SECOND READING.

HC Deb 12 March 1860 vol 157 cc354-436

Order for Second Reading read.

Motion made and Question proposed, "That the Bill be new read a second time."

SIR WILLIAM MILES

said, he rose to oppose the Motion, and never had he addressed the House more strongly impressed with the justice of his cause than at that moment. He might, in the first place, be permitted to remind the House of the difference between his Amendment, as it first appeared, and as it then stood. When he intended to oppose the Resolutions in Committee, he had given notice that he should move the rejection of the 16th Resolution; and also that, as regarded the 17th Resolution, the word "ninepence" should be inserted in lieu of "tenpence." He thus intended to discuss the two questions of the Repeal of the Paper Duties, and the imposition of the extra penny Income Tax together, and as a division of the Budget perfectly distinct. He had, however, been obliged to alter that intention, and to urge his opposition to the proposals of the Government by a specific Motion, with which he should conclude his observations. He had no objection to the repeal of the paper duties in the abstract. He was a Member of the last Parliament, and he considered himself a party to the Resolution then come to, that these duties were not to be considered as a permanent source of income. Had the tea and sugar duties been removed, and had there been a surplus in the Exchequer, he would have been among the first to consent to the repeal; but at a season when they were labouring under a deficit, it was not the time to repeal a tax which, according to the best information he could procure in the absence of a return for which he had moved, produced a revenue of no less than £1,200,000 yearly. He had listened with the greatest admiration to the speech of his right hon. Friend, the Chancellor of the Exchequer, on the introduction of the Budget, and to his lucid arrangement of the subject with which he was dealing. His statement was divided into three parts. In the first of these his right hon. Friend gave the income and expenditure of the last year, and the estimated income and expenditure of the coming year; in the second he stated what were the intentions of the Government with respect to the remissions of Customs' duties, and more especially the remissions in connection with the French Treaty, while he showed at the same time how he intended to meet the anticipated losses of revenue from those changes; and, in the third part, the right hon. Gentleman confined himself to his proposal to repeal the paper duty, and to add another penny in the pound to the income tax. Under these circumstances it would be impossible for him (Sir W. Miles) to discuss the question of the repeal of the paper duty, without at the same time adverting to the incidence of the income tax. In fact, the repeal of the paper duty and the imposition of a tenpenny income tax went side by side. If the duty was abolished, the people must pay a tenpenny income tax. If it was retained they would pay only 9d. If things were allowed to remain as they were with respect to the paper duties, and if the income tax were continued at 9d., the right hon. Gentleman would not lose more than £30,000 of his estimated surplus. Deducting the war duties, the income for the year would be £58,592,000. But, adding to that the renewed duties on tea and sugar (£2,100,000), the malt and hop credits (£1,400,000), and the income tax at 10d. for three-quarters of a year (£8,472,000), the grand total for the year would be £70,504,000. The estimated expenditure being £70,100,000, that would leave a surplus of £464,000. If, however, they took the income tax at 9d., that would give only £7,237,350, under the head of income tax; but, on the other hand, they would have to add to the grand total £1,200,000 from the paper duty. In that way the surplus would be reduced, but reduced only from £464,000 to £429,350. At the same time he had been informed— not upon official authority, for none such had been furnished—but on the best authority to which he had access, that the revenue from the paper duty was increasing, and that an additional sum of £300,000 would in all probability have been realized from that source in the course of the coming year. He would proceed to lay before the House a brief account of the origin and the growth of that duty. It had first been imposed in the tenth year of the reign of Queen Anne, and it had subsequently gone through a number of emendations, which he need not then bring under the notice of the House. He would therefore pass on to the year 1835, when a Commission, of which Sir Henry Parnell was the head, was appointed to inquire into that and other excise duties. A discriminating duty was at that time imposed upon paper, consisting of 3d. per pound on the higher class, and 1½d. per pound on the lower descriptions of the article; and the Commissioners recommended that that practice should be discontinued, and that one uniform duty should be levied upon all kinds of paper. The consequence was, that in the following year—the year 1836—the Chancellor of the Exchequer of that day brought in a Bill, by which it was provided that the charge should stand at the uniform rate of 1½d. per pound. That measure was carried, and it put an end to much fraud. The duty had, up to that period, amounted to about £700,000 a year, and it was some little time before the revenue recovered from that change. But it did so in the course of a few years, for in the year 1840 it amounted to £800,000; and since that time it had gone on steadily increasing, with one single exception, from year to year. In the year 1855 the yield to the revenue from that source amounted to £1,094,146; in the year 1856 it amounted to £1,014,945—that being the only year in which it had decreased; and that result having, as he had been informed, been attributable to a diminution in the supply of the raw material; in the year 1857 it again progressed to £1,190,822; in the year 1858 it amounted to £1,242,732; and in the year 1859 to £1,281,023. So much for the elasticity of the tax. And now let him say a few words with respect to its nature. It was peculiar in this respect, that it entailed no interference with the manufacturer of the article on which it was levied; for paper did not come under any charge until it was actually made, and notice given to the Excise of the fact; and did not, therefore, necessitate that obstructive vigilance on the part of the Excise officers which was required in the case of malt, spirits, and other productions. Now, he was far from saying that the paper duty should be permanent; but, in the present state of our finances, when we were literally living from hand to mouth, and forestalling all our revenue, it would be a most imprudent thing to immediately abolish so fruitful a tax. The question might be asked, "What is paper?" [Hear, hear! from the CHANCELLOR of the EXCHEQUER.] He was perfectly astonished to hear that cheer from the Treasury bench after the decision which had been given by the Lord Chief Baron last year, because nothing could be more distinct than the definition given in that judgment. The question, if he recollected rightly, was, whether what was called false parchment was to be considered really paper or parchment. The fictitious parchment was made of animal fibre, and it was endeavoured to be passed off not as paper but as parchment. Consequently, there was a surcharge by the Excise. That was appealed from, and the whole matter came before the Court of Exchequer, when the Lord Chief Baron decided that anything made in sheets of fibrous material, whether animal or vegetable, and used for the purpose for which paper was generally used, came under the denomination of paper. If that were the case no difficulty could arise, although it was represented that a difficulty had arisen. He would next refer to the Reports of the Commissioners of Inland Revenue, in reference to the operation of the Excise laws upon that branch of industry; and he believed the House would unite with him in expressing a hope that they might never again have laid before them documents of so strangely contradictory a character. Nay more, the last Report had been placed upon the table to back up the opinion of the right hon. Gentleman in debate, but he hoped that such a proceeding would not be made a precedent, and that upon a question actually before the House the Board of Inland Revenue would not again be called upon to give their opinion. The first Report of the Commissioners was dated in 1857, and in it they stated that their regulations had been modified to meet the wishes of the manufacturers, that the duty was charged and collected without any appreciable restriction upon the trade, and that the complaints, at one time so frequent, had entirely ceased. In the Report of 1858 the Commissioners stated that there was scarcely any duty in the collection of which their interference was so little felt. He now came to 1859. It would be in the recollection of the House that in 1858 a Resolution was passed respecting the paper duty, to which Resolution he had already alluded, and the House would remark how different was the tone of the Report of 1859 compared with that of the two preceding Reports. In their Report of the year 1859, the Commissioners declared that "the expectation that the paper duty would be repealed on the first favourable opportunity, had been for many years a source of embarrassment in the collection." A source of embarrassment in the collection! Why, they had themselves stated in the years 1857 and 1858 that it had been very easily collected; but the whole tone of their observations upon the subject had changed after the House of Commons had passed their Resolution with respect to it.

The hon. Member was here interrupted by the Message from the Lords, (see page 354). The Conference having been had and reported, the; hon. Member continued:—

When the House went into Conference, he was calling their attention to the difference between the three Reports of the Commissioners. In 1857 the complaints of the paper-makers had entirely ceased, and in 1858 there was scarcely anything said about the interference, so little was it felt. Then came the last Report, to which he had referred as being an extraordinary Report. In that Report the Commissioners took care to remedy their former error, and drew a comparison to show the competition existing in the manufacture of cardboard, pasteboard, and scaleboard, the pasteboard makers being subject to Excise survey, while the cardboard and scaleboard makers were exempt. Looking to the Act, he thought pasteboard was subject to the duty, but from what had been stated in the House he supposed it was not. There could be no doubt, however, that from 1848 to 1850 there had been no increase in the rivalry, and he could not, therefore, understand why that was put forward as one of the difficulties of the case. He now came to the consideration of the articles used in the manufacture of paper. He quite agreed that everything which had a fibrous texture could be converted into paper. They might make it from papyrus to old junk, filling up the interstices with anything they liked; but the question with the paper manufacturers was, could it be made at a profit? This question had been so much argued that he considered it unnecessary to say more than that it had been proved that good printing paper could only be made out of cotton waste, or old rags. Take The Times, than which nothing could be better. That was made out of the best rags. If was true that other substances might be used; straw might be and had been used; but let them compare one description of paper with the other. Let them take The Standard, the paper of which was made out of rags and straw combined, and compare it with The Times, which was made of the best material, and say which was easiest to be read by old eyes. Undoubtedly paper could be made out of other materials, but none of them could compete with the materials which were now used. There was a description of paper which was under inspection below stairs, made of a fibre—a kind of grass—obtained from Spain and the north coast of Africa. The objection to that, however, was, first of all, that it would not bleach, and next that it would not receive a gloss. For the higher kinds of printing and writing paper such a material was perfectly useless. The Indian material, jute, was very much used for making paper; but it was imported not so much for the purpose of making paper as rope, and a vast quantity of common rope was made out of jute. The residue went to make paper. A pamphlet had been written on this subject by the great publisher, Mr. Bohn. What did he say of jute paper? Why, that it was hard, brittle, easily imbibed wet, and, from; its silicions properties injured the printers' types. It was plain, then, from the failure of the substitutes that they must come back to the substances which had always been used, so that nothing remained but I woollen and cotton rags, linen rags, and the refuse of the cotton and linen manufactures. On this point he would refer to a letter written by a firm of half a century's standing, who were very large paper manufacturers. They wished their names withheld, but he would be happy to show the letter to the Chancellor of the Exchequer. It was to the following effect:— On referring to the Chancellor of the Exchequer's speech on the night the Budget was brought out, it will appear that he has been led to believe that there are hundreds of fibres which can be imported and used for papermaking, and thereby increase the manufacture of paper to an unlimited extent, and that carriages and almost everything else can be made of paper after the repeal of the duty. Now, the best answer to this statement is the fact that, although a large reward was offered some four years back to any one who would produce an article that could be used as a substitute for rags, and although hundreds of different things have been introduced and trials made of them, there are not two of them at this moment in use, neither have they been used beyond the trials made, in consequence of their being quite unfit for the purpose. The expense from the enormous waste in preparing them for paper exceeds in cost the price of the highest rags; and, even if they were less wasteful and more productive, there is another fatal objection to their use —namely, that they will not bleach. The New Zealand flax referred to at the meeting yesterday, and all other articles of that sort, are of more value in this country for other purposes for which inferior hemp is used than for papermaking purposes. These are facts which we, as a firm, can vouch for, after the experience of half a century as paper manufacturers and importers of the raw material for the manufacture of paper. We could not have believed it possible that the Chancellor of the Exchequer could have been so deceived by the representation of a few interested parties, thereby deceiving the public at large, who are led to believe that there are no bounds to the supply of the raw material for papermaking; whereas the supply depends only on the increased population and the prosperity of other manufactures, the waste from the latter contributing largely to the manufacture of paper. The House ought to understand that there were few things of which really good paper could be made, while the capital employed must be very large. He now came to the objections which had been made to the existence of the tax. The tax on paper was said to be detrimental to the diffusion of knowledge. He had endeavoured to make himself master of this part of the subject as much as possible, and his inquiries had satisfied him that little or no decrease would take place in the price of the cheaper productions of literature read by the multitude in consequence of the paper duty being removed. Take the hundreds of penny papers now existing: did any one suppose that they would get them for a halfpenny when the tax was removed? Did they suppose that The Standard, The Star, or The Telegraph would sell for less? They must then, limit their inquiries to what would be saved on books. No doubt it was possible that the paper manufacturer and the publisher might be benefited to the extent of the removal of the duty. Mr. Bohn, the publisher, had given an exact statement of the sum which would be saved by the repeal on several standard works, and he was one of the largest exporters of books in the kingdom. He took four books, the Annual Register, Lord Macaulay's History of England, Colenso's Arithmetic, and the Cornhill Magazine— all being books having an extensive circulation, and books which by no repeal of the duty can be affected for the better. Mr. Bohn showed how the price of these books was affected by the duty. The Annual Register cost 18s.; the amount of duty on it would be 3d.; on the two last volumes of Macaulay's History, of which the price was 36s., the duty was 6d.; on Colenso's Arithmetic, price 4s. 6d., the duty was one halfpenny; on the Cornhill Magazine, price Is., also one halfpenny. He would ask if the consumers of knowledge would be greatly benefited by the total abolition of a tax that formed only so small a fraction of the price of a book? The vast consumers of paper might be benefited to the amount of the duty, but the purchasers of books, the consumers of literature, would have no advantage. It should be recollected, too, that many of the common schools throughout the country were supplied with books by the National School Society and the British and Foreign School Society at less than cost price; when the duty on a standard school-book was only a halfpenny, how could the middle-class schools derive any benefit from its repeal? It was said the duty was an impediment to the manufacture of paper; the fact was, both the quantity manufactured and the quantity exported had increased. The only large export of books was to Hamburg and America; all the rest of the trade was with our own colonies. Now, what had been the export of paper from this country? In 1857 the quantity of paper charged with duty was 191,721,6201bs., of which 16,031,063lbs. were exported to foreign countries. In 1858 the quantity that came to charge was 192,847,825lbs., of this 16,548,828lbs. were exported. In 1859 the quantity charged with duty was 217,827,1971bs., of which 20,067,749lbs. were exported. Thus, comparing the year 1859 with the year preceding, the quantity of paper manufactured had increased by 24,979,3721bs., and the quantity exported by 3,518,92llbs. The home consumption and the foreign export had both immensely increased; it could not therefore be said that the duty impeded either the manufacture or commerce, which was the great objection made to the tax. It had been said by the Chancellor of the Exchequer that, wherever there were streams of clear and rippling water, cheap labour, and healthy air, there the manufacturer of paper would settle. He lived in a county answering to this pleasant description, but he had seen both paper and cloth mills in existence which were now in ruins. Except in a few places in Somersetshire, cloth mills no longer existed; the manufacture had gone to the north. The paper manufacture had also left those villages, because, being established by men with insufficient capital, they had become bankrupt, or been obliged to shut up their mills, as unprofitable. The larger manufacturers, with greater capital, had been able to purchase the highly wrought machinery now used, and these men monopolized the trade. It had been stated that of 525 paper mills existing twenty years ago, there were now only 393. But by an old return he found that in 1813, before the great increase in the manufacture had taken place, there were in England alone 700 mills, and seventy or eighty in Scotland. The comparison might as well have been taken back to the ancient time, when all the labour was manual. With respect to the cheap labour market, he did not think that the propo- sition of the Chancellor of the Exchequer to bring back the halcyon days of paper-makers would be much relished by the agricultural interest, because farmers at present had the greatest difficulty in getting sufficient labour for their farms. As for giving more employment to labourers, he had some difficulty now in getting labourers on his own estate, and were it not for the machinery now used half his liar-vest would be spoiled; so that he did not thank the right hon. Gentleman for this boon. Immediately after the Chancellor of the Exchequer had made his financial statement, The Times, which was naturally anxious for a repeal of the paper duty, as its proprietors paid £40,000 a year for that duty, but whose articles upon the subject had been exceedingly fair, that journal made some remarks, in the course of which it said— Alas! no village mills will ever again arise. These were all destroyed, not by the paper duty, but by Fourdrinier's paper-making machine, which rendered paper-making, like cotton-spinning, an affair of capital and machinery and great establishments. When handloom weaving again becomes a flourishing trade, and the distaff and spindle are seen in every cottage, then we shall have again the village paper mill, and not before. He (Sir W. Miles) had that morning had a conversation with Mr. Potter and his managing partner, gentlemen well known in Lancashire, and by them he was informed that the expense of erecting a paper mill, with all the newest appliances in machinery, would be from £4,000 to £5,000 if water power were used, and from £10,000 to £11,000 if steam power were used. That was, he thought, a sufficient answer for those who were of opinion that small paper mills could exist in the present day. He was informed by the same gentlemen to whom he had just referred that their outlay for engineers and smiths for attending to the machinery alone reached £1,200 per annum. He had voted against the paper duty as a permanent source of revenue, but still he must consider the circumstances under which the Chancellor of the Exchequer proposed to meet the deficit of £1,200,000 that would be caused by the abolition of the duty. He hoped he had misunderstood the right hon. Gentleman, but he thought he had declared that the income tax must be regarded as a permanent tax. If that was the opinion of the Government, now was the time to proclaim it distinctly, instead of asking the House to vote the tax from year to year at fluctuating amounts.

