HC Deb 18 July 1859 vol 154 cc1385-428

Order for Committee read.

House in Committee of Ways and Means.

MR. MASSEY in the Chair.


I presume, Sir, that it will be for the convenience of the Committee that I should follow the usual practice of making known to it, before I proceed to discuss any plans or proposals of the Government, the results of the finance of the last year. This need not occupy any great length of time. I will state to the Committe the Estimates of income as they were proposed by the right hon. Gentleman the Member for Buckinghamshire, when he held the office of Chancellor of the Exchequer, during the year 1858; the actual receipt of revenue which took place when those Estimates came to be tested by the result, and likewise the experience of the year as it stands. The right hon. Gentleman estimated the Customs' revenue at £23,400,000. It produced £24,117,000. He estimated, the Excise at £18,600,000. It produced only £17,902,000. He took the stamps at £7,850,000. They produced £8,005,000. The Land and Assessed Taxes were estimated at £3,200,000; they produced £3,162,000. The income tax, which the right hon. Gentleman estimated at £6,100,000, exceeded that sum by more than half a million, and produced £6,683,587. The Post-office revenue corresponded almost precisely with the estimate of the right hon. Gentleman, which was £3,200,000. The Crown Lands, which he took at £270,000, produced £280,041, and the Miscellaneous revenues, which he calculated would produce £1,300,000, have amounted to £2,125,944. The Miscellaneous revenues, it will be in the recollection of the Committee, are very difficult to estimate with precision, particularly at a period shortly after the close of a great war, when extensive changes are in progress in the manufacturing establishments of the country, which lead to the disposal of old stores and the substitution of new ones upon a scale that is sometimates impossible to calculate beforehand. The general result on the total of the revenue of the year was, I think, satisfactory. The right hon. Gentleman estimated the entire revenue at £63,920,000; its precise amount was £65,477,284. With respect to expenditure, I do not know that I need trouble the Committee by referring to the original Estimates of the right hon. Gentleman, because they were subjected to certain modifications in the course of the Session, as Supplementary Estimates, adding to the charges for the year, were brought forward. But I shall state to the Committee the expenditure as it actually took place. The charge of the debt took £28,527,484; the Consolidated Fund charge was £1,940,655; the charge for the Army was £12,512,291; the charge of the Navy, £9,215,487; the Civil Services amounted to £7,169,473; the collection of the revenue, or the expenditure on account of the revenue department, was £4,515,969. There were, besides, two Votes retrospective in their character, one of them for operations in China, £391,943; and the other, some remaining expenses of the Russian war, £390,580. The total result was to give an expenditure of £64,663,882, against a revenue of £65,477,284; so that there was in round numbers a surplus of about £800,000 upon the balance between the income and expenditure for the year. The Committee will probably wish to know what has been the fate, so far as it can be ascertained, of the special proposals that were made by the right hon. Gentleman during the last year for the purpose of increasing the revenue of the country. At the same time it is right they should bear in mind that our experience has been too short to enable us to pronounce conclusively upon the degree of success that has attended those proposals. But as far as we are aware the facts are as follow:—1d. stamp upon drafts or cheques was estimated by the right hon. Gentleman to produce £300,000, and the augmentation of duty upon Irish spirits, which was proposed by the right hon. Gentleman in such a manner as to produce a complete equalization between the spirit duties of! the three kingdoms, was estimated to yield £500,000. Neither of these duties has, however, as yet produced the sum which was expected from them. We have no means of knowing precisely what has been the product of the stamp duty upon drafts or cheques, because it is kept in a single account with the stamp duty upon receipts, and the only measure that can be applied to that portion of this revenue which is due to the stamp duty upon cheques is by comparing it with the whole increase that has taken place in the aggregate produce of the two duties. The duty upon receipts had been a constantly increasing duty up to the year 1858, and therefore if in 1859 we credit the penny duty upon drafts and cheques with the whole increase that has taken place since 1858, that is, upon the whole, perhaps, the fairest mode of reckoning that can be adopted. The aggregate duty upon receipt stamps and draft stamps in the year which ended on the 31st of March last was £418,000. The duty from receipt stamps alone, with the addition of the draft stamps which were formerly required in all cases where drafts passed beyond a distance of fifteen miles, in the year 1857–8 yielded£281,000; so that the probable produce of the duty upon cheques was no more than £137,000. But, then, it is to be borne in mind, in the first place, that the duty was in operation for little more than a period of ten months instead of twelve; and, in the second place, that many persons were already provided with stamped cheques for the purpose of transmission over the country, a circumstance that would naturally retard the influx of revenue from the new duty until new stocks of cheques required to be provided. It is very hard to say what that duty is likely to produce, but, upon the whole, I think it would be sanguine, with the information which we now possess, imperfect thought it be, to repeat an estimate so high as £300,000. I should think that £200,000, or something lower, is in all likelihood the sum which the duty upon drafts or cheques will be found to add to the year's revenue. I may state here that a question has been raised whether it would not be convenient to abolish a partial exemption which is found to exist under the present law. I do not know whether it was part of the original intention of the right hon. Gentleman, but under the law as it stands it has been found that the drawer of a cheque is entitled himself to receive across the counter the proceeds of the cheque without payment of the stamp duty. The general opinion, I think, seems to be that that exemption is not strongly founded either in reason or in convenience; and I also believe that the opinion of the bankers of London, considering it with reference to the facility of operations, is that their trade would be decidedly in favour of its removal. It is not an important financial operation, but probably as a matter of fiscal improvement I may think it my duty to make a proposal to the House for removing that exemption. With respect to the question of Irish spirits, it is one of greater interest, and at the same time the change, as far as the amount produced is concerned, has been attended with a less degree of success; but it ought always to be recollected, in the first place, that all duties of that description require some considerable interval before their operation can be correctly appreciated, and, in the second place, that the measure of equalization proposed by the right hon. Gentleman was in itself a fiscal reform of very considerable importance, as establishing one duty between Ireland, Scotland, and England, independently of its pecuniary results. However, the pecuniary result stands thus:—Upon Irish spirits in 1858–9, as compared with 1857–8, we had an increase in actual money of only £85,000, which is but a very small proportion of what had been expected to proceed from that source. But, then, the duty did not take effect from the first day of the financial year. It took effect on the 17th of April, and between the 1st of April, when the year began, and the 17th, there were delivered from bond in Ireland, though the period was only about a fortnight, no fewer than 1,129,000 gallons of spirits, or the consumption of two months. If we take the additional duty upon that quantity of spirits, which is fairly due to the accounts of the year, inasmuch as the period between the 1st and 17th of April formed part of the financial year, it would add £103,000 to the £85,000 which I have mentioned, giving a total of £188,000 as the produce of the new scale of duty for the year. As far as we can judge from the produce in the period which has elapsed since the 1st of April last, there is a prospect of the duty being considerably more productive; but at the same time it is hardly possible to judge of the result of changes of this kind upon articles of consumption. Where many interests mix with and traverse to a certain extent the proceedings of Parliament, and where likewise the effect of your operations depend, in some measure, upon seasons and the prices of the raw material, it is not possible to form a conclusive judgment upon the pecuniary results of any change in the law until a year or two have elapsed. Such, then, is the state of the case with regard to the revenue and expenditure of the year which closed on the 31st of March last, and with respect to the measures proposed in the Session of 1858 for the purpose of providing a surplus of revenue over expenditure. I come now, Sir, to a more grave and serious part of the task which is imposed upon me. I have to lay before the Committee, in the first instance, a comparative statement of the estimated revenue and expenditure for the year which is now current. The Committee is already generally aware, from the Estimates that have been laid before it, in the first place, that the expenditure will be unusually large, and, in the second place, that it will very considerably exceed the Ways and Means which the ordinary revenue of the country could provide, and that, consequently, increased efforts must be made to meet it. To begin with the estimates of revenue, the Customs are taken to yield for the year which commenced on the 1st of April last, and which will close on the 31st of March next, a sum of £23,850,000; the Excise, £18,530,000 the Land and Assessed Taxes, £3,200,000; Stamps, £8,100,000; Income Tax, at 5d. £5,600,000; Post Office, £3,250,000; Crown Lands, £280,000; and Miscellaneous Receipts, £1,530,000. It may be as well to state that in the last mentioned item there is included a sum with respect to which no definite arrangements have been made—a sum of £130,000, which is more or less probable that the Council of India will pay out of Indian revenue, in order to obtain a site on which they may erect buildings for the transaction of their business in lieu of the premises in Leaden-hall Street. Although to some extent, uncertain, this item has no disturbing effect upon the general balance of revenue and expenditure which I shall present, because, if the Council of India does not reimburse the Treasury to that extent for the ground which it would require, the Treasury will not incur the outlay for it. The total of the items which I have given to the Committee is £64,340,000; and it may, perhaps, be interesting to the Committee to compare this total with the estimate of last year, in which the right hon. Gentleman the Member for Bucks proceeded upon the same basis of taxes, with the exception of those which he himself proposed. He estimated the revenue of the year at £63,920,000. The estimate which I now present would give us about £420,000 more than that of the right hon. Gentleman; but I am not able to say that there is in fact any evidence of sterling or extraordinary progress, because that £420,000 is about the sum which at present appears to have been produced by the two small taxes which were imposed by the right hon. Gentleman. We come now, Sir, to the estimate of the expenditure for the current year, the revenue being, as I have said, £64,340,000. The charge of the funded and unfunded debt for the current year will be £28,600,000. In that sum there is included a particular item of £400,000, which represents the last payment upon a certain portion of the Long Annuities, which will have to be made on the 5th of January next. I mention this item now because it is entirely exceptional in its character. The Committee is aware that as a general rule all dividends, whether upon stock or annuities, are paid half-yearly. In this particular case, however, it happens that a certain considerable portion of the annuities for which the public is liable, and which have their dividends payable half-yearly in April and October, expires not at the end of the half-year, but at the end of the odd quarter, so that a quarter's payment becomes due in respect of that portion on the 5th of January next; whereas, if the annuities had continued to run, it would not have been made until the expiration of the half-year—namely, the 5th of April next. The effect of this is to throw upon the Ways and Means of the year 1859-60 a sum of, in round numbers, £400,000, which in the regular course of things would have passed to the debit of 1860–61. The first result, therefore, of the cessation of these annuities is to impose a burden upon the financial year which is now passing. However, the estimated charge for the funded and the unfunded debt is £28,600,000; that for the Consolidated Fund, £1,960,000; the Army, including the Militia, £13,300,000; the Navy, including the Packet Service, £12,782,000; the Civil Service, on what are called the Miscellaneous Estimates, £7,825,000; the Revenue Departments, £474,000. The Committee will observe that there is a very considerable increase in the aggregate charge of the Miscellaneous Estimates as compared with those of last year, the estimate for the present year being, as I have stated, £7,825,000, and that for last year not having exceeded £7,169,000. I may, perhaps, without attempting to enter into detail, state briefly to the Committee what are the principal items of this increase. The Committee will recollect that a measure passed this House about two years ago which imposed upon the public a very heavy charge in respect of the County Courts. From that source we have an increase in the Civil Service Estimates of £49,000; the constabulary in Ireland shows an increase of £36,000; the Vote for Public Education, including Art, an increase of about £200,000; the Vote for British Columbia, £42,000; that for China, Japan, and Siam, which is a new acquaintance, and has not appeared upon the Estimates before, £25,000; the Vote for the Foreign-office, site and buildings, £200,000, including however, the £130,000 which I have just spoken of as repayable from the Indian revenues, if the arrangements go forward. Last comes the submarine cable to Gibraltar £115,000; and perhaps this is the place at which I ought briefly to refer to that subject. The late Government had entertained a plan for both manufacturing and laying down this cable from England to Gibraltar during the pre- sent season. The cost of