankers, merchants, and others in Manchester, differing entirely from the opinions expressed by the hon. Member (Mr. Baxter). They objected to this tax as a step in the wrong direction, burdening commerce with a tax the only merit of which was that it was a small tax. Its tendency would be to diminish the use of cheques, which were found to be a most economical mode of making payments, and avoided the use of the circulating medium, of which they had lately had too small a supply. The extent to which the measure would operate might be a matter of opinion, but there was no doubt it would tend to prevent the use of cheques for small sums; and this in turn would lead to inaccuracy in accounts, to the chance of theft, and to the abstraction of capital, by which bankers would be prevented from affording that accommodation which they were accustomed to render to the mercantile community. Then, again, the tax would not produce so large a sum as was anticipated, for arrangements were already making by which cheques issued to order would be made use of instead of receipts. But his main objection, he repeated, was that the step taken was in a wrong direction, and placed an additional weight on the shoulders of commerce.

SIR GEORGE PECHELL

asked, whether benefit societies, duly enrolled and certified, which were at present exempted from stamp duty by the Acts of William IV., would become subject to the operation of this tax?

MR. WILLIAMS

said, he hoped that the right hon. Gentleman would insert a clause in the Bill to amend the defect in the Act passed two years ago, making crossed cheques payable only through a banker. He supported the Bill, as he did not believe it would be any check upon commercial transactions. Great reductions had been made of late in the stamps upon commercial documents, such as bills of exchange, receipts, and the commercial world would have no reason to complain of this tax.

MR. J. C. EWART

observed, that he did not rise to oppose the tax. In Liver- pool there was no strong feeling against it. It would be a great convenience, however, if the public were allowed to affix an ordinary penny postage stamp on cheques.

COLONEL SYKES

suggested that a penny stamp should be put upon tradesmen's bills above 10s., and the law as to cheques left unaltered.

THE CHANCELLOR OF THE EXCHEQUER

said, the hon. Gentleman the Member for Dumfries (Mr. W. Ewart) stated that he objected to this tax on principle. Its principle, he said, was wrong, and in that view he was supported by the hon. Gentleman the Member for Manchester (Mr. Turner). He objected to burdens on commerce. Now, the fact is, that this Bill asserts no new principle. It only seeks to extend a principle already recognized. If a stamp upon a cheque is erroneous in principle, if it is a regulation injurious to commerce, it is nevertheless the accepted and sanctioned law of the realm. All that in this instance we propose is, that as that is the law, a certain exemption, which cannot be defended, should no longer be permitted to prevail. This Bill only seeks to abolish that exemption. The law of the land is, that every banker's cheque should bear this 1d. stamp, and then comes a great exemption, which certainly cannot be defended on any principle, but to which I will not now address myself, because no person has taken a contrary view of it. No one has really attempted for a moment to vindicate it. Well, that being the case, this Bill will merely terminate it. To what do the objections to the Bill amount? Why, my hon. Friend the Member for Huntingdon (Mr. T. Baring), who represents on this occasion the Stock Exchange, presented a petition from that body some days ago, in which their objections to this Bill were very acutely expressed. That body is remarkable for ingenuity. It is one of the most acute and ingenious bodies of men in Her Majesty's dominions. And how do they stand, according to their own argument, with respect to this Bill? First of all they say it would he a very great injury and inconvenience to them to proceed with this Bill. Secondly, they say that if we persist in passing it they will evade it. I am sure that there is not one of them who would shrink from paying his stamp upon a cheque coming in the fair course of business; and I have such confidence in their ingenuity that if they are in the habit of using cheques otherwise, I am quite certain they could by some artificial arrangement evade the consequences of the new Act. But what is their argument worth? If they can evade it where is the hardship? If it would be inconvenient to evade it, and more convenient to carry on their business by cheques, where is the injustice of having to pay 1d. for that convenience? Now, that really is the whole case. It is a tax upon convenience. When the gentlemen of the Stock Exchange remember the reduction of their income tax they will be convinced that we cannot still further reduce and finally extinguish the income tax, unless, among others, we by this means build up substantially the revenue of the country; and I am quite certain they will soon cease to murmur upon the subject. My hon. Friend the Member for Huntingdon seems to complain very much of this new system of raising revenue by stamps. Commerce, he says, is built upon stamps. But he docs not take into consideration that at this moment there is no interest in the country to which the raising of revenue by small imposts in the shape of stamps has been so profitable as to commerce. As he is the greatest merchant that ever lived, I presume (though I am sure he is never influenced by personal considerations) that he, of ail those connected with commerce, has most profited by that system. I will not say a single word in answer to my hon. Friend (Mr. Greaves) who represents the country bankers on this subject. I have read the memorial of that highly influential and truly respectable body. They make two objections to this Bill, but it is unnecessary to consider such objections at this stage. If my hon. Friend should submit his suggestions in Committee I am sure they will be fairly considered. But if the Committee should agree to the modifications he suggests—and I must frankly tell him that so far as I have been informed on the subject I am not prepared to sanction any — they would nut at all affect the principle of the Bill. The hon. and gallant Member for Brighton (Sir G. Pechell) asks me a question with reference to the effect of this Bill upon benefit societies. Benefit societies enjoying the privilege to which he refers, under the previous Acts of Far- liament will not be at all affected by this Bill. I believe that I have entered as much as is necessary upon this stage into the question. I do not understand that there is any serious opposition to the principle of this measure. Two or three hon. Gentlemen have opposed the measure on principle, but I hope that when they reflect that the principle to which they object is the law of the land they will perceive that this is not an occasion for offering any opposition to it. I am extremely glad to find from the hon. Member for Montrose (Mr. Baxter) that the people of Scotland generally approve this Bill. I said that the members of the Stock Exchange were the most acute and ingenious body of Her Majesty's subjects, but I think I may place upon a parallel with them the people of Scotland. Animated by that expression of approval on the part of the hon. Gentleman I beg to ask the House to give a second reading to this Bill.

In reply to Mr. J. C. EWART,

THE CHANCELLOR OF THE EXCHEQUER

said, that the question of allowing penny postage stamps to be put upon cheques was under the consideration of the Government. There were great difficulties in the way of carrying such a proposition into effect, but he should be prepared, when the Bill went into Committee, to state the conclusion at which the Government might have arrived upon that particular point.

Bill read 2° and committed for Friday.