In former times the income tax was not resorted to, except in great emergencies. Until 1842 it was always considered to be a war tax. In that year the emergency was great, and when Sir Robert Peel introduced his Bill for the imposition of the income tax he did so, not in order to enable him to carry out a revision of the Commercial Code, but to supply a deficit that had been growing up for several years, and which would have reached to upwards of £10,000,000 in 1843 if that tax had not been imposed. That was the prime reason for its imposition, the improvement of the Commercial Code was merely subsidiary to the other. It was granted for three years, afterwards renewed, and then in 1852 came the memorable Budget of the right hon. Gentleman the Chancellor of the Exchequer, who after his prophecies of the extinction of the tax in the present year ought to be the last man to propose any augmentation of it. He would, however, call the attention of the House to the class of persons upon whom the tax pressed with especial severity—namely, those who paid upon incomes between £100 and £150. He found that the total amount assessed under Schedule D, in 1855, was £819,754; in 1856, £1,065,705; and in 1857, £1,097,205; but those who were assessed for incomes not exceeding £150 were in the three years he had mentioned respectively £108,769, £239,953, and £266,937, so that in the last year one-fourth of the whole amount of assessments was upon income not exceeding £150 per annum. In 1857 out of 275,469 persons assessed under Schedule D no less than 150,200 were assessed for less than £150 a year, while in 1858 the number was 155,166 out of 274,205. Under Schedule E the number assessed under £150 was 52,943 out of a total of 87,493, and in 1858 the figures were 57,665 out of a total of 91,780. Taking the classes D and E together, it 1857 there were 203,143 persons assessed under £150; and in 1858, 212,831 under £150. He would make intercession on behalf of those persons, and urge the Chancellor of the Exchequer to consider the course he was now pursuing. Was this the time to sweep away the paper duty, and to replace the loss of revenue by increasing the income tax? The class of persons to whom he was referring found it hard enough, God knew, to live respectably. They were among the most useful in the community; the greatest confidence was placed in many of them; they had, generally speaking, wives and families dependent upon them; and, he asked, how were they to be benefited by the admission of French wines and French silks? To many of them it was a constant source of anxiety how to square their daily expenditure with their daily income, and every farthing taken from them in the shape of taxation was therefore a subject of disquiet. Besides, what did the Commissioners of Inland Revenue say in their Report for 1858? They said— It would be almost impossible to convey to any person unacquainted with the practical working of the income tax a notion of the labour which it entails upon this office, of the great variety and complexity of the questions daily brought before us; and of the painful appeals which are made to our compassion and forbearance. To those who are aware of the numerous and troublesome inquiries necessary in each case of claim for exemption or repayment, the fact that upwards of 250,000 such claims are annually disposed of will convey a formidable impression of the difficulties experienced in the collection of this tax. He said, then, the House ought to be careful how they, except in cases of the greatest emergency, placed an additional farthing of income tax on such persons. He could give them no greater proof than he had done of the way in which the income tax operated to the injury and privation of what he might call the upper orders of the poor—for so he might designate persons with incomes of £100 and £150 a year — and he would ask the House to pause before they inflicted additional oppression upon that important class of the community. In conclusion, he would ask leave to place in the hand of the right hon. Gentleman the following Amendment, instead of the one he had put upon the paper:— That, as it appears the repeal of the duty on paper will necessitate the addition of 1d. in the pound to the property and income tax, it is the opinion of this House that such appeal is under such circumstances at the present moment inexpedient.

Amendment proposed, To leave out from the word 'That' to the end of the Question, in order to add the words 'as it appears that the repeal of the Duty on Paper will necessitate the addition of one penny in the pound to the Property and Income Tax, it is the opinion of this House that such repeal is under such circumstances at the present moment inexpedient,'—instead thereof:—

Question proposed, "That the words proposed to be left out stand part of the Question."

MR. BANKS STANHOPE

said, he rose to second the Amendment, and he trusted that the House would permit him to give his reasons for supporting the proposition which was now before them. When about to reduce taxation they must consider whether the loss was to be supplied from any existing fund or by the imposition of another tax; and if they had to impose another tax it would be necessary to look into the character of the new tax, and to apply to it the same scrutiny which had been applied to the tax which, they proposed to repeal. He believed if this course were taken there could be no doubt that the additional penny income tax would be found to be more burdensome than the paper duty. He submitted to the House that it was evident from the financial situation of the country, as described by the Chancellor of the Exchequer the other day, that without any additional income tax he would have been able to make all the customs alterations. The additional penny of income tax was therefore the immediate consequence of the repeal of the paper duty. It was stated, however, that the paper duty had been condemned by a special vote of the House of Commons, and that therefore it was incumbent upon them to repeal it without delay. But they should remember the circumstances of that vote. It was condemned in 1858 by the passing of a Resolution to this effect—"That the maintenance of the Excise duty on paper as a permanent source of revenue was impolitic." Surely, if it were a tax upon knowledge now, if it were odious and untenable and impolitic now, it was equally so in 1858; and why, he asked, if the case were so strong against it, did not the House abolish it at that time, once and for all, instead of passing the general Resolution to which he had just referred? The Chancellor of the Exchequer, in his able speech on introducing the Budget, had explained with much ingenuity why in 1860 he was unable to fulfil his promise given in 1853 of abolishing the income tax; and he said, "You cannot take off the income tax, because those expenses which are more immediately under the control of the House of Commons have been increased by £14,000,000 since 1853, and that is a circumstance which in 1853 I could not calculate upon." But if that argument were good for anything as respected the income tax it was equally good against the removal of that paper duty in 1860, although it had been formally condemned in 1858. There was one objection which had been used for a great many years to the paper duty—that it was a tax on knowledge. Bid they mean to say that the whole amount of the paper duty (£1,200,000) was a tax on knowledge? If so, it was an erroneous opinion. He had inquired of a large manufacturer, and though only an approximate estimate could be formed, he found that of the whole quantity of paper manufactured in this country in the year two-fifths were used for printing purposes of every description, inclusive of newspapers and periodicals, and one-fifth for writing, while the remaining two-fifths were used for packing and the general objects of trade. Now, if that were so, what became of the statement which had been paraded for years that the whole of the £1,200,000 was a tax upon knowledge? So far from that being case, of the £1,200,000 to be remitted this year, only £400,000 would be upon sources which contributed to knowledge, whilst £600,000 had no connection with printing, knowledge, or education. Mr. Bohn had stated, over and over again, that the remission of the paper duty would make no appreciable difference in the price of books, and Mr. M'Culloch, who was often quoted on the other side of the House, said, The abolition of the duty on paper would not I make any difference in the price of books, newspapers, and other periodicals. The duty on a copy of a double sheet of The Times is about a farthing. On a number of The Edinburgh or Quarterly Review, which sold at 6s., it was twopence; and on Macaulay's History of England, which sold at 32s., it was only &d. It is idle, then, to pretend that the existing duty on paper is any obstacle to the circulation of literature, or that books would be cheaper if the duty were abolished. It is customary, indeed, for those who are in favour of the abolition of the duty to call it in the cant of the day a tax on knowledge, but the larger portion by far of the paper which pays duty is neither used for books nor newspapers, but is used for the humbler purposes of wrapping up parcels. That being the case, he (Mr. B. Stanhope) could not understand how it could with justice be argued that the repeal of the duty would tend to the spread of literature among the lower classes. If they took off the tax let them do it upon fair grounds, and not say it was to spread education among the working classes. The paper duty might be objectionable to the trade, but it was not a tax upon knowledge. Another objection which was made to the paper duty was, that it was untenable. He believed that if they were to ask the same question of the Commissioners of In land Revenue concerning any other tax, the Commissioners would say that if, too, was untenable. He believed that maltsters were much more incovenienced by the excise than the manufacturers of paper. Another objection was, that it so interfered with freedom in the manufacture of the article as to prevent its being made of several materials which were not now employed for the purpose; but in opposition to that statement he might quote from the Report of the Inland Revenue Commission of 1858 the opinion of Mr. Phillips, of the Laboratory Department, who stated that the regulations under which an Excise duty was charged on paper did not in the slightest degree preclude the introduction of new material or interfere with the manufacturer in the alteration or improvement of his processes, as paper, unlike all other excisable articles, was perfectly free from fiscal interference during its manufacture, and it was only when the article was finished and ready for the market that an account was taken of it and the duty charged. They had formerly an Excise duty on glass, which, by increasing the price of the article, to a great extent prevented the lower classes from making use of it, thereby acting most prejudicially to the public health, while it caused such an interference during the process of manufacture that it was impossible the English maker could compete with the foreigner. So also with regard to soap—a very useful and necessary article, which should be used much more extensively than it was at present. The Excise on soap had not merely the effect of making the article dear, but from the way in which it was levied it prevented substances being used to make it sufficiently good to compete with the foreign manufacture. The Excise duty on malt was still more odious. Those who had read a series of papers which appeared in Blackwood's Magazine, written by Mr. Johnston, relating to the different articles of food and drink, would not fail to remember the details which were given of the impurities and objectionable substances which were introduced in the manufacture of beer; and he therefore said the malt-tax really did act most injuriously both on the morals and health of the people. He thought, then, that he had answered the three points for the repeal of the duty, that it had been condemned by Parliament, that it was untenable, and that it was an odious tax. If he might be permitted, he would now refer to the income tax; but before doing so he would offer one or two observations on the statement made the other day by the Chancellor of the Exchequer as to the great increase of profits and rental of land assessed under schedule B to the income tax. The right hon. Gentleman said that while there had been a small increase in schedules A and D from 1843 to 1858, in schedule B, which represented the profits of farmers, there had been an increase of 19 per cent. Now, he had gone into the figures, and was prepared to maintain that the calculations of the right hon. Gentlemen were totally erroneous. On what ground the right hon. Gentleman had based his statement it was impossible to find out. There was no printed paper which furnished the data or gave any return at all like his calculations. So far as he could ascertain, the Chancellor of the Exchequer must have founded in the one instance on the net assessment in schedule B, and in the other on the gross, the same returns being represented very high in the gross, and ludicrously small in the net produce. He had inquired of the Inland Revenue authorities how the apparent discrepancy could be explained, and he found that the net assessment under schedule B indicated half the net rentals in England over £200 per annum, the deduction of one-eighth and exemptions having been previously allowed. The net assessment under schedule B was the amount on which the income tax was charged to duty. The gross assessment under schedule B represented the actual amount of rental of land in England, upon a portion of which above £200 per annum the occupier paid income tax. This in no way indicated the profits of tenants. Now, he could prove three things — first, that schedule B neither by net nor by gross assessment indicated the slightest increase; secondly, that the increase in the income tax received was attributable solely to an increased area down to incomes of £100; and thirdly, that landed property had not increased in annual value from 1843 to 1858. There were two returns on this subject to which he would for a moment refer. The first was moved for in 1852 by Mr. Miles, the other by Lord Monteagle in 1858–9. The amount of income tax actually received under schedule B in the year ending April 1853, at 7d. in the pound on incomes of £150 was £282,000. In 1854 they made a considerable change. A tax of 7d. was imposed on incomes of from£100 to£150, and an additional tax of 3d. above that amount. In consequence, in 1854 schedule B sprang up at once to £349,000— an increase, not, as the Chancellor of the Exchequer said, of 19 per cent, but of 22 per cent in one year; while in 1858 the amount was £383,000 at 7d. on £150 and 5d. on £100, showing an increase from 1854 to 1858 of only 10 per cent. This increase was due to the tax being extended from farms of £300 a year to farms of £200 a year. Another reason was the tendency to increase the size of farms. When small farms were given up they were united to larger farms, and as the small farms had not been subject to the tax the increase was in that way partly accounted for. From 1843 to 1858, though there had been some considerable variations, there were no material alterations or advancement in the actual rental of land. Still there were variations. Thus in 1843 the gross assessment under schedule B represented a sum of about £41,000,000 a year; in 1849 the rental increased to £42,500,000; in 1852 it had diminished to £41,000,000; and in 1858, on a new assessment, it again went up to£41,700,000 The Chancellor of the Exchequer stated that the return under schedule B indicated the amount of the profits made by the farmers, but really that was a mistaken idea. The return quoted the other night of the gross assessment under schedule B merely showed the amount of the rental of land in England, and the net assessment showed the amount of rental above £200 a year; but it had nothing to do with the profits of the tenant; on the contrary, any inference drawn from the schedules might be exactly opposite to the fact. Thus in the years 1849–51 the gross assessment was £42,500,000, or an increase of four per cent, whereas those years were the most disastrous to the farming interest that had ever been known. They were the years in which the pressure of free trade was most felt by the British farmer, and they were years in which there was not only no profit, but actually a considerable loss. On the other hand, the years 1853–7 were years in which farmers had made great profits, and had considerably retrieved their previous loss; but in those years there was positively a diminution in the assessment of four per cent. The returns were actually less in the years when agriculture was very prosperous than in the years in which it was being ruined. He had already referred to the argument that the paper duty had been condemned by the House of Commons. He maintained that the income tax had been still more emphatically condemned. All that had been done against the paper duty was, the House of Commons had passed an abstract Resolution stating that at some future time it would be well to take it off; but the income tax had been positively repealed. Unless it were re-imposed before the end of this month it would expire; and therefore he maintained that any argument that could be brought against the paper duty on the ground of its censure by the House would apply with treble force to the income tax. But it was said that the paper duty was untenable as a permanent source of revenue. Was income tax tenable? Would those hon. Gentlemen who agreed with the Member for Birmingham say it tenable in its present shape? ["No."] He was sure that he should receive hat answer. But if not tenable in its present shape, in what shape would it be tenable? Those who were in the House in 1853 would not soon forget that marvellous budget speech of the Chancellor of the Exchequer, in which the right hon. Gentleman went at length into the subject, and showed that the moment you attempted to obviate the injustice or to repair the anomalies of the income tax, you began to commit more striking injustice and plunged into still grosser anomalies. The hon. Member for Birmingham had lately proposed his scheme for amending the tax—a scheme remarkably simple, remarkably lucid, and remarkably unsatisfactory. The hon. Gentleman merely proposed to capitalize all property, and to charge it with a general tax of 8s. per £100; but no one that had considered the effects of such a plan could have failed to see that in many cases it would really amount to confiscation. But that was not all. The right hon. Gentleman's (the Chancellor of the Exchequer) speeches in 1853 and 1854 were in fact able historic papers on the value of the income tax as a war impost; and he showed in them that just as we ought always to keep our armouries and arsenals prepared for hostilities, we ought likewise to have our income tax always in reserve. He pointed out the error of Mr. Pitt—whom he professed generally to admire—in not having availed himself of it sooner, a step by which he might have saved £200,000,000. Even in the late war the House had had an illustration of the justice of the right hon. Gentleman's argument. In that war they had had to raise £40,000,000 by loan; but if the income tax had been imposed for the special purpose of carrying on the hostilities, it would have saved £19,000,000 of that loan, while they might have made an arrangement to pay off the remainder by means of a sinking fund. At all events they would have avoided what now appeared to be the inevitable calamity of a deficit, with Exchequer-bonds perpetually floating before their eyes, of which successive Chancellors of the Exchequer were compelled to promise payment, but of which, so far as they were able to judge, there appeared to be very little probability. Ask any one they pleased, and from one and all they would get the same answer. Even professional men, who were to gain so much by the remission of the paper duties, would join with his neighbours in declaring that the income tax was the very worst and the cruelest tax that ever was imposed. The question really before the House was not whether they would repeal the paper duties, but whether the would increase the obnoxious income tax? That was the question which they had really to answer; and on which they would have to explain their answer to their constituents, to whom they had now-a-days to pay almost an annual visit. If the House really represented the views of the community, they would indorse without hesitation the opinion that it was impolitic by taking off a tax that was burdensome at most to but a small portion of the public, to render it inevitably necessary to increase one of the most odious imposts that was ever levied upon the country.

MR. NORRIS

said, the two hon. Gentlemen had spoken of the income tax as having grown to such hateful proportions as to have become offensive to the entire body of the people; and at the same time had treated the paper duty as something so light and airy as to be borne by the public with indifference, if not with complacency and satisfaction. He submitted that neither of these descriptions correctly represented the state of the public opinion as it existed at that moment. No doubt the public were not much in love with either the income tax or the paper duty, but it was a choice between two evils, and he believed that the community would rather accept the Chancellor the Exchequer's Budget as it stood than accompanied by the supplementary budget of the hon. Baronet the Member for East Somerset. It was quite true that if the right hon. Gentleman (Mr. Gladstone) continued to charge the same assessment upon incomes of a precarious as upon those of a fixed character, its unpopularity would in time sweep away before it the reputation which the right hon. Gentleman had so well earned by his financial scheme. But the proposal respecting the income tax he understood to be for one year, and for one year only; and the hon. Baronet, with all his strong objections to the impost, only proposed to abate it by a tithe of its amount. If the hon. Baronet thought that the fact of the income tax having always been a war tax till 1842 was a reason why it should not be continued in time of peace, he (Mr. Norris) had a right to claim all that portion of the hon. Baronet's speech against the paper duty, for it was first imposed in 1711, in order to enable Queen Anne to carry on the war then raging, until she had made a good and lasting peace. With regard to the effect of the paper duty, let him call into court an adverse witness. Mr. Bohn, the publisher, whose name had been so often mentioned in the debate, said,— "The public will naturally inquire why I have troubled myself to advocate the maintenance of a tax which, as one of the large payers of it, ought to be as objectionable to me as to anybody." And he added:— "I shall lose the drawback, which, as a considerable shipper of books, yields me several hundred pounds per annum. At this moment I hold half a million of volumes in stock, which are equitably entitled to drawback, but I have no doubt it will be denied." From this it was plain that if Mr. Bohn retained his half million volumes for sale in this country, in competition with untaxed books, the several hundred pounds a year which he would lose by the repeal of the duty would go into the pockets of the public. The paper duty amounted to a charge of 5 per cent on some of the elementary school-books used by the poor; on many it was 10 per cent; on more, 15; and on most 20 per cent. If then it was only equivalent to 6d. on two of Lord Macaulay's volumes, which cost £1 12s., upon other works that cost 10s. it amounted to no more than three-halfpence, and on others that cost 20s. to no more than 2d., its incidence was most unfair. It was a tax that pressed heavily on the necessary school-books and cheap literature which reached the labouring man and his children, while it let the luxuries of the rich all but entirely escape. The income tax had been spoken of during the debate as though it were an impost which was now to be felt for the first time. But when an income tax of 7d. had been proposed by Sir Robert Peel in 1842, by the noble Lord the Member for London in 1849, and the right hon. Gentleman the Member for Bucks in 1852, the gross expenditure of the country being but £50,000,000, he (Mr. Norris) did not think the hon. Baronet need be surprised, when an enlarged expenditure had to be met, that the tax proposed to be increased was that which had been sanctioned by those three great statesmen in succession. He could not doubt that the country, which had demanded this expenditure, would cheerfully bear an income tax of 10d. in the pound rather than recommend the further and continued imposition of the paper duty. His hon. Friend opposite had spoken of the expenditure having grown to an enormous amount; but however oppressive a tax might be, nothing was more offensive than a tax imposed unequally upon the shoulders of the people. The hon. Gentleman had referred to the definition of the Court of Exchequer, that paper consisted of "a fibrous matter knit together in sheets." But there were thousands of articles manufactured by ingenious people in this country which would come under that definition. He rather thought the clothes he had on might be defined in that way, and by a stretch of the powers of the Excise might be made liable to duty. He ventured to say that there were a number of paper mills producing articles which, in the districts of the country where they were situated, the Excise authorities claimed to be paper, and assessed and charged as such, as to which, in another part of the country, the Excise authorities took a different view altogether; and if his hon. Friend succeeded in his Motion, he must bring in a Bill to define accurately the distinction between what was paper and what was not, and to draw out such a Bill he would need the assistance of the most ingenious people who were engaged in the manufacture of cloth, and of the ablest chemists. The officers of the Inland Revenue had themselves declared that without going into details, it was sufficient to state that the card-makers were exempt from duty, while the pasteboard-makers were subject to it. This distinction was merely nominal. They concluded their Report by saying that they were unable to deny the existence of these evils, or to suggest any remedy except the abolition of the duty complained of. He should like, however, to refer once more to the serious impediments which this tax placed in the way of those benevolent persons who advocated the spread of education among the poorer classes of this country. In 1840 the first sum of money was voted, namely, £10,600, which went by order of the Privy Council in aid of the education of the country; and so popular was the grant that, from time to time up to 1849, in those nine years it had increased to £109,000. Onward it went like a tide, until it reached the amount of £886,000. He had even heard it predicted that it would increase until it reached £3,000,000. But looking at the actual facts, if the Government granted £886,000 last year, the House knew that the proportion of the Government grant to voluntary subscriptions was as two to three. Consequently the public must have contributed voluntarily more than £1,250,000. Adding these two sums together, it followed that more than I £2,000,000 was paid for education during the financial year 1859. It was difficult to ascertain the precise proportion of this large sum which was spent on school books, but the operation of the paper duty must in this way have necessarily circumscribed the usefulness of the benevolent I persons who were engaged in this holy work. In addition to the objections to the tax which were derived from the difficulty of accurately defining what was and what was not paper, there was also the objection that a number of persons were exempted by order of the Commissioners of Inland Revenue. Under all these circumstances he hoped that the House would by a large majority reject the Amendment of the hon. Baronet the Member for East Somerset.