those operations would, it was estimated, be about £250,000;" and when Her Majesty's Government came into office, a contract had actually been entered into for the manufacture of what, I believe, is called the core of the cable. The cost of that manufacture is represented by the sum of £115,000 which I have just mentioned. Upon a consideration of the whole matter—which will be more conveniently discussed in detail upon the Vote—and taking into consideration as a main element the advanced season of the year and the extremely narrow margin of time, during which tolerably fine weather could be reckoned upon, we thought it would be wiser not to prosecute the plan for laying this cable during the present season; and, consequently, a smaller sum is asked from the House than would otherwise have been required. The sum which will be asked for is simply the price of the cable manufactured under contract, which contract we found in course of execution at the time we entered upon the exercise of office. The total of these items of increase upon the Miscellaneous Estimates which I have stated to the House is £667,000. On the other hand, there are some items of decrease by which that is partially balanced, but I believe that the net increase in the amount of the Miscellaneous Estimates of this year, as compared with those of the last, is somewhere between £580,000 and £599,000. Now, if the Committee will take the trouble to add together the figures which I have given them, they will find that whereas the revenue of the year as it is estimated amounts to £64,340,000, the estimated expenditure will amount to £69,207,000. Subtracting the smaller from the larger of these sums, the result is a gross deficiency of £4,867,000, and that is the charge the mode of making provision for which will have to be considered by the Committee. Now, Sir, before I go into any particulars with respect to the mode of meeting that extra charge, I should wish briefly to draw the attention of the Committee to one or two general considerations which appear to bear upon our present position, and to give it a somewhat peculiar character. I think, Sir, that it is plain that while this is a time at which it will become the Committee to make an adequate and effective provision by those means which they shall think most in accordance with the public interests for the wants of the year; it is likewise a time at which the attention of the Committee should be rigidly confined to the wants of the year. The first reason for that is, that no one can review the Estimates which I have laid, before the Committee without observing that they hear in no inconsiderable degree an exceptional character. The circumstances out of which they have grown are full in the notice and in the knowledge of the Committee; hut, without entering into detail upon those circumstances, I may in general terms say that they are obviously such—I speak especially of the state of affairs abroad—that if within the next six or twelve months they do not grow worse we may then entertain a confident expectation that they must grow better. The Estimates which have been submitted to you hear—I do not conceal the fact—they bear what may so far be called an ambiguous character, that while they greatly fall short of the sums that you have been called upon to vote in time of war, they on the other hand considerably exceed any sums which Parliament has been called upon to vote in times of peace and with reference to the maintenance of peace establishments. If I take the Estimates of the previous year, 1858-9, which were not considered to be low Estimates, as the standard of comparison, I find that they exhibit the following figures;—In 1858-9 the sum voted for the Army was £12,010,000, and that for the Navy £8,890,000. In every case when I speak of the Army I include the Militia, and when I speak of the Navy I include the Packet Service. In the current year the Estimates voted for the Army, instead of £12,010,000, have been £13,299,000;; and the Estimates voted, and willingly voted: by the House for the Navy, instead of £8,890,000, have been £12,782,000; so that you have an increase of £1,288,000 on the Estimates for the Army, and of £3,891,000 on those for the Navy, making together an augmentation upon Estimates which were themselves high, amounting to no less than about £5,180,000. That, as, I say, may be thought to constitute an exceptional state of things, from which I draw no other inference than this, that the present time is thus far marked out to us as one at which it is hardly open to us to busy ourselves with extensive prospects or with comprehensive plans; but that we ought to confine ourselves to the duty of making a sufficient and effective provision for the wants of the year which has actually commenced. There are other circum- stances which I think greatly tend to corroborate the same conclusion. Next year has already been marked out by the proceedings of previous Parliaments as a critical one in the history of our finance—as a year when it must be the obvious duty of Parliament, whatever political circumstances may occur, to enter upon a comprehensive review both of the system of taxation, and also of the scale of our expenditure. I may remind the Committee that during the next year the income tax by law from the 5th of April will lapse. At the same period, according to the understanding arrived at by Parliament, certain war duties on tea and sugar, which have been granted for a period of three years from the year 1857, will also lapse. The disappearance of these duties would ultimately make a difference in the receipts of the Treasury of about, in round numbers, £8,000000. On the other hand, next year we have the advantage of a falling off in the Long Annuities, and it will be the duty of Parliament to consider whether they will endeavour to signalize the year of escape from so serious a burden as the constant and permanent payment of £2,000,000 by something done for the benefit of the people, or whether they will simply allow those £2,000,000 to be dragged unnoticed into the general vortex of expenditure, to be disposed of piecemeal in augmentation of £10,000 on this Vote, £30,000 on that, and £100,000 on another. All these considerations will bring the Committee—as they have already brought the Government—to the opinion that the present is not a year in which we ought to enter on the consideration of what is termed prospective finance, but that we ought rather to be contented with temporary, and I might say almost provisional finance, provided it be sound and adapted to the occasion. I might also plead the short period during which we have held our offices, which has made it impossible for us, each in his own department, to consider in what respect a reduction of expenditure might be possible. We have come into office with a full conviction that the great demands made upon the House for military Estimates are demands both justified and required by the highest interests of the country. In stating therefore to the Committee the amount of these Estimates and the magnitude of the figures which they involve, it is not my intention to take in respect to those demands in any degree an apologetic tone. On the contrary, I know-well that large as those demands are, they have been voted with freedom and with enthusiasm, and that if it had seemed right to the Government, from the information which we possess, to make a still larger drain on the confidence and patriotism of Parliament, it would have been as freely and as warmly met. But apart entirely from the exigencies of the public defence and the public service, it remains the duty of the Government to consider what is not only necessary to be done, but likewise to take care that the funds with which they are so generously intrusted are wisely and thriftily expended; and it is with reference to that great duty of public economy—a duty which no public exigency can set aside—although, unfortunately, certain circumstances of public affairs greatly indispose the minds of men to its dry details—that I venture to submit to the Committee that the Members of the Government have, as yet, had no opportunity of considering, each in his own department, in what respects, apart from the honour and safety of the country, it is possible for them to look forward to any alleviation of the public burdens by way of counterpoise to the present heavy demands which the necessities of the time have imposed on the public purse. I must also remind the Committee that I have not the honour to address it, as is usually the case, either before the financial year has commenced or shortly after its commencement. Nearer four months than three have now elapsed since the commencement of your financial year, and none of your financial measures, therefore, can be made practically retrospective. Subject to the effect of these general considerations, I come now to ask the Committee to reflect by what mode of supply shall we raise the sum which will enable us to meet the heavy demands of the year? Of course this great question divides itself at first into these two branches—shall we attempt to raise the necessary funds by borrowing or by taxes? The Committee will have to consider whether this is an occasion on which it ought to resort to the expedient of a loan. The sum which is required is between £4,000,000 and £5,000,000. It is certainly a large sum to demand from the tax-payers at a short notice. But, on the other hand, it is a sum which has never driven a British Parliament to the expedient of augmenting the National Debt. I think we are all nearly agreed on this, that in time of peace nothing but a dire necessity should induce us to borrow. Whatever doctrine may be theoretically held and propounded by high authorities with respect to the facility with which we bear the burden of a national debt, I do not think that any man standing in my place would wish so to apply that doctrine as to relax the sound manly sentiment which fills the British people and Parliament with aversion to the principle of borrowing to meet the ordinary expenditure of the year. There have been cases undoubtedly—but they were exceptional cases—in which we have resorted to borrowing even in time of peace. Two I may quote, but I quote them only that the Committee may bear freshly in mind how different were the circumstances from those in which we now stand. In 1835 the Government of Lord Melbourne borrowed £20,000,000 for the purpose of negro emancipation, but that was a service to mark an epoch in a nation's life, and it had no connection with the ordinary expenditure of the year. Again, in 1847–8, my right hon. Friend the present Secretary for India (Sir Charles Wood) made a loan of £10,000,000, but it was for the purpose of meeting a frightful visitation in the sister island, and at the time it would have hardly been possible to raise by the taxes of the year the sum for which he was compelled to apply to Parliament with the view of relieving the distress occasioned by that calamity. Those two cases are entirely different from this both in amount and in principle. They are different in amount, because one sum was four times, and the other twice, as large as that which I have now to ask at your hands. They were different also in principle, because while one related to a great and extraordinary visitation of Providence, the other was connected with a permanent social change, the opportunity of which could not again occur. You are now, on the contrary, called on to meet an expenditure which, legitimate and needful as it is, has reference strictly and exclusively to your own wants,—to the wants of the time in which you yourselves are living. It appears to the Government for these reasons, and I hope it will also appear to the Committee, that this is not the occasion for a loan. Another matter we are bound to take into view in considering this question is the condition of the country. I must express my firm conviction that there never was a period when the people of England were better satisfied of the justice and necessity of the demands made upon the public purse, and that there never was a time when they were more able or more willing to meet them. I refer it alike to the hearts and understandings both of those who hear me, and of those out of doors who will consider our discussions and debates, whether we should not shrink from our duty and disgrace the memory of those who have gone before us if we were to hesitate to say that we will provide for the wants of the day in which we live, not in such a manner as will further embarrass our posterity, but out of the resources immediately at our command. There is another reason, too, not altogether agreeable, at which I may slightly glance. There will soon be another public borrower in the market with whom I have no desire to compete. My right hon. Friend the Secretary of State for India will, I believe, have to make another application to Parliament in addition to the measures already taken, in order to meet the exigencies of the Indian service; and if the Committee will allow me, I must frankly confess that I would rather leave the field clear to him, and be dispensed from interfering with his operations. What I have presumed to say with regard to a loan appears to me equally applicable to the more temporary mode of borrowing by instruments at a short date, such as Exchequer bills. If ever there was a time to which this mode of borrowing was inapplicable, it is the present, because its effect would be, not to throw the burden on posterity, but upon the year 1860, which we shall all agree is already charged to its very utmost. If, then, I have sufficiently got quit of the first alternative of making provision by borrowing for the deficiencies of the present year, and if we seem to be driven by considerations of justice and policy to the other alternative of looking to taxes for the means of meeting our expenditure, we have still one other question before us—shall we look to direct taxation or to an augmentation of our indirect taxes? I propose not to enter into any elaborate or detailed inquiry, because I think a very few minutes will suffice to dispose of this portion of the subject. But, inasmuch as there is nothing irrational in the first idea of resorting to indirect taxes for either the total or the partial relief of the exigencies of the State, let us calmly advert in a few words to the articles upon which alone it might, perhaps, be possible to think of ob- taining rapidly and effectually some considerable amount of revenue. Those articles which I think would present themselves to any Finance Minister engaged in the disagreeable task of selecting new subjects of taxation would, I think, ordinarily, be malt, spirits, tea, and sugar. I confess, Sir, it is my own opinion, and it is the opinion, I believe, of all my colleagues, that it would not be desirable to propose any augmentation of the duty upon malt. ["Hear, hear!" from an hon. Member on the Opposition Benches.] I am glad to have given consolation to at least one anxious and wounded mind; but we must frankly own, and I own