MR. A. MILLS

said, that the question before the House, as he understood it, was not as to the merits or demerits of the Excise duty on paper, but whether they would impose upon the country an income tax of 10d. in the pound in order that they might abolish that duty. He quite agreed with the hon. Gentleman who had just sat down and with the right hon. Gentleman the President of the Board of Trade, that this was a duty which ought at the earliest opportunity, consistent with the exigencies of the public service and the position of the public revenue, to be got rid of. The question was, whether this was such an opportunity. In 1858 the question was argued by the right hon. Baronet the Secretary of State for the Home Department and the noble Lord the Secretary of State for Foreign Affairs, upon such grounds that he had a right to expect they would on the present occasion support the Amendment. On the 21st of June, 1858, when the present President of the Board of Trade proposed a Resolution simply declaring that when the time came at which the finances of the country could afford it the Excise duty on paper ought to be abolished, the noble Lord said:— The House would recollect that last year the then Chancellor of the Exchequer proposed that the income tax should be kept, up at 7d, in the pound, and that instead of 1s. 3d., the duty oil tea should be 1s. 5d., and that there should be a proportionate increase in the duty on sugar. This year they had allowed the income tax to fall from 7d. to 5d. in the pound, but they had kept up the duty on tea at 1s. 5d., and also retained the proportionate increase in the duty on sugar. It was, therefore, almost a matter of good faith, when next there was a reduction in taxation, that the duties on tea and sugar should be reduced, which were, in fact, war duties, and there could be no greater claim for reduction in taxation than in those articles of consumption which entered so largely into the comforts of the people." [3 Hansard, cli. 133.] On the same occasion the right hon. Baronet the Secretary of State for the Home Department expressed himself thus:— They were told that in a particular year the income tax was to be abolished. That announcement was received with approbation by many hon. Members of this House. But it must be remembered that it involved the fact that in three years they would abandon £5,000,000 of taxation. The question then arose under these circumstances, not whether any other tax could be remitted, but whether some new one must not be created. Although he would not say that hon. Members in that House or the Members of a Government were to be bound in 1860 by the reasons they had put forth in 1858, yet it seemed difficult to understand how, after using these arguments, either the noble Lord or the right hon. Baronet could with consistency oppose the Amendment of the hon. Member for East Somersetshire. With regard to their ability to abolish this tax at the present moment, it appeared to him inexplicable how the House of Commons could impose an enormous tax upon the whole body of the people in order to enable the producers of penny newspapers to drive a profitable trade against the natural course of affairs. No doubt the proprietors of those papers would say they were losing money. His reply to this was, that they should not have engaged in a losing trade. The immediate abolition of the excise on paper might be very advantageous to those whose capital was embarked in the manufaucture of that article; but if this advantage was to be purchased by a large increase of war taxes in time of peace, the question really lay between the interest of the whole community, and that of those who were concerned in a particular department of manufacture. It was with the greatest reluctance that he gave any vote which might seem to be in the slightest degree opposed to the present Conservative Government; but the Amendment so approved itself to his judgment, and was so entirely accordant with the past policy of that House and with the general feeling of the country, that he could do no less than give it a cordial support.

MR. BLACK

said, he should support the Motion for the second reading of the Bill, on the ground that it would really be economical to the country to abolish this tax, as the revenue derived from it was collected at great expense. Let hon. Gentlemen consider the course of paper from the time it left the maker till it reached their hands in the shape of a book. The paper-maker, as soon as he had a sufficient quantity of paper, disposed of it to the wholesale stationer. He, of course, had his profit, not only a profit on the material, but a profit on the Excise duty which he had already paid. As the book passed through the hands of the publisher, the wholesale bookseller, and the retail bookseller, each of these persons charged a profit upon the duty paid, and before the book came into the hands of the reader, the tax was doubled or trebled. On one work he published himself, on which the paper duty amounted to between £3,000 and £4,000, he calculated that before it reached the public the purchasers would have to pay £7,000 or £8,000. Surely that was a most uneconomical method of raising a tax of £1,200,000 a year. It was much better to pay an additional penny on the income tax—not that he loved the income tax. He hated it for its unjust and inquisitorial nature, but as the tax was to continue, at any rate the additional penny did not increase its evils; a man who paid income tax on £100, and had three or four children at school, would save it all on school-books. The abolition of the paper duty, therefore, would greatly benefit those who had most reason to complain of the income tax. Great capitalists, indeed, who paid enormous amounts in the shape of income tax, would not be benefited to the same extent, but he looked upon their sufferings with the utmost composure and serenity. He believed that if the paper duty were abolished, there would be an immediate reduction in the price of all articles manufactured from paper. When the duty was reduced from 3d. to 1½d., the manufacturers wanted him to pay the old prices; but he refused to do so, and the consequence was that ultimately every farthing of the reduction was given up. So it would be in the case of total abolition. But that was not all the benefit they would derive from the repeal of the duty. They would get quit of the army of excisemen they were now obliged to keep to watch the paper mills. It had been said that the higher-priced books would not be affected; that might be true; but there was a large class of useful publications on the price of which the reduction of the duty would make a material difference, and as the money must be found for the Exchequer, he was certainly in favour of raising it by an additional penny on the income tax rather than by retaining the paper duty.

MR. MAGUIRE*

Sir, I have listened with the greatest attention to the speeches of the Mover and Seconder of this Amendment; and I must admit, as the result of that attention, that not only are my previous opinions unchanged, but the convictions which I entertained ere I heard those speeches are ten times stronger than they were before. The hon. Baronet, the mover of the Amendment, has favoured the House with an account of the number of mills that existed in England and Scotland in the year 1813, showing that there were then 700 mills in England and 80 in Scotland; and he stated that somewhere about 400 of the mills which then existed had since ceased to exist. Was that fact an argument in favour of the hon. Baronet's proposition? If it proved anything, it proved this—that these 400 mills were crushed under the heavy pressure of Excise restrictions. It was said that those mills were crushed out of existence because the owners had not sufficient capital to work them. But is not that the argument of the monopolist? Is a tax to be maintained which is to serve the rich and crush those of small means?—are men to be excluded from a profitable branch of trade because they are not millionaires? The hon. Member who seconded the Amendment believed he was using an irresistible argument when he said to the advocates of abolition— Do not sail under false colours; it is all very well to pretend that you are urging the abolition of the paper duty for the intellectual improvement of the people, and the more general diffusion of knowledge; but it is well known that two-fifths of the duty is imposed on paper used for the purposes of trade. My answer is, the argument tells quite the other way, and against the Amendment; because those who use this paper—traders, shopkeepers, many of them of small means —are the very persons who would derive the greatest advantage from the abolition of the duty, and who, in obtaining cheaper paper for their business, would have more than an equivalent for the income tax which presses now so heavily upon them. It is the strongest argument to prove that the repeal of this duty would benefit not newspaper proprietors, publishers, and booksellers alone, but that the whole retail trade of the country would gain an advantage from this proposition of the Chancellor of the Exchequer. Now, Sir, I must say it is a disingenuous mode of arguing this question to pretend that it is one between a 10d. income tax and the repeal of the paper duty. Under any circumstances, and even at the worst, it; is a question of a penny additional; but this penny should not be considered as an equivalent for the paper duty, but as the means of enabling the Chancellor of the Exchequer to carry out all kinds of useful reforms in the commercial system of this country, and to institute great fiscal improvements. The hon. Baronet said there were no returns from Ireland as to the number of mills in that country in 1813; but the hon. Baronet had not evidently looked in the right quarter for them. I have here a passage from an article in The Times, which though applied to this country, graphically, if not poetically, describes the state of things in Ireland; and the language is so similar to that used by the Chancellor of the Exchequer, that I do not know but that the right hon. Gentleman has borrowed his thunder from the Thunderer. In concluding a very able article in favour of the repeal of the paper duty, The Times of June 22, 1858, used these words: — Take away the duty, and you open the manu- facture, opening also hundreds of small mills in the quiet valleys, and on the clear streams of the midland and southern counties. One has only to look at one of these ruinous mills, to see the old men who worked in them half their lives and hear their sad story, to feel the excessive hardship of the duty under which these mills were gradually impoverished and crippled, and finally brought to a stand-still, while all other trades have been continually assisted by the Legislature. The hon. Baronet, no doubt, wishes to learn some information with respect to the manufacture of paper in Ireland. I can afford him a little light on that subject. I shall not speak of Ireland generally, nor even of an entire county; I shall confine myself to a mere district of the county of Cork. Within a ten mile radius of the city of Cork there were at one time no less than seven paper mills at work, and that at a much later period than that spoken of by the hon. Baronet with respect to England and Scotland. How many mills are there now? Only one; and the ruined gables and mouldering walls of the others throw their shadows upon as beautiful streams as any that ever flowed through the sweetest valleys of England. And yet, if there is any part of the United Kingdom which was more than another suited for the successful manufacture of paper, it was Ireland; for there were to be found cheap labour, a cheap and abundant—perhaps a too abundant—supply of the raw material, and numberless streams of pure water, now, unhappily, flowing idly to the sea. If the duty be abolished, as I earnestly hope it will, I venture to prophecy that before this day ten years there will be a larger number of new mills started in Ireland than have been extinguished in that country under the crushing oppression of the Excise. Let us consider for a moment how the abolition of the paper duty will affect the trader and shopkeeper, I care not what his particular business, or what his class—let him be grocer, ironmonger, haberdasher in extensive business, or let him be a huckster carrying on a brisk trade in the midst of a poor population. Every person in trade, especially in the retail trade, uses an immense quantity of paper to wrap up articles purchased in his shop, The small shopkeeper who wraps up thousands of articles a week in the cheapest and coarsest paper, upon which the duty is heaviest, will benefit far more than he will have to pay in additional income tax, supposing that 1d. in the pound represents the equivalent to the revenue for the remission of the paper duty. Even the poor shopkeepers in the village must wrap up the smallest article — the half-penny worth of sugar, the pennyworth of tea, the pennyworth of butter, for the breakfast of the labourer— in paper which is taxed to the very highest amount; for it must be remembered that while the perfumed note paper used by the lady of fashion pays the smallest amount of duty—from 5 to 8 per cent— the coarser paper used by shopkeepers pays from 50 to 60, and even 75 per cent. To such a class the Chancellor of the Exchequer proved himself, by the proposal to abolish this onerous tax, not an oppressor, but a benefactor. The tax is also an unfair tax upon the honest manufacturer, because he has to encounter an unfair competitor in the smuggler. Let the manufacturers in England, Ireland, and Scotland be asked what was the most serious cause of embarrassment to their trade; and their answer will be, that the smuggler was their great enemy. The fact is, there is an enormous amount of illicit trade and smuggling going on with reference to this duty, to the detriment of the honest manufacturer and trader. A letter which I will take the liberty of reading will throw some light on the subject. It is written by a friend whom I instructed to make inquiries for me on the subject generally; and it gives the information which he obtained from a gentleman of the highest respectability and greatest intelligence— Mr. Greer, of the Dripsey Mills—and it gives it almost in the words of Mr. Greer himself. The letter says:— In the first place, there is an immense amount of smuggling going on at present, which, apart from all other evils, places the fair trader at a great disadvantage. Mr. Greer pays £10,000 a year duty. The whole duty does not exceed £1,200,000. In that case he should make a hundred and twentieth part of the whole paper of the United Kingdom, which he has very good reason to know he does not. The smuggling takes place chiefly in the inferior descriptions of paper, on which the duty bears the largest proportion to the intrinsic value. The disadvantage to him is therefore the greater. If, for instance, on a coarse paper worth 3d. he pays 1½d. additional, it is quite manifest he is placed at an immense disadvantage to the man who makes it without paying duty. Again, some time since, about the year 1840, the excise added 5 per cent to the duty. This pressed mainly on the manufacturer, as he could not charge so small a sum to consumers. He could not ask for 5 per cent on 1½d., or on ten times 1½d.; while on the whole of the duty (£10,000) which he paid, he was taxed an additional £500 a year—no small burden on his industry. The duty presses heaviest on the lowest descriptions of paper. Fancy paper, on which ladies write perfumed notes, pay but 8 or 10 per cent ad valorem, while a grocer, for wrapping paper, pays 50, 60, or even 75 per cent. The hon. Baronet has evidently adopted the fallacies of Mr. Bohn, who, being one of the great publishers, perhaps loftily disdains the benefit to be derived from a repeal of the duty; and the hon. Baronet argues that because the remission of duty will be of no advantage to such works as Macaulay's History, for which publishers can afford to give several thousands of pounds, therefore it will be of little benefit to the public at large. An humbler man than the hon. Baronet, or it might be than Mr. Bohn, but certainly a more practical man than either, has conclusively answered Mr. Bohn's fallacies; and I shall ask permission of the House to read an extract from the pamphlet of Mr. G. W. Petter, written in reply to Mr. Bohn. I rest upon it as a conclusive refutation of the assertions of the hon. Baronet:— In considering the effect in price, Mr. Bohn ignores the existence of such publications as Cassell's Illustrated Family Paper, published at 1d., and Chambers's Journal, at 1½d., and which are essentially publications for the masses, and rests his argument upon such high class works as Macaulay's History, published at 36s., and upon other works issued respectively at 18s. and 10s. 6d., and finally upon the Cornhill Magazine, published at 1s. He deceives himself by despising the halfpenny saved on the latter, as we shall presently see; but the expensive books are absolutely out of court in the argument before us. Taking, then, the circulation of Cassell's Family Paper at 250,000 weekly, we will assume that it is affected by the difference represented by the smallest coin. Starting with paper at a given price, one farthing per pound gained in 250,000 copies amounts to a gross sum of £15 per week— of itself a handsome profit—but if, on the other hand, only a farthing per pound be added to the price of paper, the profit on the whole vanishes, and a further advance of a farthing would leave an intolerable loss. He (Mr. Maguire) would call the attention of the hon. Baronet and the House to this passage:— Herein lies the secret of the abandonment of many enterprises, the success of which would have been for the advantage of the general public. Demand in any quarter for an increased quantity of paper, under the 'existing monopoly' —that which the House should now put an end to —'is the signal for an advance in the price of all the paper actually supplied, and this acts with the most destructive effect on the very publications which are in most demand.' This is the fact, to which large publishers could bear painful testimony, Mr. Behn, with the notions of a prince of booksellers, looked down with contempt on halfpenny savings, and even the hon. Baronet seemed to deride the advantage of a halfpenny saved in the publication of such a work as the Cornhill Magazine. Now, in all probability, if the duty be taken off, this magazine may not be sold at 11½d. instead of a shilling—nor, indeed, need those who purchase a work of the kind care about the difference. But the public would have the benefit of a still better article; for the saving on the publication of this magazine, on its circulation of 70,000 a month, would be somewhere about £1,800 a year, which would thus enable the publishers to give better prices to writers, artists, and engravers, and thus, if necessary, ensure the greater merit of the magazine. I assert that the repeal of this tax will materially tend to the diffusion of knowledge amongst the masses. You boast of having taken off the duty on glass, and thus given the peasant in his cabin and the mechanic in his humble home larger windows and more abundant light. But is there no other light that is even more precious, which it should be the policy of the Legislature to let in upon the human mind? Knowledge is the light emanating from God, who is the author of all intelligence; and by the diffusion of good and wholesome literature, by which knowledge is best conveyed to the masses, you render the people better citizens, more obedient to the laws, more faithful and loyal subjects, and more determined to stand up for the honour and liberty of their country. But, Sir, I have one source of consolation for the hon. Baronet who on this occasion so worthily represents the agricultural interest, and I say to him there is balm in Gilead—a drop of comfort in the bitter cup he is asked to swallow. This I shall proceed to show him. According to the returns of the flax grown in the United Kingdom, and especially in Ireland, it appears that, the quantity is considerably on the decrease; but I believe that the cultivation of flax will be materially promoted by the proposition of the Chancellor of the Exchequer, as the inferior description, as well as the refuse, can be used, and would be more generally used if the duty were taken off; thus a new field of industry would be opened up, which would principally benefit the agricultural classes. I take the following passage from Mr. Petter's pamphlet, and I commend it to the consideration of the proposer of the Amendment:— The use of flax straw as a staple for paper offers still greater advantages from the fact that this material contains many of the properties of the very fibre from which linen stuff is made, and that its cultivation on the soil of Great Britain and Ireland would open new fields of labour and capital. Up to this time flax has alone been of value to the linen manufacturers, who will buy only of the finest kinds, and then of certain lengths; so that immense quantities are left to waste. Were this material rendered available for the manufacture of paper, by the abolition of the Excise (which is the main hindrance to its commercial success), the cultivator, who has hitherto grown the plant for its seed only, would find a ready market for his straw and refuse, and a great impetus would be given to agricultural industry. This seems to be a most excellent reason why the hon. Baronet, on cooler reflection —and I willingly give him to twelve o'clock to consider—should withdraw his Amendment. If, as the hon. Baronet admits, the produce of the paper mills was greater last year than ever, that is no argument in favour of the tax; it simply proves that there was an increased demand for the article, and in spite of the Excise regulations. In my opinion, there are conclusive reasons why this tax should be abolished. It has been solemnly condemned by this House, and it is high time that the Government should carry out the wishes of the House, and realize the expectations of the country. Would the hon. Baronet, had he succeeded in getting the House to condemn a tax which fettered industry and obstructed trade—would he be satisfied if the Government, whether of the one side or the other, refused to ratify the solemn decision of Parliament by the abolition of the obnoxious tax. And, surely, it is time in 1860 to abolish a tax condemned in 1858. It has been also condemned by the Excise—condemned by the Board of Inland Revenue—by those whose interest ii is rather to maintain than to abolish taxation, inasmuch as it increases their duty, adds to their staff, and, perhaps, establishes a claim to higher salaries. The fact is, the subject is surrounded with the greatest difficulties, which are every moment increasing. It is as hard now to know what paper is as who Junius was. "Who was Junius?" was the literary puzzle, but "What is Paper?" is now the Excise puzzle. Here is duty charged on one article, and not on another, although they are made out of the same raw material, and actually spring from the same root. Then the trade and the country expect that, the tax will now be put an end to. Even the nineteen-twentieths of the trade are in favour of its abolition, notwithstanding that it is certain to bring a new race of competitors into the field. We have heard much of the cheap newspapers in this question, and I shall say one word in allusion to them: Is this House—is this country—ashamed of the cheap newspapers of the day? I ask, are the Gentlemen on the Opposition side of the House ashamed of The Standard? The hon. Gentleman under me (Mr. Roebuck) says, "it cannot be read." My answer is, abolish the duty, and the publisher can afford to give better paper for the money. Then take The Star and The Telegraph, and see what they are. Contrast those papers with the papers in America. How are those papers conducted? Morally and honourably. It is true they are faithful to their friends, but they are also fair to their opponents, and, thank God, there is to be found in their columns none of that shameful and abominable licence which degrades some of the journals at the other side of the Atlantic. Is it not, therefore, of advantage to know that these cheap papers circulate in thirty, and forty, and fifty thousands a day amongst the people, and especially amongst the working classes, seeing that newspaper literature has so large a share in the education of all classes of the inhabitants of this empire? Education does not entirely consist in what is learned at the mother's knee, or in the book at school; it is going on every day of one's life, and principally through the medium of newspapers, even of the cheap newspapers, that are so admirably and so intelligently conducted. It is, therefore, the duty of this House to facilitate the acquisition of knowledge, that which does not debase the mind, but ennobles and dignifies the man. Another argument may be adduced in favour of the repeal of the duty on paper—namely, that it would facilitate the circulation of the Bible. Now, a friend of mine, Mr. James Duffy, of Dublin, published the greater portion of 100,000 Catholic Bibles that were published within a period of ten years, and yet he had not the advantage of the drawback allowed to the publishers of the Protestant version. But when the tax will be abolished, Mr. Duffy will be enabled to publish his Bibles at a cheaper price; and thus the peasant of Connemara or of Cork will become, if not as great a Bible reader as some, no doubt, wish him to be, certainly far more so than those to whom whole cartloads of Bibles are now sent, but by whom they are never, read. Many there are, perhaps, in this House, who only think of sending Bibles to the blacks abroad; but I would ask them to assist my excellent friend, Mr. Duffy, in publishing cheap Bibles for the whites at home. On every ground it is expedient that this tax should be abolished; and I am most anxious to see a fair chance given to Ireland, an opportunity of recovering a fair portion of what, considering all circumstances, may be termed one of her natural branches of industry. It is the bounden duty of Parliament to afford Ireland every opportunity of developing her resources and employing her people; and I hope to see the day when Irish manufacturers, of even moderate capital, will be able, under a free system, to hold their heads safely above the strongest tide of English competition. The hon. Baronet expresses his horror of the income tax. Now, if he will favour me with a stronger term, I will adopt it to express my own feelings; for I loathe and execrate it—but I believe, under existing circumstances, it is a necessary evil, that cannot at present be got rid of. Hating this tax as I do, I am still willing to pay an additional penny in the pound, if by doing so I can thereby open up the sources and lay the foundation of new industry and greater enterprise. Still, Sir, I do say that the Chancellor of the Exchequer should at once deal justly and fairly by the different classes who pay this income tax. It is idle to pretend that it is but a temporay imposition; for I do not fancy that any Gentleman in this House is so Arcadian, or so green, as to believe such a statement. But even supposing it to be a temporary tax, and that it was to exist for one year, or for six months, that is no reason why it should press unequally on different classes—why the trader, whose profits depend altogether upon the fluctuations of business, and the professional man, whose means depend on his physical or mental constitution, should have the same pressure put upon them as upon those who derive certain and fixed income from land or from the funds. The income tax is one of those questions with which the Chancellor of the Exchequer should himself deal boldly and resolutely the moment his Budget is passed, and its benefits are secured to the country; and in doing so, he will bestow a great boon on the industrious classes of the community. I shall vote, Sir, for the second reading of this Bill.

LORD ROBERT CECIL

said, that in the abstract no one wished for the continuance of a tax. A tax was an abominable thing in itself; therefore the question really was not whether they should or I should not repeal a duty. Those who argued the matter merely in that way, did not put the case as it should be stated. What the House had to decide was a question of the balance of taxation—not whether or no there should be a paper tax, but whether or no at this time it was preferable to pay the paper duty or another 1d. of income tax. The right hon. Gentleman the Chancellor of the Exchequer shook his head, and was, no doubt, ready to prove what he said to be a fallacy, but at the present moment the paper duty yielded £ 1,000,000 or £1,200,000 a year, and a 1d. of income tax produced much the same amount. He might say, therefore, that the one counterbalanced the other. It was desirable every tax should be repealed, if possible; but, in spite of the Resolution of the House passed as he thought somewhat unfortunately two years ago, he ventured to think the paper duty was distinguished, in contradistinction to other taxes, by two features which placed it very low down in the eider of those that should be repealed. In the first place, we depended for a large portion of our most valuable raw material on certain foreign Powers, who were deplorably unenlightened in regard to the question of free trade. We got our chief supply from Spain, Portugal, and Italy; and it was possible the present prohibition on the export of rags in France and Hungary would be modified. But all those countries charged very high export duties; and they would tax the paper manufacturer to about the same extent as the present excise duty on paper. The consequence of repealing the duty would be to create an increased demand for paper, and, the cost of the raw material being raised by high export duties, the price of paper would remain as it was. The only difference would be that the £1,100,000 which at present fell into our own Exchequer would be transferred to the Exchequers of various foreign countries. The second peculiarity about the paper duty was, that the supply of raw material for the manufacture of that article was absolutely limited. He was aware that in saying that he trenched on controverted ground, and that for weeks past the newspapers had been filled with pleas, replications, rejoinders, and sub-rejoinders on the subject. If any new material bad been discovered by science in substitution of the present raw material used in the manufacture of paper there would not be any doubt about the fact. The fact that there was any controversy on the point only proved to him that no such discoveries had taken place. The Chancellor of the Exchequer quoted the case of Indiarubber combs as an instance of the improvement of manufactures. But there could be no doubt about the existence of the Indiarubber comb, for you had only to go into a hairdresser's and buy one, and then there was no need of writing to the newspapers to affirm or deny the fact. If in like manner any new stuff had been discovered which could be made into printable paper there would be an end of the controversy. People talked of the discovery of some Spanish fibre, &c., but until paper made of this material was practically employed upon a largo scale, and brought into the market, he had a light to assume that no material had yet been discovered as a substitute for rags in the manufacture of paper. But upon this single fact the whole of the operation of the paper duty abolition depended. If nothing had been substituted for rags there could be no relief from taxation. The paper manufacturer would put into his pocket what the Chancellor of the Exchequer now received for the coffers of the State, while the consumer would pay the same for the printed paper he purchased. That however, was a very unsafe and unwise fiscal measure. There was no single fact upon which any two members of the trade were agreed. A great deal had been said about the duties being a tax on knowledge. No doubt that was a grandiloquent, high-sounding, and sentimental cry. But of the £1,250,000 now raised by the paper duty only two-fifths were paid by the paper on which books and newspapers were printed. That reduced the taxes on knowledge to £500,000. Then, although books of large price and great volume paid a good deal, yet the price of these works was so high that no appreciable relief would be felt by the consumer. They might, therefore, take out of the tax the whole of the sum which these larger works represented. Hon. Members had talked of the hardship of taxing books of education, and what great folly it was to take out of the pocket of the people with one hand what the State put in with the other. This, however, was merely a matter of detail, which might be regulated by exempting from paper duty books which were sanctioned by the Committee of Education in the same way that Bibles were now exempted. Therefore, if they excepted dear books and books of education, the tax upon knowledge limited itself to very cheap books and very cheap newspapers—to books like Cassell's Illustrated Bible, and the penny papers. Now, he was a little inclined to doubt whether the tax upon the penny papers could be said to be, in any proper sense of the word, a tax upon knowledge. Could it be maintained that a person of any education could learn anything worth knowing from a penny paper? It might be said people might learn what had been said in Parliament. Well, would that contribute much to their education? They might read the foreign intelligence, of which many would understand very little, and they might see the opinions of the editor of the paper on a variety of topics. No doubt, all this was interesting to hon. Members of that House, but it did not answer any true idea of education, or carry any real instruction or true training to the mind. It was a prostitution of the word education to talk of this tax upon the penny papers as a tax upon knowledge. Then, again, no one liked to pay odd sums in this country. Booksellers charged 1s. for a book, and if they could not afford to sell it for this sum they charged, not 1s. 3d. or 1s. 4¾d., but 1s. 6d. They would never get him to believe that when the paper duty was taken off he should be asked 11¾d at a railway book-stall for a 1s. novel. Prices for books would remain very much what they were, and the whole profit would go into the hands of the producers. The dogmas of political economy they were told declared that what would benefit the producer would benefit the consumer. But how did it happen, then, that such large sums of money were made in trade? They heard of the large fortunes amassed by men in the work, but that was not the honest interest of money, or a fair profit upon their time or capital. These huge sums were accumulated by accident, by speculation, by remission of taxation, by a rise of price here or a fall of price there. They were sums that ought to have gone into the pockets of the consumer, according to the dogmas of political economy, but had been intercepted half way by the producer. So, also, the very large proportion of the benefit from the abolition of this duty would be intercepted half way by the producer. Then they were told that this tax was a restraint upon industry. The hon. Member for Dungarvan (Mr. Maguire) had spoken of a time when every stream in Ireland had its mill and when rural in- dustry flourished. But was paper-making the only industry that had been driven from the rural districts? The linen manufacture used to flourish where it was now, extinct. Was not the silk trade going northwards? In France was not the silk manufacture betaking itself from the smaller towns and rural districts to the city of Lyons? This was not in consequence of any fiscal duty, but was the operation of the inevitable law that all manufactures were carried on more cheaply where labourers were congregated together. The tendency of all industries was to gather together in the larger centres and to leave the rural districts. The paper manufacture would follow the same law, whether the paper duty was repealed or not. The hon. Member further said there was smuggling in Ireland, and that the profits of the Irish paper manufacture were diminished by the competition of people who evaded the Excise duty. That was probably true, because Ireland was the home of smuggling.

MR. MAGUIRE

observed, that he had not complained of Ireland, but had complained of the whole of the United Kingdom.

LORD ROBERT CECIL

said, he had never doubted the readiness of any Irishman to attack the whole of the United Kingdom; but had the hon. Member never heard of smuggling in the income tax? Had he heard of no unfair returns? Had not the honest trader to contend against those who made false returns? If smuggling and evasion were grounds for the abolition of a tax, there was no tax so exposed to that charge or which ought to be so determinedly swept away as the income tax. The last complaint was that the paper duty was untenable. The hon. Baronet (Sir William Miles) had disposed of the last Report of the Revenue Board, and it would be enough to say of it that it seemed to him like a report made to order. On what ground did they condemn the duty? Not because it was diminishing. If they had said the paper duty was untenable on the same grounds as the wine duties, he should have understood them. The revenue from the wine duties was lessening through the introduction of counterfeits, but the paper duty was increasing. Nor did they say the tax was unjust. They condemned it because they were continually getting cases before them, which they found it difficult conscientiously to resolve. They found it difficult to draw the line with logical accuracy be- tween what ought and what ought not to pay duty, and being unable to make a satisfactory distinction between what was just and unjust, they declared the tax untenable. But surely the paper duty was not the only case in which an arbitrary line had to be drawn somewhere in levying a revenue from the public. They need only turn to the speech of the right hon. Gentleman the Chancellor of the Exchequer himself in a former Session to see that the income tax was more full of these waving lines of justice on the one side, and injustice on the other, than any other tax that was imposed; and if the difficulty of being able to draw a philosophical line of distinction between them was to be taken as a reason for abolishing a tax, then the income tax ought to be repealed to-morrow. It had been argued the other night by the right hon. Gentleman, that at the beginning of the Russian war the House laid down certain plans and principles on which the people of this country were to be taxed, and that the proportions between direct and indirect taxation were then fixed. He (Lord Robert Cecil) denied that any fixed or definite plan was laid down by the House at that time. It was found necessary to raise a largo amount of revenue to maintain the honour and dignity of the country during the war; and for that reason a large amount of direct taxation was imposed. There was then in the House a man—Mr. Joseph Hume—not a Tory, who thought that the higher classes had been unjustly treated, and the lower classes unduly exempted from taxation; and he proposed that the income tax should be levied on incomes of £50 and £60, in order, as he said, that the lower classes might not be encouraged to demand a war, the expenses of which they did not pay. But whether the balance of taxation between the direct and the indirect payers was established in the way stated on the other side or not, the question now was whether the basis on which the Chancellor of the Exchequer proceeded was a fair one. The right hon. Gentleman took the direct payers in one hand and the indirect payers in the other, and balanced them against each other while he made his calculations; but what he asked the right hon. Gentleman to do was to descend from his abstract ideas of direct and indirect taxation—to take the individuals of each class, ascertain what they contributed towards the war, and see whether they each paid a fair proportion of their incomes. In this way they would be able to judge whether they now owed a debt to the class that paid indirect taxation, and whether they were bound to abolish the paper duties. He would take the case of the family of a curate with £200 a year, and of an artizan with £90 a year—the former paying income tax, and the latter indirect taxes only, and ask which of them paid most in proportion to his income towards the support of the Russian war,—the articles paying indirect taxation being tea, sugar, and beer. Now he would suppose that the artizan to whom he referred consumed one pound of tea every week and half a gallon of beer every day. That was certainly a liberal allowance, and with it he would have paid in the shape of war duties, during the last six years, a sum of £8 16s.; but the curate with an income of £200 a year, consuming the same amount of tea and of beer, and paying besides the war income tax, would have contributed to the increased charges of the State during the same period a sum of £36 6s. The annual contribution, of the artizan would thus amount to 4d. in the pound on his income, while that of the curate would amount to 8d. in the pound on his income. There was an entire fallacy in the ordinary mode of dealing with the question of direct and indirect taxation. The proper way was to set the payments made by individuals in one class against the payments made by individuals in the other. The usual plan of estimating the amount paid by each class led to erroneous conclusions, and, moreover, exerted a mischievous influence by setting class against class. If you called upon one man to pay 8d. in the pound towards the support of the State, while another man occupying not a very different station of life was made to pay only 4d., you were committing a great injustice. According to every principle of sound finance all classes ought to pay alike, and if that were so the indirect taxation of the country would be considerably increased and the direct taxation considerably diminished. At present direct taxation pressed so heavily upon the classes with more than £100 a year that they were called upon to contribute out of all proportion towards the burdens of the State. Now, the armaments of the State were not maintained for the benefit of the rich alone. What classes would be most injured if an invasion were to take place, or if the peace of society were seriously menaced by in- ternal convulsion? The man with a large fortune in the funds might go to some safer land where there was no danger of invasion and where the peace of society was never menaced by demagogues. But as to the poor man, trade would be stopped in case of any such disturbance, capital would cease to be invested, there would be no demand for labour, and his only support would thus be destroyed. The poor man, therefore, had the greater interest in maintaining those protective agencies by which the State defended capital and labour, and ought consequently to contribute at least as much towards their support. It was not just to claim the abolition of the paper duty on the ground that it was an indirect tax, and that something was owing by the payers of direct to the payers of indirect taxation. The right hon. Gentleman had taunted his hon. Colleague (Sir Stafford Northcote) with advocating what he called a "stationary finance," but his notion of progress seemed to consist in substituting direct for indirect taxes and in shifting the burdens from the poor to the rich. If such a policy were persisted in it would weaken the stability of the State, and it ought least of all to be pursued just at this moment when they were going to hand over the government of the country to those who were not to pay for it. Such a plan of finance was really a plundering finance; it practically amounted to confiscation; and therefore on higher grounds than those of mere detail he contended that those who paid indirectly towards the support of the State ought not to be relieved by placing a heavier burden on the shoulders of classes who were already overweighted by taxation.