it the more frankly as I was the person who proposed the measure, that when we did, under strong necessity, in a time of war, propose a great augmentation of the malt duty, although we derived from it a large sum of money, yet that sum of money did not altogether answer our expectations. It is not a very elastic revenue. It is a large revenue, but it does not seem susceptible of bearing additional burdens. On the whole, therefore, what seems obviously to be the dictate of good sense is that under present circumstances we should let well alone. Well, then, the next article I mentioned was the article of spirits, and I believe that, judging from what I hear of the accelerated deliverances from bond of spirits in the different parts of the United Kingdom, there is a portion of the public who either think themselves, or who think that somebody thinks that they are, very proper subjects of taxation. I should be very sorry to give a pledge which was intended to bind future years, because the principle upon which the House of Common has, I think, uniformly proceeded with respect to spirits has been, not that we ought to lower the duties upon them as much as we can consistently with the interest of the revenue, but that we ought to raise the duties upon them as much as we can consistently with the policy and necessity of preventing the growth of a contraband trade. I wish merely to say, that we now think that question should be postponed to a future year. The Committee will recollect that we have been very bold, and I am thankful to say, upon the whole, very successful for a series of years in our operations upon spirits. From the year 1853, when it was my good fortune to take the first step in that movement, down to the year 1858, when the right hon. Gentleman opposite put the last hand to the work and completely equalized the spirit duties in the three kingdoms, we have had a number of successive changes which have upon the whole been, I think, eminently satisfactory in their results; but I will give the general figures very briefly, so as to enable the Committee to form their own judgment. In the year 1853, when we began to deal with the spirit duties, the total amount in round numbers, of duties collected upon British spirits—of course I do not include either colonial spirits or brandy—was, in England, £3,165,000; in Scotland, £1,867,000; in Ireland, £1,267,000. In 1859 the total amount of these duties collected in England was £4,073,000, being an increase of £907,000. That was upon a uniform duty, and no change, except a very trifling adjustment, had taken place in England; but, at the same time, England had been deriving supplies from Scotland and Ireland in a manner that it would be hardly possible to show upon the face of the account. England showed an increase upon the face of the account. Scotland had risen from £1,867,000 to £2,750,000, showing an increase of £882,000; Ireland from £1,267,000 to £2,364,000, showing an increase of £1,097,000. The general result has been that from this most legitimate source of taxation we have had an increase between 1853 and 1859 as follows:—The total in 1853 was £6,301,000, and the total in 1859 was £9,188,000, or an augmentation of £2,887,000, which I trust we may look on substantially as a real addition—without a single moral drawback attending it, but rather the reverse—to the amount of the permanent revenue of the country. After making due allowance for the progress of the population in the three kingdoms, I think we may say that from £1,000,000 to £1,200,000 of that sum has been due to the augmentation of duty imposed by Parliament in successive years upon the kingdoms of Scotland and Ireland. Considering, however, with what difficulty the whole subject of the spirit duty has been attended in Ireland; considering how recent, how great, and how rapid have been the augmentations of duty in that country, for they have hardly had a single year's rest—Chancellors of the Exchequer from time to time have been so anxious to get back upon them, and considering that at this moment our success has been complete, so that we have no reason to believe that a contraband trade has received any stimulus; but, on the other hand, considering how short an experience of a few months is for determining a matter so serious as that,—I mean the question whether there is a danger of stimulating the creation of a new contra-hand trade on a greatly extended scale; considering these things, we are certainly of opinion that it would be unwise, and, at all events, premature, to raise at the present moment any question with respect to the general increase of the spirit duty through the three kingdoms. With regard to a particular increase to take effect in England, or in England and Scotland and not in Ireland, whatever the yield to the Treasury might he, it would be decidedly a measure of retrogression and not of improvement. That is a step which I think that we should not, under any circumstances, be disposed to take. Therefore, Sir, malt gives us no hope, and spirits yield us no means of replenishing the public treasury. Now, what are we to say of the more important and more vital articles of tea and sugar? I have presumed to impress upon the Committee the opinion that we are dealing at present not with a prospective and permanent finance, but with the finance of the moment; that we are making provision for the year; that we do not wish to tie the hands of Parliament, if we can avoid it, with reference to anything that may take place in future years; that we wish that Parliament when it meets again after the recess should be in a condition to face as a whole the great and serious question of revenue and expenditure that it will then have to meet. But if these considerations be just, they form a most powerful argument against meddling at the present moment with the indirect taxes of the country, because you cannot touch one of these indirect taxes, and especially you cannot touch the taxes that are derived from tropical articles, without greatly interfering with the course of trade. You may tax your malt, you may tax your home-made spirits; you then interfere with trade; but you interfere with trade far more if you touch sugar, or if you touch tea that has to be brought from what I may call the extremities of the earth. I do not speak now of the interests of the consumer. I speak simply at this moment of the interests of trade, and I say it would be contrary to those wise and circumspect rules which govern the proceedings of Parliament in regard to its fiscal legislation, if they were to permit themselves to interfere with those great and capital trades of the country for the purpose of supplying what we must call a momentary derangement. But there are other reasons which, I confess, amount for me to a demonstration, and more than a demonstration, upon this subject. It is undoubtedly true—I have already mentioned to the Committee by anticipation the deliverances of spirit—that the deliverances of tea and sugar within the last few weeks from bond have been very large indeed. I do not know whether these deliverances show confidence or a want of confidence, hut at any rate I will proceed to lay as well as I can an argument, which appears to be conclusive, against raising the duties on those articles, before the Committee. When we deal with a question between direct and indirect taxation, we deal to a certain extent—imperfectly and roughly no doubt the distinction is taken, but still it is in fact and in substance a true distinction—we deal to a certain extent with a question between a rich man and a poor man. (All classes are affected by taxation, hut direct taxation falls upon the middle and wealthy classes, while indirect taxation weighs with much more serious pressure upon the poor and labouring man. This was felt by Parliament at the commencement of the Russian war, and in the effort which it made in successive years to meet a large portion of the demands of that war by means of new taxes it carefully observed the maintenance of a due relation between the amounts of direct and indirect taxation. And I think, without going into minute particulars, I may say that it was the determination of Parliament, as evinced by its act, that of that portion of the war expenditure which was to be drawn from taxes, the greater part should be taken from direct taxes, and the lesser part from indirect taxes. But now let us see what has happened since the close of the war. i The war closed in the month of March, 1856, at the beginning of the financial year, but the finance of the year 1856–7, although it was a year of peace, was not, i and could not be, a finance of peace, because it was a year of transition, and, in fact, a great part of it was consumed in bringing home the armaments from the Crimea. That year in fact, was a year of war more than a year of peace so far as the expenditure was concerned. But in 1857–8 began a finance of peace, and a reduction to a peace establishment. My right hon. Friend the Secretary of State for the Home De- partment (Sir George Lewis) found himself under the necessity, with reference to the demands of the public service in that year, of keeping up a portion of war taxation. Had war taxation been entirely removed on the 31st of March, 1857, the duty on sugar of the lowest class would have gone down to 9s. 6d. per cwt., the duty on tea would have gone down to 1s. per lb., and the tax on incomes would have gone down to 5d. in the pound. My right hon. Friend, finding the necessity for further income and a partial retention of war taxation in order to meet the scale of expenditure which had been, or was to be sanctioned, maintained that portion of taxation distributed between its two main heads. He requested Parliament to continue a modified part of the extra duties on tea and sugar; but he likewise retained 2d. in the pound on incomes, which would have dropped if the Act of 1853 had been suffered to take its full effect. My right hon. Friend obtained from Parliament the continuance of those extra tea and sugar duties from April, 1857, to March, 1860, or a period of about three years, and the result has been as follows:—We have kept up a certain portion of war income tax, that is to say the imposition of 2d. in the pound which would have lapsed under the Act of 1853, and which yielded two millions of money. But that we kept up for one year only, from April, 1857, to March, 1858. In the financial year 1858–9 the income tax went down to the limit which was provided for in the Act of 1853, but the tea and sugar duties continued at the limit at which they were fixed for a period of three years by the Act of 1857. The result is shortly this—if we look at the three years 1857–60, during those three years we shall have raised, of what must be regarded as temporary war taxation, two millions only from direct taxation in the shape of income tax, and three millions a year from tea and sugar, or nine millions of indirect taxation. If that be a true state of the account, and I believe it cannot be impeached, then, I say, whatever may have been the anticipations of the public out of doors, whatever the patience of the traders or of the consumers, it would, in the view of the Government, be a positive breach of duty, and an act of gross injustice towards the consumers, if at this moment we were to ask you to add one single shilling to the imposition on tea and sugar. But if it be not slaying the slain to pursue that question further, I would likewise remind the Committee of the position in which we stand for raising money at this moment by Customs and Excise duties. Customs and Excise duties are very convenient in one point of view—namely, that you begin to get the duty the very night you make the financial statement, and if you make the financial statement just after the close of the financial year you get twelve months' duty for twelve months' taxes. But what is our case now? We might resort to the odious course of laying on 3d., or 4d., or 5d. a pound on tea, and 3s., 4s., or 5s. per cwt. on sugar, but we should not get twelve months' duty. Three and a half months are irrecoverably gone and counted with the past. One and a half month more have already been forestalled by payments in anticipation. At this moment the Exchequer of the country is richer than it ought to be by upwards of a million of money in duties on tea and sugar, which have been paid in advance, earlier than they would have been paid in the natural and ordinary course of trade, by parties who supposed that it might be the possible pleasure of Parliament to enact an increase of those duties. That being so, we arrive, Sir, at a point which can be easily anticipated, [Laughter.] The divining faculty of an intelligent audience altogether outruns either the power or necessity of a detailed statement. It only remains to consider what we shall do with the income tax. The income tax, as I conceive, was introduced into our fiscal legislation for two great purposes and at two different periods. The one was to effect permanent and salutary reforms in our commercial and fiscal system, and the other was to meet in the manner the most efficacious sudden public exigencies. I wish it had been my fate to ask the Committee to vote an augmentation of the income tax for the former rather than for the latter of these circumstances. I trust that the day may yet come when, if the income tax is to be continued, Parliament will recollect that it derived no small part of its passport as a peace tax to the public favour or public endurance for this, that it was associated, as it has been, with other changes of the law productive of the widest and most permanent social benefits. This other purpose, however, of meeting great public exigencies and extraordinary demands on the public purse—that is, demands extraordinary in amount yet strictly referable to current wants—although it be not one so pleasant to entertain, yet is it one equally legitimate, and I put it broadly, that in a case like this, where, for the dignity, honour, and safety of the country we are called upon to make great and rapid efforts in the augmentation and extension of our defences, the income tax is beyond all others the regular and legitimate resource to which to resort. I do not know whether the Committee would like me to lay before them any facts with regard to the condition of the income tax, and the expectation the country has entertained that it might be found practicable at a period now approaching to part with it. I do not speak of the augmentation which I am about to propose, but I speak of the income tax with reference to its acquiring a place of permanence in finance. In the year 1853 there was an expectation that the revenue of this country would so thrive under the system which had been in operation that we should be able to dispense in seven years with the aid of the income tax as an ordinary tax for the purpose of national income; and, so far as depends upon the revenue of the country, and the simple consideration of the revenue, that expectation has been entirely fulfilled. If I go to the