MR. MILNER GIBSON

I think the noble Lord who has just addressed us has travelled somewhat beyond the question immediately before the House. He has descanted upon general theories which I think it is hardly necessary to consider, while we have before us so limited a proposal as that of the hon. Baronet (Sir W. Miles). Before coming to a vote upon the question of the repeal of the paper duty we must take into account the decision already come to by the House in reference to the Budget and the French Treaty. Now I may, I suppose, assume that the House, after full deliberation and after several divisions, has given its assent to the French Treaty. That being so, you have bound yourselves by one of the Articles of that Treaty to admit foreign paper at no higher rate of duty than the Excise which shall be levied on the home manufacture. Protection, therefore, for the home manufacturer is gone, and the question is, whether being offered the total repeal of the duty, you will now insist on retaining the Excise and admit the foreign paper at no higher duty than that imposed on the home manufacturers. Another point to be remembered is, that by a formal vote on the Motion of the hon. Member (Mr. Du Cane) the House has approved the general policy involved in the financial scheme of the Government, the effect of this policy being that, although during the present year it was necessary to provide for a large additional expenditure, nevertheless you would remit a certain portion of indirect taxation for the benefit of trade and industry. ["No!"] I understood the division upon the hon. Member's Motion to be a deliberate acknowledgment that that is to be the financial policy of 1860. My right hon. Friend the Chancellor of the Exchequer, in introducing his financial scheme, announced that the amount of remission which he proposed upon indirect taxes was about £2,200,000, being the sum which would arise from the falling in of the Long Annuities. I take it, therefore, to be the understanding, on both sides of the House, that something like that amount shall be given to the trade and industry of the country. The French Treaty has swallowed up £1,190,000 of that sum. Supplemental reductions of Customs' duty have been made besides, but these have been compensated by new charges, and therefore, in order to carry out the proposed remission of £2,200,000 to the trade and industry of the country, you still have above £1,000,000 to dispose of. Well, then, the question is whether, in fixing upon the paper duties for remission, we have made a judicious selection. It is not a question between the paper duty and income tax, but between that duty and some other branch of indirect taxation. The hon. Baronet gave notice that he would oppose the second reading of the Bill on this subject; but he has now moved a Resolution which, though I have no wish whatever to stifle discussion, or to raise objections on technical grounds, I think he ought not to have placed on the paper. I must say when the House considers this Resolution, whatever it may do with this Bill, it will be unwilling to place such a Resolution on the records of Parliament. What does it say? It says, "as it appears that the repeal of the duty upon paper will necessitate the addition of 1d. upon the property and income tax, it is the opinion of this House that such repeal is at this moment inexpedient." I want to know where "it appears." I am not aware that it has been made to appear that the retention of the paper duty involves the remission of a penny on the income tax. That may have suggested itself to the hon. Baronet, but to place upon our records that some past proceeding justifies such a statement, I do not think this House will consent to do, whatever it may do with the Bill before it. I do not think my right hon. Friend the Chancellor of the Exchequer will agree that a penny of the income tax and the paper duty have any connection with each other. My right hon. Friend may say that if you insist upon keeping the Excise duty upon paper he will consider whether the sugar duty may not be lowered, or whether it would be proper to make a reduction in the war duty upon tea. It does not at all follow that my hon. Friend opposite will get his penny in the income tax even if he succeeds in retaining the present paper duty; and when his Friends consider the real meaning of the Resolution I do not think they can consent to vote with him. But why has the Government selected the paper duty? I suppose it will be admitted that, having taxes to remove, it became necessary for the Government to make a careful review of the various items of indirect taxation, and to decide which items presented the strongest claims for remission. What did they discover? I think, in considering the claims for remission, hon. Gentlemen opposite will admit that the Government could not overlook the paper duty after all that has passed. The Government found that for the last twenty-five years those who were entitled to have the greatest weight with Parliament had looked forward to the repeal of the paper duty as an object to be carried out as soon as it was possible to do so. Prom time to time opportunities were taken by Commissions and Committees to condemn this duty as a permanent source of revenue, beginning with the Excise Commission of 1835, of which Sir H. Parnell was chairman; for although the Commission did not recommend the immediate repeal of the paper duty, they did anticipate a future repeal of the tax, and carefully guarded themselves against being supposed to give any sanction to the paper duty as a permanent method of taxation. I am not about to quote the writers of books or the opinions of theorists elsewhere, but I am entitled to ask the House to attach weight to the advisers it has itself selected, to Commissions of Inquiry, and the opinions of those men of different political parties who have guided the deliberations of Parliament. Ten years ago I brought forward a Motion for the repeal of the paper duty, not asking for immediate action, but to make preparation for it, because I felt that the instant abolition of a tax of such magnitude was not a proposition that a Member of Parliament was entitled to make to the House. The right hon. Member for Buckinghamshire (Mr. Disraeli) was one of those who sympathized with the terms of my Motion, "that such financial arrangements ought to be made as will enable Parliament to repeal the Excise duty on paper." What did the right hon. Gentleman the Member for Bucks say on that occasion? He said, "Was there a man in the House who entertained an opinion different from that of the right hon. Gentleman who introduced the Motion? Different opinions might be entertained as to the effect of the duty upon advertisements and upon newspapers, but no financial evil was abstractedly greater than an Excise duty, while in the present instance it was aggravated because to a physical a moral disadvantage was added;" and he went on to say, "in his opinion it was a prudent, a politic, and a beneficial Motion." The right hon. Gentleman followed up his emphatic speech by his vote in favour of my Motion, Now, I say that the requisite financial arrangements are made; and, therefore, I claim as a matter of right the vote of the right hon. Gentleman. Coming down to a later period, I find the same views were held in other quarters. I had the honour of several interviews with the Earl of Derby, when he was in power, upon the subject of this duty. His Lordship not once, but on several occasions, expressed his opinion on the remission of these duties. In the last interview I had with the noble Earl, when I accompanied a deputation to him on the subject, he reminded us that he was expressing an opinion he had formerly expressed when he said that the paper tax was bad alike in principle and in practice, and that as soon as possible it ought to be repealed, and he held, out hopes that if a Conserva- tive Government should remain in office for two years, seeing the disposition there was to economy among the Conservative party, the paper duty would be repealed. I find a uniform and constant enforcement of the doctrine that the paper duty was not to be looked upon as a mode of raising revenue that ought to be maintained. I now find that the Commissioners of Inland Revenue themselves distinctly say in their Report that it is so universally believed that the paper duty is doomed and about to cease, that they found it extremely difficult to make those necessary changes of regulations, or to apply to Parliament for power to make those alterations which varying circumstances require from them to regulate the levying of the tax. I do not dwell alone upon the last Resolution of Parliament, but I contend that it is only part of a long continued uniform system of condemnation of this tax. The House of Commons by a unanimous' vote having decided, in terms placed upon its records, that the paper duty is not to be a permanent source of taxation, could the Government, I ask, having undertaken to remit a certain amount of indirect taxation, venture to overlook this particular tax? Is that Resolution which I have referred to, to remain a dead letter upon your books? The hon. Baronet the Member for Somerset (Sir W. Miles) has some idea that one day or other he will agree to the repeal of the paper duty. I think, however, the latter part of his speech did not quite agree with the first part, for he took pains to show that the paper duty was not such a bad tax, and was not so injurious as it was represented to be, while in the first part of his speech he said he was not prepared to maintain the paper duty permanently. I do not know why he should not maintain that duty as an ordinary branch of our revenue, if he is satisfied that it is not an injurious tax, or a pernicious mode of raising money. It appears to me that it was impossible for us to overlook this question, for I do not agree that Resolutions of this House are to be considered as trifling matters. I am not in favour of Resolutions being moved, especially with reference to taxation, unless hon. Members mean to do their utmost to procure the repeal of the particular tax; but a Resolution having been placed upon the records of the House, it would have been a neglect of duty on the part of the Government if they had given it the go-by, and treated it as a mere unmeaning paragraph in the journals of Parliament. The very first person who would have had a right to reproach us for such a course would have been the right hon. Gentleman the Member for Bucks, who would have told us, "You come with a repeal of indirect taxation, but have omitted to notice the tax which Parliament has condemned, and which has been uniformly reprobated by the leading men on both sides of the House." Admitting, however, for the sake of argument, that all these authorities to which I have referred are to be disregarded, and that perhaps the paper duty is to be retained, what do we find as a preliminary difficulty? That it is necessary to come to Parliament for a Bill to enable the collectors and assessors of the tax to carry out such rules as they believe are necessary and just for the trade of the country. The noble Lord (Lord R. Cecil) says the report of the Commissioners is one got up for the occasion. That is a monstrous charge to make, unless the noble Lord is prepared to substantiate it. Does he mean to say that the Gentlemen who put their names to that Report have deliberately asserted what they do not believe to be correct merely to serve the Government? The question is, is the Report true as to the difficulties which lie in the way of the collection of this tax? I am prepared to maintain that it is true, and if you mean to maintain this duty, I say you must bring in a Bill forthwith to define the article on which the duty is to be levied and apply it to a number of articles which now come into competition with paper, but on which the duty is not charged. You cannot adopt a system of arbitrary exemptions. Such a course would be contrary to the principles of our institutions, and is one which, I am sure, this House will never sanction. But we are told that the definition of paper is to be found in the decision of the Court of Exchequer in terms clear and precise. The Court of Exchequer defined paper; the Act of Parliament did not. All that the Act said was that paper, however made, whether by a wet or a dry process, and of whatever material, should be deemed to be paper. But the Court of Exchequer having to define what paper was, said:— That paper may perhaps be described as a manufactured substance composed of fibres adhering together, in form consisting of sheets of various size and of different thickness, and used for writing or printing and applicable to other purposes for which flexible sheets were applicable. But that definition covers a great many articles to which the paper duty does not apply. For instance, it covers the article of felt, which is extensively used for roofing, and I ask if you are prepared to take the decision of the Court of Exchequer as your definition of paper, are you prepared to apply the Excise survey and the imposition of the Excise duty to the article of felt? You must do that, if you carry out the principle of the declaration of the Court of Exchequer. The Board of Inland Revenue feels this difficulty strongly, and says, "Make up your minds whether you mean to maintain this tax or not; if you do mean to maintain it, we will ask you to pass a law that will enable us to assess the duty fairly and justly between the different trades and manufactures." Can anything be more reasonable? To say you will not do it now is only to prolong all this injustice and difficulty, and to leave the trade in uncertainty. I say it behaves Parliament to make up its mind now whether this duty is to be maintained; and that, if it be their deliberate opinion that it is unfit to remain as a part of our permanent revenue, this is a fitting moment for its total abolition. I hold in my hand the third Report of the Board of Inland Revenue, published last year, during, I believe, the administration of the Earl of Derby, and, therefore, I presume, not got up to order. What do the Commissioners say?— The expectation that the paper duty would be repealed on the first favourable opportunity has for many years been a source of embarrassment to us in the collection of it. In all duties which are levied on articles in the process of manufacture, the continual introduction of new methods of working, of new materials, and of new inventions to suit the taste of the public, requires corresponding alterations in the laws under which the duty is chargeable, and in no case has there been so great a necessity for those alterations as in that of the Excise on paper. Who are the persons most competent to advise Parliament in a matter of this sort? I assert there are no men to whom the Government can more properly look for advice on such a subject than the Commissioners of Inland Revenue. I believe the extract I have just read contains the honest and deliberate opinion of the Commissioners, and I have no doubt that it would have been the same whatever Government were in power. I trust, therefore, the House will be guided by their advice, and I feel that if the Excise system connected with paper had not been administered in a most considerate manner it would not have been possible to main- tain this duty for so long a period. I say, therefore, there is no mode of escape from their difficulties except by a total repeal of the duty, and that this House will hesitate before it places itself, in a matter of this kind, in opposition to men so experienced. Seeing, then, that we are met by these difficulties — first that the tax had been condemned by a uniform course of authority, and, secondly, that if we are to maintain it, we must legislate to enable us to collect it;—the question remains, is the tax of a character that we should desire to maintain it? What is its effect on trade? I admit that its operation in impeding the diffusion of knowledge is not the only argument in favour of its repeal. The commercial argument is a most important one. In the first place, is the consumption of paper in this country at all in accordance with our population, or with what we should naturally suppose to be the demand of a country like England, having regard to the progress of education and trade? Is it commensurate with what we find in other countries under similar circumstances? The consumption in the United States, with a smaller population, I believe is three times as great as that of England. The population of the United States is about 23,000,000. We have in this country some 29,000,000 of people. The 23,000,000 in the United States make a much larger quantity of paper than we manufacture in this country. Is there any reason why that should be so? Paper is susceptible of a great variety of uses, and in a country with such an enormous trade as ours, we should be the first producers and consumers of paper in the world, in proportion to our population. Mr. Rawlings, a large paper manufacturer at Wrexham, who has seen the way in which paper is made in the United States, states that the processes there are so much improved that a man and his children can make paper by themselves, and turn out a much greater quantity than a similar number of persons in this country. Mr. Rawlings produced a brown paper made in the United States of, among other things, old leather, flax straw, Indian corn stalks, palm leaves, and damaged marsh hay, and sold at a price below the sum charged for duty in England. He also exhibited a sheet of paper of remarkable gloss and fineness, which was produced by two persons at the rate of 100 reams in eight hours. Do not tell me we cannot do in this coun- try what is done in the United States; we have peculiar advantages in England, both in mechanical skill and command of the raw material, and yet here the production of paper is limited and crippled; and I have a right to assume that the Excise duty and the Excise survey have something to do with this important difference. Again, with regard to our exports, the paper duty acts as an export duty on several kinds of manufactures. The duty is paid on the paper boxes in which those goods are sent abroad, and sometimes forms a small percentage on the value of the articles the boxes contain. You increase the difficulty of our manufacturers in competing with foreigners in neutral markets if you place a duty on the boxes in which their goods are packed. Such a duty must have a pernicious effect in a great exporting country like England. The duty forms an enormous percentage on the value of coarse papers. A paper manufacturer of Birmingham told me that, on an average, he made paper of a coarse kind to the value of £33,000 in a year. The amount of duty he paid on that quantity was £12,800 a year. That is an enormous tax; as he graphically stated the case, he was obliged to work twenty-two weeks out of the fifty-two to make enough to pay the duty for one year. I can prove also that the duty limits the power of producing an article for which England is admirably suited. England abounds in auxiliary raw material for paper-making, much of which cannot be applied under the Excise system. The statements of the scarcity of rags in this country are no novelty. They were urged in 1836, when the duty was reduced. It was said the manufacturers would only put the remitted duty in their pockets, because no greater quantities of the raw material were likely to be imported. What are the facts? From 1815 to 1836 the average price of rags was perhaps 40 per cent higher than the average price since 1836. I believe the quantity of paper made is 90,000 tons per annum; previous to the reduction of duty in 1836 it was only 40,000 tons; you have thus added 50,000 tons to the production of paper, or nearly trebled it, and yet the price of the raw material has not risen since 1836. Is this consistent with the statement of a deficiency of the material? I firmly believe that what happened before will happen again; that if you repeal the duty the production will be greatly in- creased, and the demand for the raw material will bring it into this country; and the price of the raw material will not be enhanced. It should be remembered that every country imports rags from time to time. We have heard much of France prohibiting the export of rags; but France imports rags, and some small quantity even from England. Belgium and other countries also import rags; we ourselves export rags to various countries every year. It is a mistake to suppose there is any deficiency of this article if you take the whole world as the source of supply instead of two or three particular countries. The price of the raw material may rise a little, but I believe that the cost will be equalized gradually in different countries, for it will be impossible to maintain any great difference when you place the great English market on the same footing as those of France and Belgium. As foreign paper is to be admitted duty free the argument of the home manufacturer being able to put the amount of the remission into his pocket loses its force. There is one article likely to be extensively used in the manufacture of paper, to which I would call the attention of the hon. Baronet (Sir W. Miles)—it is flax refuse. I have before said that the repeal of the paper duty is to some extent a farmers question. I believe the agricultural interest did not think me serious in saying so; but I am quite serious. I believe that the manufacture of paper is the only rural manufacture that in these days can be carried on with advantage. It is a manufacture in the extension of which the agricultural community is greatly interested. I have received a letter from an agriculturist stating that he had always grown flax with a larger profit than wheat, by using the seeds to fatten cattle and converting the straw into flax fibre for the Leeds market; and he adds that flax is not, as commonly supposed, an exhausting crop. Thus, if there are any complaints of the low price of wheat or other grain, the prospect of a development of the paper manufacture is worth the farmers' consideration. I believe that large quantities of straw may be converted into the material of paper; and that other auxiliary raw materials which are now burnt, such as couch-grass, may be made a source of profit to the agriculturists if they will only lend the Government their assistance on this occasion to repeal an obnoxious system of Excise regulations that cripple an impor- tant manufacture and prevent its full development. A word on the effect of the paper duty on the diffusion of knowledge. Giving this Excise duty the name of a "tax on knowledge," has been called something of a clap-trap; I am not responsible for that title; it was used many years ago; I believe the right hon. Member for Hertfordshire (Sir B. Lytton) in a speech on a repeal of the duty, was one of the first who gave that definition of the tax. But the term of a tax on knowledge is fairly derived from the Act of Parliament itself. In one of the clauses I find these words: "that for the encouragement of learning" the duty shall be remitted "on all books printed in the Latin, Greek, Oriental, and Northern languages." If you remit the duty on books printed in these languages "for the encouragement of learning," you certainly admit that the tax on paper is a "tax on knowledge." That is a logical deduction, and if in the days of Queen Anne it was thought advantageous to remit the duty on books in the Latin, Greek, Oriental, and Northern languages, surely in the days of Queen Victoria, when we are educating the people, it is right also to remit the duty on books printed in the English language. Under the existing law we are not entitled to levy a tax on books printed in the Northern languages, and I see no reason why the English language should not come within that category. But, be that as it may, the paper duty is a tax on knowledge, because it is a tax upon the means—the principal, perhaps the only means—of diffusing knowledge throughout the country; for how, I should like to know, is information to be distributed throughout the mass of the people? Is it not through the medium of cheap publications extensively circulated? Yet you who are opposed to the repeal of this duty argue as if it would in no way affect the spread of information whether the tax were 1½d. or 6d. per 1b. Now, I dare say it is very true that an increase of the duty to that extent would not appreciably add to the cost of a book the selling price of which is three guineas, and which weighs only two or three pounds, and that a man who is prepared to pay that price would not have any very strong objection to the payment of an additional shilling; but then you must bear in mind that this line of argument is applicable to any amount of duty, however high. The real question for us to decide is, how the existing duty acts on publications which are low in price, and by means of which useful knowledge is extensively diffused, using large quantities of paper. I recollect the right hon. Baronet the Member for Hertfordshire, when, on a former occasion, he advised his political friends not to put themselves in the wrong on this question, told them that by doing; so they would continue to impose obstacles in the way of the improvement and refinement of the people. He went even still further, and maintained that the principles which that party professed would be promoted by the removal of the impediments which stood in the way of the circulation of knowledge. He placed so much confidence in the justice of Conservative principles, that he expressed a wish to have a cheap organ established by which those principles might be widely promulgated. That wish has since been gratified. The Standard, a most excellent paper, has been published at the price of 1d. I call upon you, in accordance with the argument of the right hon. Baronet the Member for Hertfordshire, to remove the impediments which lie in the way of its more extensive circulation. For what, let me ask, does it pay in the shape of paper duty? I understand that nine numbers of The Standard are sold by the publishers at the wholesale price of 6d. Those nine numbers, I believe, weigh 11b., therefore out of every 6d. that is received upon the wholesale price, 1½d. has to be paid to the Government—that is to say, 5s. on every £1-worth that is sold. That amount represents the direct payment; but the 5s. originally advanced by the paper-maker and afterwards by the wholesale stationer eventually reaches, if I am not misinformed, some 7s. or 8s., which is probably the amount of duty paid directly and indirectly on every £1-worth of the paper to which I am referring. ["No!"] I know this calculation to be correct as applied to other papers, and I see no reason to doubt its accuracy so far as The Standard is concerned. Well, if that be so, a great impediment must thus be thrown in the way of the success of that journal; for, be it remembered, in fixing its price you must take a coin which is in general use, and cannot raise its cost to 1¼d. Suppose, for instance, the circulation of The Standard amounts to some 25,000 copies a day, which probably may be the case, I dare say, the amount which it pays in the shape of duty must be somewhat like £20 per day; at all events, it cannot be very far short of that sum; so that the obstacles against which it has to contend in this respect are very considerable. It, therefore, does appear to be perfectly monstrous to wish for a cheap Conservative organ, with an extensive circulation in the country, and at the same time to maintain a tax which must eat up all the profit. But the question is not one altogether of a cheap press; it involves also moral considerations of no ordinary value. It is not only desirable that we should have cheap newspapers, but that we should render them as agents in the communication of knowledge as good as they can be made, instead of perpetuating a system of taxation which impoverishes them, and which may, instead of their being productive of benefit, cause them rather to be productive of injury to the community, Let me now take the case of periodicals, and of those publications of a religious and philanthropic character the diffusion of which throughout the country we ought to be desirous, as far as possible, to promote. I daresay the noble Lord who last addressed the House is a great supporter of religious tract societies, but he will be surprised to learn, on the authority of a gentleman who is well informed on these matters, that one of the largest of those societies pays in the shape of duty on the paper which they use, and in charges for printing, binding, and packing, a sum bearing no small proportion to the annual subscriptions which it receives; so that nearly the whole of its income goes into the coffers of my right hon. Friend the Chancellor of the Exchequer. Now, to show still more clearly how this tax operates against the diffusion of cheap tracts among the working classes, I will take the case of two periodicals published by the Religious Tract Society — The Leisure Hour and The Sunday at Home—[a laugh]. Hon. Gentlemen may laugh at the mention of these names, but I am quite serious in addressing myself to the subject, for I am of opinion that those who promote the circulation of these tracts are entitled to our approbation. Well, then, I may shortly state that the duty on those two works amounts to £3,000 per annum, which nobody can, I think, seriously contend does not operate as a barrier against their more extensive diffusion. I may here observe that I some time ago sat with the hon. Baronet the Member for Somersetshire on a Committee for the promotion of educa- tion, and that I then found him to be a great stickler for what he called exclusive religious instruction; yet now he comes forward in support of a tax which lays upon these religious publications the heavy burden which I have mentioned, and is prepared to maintain that the Religious Tract Society ought to pay the Government £3,000 a year as a fine for the permission to circulate two of their publications. But these are not the only facts which I have to adduce to show the House how injuriously this duty operates. Mr. C. Knight, who was for a considerable time engaged in the publication of books, states that for a period of twenty years he paid a sum of £80,000 to authors for their literary productions, but that in order to circulate that amount of mind throughout the country he had been obliged to hand over a sum of £50,000 to the Government. Do you mean to tell me, then, with these facts before you, that this is not a tax upon knowledge? Is it mere clap-trap or the statement of a simple fact when I place the paper duty in the list of such taxes? For my own part I cannot believe that by maintaining it you do not trench materially on the fund out of which literary labour is paid, and greatly add to the cost of literary enterprise. I say the paper duty is not only a tax upon knowledge, but it is also a grievous and oppressive trammel upon the freedom of authors. I am quite sure it must trench upon the fund by which authors would be paid; for if the large sum I have stated as having been paid by that eminent publisher in the shape of paper duty had remained at his disposal competition would have forced him to give the public the benefit of it. The money that went to the Exchequer would have gone to provide other, and perhaps superior, authorship, and thus the country at large would have had the advantage. I do hope, this opportunity having arisen for the repeal of the paper duty,—now that you are about to remit indirect taxation, and seeing the great public expectation that has been excited in reference to this duty, the House will hesitate before it gives its support to the hon. Baronet the Member for Somerset. I give him credit for bringing this Motion forward with all sincerity; I think he is grievously mistaken in the course he has taken; and I trust with full confidence that this House will read the Bill now before it a second time by a large majority.