expenditure of the country as it was in 1853, and if I compare that expenditure with the present revenue, there is not an expectation which was held out in 1853 (I do not speak of details, but I speak of general results) which has not been more than satisfied and fulfilled. In 1853 the revenue was £59,024,000, and the expenditure £55,769,000. In the year 1859–60—taking, of course, the estimated revenue—the revenue is £64,340,000, showing a growth of £5,316,000 in revenue, which is a sum as large as an income tax of 5d. in the pound. But that is not all. We must balance our revenue with expenditure. The expenditure in 1853 was £55,769,000. The estimated expenditure of 1859–60 is £69,207,000; so that while our revenue has been growing £5,316,000 our expenditure has grown £13,438,000, and that is a very simple, transparent, and conclusive explanation of the difficulties with regard to parting with the income tax. When I say that the revenue has increased to the extent of £5,316,000, I would remind the Committee that that is entirely independent of the advantage next year from the falling in of £2,146,000 Long Annuities, which, indeed, increases the revenue up to £7,000,000, being enough, as I can show if we go into details, to enable us to part both with the income tax of 5d. in the pound, and likewise with the war duties on tea and sugar if only our expenditure had not increased. That is the simple case, which at a future time, if it is thought right, I will display in more detail; but I pledge myself that, taking the revenue as it stands and is estimated to be, there would not have been the slightest difficulty in dispensing both with the income tax and the remaining war taxes on tea and sugar, if it had not been that the exigencies of the public service, as stated from time to time, have created new calls, which of course must be met by resorting to corresponding taxation. Well, Sir, £4,867,000 was the sum which I ventured to state to the Committee as the gross deficiency which we shall have to meet. But there is a question which I am about briefly to open, and a source from which (without exposing ourselves to any objection which applies to borrowing, and without inconveniently interfering with the course of trade or private interest) we may yet draw a limited sum in alleviation of the public burdens. It is a source not altogether new to this House, because it has been mentioned from time to time by Chancellors of the Exchequer, and it has always been felt that the time would come when some proposal on the subject would be made. I refer to what is called the system of malt credits. It is known to a large portion of the Committee that there is a peculiarity in the collection of the malt and hop duties. I will not touch upon the latter, because the case is peculiar, and the amount involved small; I will deal exclusively with the duties on malt, and speaking roughly there is a credit of nearly six months which is given to the maltster by the public, the effect of which is that he makes his malt, disposes of his malt, and is paid for his malt in general, or at least if he is not, it is his own fault, before he is called on to pay the duty, or, in other words, to a considerable extent the public find capital for the malsters. This, with the slight exception of the hop duties, is altogether an exceptional privilege. The distiller of spirits, directly after the spirits are gauged and the gauging officer has completed his round, is called upon to pay the duty. A delay of five or six weeks is all that takes place in the payments of the distillers of spirits and the makers of paper, and in point of fact the duty is paid as soon as the collector can make out the charge. The Government give them no credit, but they require them to pay the duty to the revenue officer when he presents his account. In the case of the malt distiller there is a clear term of eighteen weeks, which, added to the other six weeks taken for making out the accounts, makes a delay of nearly six months. In former times it was felt that these questions had an importance in relation to the system of protection and the dependence of the agriculturist upon the prices that barley fetched in the market. It was thought, and with some colour of reason, that this system of supplying capital to the man who buys barley from the farmer had a tendency to augment the price of barley to the purchasers. It certainly did tend to break up the malt trade, and to bring many competitors into the market. But we have, I hope, long outlived the day when any consideration of that kind, arising out of artificial interests, either could, would, or ought to he entertained. The system of finding capital for traders on the part of the public is in principle a bad system, and being bad it has also this second bad feature, that it is an exceptional system, being a privilege granted to some and not to others. Therefore the Government are of opinion that the time has come when this system may be safely modified—I don't say abolished altogether, because a sudden abolition of such a system would derange the trade, and run the risk of hampering the operations of private parties, whose resources might not be large, and that would be extremely objectionable. My proposal is, therefore, to deal with the malt credits, but to deal with them in the mildest manner. Of the eighteen weeks now allowed we propose to take away six, leaving twelve. I do not say that there might not be a further measure in the same direction at a future time, and after matters have been adjusted to the present change; but this I do say, that I am most unwilling to give grounds for complaint, and in proposing to abridge these six weeks from the credit given in the case of malt we also propose that you should incur the very small expense of allowing the malster a discount at the rate of 4 per cent, on the payments made under the proposed system at an earlier period than he has been accustomed to make them, so that the shortening his credit would be a matter limited in extent, and as far as possible reduced to the condition of a banking transaction. Of course in future years there would be no operation of discount, and the credit would stand re- duced to whatever Parliament might determine. I will not trouble the Committee with the intricacies of the arrangements under which the malt duties are collected, and under which the year is divided into certain periods, the malt is gauged, and the duty charged and collected from the malster. But the effect of reducing six weeks from the credit allowed to the malster will be to bring into the Exchequer, and not only that, but to bring into the Exchequer before the 1st of April next, the sum of £780,000, which, if the present course of collection were adhered to, would not find its way there before the following financial year. In point of fact, the public have £2,500,000 out on loan to the maltster, of which I propose to take up, by a Resolution I shall submit, a sum something short of £800,000. Well, that is a deduction, as far as it goes, from the rather formidable figure of the deficiency that we have to supply. That deficiency, it will be recollected, I stated at £4,867,000, and the deduction of £780,000 will make it stand at something over £4,000,000. That sum we propose to raise by an augmentation of the income tax. The present rate of the income tax is 5d. in the pound. We propose an addition of 4d. in the pound. An addition of 4d. in the pound would yield something over £4,000,000 of money. In making an addition of that kind, it will be necessary of course to reintroduce the distinction between incomes above £150 and incomes under £150; because that distinction was originally introduced when the rate was at 7d., and was allowed to drop when it fell to 5d.; but when it goes above 7d., take it for granted there cannot be a doubt that the distinction must be reintroduced. I think it will also be the feeling and disposition of the Committee that any additional rate laid on incomes between £100 and £150 should be rather lightly laid in reference to sudden calls of this kind, so as to give what, in commercial phraseology, I may call the turn in their favour. Therefore, what I propose is, that the 4d. laid upon the general mass of the income-tax payers should stop at incomes of £150, and that in lieu of 4d. in the pound paid by incomes above £150, the rate of 1½d. in the pound should be laid upon incomes under £150. But I must frankly admit that my proposal is, that the whole of the addition to the income tax, which is voted for the service of the year, shall be made applicable to the service of the year by being charged on the first half-yearly pay- ment. It is, I take it, the clear sense of the Committee that on this occasion we ought to pay our way. It is also the clear sense of the Committee, if I gather it rightly, that we ought to pay our way without resorting to indirect taxation. Having done what I am able towards a reduction of the deficiency by a limitation of the malt credits, I still find £4,000,000 of money staring me in the face. And if I am to have that money for the service of the year, it must be in the Exchequer before the 1st of April, nor can it be, by any means that I am aware of, in the Exchequer before the 1st of April, unless it is made leviable in one single payment, on the first assessment or charge, after the Resolution shall be adopted by the House. [Murmurs.] I wish to explain to the Committee, if they will hear me, exactly how the payments will stand. I wish to show the Committee what it is the tax-gatherer will ask for, the next time he shows what I suppose we must call his ill-omened visage at the taxpayer's door. The effect of my proposal is to place an addition of 1½d. in the pound upon all incomes under £150, and upon all above £150 an addition of 6½d., or at the rate, annually, of 13d. on incomes above £150. But the first half-yearly payment of the taxpayers whose income is under £150 a year will be at 4d. in the pound. The remaining liability for income tax for 1859–60 will stand exactly as it does now, at 2½d. for both classes. So that the first half-yearly payment will be 6½d. on incomes above £150, and 4d. on incomes under £150, or at the rate of 13d. in the year on incomes over £150, and 8d. on incomes under £150. The result will be that the tax will bring into the Exchequer the sum of £4,340,000. Adding that to the sum of £780,000 which the malt credits will bring in, the total will be £5,120,000 Now, the deficit, as I have already stated to the Committee, is £4,867,000, and deducting that sum from the Ways and Means which have thus become available, there remains a surplus of £253,000. It will naturally be observed that this surplus is very small, but I should wish to say a word to the Committee on that point. I have already pointed out to the Committee that there is a charge of £400,000 which we must be prepared to meet in January, which legally falls to the charge of this year, but falls to it by an accident, and which really belongs in the ordinary arrangement of our finances, not to this but the following year. That being so, I do not consider that I am bound to raise taxes for such a sum as that. The whole question is whether it is a sum that can be conveniently met out of the public balances, and if the Committee will permit me I will state how the public balances have stood lately, how they now stand, and what they are likely to be at the close of the financial year. On the 30th of June, 1859, the balances for the financial year were £5,016,000. Rut on the 1st of April, 1859, at the commencement of the financial year, they stood at £7,789,000. In the course of the year it is calculated that there will be several i additions to the balances from a probable excess of repayments over outgoings for public works, to the extent of £500,000. The surplus revenue I have estimated at £253,000, and these sums will make altogether £8,542,000. From that you will have to deduct £2,000,000. Exchequer bonds paid off on the 8th May, in consequence, as I have no doubt, of the dissolution of Parliament and there being no opportunity to consider whether any provision ought to be made for them. Deducting these £2,000,000, the probable balances on the 1st of April, 1860, will be £6,542,000. That is an ample amount, and more than is absolutely necessary for the coming year, because the subsequent quarter will be relieved in this respect to no less an extent than £1,000,000 in consequence of the lapse of a large portion of the terminable annuities. That, I think, is the statement which I have to make to the Committee. I shall not, of course, ask the Committee to come to any material vote to-night. It will be for the Committee to consider when they will like to resume the discussion of the subject. If I anticipate their wishes rightly, they will probably desire to choose a very early day in reference to the state of the weather, of the Session, and some other considerations that are better to be reflected on than named. I shall only propose to-night a formal vote of Ways and Means, and I shall lay on the table the Resolutions having reference to the income tax and the malt credits. Now let me add another word before I sit down. I know I have made a great demand on the generosity and patriotism of this Committee; but do not be repelled from considering that demand by the fact, which we all know, that it is disagreeable to us individually, and does not tend to promote our popularity as a Parliament, to augment the burdens of the people. Look at the charge you have incurred, and the Estimates you have voted. Consider, if I may be permitted to make the appeal, that neither the honour nor responsibility of these Estimates are mainly ours. Our duty has mainly been to take over the Estimates framed for us by our predecessors, but yet we have taken them over not in the mere discharge of formal official duty, but with a ready warmth and a conscientious assent. But there stand the Estimates. There is the charge you have placed on the public Treasury. How will you meet it? Do not allow yourselves to he swayed by considerations of what might he merely agreeable. Ask yourselves whether you have really performed your duty by simply fixing the expenditure of the ensuing year, as has been done in the main and is likely to be entirely done so, at a sum of £69,000,000. If you have performed your duty in that, there is another duty not less transparently clear—namely, that you should make adequate provision to meet that charge; and, instead of ascribing to the great English people a childish impatience to meet necessary demands, with which they were never chargeable, I, on the contrary, shall rely on their unyielding, inexhaustible energy, and generous patriotism, and shall be confident that they will never shrink from or refuse any burden required in order to sustain the honour and provide for the security of the country. With that conviction I shall conclude by proposing a formal Vote to the effect that £7,000,000 be granted to Her Majesty out of the Consolidated Fund for the public service.