Mr. HORSMAN

I have listened, Sir, with great interest to the speech of my right hon. Friend who has just sat down, and I am sure the hon. Baronet who has moved this Amendment must have listened to it with great satisfaction, because he must have perceived how carefully, how significantly my right hon. Friend declined his challenge to discuss the principle of this Bill. My right hon. Friend has been lively on the Tract Society—he was very eloquent upon rags, but upon the principle of the Bill he declined to say one word. He said this measure is a very limited proposal; that there is no principle at all involved, and it is merely a question of Parliamentary consistency. You voted for the Treaty, he says, you have passed the Budget, you have rejected the Motion of the hon. Member for North Essex; can you refuse to pass this Bill? And so, as by a skilful process of Parliamentary manipulation, it was arranged that the Treaty carried the Budget, and the Budget carried the Treaty; now the Budget and the Treaty combined are to carry the repeal of the paper duty. My right hon. Friend must be quite aware of the truth of what fell from the noble Lord (Lord B. Cecil) when he said we could not discuss this Bill on its abstract merits. All taxation is a matter of comparison. Taxes are a necessary evil, and it therefore fell to my right hon. Friend to show that not only are there great evils connected with the paper duties, but that they are greater than those connected with other taxes, and especially than those connected with the direct tax which it is proposed to increase—[Mr. M. GIBSON: I compared it with indirect taxes.] My right hon. Friend corrects me, and I accept and will deal with his correction. I will not discuss the case, I will not degrade it into a mere question of detail. My objection is that, under the semblance of a small and apparently insignificant remission, we are called on to agree to a change which, as I said once before, is the most important financial change ever submitted to Parliament by any Minister in our day, not only because of the principle it involves, but for the consequences to which it must lead. I cannot really allow my right hon. Friend to separate, as he has endeavoured to do, the income tax from the remission of the paper duty, because we must recur to the speech he has found it very convenient to forget or ignore, delivered by the Chancellor of the Exchequer when he introduced the Budget. What did he tell us? He said, in effect this—"I am proposing a repeal of taxes now in fulfilment of the promise that in 1860, when the annuities fell in, the nation should receive a remission of taxation. Well, now, this remission of the paper duty is in part fulfilment of that promise." I have nothing to do to-night with the rest of the Budget, to which my right hon. Friend endeavoured to commit us; but, in order to make the real question before us clear and intelligible to the House, and to make it impossible for the Government to evade it, I will put it so that I defy my right hon. Friend to get out of it. The Chancellor of the Exchequer makes a calculation of the income and expenditure of the year, and he balances the account with the income tax at 9d. per pound. Up to that point I have to-night no fault whatever to find with the arrangement. The annual income and expenditure are there accurately balanced. But after that point he performs another operation. He then makes a remission of the paper duty, by which he creates a deficit of upwards of a million, and he fills that deficit by adding 1d. to the income tax. Now, it is on this last point that I proceed to grapple with my right hon. Friend. I have said that this remission is in part fulfilment of the promise made that a remission of taxation should take place in 1860; and the first remark I make on that is this — that when you remit the paper duty and substitute 1d. additional income tax, it is in reality not a remission of taxation, but a mere shifting of taxation from the paper duty to the income tax. When the Chancellor of the Exchequer promised there should be a remission of taxation, we understood it in a general sense, and applied it to the whole community; and we hold that that pledge has not been redeemed when he gives the benefit of that remission to one class at the expense of all the rest. In this case in reality there is nothing but the extension of protection to that class, and under the pretence of free trade and competition, a mere return to favouritism and monopoly. In the remission of taxes my right hon. Friend corrected me, and said he made the comparison, not with the income tax, but with other indirect taxes. I will meet him on that point; I say, in the remission of indirect taxes the great rule to be observed is that the first to be remitted in time of peace are the exceptional taxes imposed for the purpose of war, especially if these are taxes of which the remission had been promised, and still more if they are taxes that press on commodities consumed by the poorer classes. The Chancellor of the Exchequer admitted this difficulty in his Budget speech; the tea and sugar duties, to the reduction of which he stands committed more than any other man, both on fiscal and moral grounds, immediately met him in the face. He got over the difficulty. How? He determined to remit the paper duty, and not to reduce the tax on tea and sugar. How does he reconcile this with anything like consistency and justice? By one of the most daring nights of fallacy that I venture to say any great rhetorician ever ventured on. He coins a new maxim of political economy, and presents it to this House with a faith in his own powers of persuasion that I must say deserved to remove a whole chain of mountains. He says, if you would confer the maximum of benefit on the labouring classes that is to be done, not by removing the taxes on the commodities they consume, but on the commodities through which they get employment. That is the principle of the right lion. Gentleman. Is it a true principle? It is very novel, it is very bold; but I will venture to assert it is as false as it is novel and bold. And first let me apply to it, not the scientific, but the practical test. Suppose that during the last autumn, when the Liverpool Financial Association were endeavouring to resuscitate the League with the view to get the taxes on tea and sugar and other commodities consumed by the poor repealed, some gentleman, a disciple of my right hon. Friend's school, had got up in the middle of the room and moved an Amendment that in the opinion of the meeting the operative classes would be more benefited by a repeal of the taxes on the commodities used by their employers than on those consumed by themselves at home, I should like to know what reception such a proposition would have met with. In these educated days probably the mover of an Amendment to that effect would have been laughed out of the room; there were days when he would have been assisted to a more summary exit. Take a still more practical test. Suppose my right hon. Friend had sent down an emissary to Rochdale, and turned out the hands in the establishment of my hon. Friend, who generally sits here (Mr. Bright), and it had been said to them, "The Chancellor of the Exchequer has sent down £1,000 which he wishes to be distributed for the benefit of the operatives in this establishment; say, shall you be most benefited by giving it to the employers of your labour or to yourselves, to buy comforts for yourselves and families at home?" Everybody probably anticipates the answer; but what I ask is this—would that answer have been at variance with the truths of political science? My right hon. Friend says, "I will remit the duty to the paper manufacturers because that will stimulate the paper trade, and by that means give increased employment." But, I ask, would not the remission of the tax on tea and sugar stimulate employment exactly to the same extent? The question turns on the very elements of political economy, and I am almost ashamed to discuss it in this House. A million of taxes is to be remitted—shall we take it off paper or off tea and sugar—"I take it off paper," says the Chancellor of the Exchequer, "because, by so doing, I increase employment." But I say if you remit the tea and sugar duties to this extent you increase employment in either of two ways. In the first place, by the remission of a million on those duties, you enable the consumers of tea and sugar to purchase a million's worth more of those commodities, which have to be imported from abroad and paid for by articles exported from home, and you consequently increase employment at home precisely to that extent. If the consumers do not devote this million so remitted to the purchase of tea and sugar, they lay it out on other commodities likewise requiring labour, and you thus increase the wages of the labouring classes in an equal ratio. The obvious and vital difference between the two remissions is—in one you give the advantage to the consumers of paper, and in the other you confer it on the consumers of tea and sugar. Putting aside the fact that the latter class are paying a war tax, of which the remission has been promised, I ask the House which has the better claim? The consumers of paper are generally a richer class, and the remission of a million is not, after all, a benefit to them to that amount, for paper to them has been artificially cheapened, and they pay the duty in another form, being the payers of the income tax which has been substituted for it. But the consumers of tea and sugar are the labouring classes; and the reduction to them is a clear boon—first, in the gift of a million directly to them; and, secondly, in the increased demand for labour to produce the commodities which are to be exported in return. There is another consideration of the utmost moment connected with this question—namely, that it is of great social, moral, and political importance that the operative classes should receive the best wages they can command for their labour. We know that wages can be increased either by larger money payments or by a diminution in the cost of living. Money payments are, of course, regulated by the cost of labour, but you may reduce the cost of living by a reduction of taxation; and if you remit a million of taxes to the consumers of tea and sugar, you enrich them to that amount, and you enable them either, according to the principle of Sir Robert Peel, to increase the revenue by a larger expenditure on these very articles, or you enable them to spend more in improving their houses, or their clothing, and in educating their children. You elevate them in the social scale; the State becomes safer and rests on a sounder basis. I agree with what was stated by the Chancellor of the Exchequer, that the operative classes should contribute their share to the burdens of the country, but that is not the question raised by this Bill. The question is—assuming that the object is to benefit the labouring class, by which remission do we most benefit them?—and on that point the Chancellor of the Exchequer put forth a fallacy which I do not think he will venture to repeat. I have to apologize for detaining the House with a dry treatise of political economy; but I think the fallacies which the right hon. Gentleman has propounded deserved to be refuted. When he prefers the abolition of the duty on paper to the remission of that on tea and sugar, I say it is a deliberate and flagrant abandonment of the principle of Sir Robert Peel, which was, by the reduction of duties to get a larger consumption and a consequent increase of revenue. If he had reduced the duties on tea and sugar he would have acted consistently with that principle; but what does he do? He takes the paper trade, a most flourishing branch, and one in which the consumption has enormously increased, which would be a prolific source of revenue for future years, and, instead of reducing it, according to Sir Robert Peel's principle, he abolishes the duty altogether. At the very moment when it is most expanding, at a time when the Exchequer most requires replenishing, and when an enormous deficit is already in existence, he abolishes altogether a most flourishing, prolific, and increasing source of revenue. And how does he supply the deficit? By an increase in the income tax. The remission of the paper duty has within the last ten years, been frequently proposed; all its evils have been stated, and all the arguments with reference to the increase of labour which may be expected to ensue from its abolition have been so often brought forward, that on the present occasion there was nothing for the House either to learn or to acknowledge on the subject. On every occasion, excepting in 1858, the circumstances of which were so exceptional as hardly to have rendered it worth quoting,—in 1850, in 1852, and in 1853, the Minister of the day, supported by the present Chancellor of the Exchequer, admitted the evils of the tax, but refused to repeal it, on the ground that there was no less objectionable tax which could be proposed, and if it were removed there was no alternative but to substitute direct taxation. On every occasion the House supported the Minister in the conclusion at which he had arrived. What, I ask, is your justification for doing in 1860 that which you refused to do in 1850, in 1852, and in 1853? Is your Exchequer more flourishing t On the contrary, you have told us there is an unexampled deficit. Does the income tax press lighter on the country? It was 1d. in those days, and, even without the addition of the 1d., it is 9d. now. I want to know, when all the circumstances which usually justify the remission of taxation are so much less favourable now than in previous years, why you venture to do what was not politic and not safe on former occasions? We must all remember that in the interim between the debates which ended in decisions against the change Reports were issued from the Commissioners of Inland Revenue condemning such a change, and showing that the evils complained of had been gradually removed. The hon. Baronet who moved the Amendment has read a paragraph in the Report of 1858, which was previously quoted by my right hon. Friend the Member for Cambridge. When that paragraph was quoted the Chancellor of the Exchequer said it was an "old Report." He has since given us a new Report, and the hon. Baronet who moved the Amendment commented upon it, and the noble Lord who spoke at the other side characterized it as a Report "made to order." That phrase created some sensation on the Treasury Bench, but I must say that I believe it to be a just description of the Report. I am very sorry, under the circumstances, that it should have been asked for, or produced to this House. It is dated the 1st of March—a date subsequent to the speech and quotation of my right hon. Friend. And what does that Report say? "Why it tells against the Chancellor of the Exchequer, although it was produced in his favour. The concluding paragraph says,— Such inequality of pressure as we have mentioned appears to afford more valid ground of objection than the mere amount of pressure that is insisted on with so much earnestness and ability by proprietors and publishers of newspapers. They admit, therefore, that the pressure is nil, but that the inequality is all that is to be complained of; and my right hon. Friend admits that these inequalities can be done away with at any moment when the Government think fit to exercise the power which they possess of introducing and passing a measure on this subject. I repeat, Sir, that I extremely regret that the Report has been produced under such circumstances. The Commissioners of Inland Revenue are gentlemen of capacity and character and the independence of one branch of our civil establishments is intrusted to them; and I say it was not dignified nor becoming in the supreme chief of that department to call on them to furnish a Report in direct contradiction to all they had said before; and the furnishing a Report so opposed to their known and recorded opinions, is not, I think, creditable to them; and in the direction that my right hon. Friend has desired it, will certainly not influence the deliberations of the House of Commons. They say now, Sir, that it is a question of inequality; but is it to be pretended for a moment that the inequalities of the paper duty can compare with the inequalities of the income tax? Who has painted this inequality so effectively, so eloquently, as the Chancellor of the Exchequer himself, when he stated that the tax could not be retained because, more than any other tax, it corrupted and demoralized the community? But then you are told that you get rid of the paper duty altogether, and you only add 1 d.—one-tenth—to the income tax. Now, do you increase its evils only by one-tenth? As the tax rises higher, as the payment becomes more difficult, do not the temptations to evasion and fraud, and the inquisition and the irritation by which they are to be counteracted, increase? Are not the evils of the tax multiplied in a greater ratio? But, says the Chancellor of the Exchequer, it is only continued for one year; you shall reconsider it next year; But is he not making it impossible for us to reconsider it next year? You cannot re-impose the paper duty. And if, with a deficit of £9,000,000 to be made up by an income tax of 9d., you think you are justified in repealing a prolific source of indirect revenue, and substituting an addition to the income tax, I want to know what are the circumstances in which you anticipate that you will ever discontinue that tax, or, rather, what is the point at which its increase is to be arrested? For, observe the false principle you are following and the vicious precedent you are establishing. A very important interest, with plausible arguments in their favour, put a pressure on the Chancellor of the Exchequer, and get him to repeal the paper duty by increasing the income tax. You thus set a precedent from which previous Chancellors of the Exchequer have shrunk, and which the House of Commons have hitherto repudiated. How long do you think you will be allowed to rest on it? You say the income tax is established for this year only. Remember there are representations made to the operative classes that the taxation of the country weighs disproportionately upon them, and favours the rich. If that injustice exists, or is believed in, what are you now doing? You have already repealed the taxes on French wines, silks, and other luxuries of the rich. You are abolishing the duty on paper, which is also paid by the rich. ["No, no!"] "Well, it is not paid by the poor. Why, Sir, I will not condescend to squabble about phrases. I do not say that every farthing of the duty is paid by the rich; but I put it to the candour and common sense of every man in this House whether, speaking generally, paper is not an article of which far more is consumed among the monied than among the operative classes? And I am drawing a distinction between the operative classes and those above them. Well, it the very time you are doing this there is one tax upon a commodity in general consumption among the poor of which the remission has been promised, it being a war tax, but which you leave still untouched. And, while you are acting thus, you are, as we were reminded by the Chancellor of the Exchequer, by a change in the constitution of the country, admitting the operative classes to a large increase of political power. When we meet next year to discuss questions of finance under our new constitution, do you think the new representatives of these intelligent men will not remind you of your broken promise? "Will they not tell you that the case of tea and sugar is much stronger than that of paper? Will not they quote this precedent againt you? Will not their claim be irresistible? Will not you be compelled to remit these £2,000,000 on tea and sugar, the addition put on in time of war, and does not your temporary income tax at once leap up to the Chancellor of the Exchequer's "neat shilling?" And how long will it stop there? Next year comes and then you have a deputation waiting upon the Chancellor of the Exchequer to tell him that the £2,000,000 of war taxes have certainly been remitted, but that still there are no less than £9,000,000 levied from these articles of prime necessity to the poor. They will tell him that this is a heavy tax on temperance—that the workman's wife complains that her husband is driven to the public-house because his tea and sugar are taxed at home. As a friend of temperance, the Chancellor of the Exchequer, they are sure, cannot wish that; of course he cannot—especially with his own precedent to smooth the way. Let us see—£9,000,000 divided by £3—only £3,000,000 more—and the 1s. rises to 15d. But this will not be done without a murmur. The towns now begin to cry out. They will say, "Why is the industry of the country to bear so much of our direct taxation? Let it be put upon property." Aye, and you will and must lay it on property. And thus this small precedent of increasing a deficit by repealing an indirect tax, and substituting in time of peace an augmented income tax leads, by a smooth, direct, natural, and inevitable process, to a complete fiscal revolution. It is here, then, that I join issue with the Chancellor of the Exchequer, and challenge him to vindicate the course he is pursuing. The question between direct and indirect taxation is the great problem of the day. It is full of the most dangerous difficulties. No one felt that more strongly or expressed it more emphatically than Sir Robert Peel. And I say that a great financier, with the ability and authority of the Chancellor of the Exchequer, professing to review our whole financial system and place it on a new and solid basis, ought to have gone into an inquiry on all the great principles involved, into the proportion in which the taxes of the country are paid by each class of the community, and the ability of each class to pay them. He should have done this openly, in broad daylight, and after full notice of what he was doing, and ought not to have arbitrarily assumed that the pressure of indirect taxation was too heavy, the pressure of direct taxation too light, and shifted the burden from one class to another without a single word of inquiry or explanation. Observe how you are placing the whole of your indirect revenue at the mercy of those who pay it, and giving a premium to agitation to class interests. The Chancellor of the Exchequer cannot plead that he has no surplus. A surplus is not required. There stands your beast of burden. Place your load on him. He has a broad back, which cannot easily be broken; and thus, Sir, not avowedly and publicly, but stealthily and by a side-wind, the whole of our taxation is transferred to the shoulders of one class, and being so transferred without any investigation as to its justice, it becomes arbitrary and tyrannical class legislation of the worst description and, ultimately, confiscation. I say, do not let us mince matters. Let us give honour to whom honour is due. This is not the Budget of the Government, it is the Budget of my hon. Friend the Member for Birmingham (Mr. Bright). During the autumn my hon. Friend made a most able and frank exposition of his financial policy, and I can well imagine the Chancellor of the Exchequer receiving the report of that oration. I can imagine him writing to the hon. Member for Birmingham, and in these terms:—"I have read with great interest your speech at Liverpool. You have made a convert of me. I beg you to come by an early train to Downing Street and help me to frame my Budget." And can we not imagine, Sir, that when the twain financiers were closeted in council, my sagacious Friend the Member for Birmingham may have said to the right hon. Gentleman, "Don't go too fast—you are too impetuous?" (Converts always are.) "Be advised by me. There are the tea and sugar duties, yielding £11,000,000—don't touch them; there is the tobacco duty, bringing in £5,000,000 from another comfort of the poor—don't touch that. Begin with paper—it is of only a penny tax; ring the changes on that penny. That penny will get in the point of the wedge. Trust me, that once in, all the rest must soon follow. And when in process of time we are enabled to table our whole financial scheme, my revolutionary projects of finance, embellished and disguised by your rhetoric, we will astonish the world by the production of what in Manchester we should term a prime article—the last and best sample of the Oxford mixture." Well, Sir, we have had two samples—first, we had the Treaty, which my hon. Friend the Member for Birmingham told us was the object of his warmest affections; but we know that it was also a child of the Chancellor of the Exchequer. But, however, as all progenies must have two parents, we may assume that while the Member for Birmingham enjoys the pride of paternity, it was on the Chancellor of the Exchequer that there devolved the pains of labour. The firstborn was "Master Treaty," and in fulness of time appears "Miss Budget," with every prospect of a numerous progeny. We have already had timely notice of a third approaching birth. I hold in my hand a letter, signed with the right hon. Gentleman's name, addressed to a clergyman in Wales who had written to him, complaining as clergymen may well complain, of the burden of the increased income tax, and who complained also of the grievous burden of the rating to the poor. The Chancellor of the Exchequer replies, and in reference to the rating to the poor he begins of course by knocking down the poor Clergyman, as he knocks everybody down who attempts to dispute with him; but as to the income tax he really has the courage to write and publish this reply. He says, "I must remind you that the increase of the income-tax is not in the will of the Ministry, but in the will of the nation, which a few years ago was content with an expenditure for military services of—" I can't read the figures exactly, but say of so many millions.

THE CHANCELLOR OF THE EXCHEQUER

Pray read what I wrote.

MR. HORSMAN

It runs, I think—"The nation, which a few years ago was content with a Supply service of £21,000,000, [The Chancellor of the Exchequer: Hear, hear!] but which now thinks fit to spend on the same service £21,000,000"—[Cries of "Oh!"] I cannot read the figures, but I understand my right hon. Friend to contend that the increase was in the military service.

THE CHANCELLOR OF THE EXCHEQUER

I wrote nothing of the kind.

MR. HORSMAN

Well, I cannot read the extract clearly, so I will not press the point. So far I have stated frankly, in strong language I own, but not stronger than the opinions which I hold demand, my views of the proposals of the right hon. Gentleman. Perhaps he may meet me tonight, as he met me on Friday night, by telling me that on this, as on previous occasions, Her Majesty's Government, to use his own words, "have not been so fortunate as to find favour" with me. Perhaps he may meet me, as, departing from his usual good taste, he met me on Friday night, when he endeavoured to catch a cheer—which I am sorry to say—an aberration from the usual good taste of the hon. Gentleman who sat behind him—he succeeded in catching—by telling me that, in reference to my proceeding, my "sense of duty had better remain inscrutable." There have been, I confess, three great occasions during this Session on which I have thought it my duty to criticise the measures of the Government. Two of them were involved in the measure before us—the third was the Reform Bill. If my right hon. Friend inquires why I criticise the measures of the Government I will tell him that I do so because—to use a vulgar expression, for which, perhaps, I ought to apologize, as I remember the right hon. Member for Bucks once rebuked us for using it here, because, he said, it was not English—I am an enemy to all "shams." When the Government proclaimed their Treaty as a proof of confidence in France, I looked on that as a sham, and said so at the time. Again, when the Reform Bill was put off for a whole month, there being no business before the House, I considered it was a sham, and, if I may say so without offence to my right hon. Friend, who himself has set the example of diverging into these personal matters, in the estimation of most people probably his presence on that bench as a leading member of a Reform Government was the greatest "sham" of all. Having voted for the Reform Bill of the previous Government, with an eloquent protest against its having gone too far, that he should be the keystone of a new Administration, of which the great measure was to be a much larger reform, was enough to startle any one. Well, Sir, I thought the same description was applicable to the Treaty and to the Budget, and I have stated my opinions in regard to them, and vindicated them in the face even of so formidable an antagonist as ray right hon. Friend; but I must appeal to the House whether I have on any one occasion exceeded the bounds of fair Parliamentary discussion. I think, therefore, the expression of the Chancellor of the Exchequer with which he gained a cheer when he told me my sense of duty "had better remain inscrutable" was entirely uncalled for. Now, Sir, let me give my right hon. Friend a word of advice. He is the last man in the House, I say, who should diverge from political questions to invite a war of personalities, because within the four corners of the British Empire there lives not a politician so vulnerable as my right hon. Friend. No man has owed so much to the forbearance of the House of Commons. No man has been so largely indebted to the generous indulgence of the country. No man has ever insulted him by asking whether the epithet inscrutable was applicable to any of his political eccentricities. Can any man describe those eccentricities? Shall I endeavour to describe them? I will treat my right hon. Friend with more generosity than he has treated me, and I will set him an example in this respect which it would have been better had he set me. No one, Sir, knows better than he—no one has had cause to feel more acutely, that when in our wars of parties and political strifes any public man in this House chooses to separate himself from the intrigues of cliques and the manœuvres of faction, he is sure to be assailed with petty personal aspersions, which coming from an ordinary quarter no man of sense or character will trouble himself about, but which are very different when they proceed from one in the elevated position of a Minister of the Crown. It is the character of this House, it is the independence of every man in it, which is struck at when a Minister of the Crown condescends to make himself the mouthpiece of personalities like these. I will not pursue this point further—I will trust to my right hon. Friend not again to diverge to a course on which he ought never to have entered. I wish now to draw the attention of the House to the position in which this question now stands. This Bill is pregnant with principles of the most dangerous character. Now, what I want to warn the House against is this:—The Chancellor of the Exchequer is claiming the confidence and support of the country in the new career upon which he has entered, on the ground that he is following in the footsteps of Sir Robert Peel. I maintain, and am ready to prove, that he has in every respect abandoned the principles of that great statesman; that he has left the school of Sir Robert Peel, and attached himself to a newer and bolder one. With the exception of that little chasm in his financial proposal which he himself described, which he made and filled up, there is not one feature of his scheme which is not a plain and flagrant abandonment of the principles of Sir Robert Peel. ["Oh, oh!"] I will show you that it is so in a few words. The great guiding principle of Sir Robert Peel's policy was, to carry the country over future years by establishing its finances on an intelligible and sound basis, and to secure it against frequently recurring deficits. The Chancellor of the Exchequer begins by clouding and embarrassing the future with inevitable deficits. By anticipating the revenue of future years he creates a deficit, which he knows must be repaired by an increase of direct taxation—which must in its turn be the precursor of further deficit and embarrassment. Sir Robert Peel so operated on the national finance as to facilitate the discontinuance of the income tax. The Chancellor of the Exchequer throws additional impediments in the way of that discontinuance by employing it as a substitute for a flourishing branch of the indirect revenue. Again, with respect to the measure before us, Sir Robert Peel's principle was to reduce taxes, and by increasing consumption to enlarge the revenue; but once more in this Bill the Chancellor of the Exchequer tramples upon that principle, by abolishing a flourishing source of indirect revenue, and substituting for it a war tax. Sir Robert Peel denounced class legislation, and his Budgets were wise and just boons to the operative classes, but the Chancellor of the Exchequer's is a middle-class proposal; it enriches the manufacturing employer, and withholds from the operative the promised remission. Sir Robert Peel, again, most carefully, most cautiously approached the apportionment of direct and indirect taxation, in order that he might arrive at just conclusions after full inquiry and public dis- cussion; but on the present occasion the Chancellor of the Exchequer avoids that discussion, ignores the difficulties, and seduces us into a precedent which in succeeding years may serve as the basis of further fatal operations. Above all, and with this I shall conclude, Sir Robert Peel admonished his countrymen and his disciples that they should treasure the income tax as a great national resource, in order that foreign nations might know that we had for emergencies a great expansive force, which as it was a mighty engine for war, soit might also be a guarantee for peace. The Chancellor of the Exchequer prostitutes that great element of national strength into a relief fund for agitating class interests. The paper-makers get it to-day, the sugar-dealers will scramble for it to-morrow, the licensed victuallers may coerce him in a future year, until year after year, the principle violated and this great reserve broken down, when the hour of trial comes—a bad harvest, a commercial pressure, or a war, we shall awake to the magnitude of our folly, and to the reality and extent of that financial disorganization which history warns us is too often the precursor of national convulsion.