Resolution agreed to. Resolved, That, towards making good the Supply granted to Her Majesty, the sum of £7,000,000 be granted out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland.


The next Resolution I shall only lay on the table. When will it he convenient to consider it?


said, that at first he was about to suggest Friday; but as he afterwards recollected that Thursday was now a Government night, he would suggest Thursday.


said, he would not at that time enter upon the question of the income tax, but he wished to know if the expenditure mentioned by the Chancellor of the Exchequer as having occurred last year was the real bona fide expenditure of the year, or was it only that which had been brought into the cash [account? He mentioned that because he had sometimes found discrepancies as great! as a million and a half between the Chancellor's statement and that which was afterwards certified by the auditors.


said, there was no doubt often a great difference between the accounts as they were first presented and as they were found finally to stand. All he had to say was, that the accounts were made up in the same manner as in former years; and he might add, it was impossible to make them up otherwise, with expenses such as ours scattered over the whole world. But he believed in this matter of discrepancy one year balanced the other.


said, there was one part of the right hon. Gentleman's statement which was liable to be misunderstood. He had stated that at the Michaelmas quarter the public would have to pay id. or 2½d. in the pound, and in the following April only 2½d. in the pound. He did not think that quite represented the fact. They all knew the old story of the landlord who made a deduction from his tenant's rent of 10 per cent at Lady-day and 10 per cent at Michaelmas, and then endeavoured to persuade John that he had remitted 20 per cent on the year's rent. How stood the facts here? In the case of the dividends and rents there would be two levyings of taxes in the two half-years.


explained that the income tax was charged on the annual assessment, and the whole payment of 4d. in the pound would be taken in one half-year. With regard to dividends and official salaries, which were received half-yearly, of course the rate must be doubled on the first half-year received, so as to make the amount paid for the whole year 4d. in the pound.


said, that taking Schedule B, he understood the effect of the right hon. Gentleman's proposition would be to place those persons who had paid their income tax of 2½d. in the pound for the half-year ending in April last in the same position as if they had paid 4½d. by charging them with an additional 2d. in October. The consequence would be that in October next professional men like himself would be called upon to pay 4d. in the pound, in addition to the half-yearly payment of 2½d., and the total amount to be paid in October would therefore be 6½d.. in the pound. This would be certainly a very heavy charge to be met in the course of one half-year. There was another portion of the statement of the right hon. Gentleman to which he wished briefly to advert. The right hon. Gentleman had compared the expenditure of the year 1853 with the present expenditure; but in doing so he had fallen into the error of omitting from his calculations the fact that in the former year it was the net revenue, while in the latter it was the gross revenue that was given. Those were, however, only points of detail; and he had risen for the purpose of expressing his opinion upon a matter of more general interest. He could not refrain from giving utterance to his disappointment that, after the anticipations which had been held out by the Chancellor of the Exchequer in 1853 that the effect of the measure which he then introduced would be to relieve the public in 1860 from that hateful impost, the income tax, he should not only propose that that tax should he increased but very nearly doubled. He was greatly surprised to find the right hon. Gentleman recanting all his former opinions with reference to the income tax, for he had expected that if he found it absolutely necessary, in consequence of the public burdens, to increase that tax, he would at least offer some apology, or adduce some reasons, for his change of opinion. The right hon. Gentleman, however, after all his professions, had with the greatest coolness reverted to this obnoxious impost, which he had formerly said ought only to be resorted to in time of war. Not only did the right hon. Gentleman propose nearly to double the income tax for the future, but persons who had considered their income tax as settled for the half-year ending in April were to be called upon by an ex post facto law to pay an increased impost for that half-year. He (Mr. Malins) ventured to tell the right hon. Gentleman that he would have very great difficulty in passing a measure like this, which would be received with the greatest possible disappointment, after the depression which the country had suffered under the sacrifices they had to make during the Crimean war. This was one of the reasons, no doubt, why the country was so desirous for a change of Government, and one of the first blessings attending that change—the reasons for which seemed every day more inexplicable—was that the country was to have a double income tax. His right hon. Friend the Member for Buckinghamshire (Mr. Disraeli) had last year expressed an opinion, as he thought most wisely, that the settlement of 1853 ought to be adhered to, and as that decision was approved by no one move warmly than by the present Chancellor of the Exchequer, he (Mr. Malins) certainly expect- ed that he would have given some reasons for abandoning the arrangement of 1853.


said, he rose to take the very earliest opportunity of expressing his sincere thanks to the Chancellor of the Exchequer for the very noble and honest proposition he had made to the Committee, and although he was quite prepared to hear strong objections to it from the other side, he would venture to say that for one hon. Member of that House who objected to the right hon. Gentleman's measure, it would receive the warm approval of 10,000 men in the country. The right hon. Gentleman had laid down the principle which he was sure would meet with public concurrence, that it was right and honest that those who possessed the largest property should pay the largest proportion of the taxation, He gave the right hon. Gentleman the greater credit for acting upon such a principle, because he was aware how unpalatable it would be to hon. Members of that House, all of whom were men of largo property. For his own part he only wished that the right hon. Gentleman had taken off half the malt tax and added 2d. or 3d. more to the income tax.


said, that the right hon. Gentleman had not certainly dealt with the producers of malt upon the present occasion with the same severity which he had displayed towards them in his former financial arrangements; but the right hon. Gentleman had not allowed that class to pass wholly unscathed. It appeared to him (Mr. Ball) that the right hon. Gentleman was mistaken when he supposed that the public supplied the malster with capital. The fact was that barley could not be immediately converted into malt, and all that the Government had hitherto done was not to subject malt to a duty until it could be brought into the market. That was surely a perfectly fair arrangement. He could not help fearing that the result of the right hon. Gentleman's scheme would be to create a diminution in the quantity of malt manufactured, and to reduce in a corresponding proportion the sum received under that head by the Exchequer. He thought, too, that the new arrangement would hardly be consistent with good faith towards the malster, inasmuch as it would extend at once to malt which it was naturally supposed would only be subject to certain established charges.


explained that the scheme would only affect what was called the "fifth round," which began on the 1st of October, and ended on the 15th of November.


Then he did not find any fault with that portion of the arrangement. But he believed that the whole scheme would injuriously affect the interests of the malster, and that that injury would revert upon the public revenue.


said, he had always objected to the continuance of the income tax without an adjustment of its grosser inequalities. He admitted, however, and he believed that the country would admit the necessity which induced the right hon. Gentleman the Chancellor of the Exchequer to increase the tax under present circumstances, and if he referred to the speech of the right hon. Gentleman when introducing the Budget in 1853, it was not for the purpose of taunting him with an inconsistency which necessity had forced upon him. This speech proved unanswerably that it was impossible in the distribution of that tax to arrive at anything like a near approximation to justice; but, in his (Mr. Clay's) opinion, it did not prove that there would be any difficulty in effecting some less unfair arrangement in the matter than that which at present existed. He felt persuaded, for his part, that the income tax must continue, to some extent at least, to be one of our permanent sources of revenue. Those who were young when Sir Robert Peel imposed it in 1842 were now middle-aged, and those who were then middle-aged were now old. Considering, then, that it would in all probability prove a permanent tax, he would put it to the right hon. Gentleman whether it would not be well that he should devote his great capacity to an attempt to mitigate the present irregularities of the impost.


said, it appeared to him that it would be very inconvenient that the payment of the income tax should be divided in the very unequal manner proposed by the Chancellor of the Exchequer. In the first half-year the payment would amount to 6½d. in the pound, and in the second to only 2½,d. in the pound; and such an arrangement would press upon many persons with very considerable severity.


said, he presumed that the right hon. Gentleman the Chancellor of the Exchequer would on a future occasion enter more fully into the details of the collection of the tax. His proposal seemed very simple as far as regarded rents and dividends from the Funds. But he (Sir Stafford Northcote) believed that there would be some difficulty in carrying it into effect in the case of salaries. The whole addition to the tax was to be collected in the first half-year; but the recipient of a salary might die before the year was ended, and a public charge would thus be imposed on a sure which he would never receive. In such a case what was to be done with the claim of his representative to have a portion of the tax returned? Or, again, what was to be done in the event of the salary being raised after the whole year's tax had been paid? Another question presented itself affecting the landed interest. Suppose a man had £5,000 in rents, and had to pay £1,000 out of it in annuities to other members of his family, he would be called upon to pay the whole additional tax on the £5,000 now; and the question was, would he be at liberty to deduct the full amount of the tax on the £1,000 from the next payment to the annuitants, or was it to be spread over a length of time? If he deducted the whole, the annuitants might die before the year was out. If he could not deduct the whole, he would be put at a disadvantage. Those, however, were matters of detail which could be more fully considered upon a future occasion. There was another point of more general importance to which he would for a moment direct the attention of the Chancellor of the Exchequer. A doubt had been raised whether the Act of the year 1857 with regard to the extension of the tea and sugar duties, would not altogether expire in the month of April next; and the right hon. Gentleman would probably feel it his duty to inquire whether that doubt was in any way well founded, as if it were correct it might leave the public Exchequer in a very awkward situation.


said, that as far as he could collect, the class of long annuitants whose annuities would drop next Christmas, would be subjected to a special hardship by the proposal of the Chancellor of the Exchequer, inasmuch as they would have to pay next autumn, or next winter, the addition to the income tax for the whole year, although their receipts were only to extend to three-quarters of the year. The arrangement might also operate very unfairly in the case of a farmer who left his holding at the expiration of the first half-year after he had paid the whole of that new charge, while his successor would be entirely relieved from that portion of the income tax burden. It appeared to him that it would be better to levy the tax in the usual manner. With regard to the proposal upon the subject of the malt tax, he should say that he saw no reason to apprehend that the supply of malt would not always keep pace with the demand. If the country were not to continue to furnish the malster with capital, as it certainly had hitherto done, he believed that no want of money would be experienced in conducting that branch of the national industry; but undoubtedly many of the present manufacturers of malt might find considerable difficulty in meeting the requirements of the proposed change.


said, that he felt it his duty to join the hon. and learned Gentleman the Member for Wallingford (Mr. Malins) in protesting against the proposed continued extension of the income tax. He could state that among his constituents there existed the greatest detestation of that odious and demoralizing impost, the severest condemnation of which had been pronounced by the right hon. Gentleman himself in 1853. He regretted that the Chancellor of the Exchequer should propose to undo the excellent budget of the right hon. Member for Buckinghamshire, under which the £2,000,000 or £3,000,000 surrendered in the shape of income tax had found its way to the Exchequer in the form of Customs' duties. But his proposition would at all events dispel the feeling of joy in which the country had been too hastily indulging, that the pledge given by the late Government of the termination of the income tax in 1860 would be redeemed, and some even might be disposed to think that it was that pledge which had induced the present Chancellor of the Exchequer to proceed in the opposite direction. He would not touch upon the minor difficulties which had been adverted to, and which were abundant, but he might be permitted to state what his impression was about a tax which was all his (Mr. Gladstone's) own, and of which we had now a five years' experience. He alluded to the legacy and succession duties upon real property. A small increase in one department was observed to stand out very prominently in the report of the Commissioners of the Inland Revenue, but he would call the right hon. Gentleman's attention to a difference between the law of Scotland and that of England, of which he might not he aware, and by which the revenue to some extent was affected. In Scotland, heritable bonds upon land, which were the same as mortgages on mortgages, were by a fiction of law regarded as real property, and the owners of such consequently escaped payment of the same proportion of taxation as property of the like description paid in this country. If the right hon. Gentleman turned his attention to this subject he might lay his finger upon a small sum towards making up the deficiency between the expenditure and the income. He hoped the right hon. Gentleman would tell the House what stops the Government were prepared to adopt to carry out the valuable suggestions of the Commissioners of Inland Revenue.


observed that he had invariably voted against the income tax, with one exception, and that was when the right hon. Gentleman (Mr. Disraeli), in his financial scheme of last year, led the House and the country to suppose that in 1860 the tax would cease altogether. So far, however, from that expectation being realized, they wore now called upon to increase the tax. Possibly the large Estimates which the House had already voted, and for which the Chancellor of the Exchequer had to provide, left him no option; but he was quite sure that the proposition now made to the Committee would have the effect of fixing men's minds out of doors to the enormous extent which the Estimates had reached, and lead them to inquire whether those military preparations, he would not say for war but for defence, were or were not required, or whether the alarm now prevailing was not greater than circumstances warranted. He regretted that, the reimposition of the income tux formed part of the right hon. Gentleman's scheme, and he further regretted that no difference was proposed to he made between incomes arising from trades and professions and incomes of a more permanent character.


remarked that he did not rise to remind the right hon. Gentleman of former speeches he had made on the subject of the income tax, but he thought that the country would protest against the manner in which the extra 4d. in the pound was to be laid on, In the course of three months the country would be called upon to pay the whole addition in one payment, and, as had been already pointed out, would in the case of annuitants be attended with considerable hardship. It must be also remembered that several persons would have ceased to occupy land which they held at the time of assessment. He wished the right hon. Gentleman would suffer himself to lose sight for a little time of the clear balance sheet he wanted to make up in March next, and divide the addition into two parts, taking one-half at Michaelmas and the other half at Lady-day. This would make the burden lighter, and no doubt obtain more favour for his proposition with the public. True it was, the Committee had voted large sums for the army and navy, and on that ground they ought to make the additional burdens as light as possible; but if (he proposition of the right hon. Gentleman should be carried out, the tax would be difficult to collect. Then with regard to the manner in which it was proposed to deal with the malsters. The right hon. Gentleman said that they carried on their business with the capital of the country; but if they did, they gave the public the advantage, by allowing the same credit to the consumer as they received from the Excise. The proposition of the right hon. Gentleman would be attended with this disadvantage, that it would drive the smaller malsters, who carried on their business principally on credit out of the market, and thus vest the trade in the hands of a few monopolists.


said, he considered the proposition with regard to the matters fair enough, but with regard to the additional income tax he thought the levying of it in one payment would operate with extreme severity in many cases. He would suggest, therefore, that the payments should be equalized, or if a discount were allowed to those who chose to pay at once, he had no doubt the Chancellor of the Exchequer would obtain nearly the whole amount within the time stated. He also wished to express his satisfaction at what the right hon. Gentleman had said in reference to the tea and sugar duties, and his gratification that the amount now received from those duties, was far greater than they contributed to the revenues previous to the reduction.


understood that the Chancellor of the Exchequer submitted this proposition as a mere temporary arrangement, and that between the present time and 1860 a full examination would be made as to the financial condition of the country and the whole system of taxation. In that view he was prepared to accept the scheme. At the same time he thought it would be well to reconsider the question of the period at which the increase in the income tax was to be made payable. He did not object that the manner in which the Chancellor of the Exchequer proposed to levy it would press with any undue severity on the public so much as that it would be attended with great practical inconvenience in the collection. He would recommend him to modify that part of his plan so as to avoid the creation of difficulties which did not already exist. The balances of the country were now pretty full, and he did not doubt that the right hon. Gentleman would be able to get on very well without having recourse to this stringent measure. As to the choice between direct and indirect taxation, there was not a man in the country who would not approve the course which had been taken by the Chancellor of the Exchequer.


said, that as an Irish Member he strongly condemned the principle of this tax. With regard to Ireland it was peculiarly oppressive. When the income tax was first proposed the late Sir Robert Peel, in lieu of it, placed a stamp duty and an increased duty on spirits in Ireland. Those duties were still kept on, and now the income tax was about to be extended to it. In 1853, the right hon. Gentleman, moreover, promised that, unless prevented by war, his plan would bring the income tax to a close in 1860; but now, instead of continuing the rate of reduction, the tax was to be nearly doubled, and very faint hopes indeed were held out of its abolition in 1860. The income tax was; looked on with peculiar aversion in Ireland, as there was a feeling that it was to a great extent evaded and only paid by those who were possessed of fixed incomes. Under those circumstances he most thoroughly protested against the measure.


said, he was opposed to the income tax, as unjust and unequal in levy. It was unfair to tax the produce of a man's brains or hands at the same rate as permanent incomes derived from land or other permanent property. He was one of the sanguine minority of commercial men who hailed Mr. Gladstone's advent to power mainly because they thought he would carry out his own scheme and give the coup de grace to the income tax, but now they found it was about to be doubled. He could not say what other hon. Gentlemen representing commercial interests would do, or what hon. Gentlemen opposite would do, but for himself, as the representative of a commercial constituency, he could not aid or abet the Minister in what he could not but regard as an aggravated assault upon the commercial interests of the country.


said he entirely approved of the course taken by the Chancellor of the Exchequer, as he thought the true principle was to meet the demands of the country by revenue, and not by loans, He heard hon. Members cry out against this tax. In his opinion it would be better if those hon. Members would assist in keeping down the extravagant expenditure which was day after day sanctioned by that House, and which caused the necessity for these taxes. He thought, however, some means ought to be taken to relieve the poor working man who, by extra labour, brought himself within the working of this system, from the burden of the tax.


said, there were many professional men who worked as hard as any labourers, and whose case ought also of be taken into consideration. In their cases he thought some means ought to be taken to relieve them from the oppressive effects of this taxation. The imposition of the income tax on persons whose incomes were below £150 just made the difference of an excursion with their families in the summer months, and kept them in town to the great detriment of their health.


said, he thought the scheme of the right hon. Gentleman was a just and a sound one, and would be so received by the country at large. He should be sorry, however, if it were to have the effect of withdrawing public attention to what he regarded as a most extravagant expenditure for the army and navy, but which before next year he hoped to see revised and reduced. His object in rising, however, was to call the attention of the right hon. Gentleman to one tax which in its present form was, he thought, the least defensible of all taxes. He meant the duty on fire insurances. The ordinary duty was double the amount of the premium charged by the companies, and amounted to 200 per cent. Its operation was this. In 1857 the whole sum derivable from the tax on fire assurances was £1,500,000, which represented a property of £820,000,000, to which was to be added £70,000,000 of untaxed farm produce, making a total of £890,000,000 of properly, which was insured against fire; but the actual value of property in this country, including every description, was £4,000,000,000, so that by the operation of the law not more than one fourth of the property of the country was insured against fire. In 1834, in consequence of the cry of agricultural distress, the duty was taken off farm produce; and ever since we had been conferring a been of something like £100,000 upon that particular interest at the expense of the general community. He hoped that in the course of next Session the right hon. Gentleman would he prepared to put an end to that unfair and anomalous exemption. The result of the present system was that a considerable portion of insurances against fire was effected out of the country. Some time ago some French companies established agencies in London, and issued policies, and in 1856 an Act was passed to compel them to pay duty, which it was impossible to carry into effect, and its only result was to shut up half-a-dozen agency offices in London. The duty on marine insurances was formerly in the same condition, and was continued notwithstanding the remonstrances of mercantile men, but when it was found that the greatest proportion of the marine insurances of this country were carried abroad, and effected at Amsterdam, Bremen, and Hamburg, the Government took alarm and met the remonstrances of the merchants of this country by a reduction of the duty. He was aware of the difficulty in which the Chancellor of the Exchequer was placed, but he could not but urge tills subject on his consideration.


said, that the statement of the Chancellor of the Exchequer recommended itself to the Committee, not only by the general soundness of the principles which it enunciated, but by the clearness and directness with which they were enunciated. The position of the right hon. Gentleman was no doubt a difficult one. He had a deficiency of £4,000,000 to meet, and if he had considered the feeling against indirect taxation which prevailed in some parts of the House, and the objection to direct taxation which existed in others, this difficulty would have been an impossibility. On the whole, however, he did not think the Committee would quarrel with the temporary arrangement proposed. There was one point in the speech of the right hon. Gentleman to which he would take exception. As regarded current expenditure, and the necessity for meeting it by annual taxation, he thought there could be no difference of opinion. The military expenditure of the year was forced by public opinion upon the Government. There, was a prevailing sense of insecurity, and of the necessity of providing for the safety of the country, which it was not possible for the Government to ignore. It was to the credit of the late Government that they had recognized that feeling, and it was still more to their credit that they had vigorously and promptly applied a remedy to the difficulty. The late Government had thus thrown a responsibility upon the present Ministers which the latter to-night showed no disposition to evade. What he wished to point out was this—all Governments concurred in the opinion that for ordinary expenditure ordinary income should he made to suffice, and that the resorting to loans for the purposes of peace finance was a false and objectionable principle. But the question was, whether the present expenditure was really a peace expenditure, and on this point there appeared an inconsistency in the speech of the right hon. Gentleman, for when speaking of the expenditure of the present year he told the Committee it was altogether exceptional, and that it was not calculated as for a time of peace, but under circumstances of a warlike character; and yet when he came to state his objections to a loan, he stated that the expenditure ought to be met by ordinary income, and by means such as were applicable to times of peace. There ought surely to be a distinct understanding whether this was a year of peace expenditure or not. The Chancellor of the Exchequer very properly Paid that you might have a war expenditure, although in reality it was a year of peace. Well, was not that the case this year? The Chancellor of the Exchequer told them that the increased expenditure was in reality for the augmentation of our defences. Then the question arose, were they to meet that expenditure in a hearty and effectual manner? For what was the object of our defences? It was to put the country in a state of security against attack. But did we achieve that object? We did not pretend to do so, nor anything like it. We spread the expenditure over so long a series of years, and added to our defences by instalments so slow and so gradual that while the real increase in our security was altogether imperceptible, the increase in our taxation was very onerous. For instance, the Estimates for the fortifications at Dovor were very large, but the Vote that had recently been asked from the House was no more than a seventh part of those Estimates. The same was the ease with our other principal fortifications, which were not to be completed for twenty years. What was the use of such expenditure? Would it secure us from attack? There was no disguising it—we were afraid of an attack from the other side of the Channel. But if such an attack was really to be apprehended, could we suppose that our Ally on the other side of the Channel, who was the cause of all this uneasiness and expense to us, would wait fifteen or twenty years, till we had completed our defences? Was that the way in which our Ally did his own business? He achieved his works at once, and so accelerated his works of defence lately in France that in two years he added more to his own power and security than at the present rate we should accomplish in fifty years for our own security. He did not do what the Committee was asked to do that night; he did not irritate his people by a maximum of taxation and a minimum of progress in the work. We were in this position—either there was no danger of attack from without, in which case we were doing a great deal too much; or there was a real danger, in which case we were doing a great deal too little. Everybody admitted that if France attacked us, she would attack us suddenly. In our present position we should be liable in the outset, in case of a sudden attack, to great disaster. Everybody said that this country ought to be adequately defended. But in order to put our home defences in in state of perfect efficiency and security, a sum of at least £10,000,000 would be required. In the present state of Europe, it was manifestly absurd to spread our works of defence over years, and it was unreasonable to expect that these works of defence should he paid for out of the ordinary annual income. There never was a period when a large immediate outlay was more required than at present for the protection of this country. He admitted that the Chancellor of the Exchequer had made a clear statement, but he protested against the mixed system of expenditure, neither a peace nor a war expenditure, which the Committee had been asked to sanction. He (Mr. Horsman) felt this so strongly that he had been disposed not to let another year pass without submitting a proposition to the House on the subject. So far as the present temporary Budget of the right hon. Gentleman was concerned, he was anxious to do everything to facilitate its progress, but he should be disposed on an early day to test the opinion of the House as to whether the present system of expenditure, which was a war expenditure, was to go on year after year, defrayed out of annual income, and the completion of the object sought to be obtained, spread over a series of years; so that when the day of disaster, which every dispassionately observing man was predicting, arrived, it should not be in the power of any Minister to say that it was the fault of Parliament, but that it should be seen that the fault lay with those who did not discharge their duty in foreseeing and providing against the calamity which menaced the country.


said, there was nothing so injurious to trade as financial tampering with the great necessaries of life, and he was glad that the right hon. Gentleman had looked more to direct than to indirect taxation in his financial arrangements. The only objection he had to the plan of the right hon. Gentleman was the mode in which the additional 4d. on the income tax was imposed, which he thought ought to have been done in a more equal form.


said, that they had to meet an expenditure which was neither a war nor a, peace expenditure, and it was desirable that it should not be met in the manner in which people on the Continent did—that is, to go into the market and borrow any money when extraordinary expenditure was incurred. It was a feature in our system of government that we looked difficulties in the face, and resorted mainly to taxation to meet our expenditure. It was not possible for a Chancellor of the Exchequer to have brought forward a budget more clear and straightforward, or one more likely to be popular, with one exception, and that was with regard to the manner in which the imposition of the 4d. addition to the income tax was arranged, which he thought could be simplified by dividing it more equitably.


said, he regretted that while the facility of bonded warehouses war, furnished to a number of small places where the revenue levied was very inconsiderable, the same kind of facility was not granted to other places of far greater importance in the commercial world, and for the purposes of revenue.


said, that representing as he did a great commercial constituency, he must express his hearty approval of the statement of the light hon. Gentleman. He would, however, urge on the right hon. Gentleman the propriety of not making us pay this amount of income tax all at once. He would also ask him to bestow his attention, during the recess, upon a further revision of the tariff, A statement of the net annual produce of the customs of the United Kingdom showed that out of the £23,000,000 raised in that way, no more than £7,000 was contributed by sixty-seven different articles, some of which were of the most insignificant and contemptible character, and some paying no more than £1 per annum. The right hon. Gentleman would render a great service to the commercial world if he would strike those petty and odious duties out of the tariff, and the mere reduction of the expenses of the Custom House would repay the trifling difference in the receipts.


said, he thought it a hardship that the income tax should be of the same amount upon commercial men or tradesmen and upon the owners of property. He would also suggest to the right hon. Gentleman that consistently with his own views he might do something to remove an anomaly and inconsistency from the Statute-book—he alluded to the probate duty, which, although it commenced at a low sum and went on by successive steps, when it got to a million went no further, If a man died worth £100 it was taxed, but if he left millions, the second million did not pay any probate duty. Although such cases did not often occur, still we had lately heard of persons dying who were said to have been worth four or five millions, in which instances the first million was taxed, and the rest of the property altogether escaped. Now could not this be altered with benefit to the revenue of the country, and in a spirit of justice to the poorer classes more especially?


said, he was very much gratified to hear the Chancellor of the Exchequer enunciate the principle that "we should pay our way as we go." Whether with peace or war establishments, nothing was so conducive to economy. He and his constituents, and, indeed the whole manufacturing and working classes of Ireland, approved of direct as contradistinguished from indirect taxation.


said, he did not wish the income tax to be removed altogether, as he thought it preferable to direct taxation. Nor did he make any complaint with regard to the proposed alteration as to the collection of the malt tax, but he thought objections would be urged on behalf of small malsters or malsters of inferior barley. Thirteen months' credit was given to the hop-growers, and often six and twelve months in addition. He supposed the answer he should receive would be that they could not pay at the end of thirteen months, but might not the extraordinary credit which was sometimes given be one cause?


said, that his first duty was to thank the Committee for the general spirit of kindness and the favourable impressions with which his proposals had been received. Nothing could be more gratifying, and for his part it would be exceedingly agreeable to meet any wish which was expressed by any number of Gentlemen in that House. With respect to the question of the payment of the 4d., he hoped hon. Members would use a great deal of caution before they committed themselves, as the real question came to this, whether they should so raise the money within the year or not. He would only notice one or two points of detail. With regard to the hop duties, it would be inopportune to meddle with it at that moment, as the question of the credit to be allowed was not of any financial importance. The right hon. Gentleman (Mr. Horsman) had entered upon questions of great importance, which could hardly be discussed at that moment, and would be more appropriately brought forward in Committee of Supply than in Committee of Ways and Means; but he (the Chancellor of the Exchequer) entirely agreed that it was a bad and improvident system to distribute charges for permanent works over a great number of years. He would remind the House, as the hon. Member for Devonport must remember, that the first act of the Government which came into office in 1853, was to make the Votes towards the erection of the new Houses of Parliament as large as possible, in order to accelerate the work, He would not enter largely into the subject of bonded warehouses, which had been raised by the hon. Member for Sheffield (Mr. Hadfield). It was a subject which had quite a literature and history of its own, and which would afford matter for many nights' dis- cussion. The Government had always felt it to be desirable to extend such privileges and facilities to consumers, whenever it could be done with safety to the revenue. As for the tax on fire insurance he wished it were in his power to entertain any idea so agreeable as that of a reduction of the fire insurance duty, but it was absolutely requisite as a preliminary to any such reduction that there should be a fund in hand with which to deal; then indeed, there were many beneficial changes and great reforms in our commercial and fiscal system which might be proceeded with, so as to remove the most serious blots from our Statute-book. The hon. Member for the City of London (Mr. Crawford) had directed his attention to the desirableness of striking out some of the minor articles in the tariff. Three times in his public life, namely, in 1842, in 1845, and 1853, he (Mr. Gladstone) had attempted to deal with that subject, and he could assure the hon. Member that he stood in need of no spurring to make him resume that course; but some margin was requisite oven for that. The hon. Member for Stamford (Sir Stafford Northcote) had referred to the state of the law with regard to the tea and sugar duties. He was right in saying that they expired altogether on the 1st of April next. Of course the commercial world understood that this was only a legal expiration, and that a considerable duty must continue to be levied on tea and sugar after that date. He felt it was extremely embarrassing that the duties should expire at that time, and he did not know whether it would be more convenient to the commercial world to proceed now to make a law on the subject, when they could not tell exactly what the necessities of the next year would be, or to wait until February next. He wished to be guided by the feeling of that intelligent class of persons who were directly interested in the matter, and he would pursue the course most likely to avoid causing any disturbance to their important operations. He would now move that the Chairman report progress and ask leave to sit again on Thursday.


said, he wished to say a word with regard to the class to which he belonged in relation to the injustice of the income tax. He would take the case of a man with £1,000 a year from land, and that of a man with £1,000 a year from professional exertions, and both of them at the age of forty. The time came —and he spoke feelingly on that subject—when, perhaps, the professional man was struck with paralysis. There was an end put at once to this man's income, but the Chancellor of the Exchequer taxed them both alike. He (Mr. Roebuck) was quite prepared to spare the working classes; but among the working classes was the very one to which he belonged. The professional man was well educated and sensitive; he contributed largely to the comfort, the pleasure, and the benefit of mankind. All the good that had resulted to the world had resulted from that class of men, but still there was not much consideration shown for them. To call on a man who derived an income solely from his brain to pay at the same rate as one whose income resulted from land was to inflict a gross injustice on the man who lived by his brain; and the Chancellor of the Exchequer was guilty of cowardice in not daring to do the professional class justice in that respect.

House resumed.

Resolution to be reported To-morrow.