THE CHANCELLOR OF THE EXCHEQUER

Sir, at any period of the evening, but especially at the late hour at which we have now arrived (twenty minutes after 12 o'clock), I should endeavour to be very short in my reply to that part of the speech of my right hon. Friend of which I was myself the subject. If really, of which I was not aware before, I gave occasion to that terrific attack by an unhappy and casual expression which dropped from me in the rapidity of debate on Friday night, and if that expression has wounded the feelings of the right hon. Gentleman, I can only say that I am extremely sorry for having used it. The right hon. Gentleman is not, I think, quite right in supposing, as he appears to do, that he has always been remarkable for moderation of speech. It was not in my mind on Friday night—I had entirely forgotten it until I heard something of the same sort again this evening—but I do recollect that on a former evening he stated, with a blandness of manner not quite in harmony with the words, that, while Sir Robert Peel conducted the finances of this country in the spirit of a statesman, the present Chancellor of the Exchequer commenced as a spendthrift and finished as a footpad. And, Sir, vivid as has been the contrast which the right hon. Gentleman has drawn tonight between the policy of Sir Robert Peel and that of the present Government, I do not think that any of the touches which he gave to the picture succeeded in producing a sharper antithesis than his very first effort after the Budget had been brought forward. Now I pass entirely from that subject to what is more important, because it stands in some relation, at any rate, to the question which we have to decide to-night; and here I cordially agree with the right hon. Gentleman that he has not minced the matter, for he has drawn such a picture as would be perfectly wonderful from any hand but his. The abolition of a duty of excise—that is the proposal which is before the House, and in it he sees—what does he not see? He sees the triumph of the hon. Member for Birmingham, and he imagines the letter which the Chancellor of the Exchequer has written to that hon. Member. Observe how much more easily he deals with his imaginings than with his facts. Although he could not make out the letter which he had extracted from a newspaper, and which, I believe, was really a letter of mine, although he entirely failed to decipher that, the letter which was written only on the tablet of his own brain he read verbum verbo to the House, and never stickled at a point or a passage. A predominance of this faculty is necessary to my right hon. Friend. Is this really the first proposal that has been made to repeal a duty of Excise? Why is my hon. Friend to imagine that a series of horrors are to follow this beginning, each one of which, as he enunciated it, drew increasing cheers from a small but enraptured band, and which he led up to its climax by deliberately asserting that the natural consummation of the Budget of the present year would be in a system of general confiscation! There may be here and there an hon. Member of this House who shares that opinion, but, for my own part, I frankly own that, rather than waste the time of the House in dealing with statements of that kind, I should prefer to leave sentiments so extreme and so extravagant to stand confuted in the public view by what I must venture to call their own absurdity. In the course of those portions of my right hon. Friend's speech where his flight was less high, I felt inclined to ask, "How does he mean to vote to-night?" because the Motion of the hon. Member for Somersetshire is not merely a declaration that the repeal of the paper duty is inexpedient—it is, as far as I can understand it, also a declaration that this House is determined not to vote the income tax at the rate at which it was proposed by Her Majesty's Government. But that is not the sense of the speech of the right hon. Gentleman. The speech of the right hon. Gentleman consisted almost throughout of an ingeniously reasoned contrast between the claims for the repeal of the paper duty on the one side and of the tea and sugar duties on the other. All the horrors of which we are guilty, at least at the present moment—the rest remain locked in our breasts—but at present the great horror which we have committed, according to his speech, is, not that we have proposed the repeal of an indirect tax, but that we have made a bad choice and are going to repeal the paper duty instead of the tea and sugar duties. Well, I want to know what is the real view of my right hon. Friend. Does he agree with us that this million of money which is in question ought to be bestowed upon the repeal of an indirect tax? Because, if he does not, what was the meaning of all those appeals to the feeling of the House respecting the claims for the repeal of the tea and sugar duties? I must say that if he did not mean that, if while taking credit for the humanity and wisdom of giving that relief to the consumers of tea and sugar, who are the mass of the population, he had in his own mind the intention of giving them no relief, and was merely playing off that part of the question against the repeal of the paper duty, then I really must say that I think his speech, undoubtedly without any intention of his own, could only tend to bewilder and delude the House. If, on the other hand, the right hon. Gentleman thinks that we are right in proposing to grant the benefit of this remission to the trade and industry and to the commercial classes of the country, but only thinks that we have made an error in the choice of the subject, that I must confess is, in my opinion, a very immaterial difference. We carefully examined the case between the tea and sugar duties, or rather the tea and sugar duties on the one side, and the paper duty on the other, and we came to the conclusion that the repeal of the paper duty would be far more beneficial to the community at large. I never denied, as my right hon. Friend seems to imagine, that the repeal of the sugar duty would cause a considerable increase of trade. That proposition is perfectly clear; but he says that whether we repeal one tax or repeal another tax we shall produce an exactly equal increase of trade. That was the doctrine propounded by him in the lectures on political economy, which he delivered to the House; but I entirely differ from him upon that point. I dissent from the doctrine that all our taxes are equally beneficial or equally injurious. The reasons which induced us to propose the repeal of the paper duty in preference to that of any other tax were founded, as I have said, upon a careful examination. By repealing the war tax upon sugar you would undoubtedly cheapen a most important commodity of almost universal consumption, and give rise to a considerable trade, through the exchange of British labour in one form or other for the additional sugar you would consume; but when we looked at the paper duty, it seemed recommended to us by peculiar and powerful considerations. There is no commodity of more universal use than paper. It is a great error to suppose, as my right hon. Friend has supposed, that paper is consumed exclusively by the rich. The rich, no doubt, are the largest consumers for mere writing purposes, but paper is consumed to an enormous extent by the poor, who can scarcely purchase a single article of daily consumption, or of the small comforts of their lives, which is not wrapped in paper that enhances its price. [A laugh.] Yes, I repeat, that enhances its price—not in the same degree, I admit, as the paper consumed by the rich, who use the better sorts of writing paper and finely-printed books, that are taxed at the rate of three, four, or five per cent. But the poor are large consumers of paper that is taxed at the rate of twenty, thirty, forty, and even fifty per cent, and the paper duty, therefore, is no light matter to them. Again, my right hon. Friend seems to forget that there is another great use of paper, which is this—that it is a most important raw material of your manufactures, in the sense of its being a necessary accessory of your export trade. Of the £1,200,000 which the paper duty yields, a very considerable proportion is nothing more nor less than a charge upon the export of manufactured goods. The quantity of paper used for packing manufactured goods is so large as to form a large portion of the whole supply. But that is not the whole case with respect to the paper duty. I am sure my right hon. "Friend has taken no pains—otherwise, with his sagacity, he would have arrived at a different result—to examine into the real condition of the paper trade. It is perfectly true that as regards the known, usual, and ordinary qualities of paper the duty is easily levied; but the great facts of the case lie beyond the bounds of that proposition. We are really dealing with an almost unlimited mass of raw material which is applicable, not only to the known uses of paper, but to an almost unbounded diversity of uses, but which is arrested on its way to those uses by the operation of your Excise duty. That is a view of the case which my right hon. Friend has never had before him at all, but it is one which Her Majesty's Government took into consideration when they came to the conclusion that by repealing the paper duty you would be removing not simply a duty levied at a certain stage upon certain goods, but that which operates with the power and effect of a prohibition upon a number of trades that, but for its existence, would spring up and flourish. I hold in my hand a material which is as rigid as corrugated iron. It weighs about a fourth of what the same bulk of corrugated iron would weigh. It costs a very small fraction of what corrugated iron would cost. It is entirely uninflammable. It is not in any degree acted upon by temperature; it is made entirely impervious to moisture by a coating of pitch. It is a sheet of corrugated paper made for the roofing of houses, and I venture to tell my right hon. Friend that if we had been in possession of this material in the winter of 1854, when shelter was wanted for our troops in the Crimea, and when the best expedient we could devise was to send out thousands upon thousands of tents and wooden huts, which, when they arrived at Balaklava, could not, on account of their weight, be taken up to the camp, we might have saved not only a vast amount of treasure, but many thousand valuable lives. The inventor of this article writes to me that he invented it nearly four years ago; that he took out a patent for it, and that the material is admirably adapted for emigrants' houses and military huts, but that in consequence of the existing excise regulations he is unable to manufacture it. He adds that, if those regulations are removed, there are hundreds of thousands of tons of raw material, now considered perfectly useless, which can be employed in the manufacture of corrugated paper. If it were earlier I should enter more at large into this part of the subject, but I must pass by many interesting questions connected with the operation of the paper duty, especially with respect to the enormous scope there is in so many directions, not for the mere relief of existing manufacturers from the burden they now bear, but for the removal of what operates as a positive prohibition to the creation of a multitude of new trades, which you might as well prohibit by your law as prohibit by excise regulations. I hope I have shown more clearly why it is the Government have thought they acted wisely in proposing the repeal of the paper duty in preference to the repeal of the duty on tea or sugar. It is because we felt that in all likelihood through the repeal of the paper duty you may call into existence twice or thrice as much trade as you would call into existence by a corresponding sacrifice in the shape of a reduction of the tea or sugar duty. My right hon. Friend says we know nothing about the principles of Sir Robert Peel. He has got exclusive knowledge of them. Sir Robert Peel's grand principle, it seems, was to reduce duties, but not to abolish them. My right hon. Friend, before he undertook to instruct us in the policy and principles of Sir Robert Peel, ought at least to have made himself acquainted with the subject. Who abolished the duties on exports? Who abolished the duty on wool? Who abolished the duty on cotton? Who abolished the duty on glass? It was Sir Robert Peel; and I do not hesitate to say that taking the paper duty question, not in the state in which it was ten years ago, when much less was known, but in the state in which it now is, there is a far stronger case for repeal than there ever was for the repeal of the duty on glass, the duty on soap, or any of those excise duties which we have abolished within the last quarter of a century. It is true that the paper duty is an increasing duty, which, primâ facie, is a presumption that it is not one of those which have the greatest claim for repeal. But the duty was an increasing duty at the time this House condemned it, when my right hon. Friend joined in the condemnation, and when he said the duty ought to be abolished as soon as possible. Here has now come a year in which £2,000,000 of annuities are falling in, when there is some claim for the revision of indirect taxation arising out of the state of the tea and sugar duties, and when £1,400,000 of casual receipts are going to be applied to the expenditure of the year. "When could we find a better opportunity for redeeming the pledge given by the House, that the duty on an article of such universal use should be repealed. The other policy simply means that you will take whatever you can and throw it into the gulf of expenditure, and that, while compelled to maintain a high income tax, you will depart from the principle upon which renewals of the income tax have hitherto been proposed, namely, that of associating the income tax with a further prosecution of reforms in your commercial law. My hon. Friend brought forward his Motion in a manner to connect as far as he could the question of income tax with the question of the paper duty. He has done it without any notice, which I much regret. It is only a few days ago that the Government were accused by the right hon. Baronet (Sir John Pakington) who sits below him of a desire to stifle discussion because the hon. Member for Middlesex (Mr. Byng) only gave two or three days' notice of an important Motion. I will not retort that charge. I am sure my hon. Friend had no such intention. All I regret is that the Motion, as it stands, is untrue. It states as an undoubted truth that which is not only disputable, but the exact reverse of the truth, and it tends to mix up together questions which ought to be kept quite distinct. I will notice, first, what my hon. Friend said, that the paper duty is an increasing duty. Why is it an increasing duty? For this reason, that paper is in most cases an accessory, and, being only an accessory, it is subject to causes which act powerfully on things which are accessories. Not long ago we surrendered large revenues from advertisement duties and newspaper stamps. That gave a great impetus to newspapers, but the increased demand for newspapers is no proof that the paper duty is a good duty. We have set free, generally speaking, the whole commerce of the country. You cannot export manufactured goods without paper to wrap them up. Your exports have nearly trebled, flow is it possible that the paper duty should not increase? Supposing you were to lay a heavy tax on mustard, that would not materially check the consumption of roast beef, and paper is in much the same relation to exported articles as mustard is to roast beef. I say that you can draw no argument from the increase of the paper duty in favour of the duty. The duty is burdensome in varying degrees, but on the whole it presses heavily, and by far the most heavily on common descriptions of paper, which, whether in literature, furnishing, or the wrapping of commodities, are used by the lower classes. Perhaps the House will permit me to observe to them the very singular state of things generated by the paper duty. In the book trade and the production of books, the effect is the creation of one chain of monopolies. The whole way, from the maker of paper to the reader of books is occupied by a succession of monopolies. I speak of monopolies not offensively, but as bad and exclusive trade which is the result of bad laws. In the first place the publisher cannot deal with the paper-maker. He must deal with the wholesale stationer. The stationers stand, as a body, between the paper-makers and all who use paper, and they have a complete monopoly of the market. Next to them come the publishers, and we know that, notwithstanding the cheapness of all other manufactured goods, for the best class of books this country is still the dearest in the world. France with her protective system and many disadvantages, produces books of the same value at a half or at a third less than we do. Take the railway library of England and compare it with the railway library of France. It is most unworthy of England, who prides herself on preeminence in manufacture. The monopoly of the publishers is so rigid that only a few years ago the general body refused to supply books to any retail bookseller unless he would covenant not to take off more than a certain amount of discount in selling to the public. But that is not all. Besides the publishers' and stationers', there is the printers' monopoly—the printers' combination, of the most formidable kind, which proceeds on the proposition, as first and foremost, that no woman shall be employed in printing. Perhaps some hon. Gentleman, on hearing that, may be inclined to laugh, but I believe, on consideration, it will be obvious enough—or, at least, probable—that women are admirably adapted for that particular trade, because they are endowed with a niceness and a smallness of finger which handles types far preferably to that of a man. Notwithstanding this, women are absolutely excluded from the trade by the printers' combination. The result of the paper duty is that, beginning by restraining the trades which can be carried on, it ends in producing a group and cluster of monopolies at every point in the progress of the trade between the making of the paper and the selling of a book. But the great reason of all against the duty is undoubtedly the enormous expansion of trade which appears to be prevented by its operation. And here I come to a reason which was made very light of to-night, and handled in a manner which I could not listen to without pain. My hon. Friend referred to the report recently made by the Board of Inland Revenue. I only wish that those who followed him in the debate had followed his example in the tone in which he alluded to that Report. He most properly, with that feeling which always distinguishes him, and has made him the object of universal respect, criticised the proceedings of the Government and my proceedings in producing that Report, but he cast no aspersions on the able, independent, and honourable men who conduct the Board of Inland Revenue, that vast department, with its vast public interests, officered, as it is, in a manner which makes it a credit to the country. But the noble Lord (Lord B. Cecil) who followed was not so generous, for he rose and said it was a Report made to order. Sir, he had no right to cast that slur. I cheered the noble Lord at the time, and I did so as a warning of the ground on which he was treading. It is an abuse of the privileges of a Member of Parliament to use language concerning men employed in the public service whose feelings are as acute and whose honour is as high as ours, and to allow it to go forth that they are capable, in contradiction of their deliberately expressed opinion, of sending us Reports to order. I hope the noble Lord is sorry for having used that expression. At any rate, I am persuaded he did not see its force when he employed it. This is no Report made to order. My hon. Friend the Member for Somerset said we had improperly produced the Report, and he hoped we should never do such a thing again. Certainly, if fault has been committed by the Government, it is impossible to let us off more easily. But my hon. Friend was guilty of that error in reasoning which may be called, to use an agricultural simile, putting the cart before the horse, for he said the Chancellor of the Exchequer formed his opinion that the paper duty should be abolished, and hav- ing done that he brings out the Inland Revenue and requires them to support his opinion. He puts the cart before the horse. It was the Board of Inland Revenue who formed this opinion first, and the Chancellor of the Exchequer and the Government in coming to that opinion were mainly influenced by the opinion of the Board of Inland Revenue. And surely my hon. Friend will not tell me that if that was the case we were wrong in acquainting the House that those who are responsible for the protection of the revenue had given us fair notice that the revenue from paper, from causes beyond their control, was rapidly approaching an end. It would be a breach of duty if they shrank from informing the Government, and a suppression of truth on our part if we shrank from stating it to the House. This House thought proper to pass a vote promising the repeal of the paper duty in 1858. In 1858 the difficulties were 'not found insurmountable, nor even very serious. They were increasing, but were not very serious; but since the vote of the House proceedings have taken place which have reduced the Board of Inland Revenue almost to despair. Does my hon. Friend consider what will be the effect of carrying his Motion? There must be a new set of laws for enforcing this excise, with a new set of restrictions on trade and a new set of penalties to enforce them. All this must be done to enforce a duty which has been condemned two years ago by the unanimous vote of the House of Commons; and I want to know of my hon. Friend whether, as a practical and sensible man, he thinks it very likely any Government can be found to propose to carry such laws through the House of Commons. I will not pretend to say what is possible or impossible, but that is a task most undesirable to undertake. The case of the paper duty and of the sugar duty is one which had to be decided on practical considerations. I am very sorry to see that my hon. Friend gave no weight to the argument that the repeal of the paper duty bears directly on rural labour and the disposal of rural commodities. Those are two branches. If I take the disposal of rural commodities, I understand there is a highly hon. Person, much given to the cause of protection even now in its decline, who has lately taken an active part in establishing a society for promoting the growth of flax, when the duty is taken off, on the ground that, although the production of flax, when grown for the linen manufacture alone, will not pay, yet if the refuse fibre can be applied to paper manufacture flax will become a profitable crop. With regard to rural labour, my hon. Friend will feel that his argument is a very weak one when he said, "For Heaven's sake do not bring mills into my neighbourhood. It is extremely well adapted for them, but they are the last things I wish to see, because even now there is hardly labour enough to get in the harvest." That is a very good argument for my hon. Friend, but for the labourers in his neighbourhood it is the worst in the world, because it shows that my hon. Friend has to pay dear for getting in his harvest, and that if paper mills came into his neighbourhood he would have to pay dearer still, I am sure that he will willingly do so for the good of his country; but, however that might be, the Government are bound to make a proposition which would give an increased impetus to the labour of the country, and, above all, to the rural labour. The best object that attention could be directed to was, in parts of the country where wages were low to endeavour to multiply the means of employment. Without saying a word more on the paper duty, I will beg the attention of the House to the fact that we have got to dispose of two very different questions. My hon. Friend wants to dispose of the repeal of the paper duty, and also wants the House to vote at the same moment that there should be no further remission of indirect taxation. Those two things are combined in his mind, but they are not so combined in the mind of the Government, and I think I shall be able to show that they ought not to be so combined in the mind of the House. This question, whether we should stop in the course of the remission of indirect taxation, is not altogether a new one; but what was the announcement with which the financial statement was introduced to the House? It was this, that we had considered the position in which we stood—where we should stop in our remission of indirect taxation—and that we had come to the conclusion that under all the circumstances of the time, viewing the state of the expenditure and of the revenue, the lapse of the annuities, the lapse of the war tea and sugar duties—taking all these circumstances into consideration, and adding to them the fact that we were going to apply £1,500,000 of casual monies to the service of the year, we had come to the conclusion that at least £2,000,000 of indirect taxation ought to be repealed. I may say with truth, that that was understood by the House and the country to be the principal announcement contained in the financial plan of the year. The matter, however, did not rest there, for the hon. Member for Essex (Mr. Du Cane) made a Motion condemning the remission of indirect taxation at the present time, and that Motion was rejected by a large majority. I ask, then, whether the country did not understand by the rejection of that Motion that the House accepted the principle that £2,000,000 of indirect taxation were to be repealed. That is our belief, and that is the belief on which we propose to act. I do not think my hon. Friend the Member for Somersetshire will succeed in his Motion; but if he does, our first duty would be to remind the House of the claims so eloquently put forward tonight by the right hon. Gentleman (Mr. Horsman) in favour of the remission of indirect taxation, and to invite it to take it into consideration with the view to reduction of the war duty on sugar. Besides this there are the claims of the holders of the Exchequer bonds to be paid off. It is not therefore a question between the acceptance or the repeal of the paper duty on the one hand and an escape from the tenpenny income tax on the other. I do not see how you can escape from that ten-penny income tax, because if you do not accept of the repeal of the paper duty we should take the earliest opportunity—within a few days probably—of inviting the House to repeal the war tea and sugar duties. But as the tea duty is unfavourably circumstanced at present, in consequence of our relations with China, I should probably invite them to repeal the sugar duty. And, let me ask, what security will you have for your revenue if you do that? We should have given away the sugar duty, which at all events is a perfectly intelligible and tenable duty, and one which the people are content to pay as long as they are satisfied that it is required for the public service. But if we give up the sugar duty, which we can keep this year, the next year we should be asked to give the paper duties, in accordance with the expressed Resolution of the House and the opinions of the Commissioners of Inland Revenue. That, I apprehend, would not be a profitable or safe course to adopt. It is better, in my opinion, to adopt the course we now propose—a course which will stimulate the trade of the country and obviate the inextricable difficulties of levying the paper duty. The question, then, which we have to consider really is, not whether £1,000,000 of indirect taxation shall be repealed, but simply in what manner it shall be repealed? That is the principle on which we shall act. I believe that the House will adopt the proposal of the Government, and I have the more assurance of that from the fact that I have not been able to understand from the speakers on the other side what duties they would propose to repeal. My hon. Friend the Member for Somersetshire did not quite see the inconvenience of introducing the income tax as he introduced it in this debate. He founded his appeal on its hardship as applied to the lowest class of payers of income tax; but it is not a question as to them; no one proposes to add a penny to their income tax—the addition to it is, as far as they are concerned, only a halfpenny; but lot mc remind the House that the question as to what exemption from income tax shall be allowed still remains to be dealt with. The hon. Member for Lancashire has given notice of a Motion for the partial exemption of all incomes up to £500. I do not think that such a change will be adopted by the House, because it would be beyond precedent, and not only inconvenient but dangerous. But the question what amount of exemption shall be given to persons of very small means is a question entirely open, and with respect to which latitude may be allowed to the House in perfect conformity with precedent derived from the history of the income tax in former years; but let me ask my hon. Friend if it is a fair test of the income tax to take only its incidence on the very lowest class who pay it? The income tax is a grievous tax in its incidence to that body of persons, and for my own part I should neither be astonished nor should I complain if the House were disposed to increase the partial remission which it makes on their behalf now or at some future time. It is impossible to deny that it is a grievous tax as it affects persons of small incomes, and especially of small fixed incomes. I have heard it said that I have given a full account of all the vices of the income tax. I have described them, and my opinion remains now very much what it was before upon that subject. I think the vices of the income tax are many, great, and manifold; but I said that why you retain it, in my opinion, was because it was essential to assist in giving those great benefits to the people which alone made it endurable, and caused it to be endured. It has many vices, but it has one great virtue, which is this—that in the main, without any injustice in its general scope, without any of those idle dreams of plunder and confiscation which we have heard to-night, it does make the property of the country subservient to the uses of the State within limits which are safe and for purposes which are beneficial. The income tax, as administered, has no tendency to unsettle the foundations of property. What it might be in the hands of those who seek to give it a more speculative perfection I will not undertake to say. The position of the Government, then, with respect to the paper duties is this We think it part of our public duty, part of the pledge we gave to the country which has given such a general and warm support to our financial measures, that we should redeem the pledge which we gave a month ago—namely, that under the existing circumstances of the present year, we should ask for such a repeal of indirect taxation as should not exceed two millions of money. We desire the House to exercise an impartial judgment on the question—what is the best mode of applying that sum; but for all the reasons I have stated, we submit that the wisest and most prudent choice we can make is to determine to repeal the paper duty, and to give freedom to a great branch of industry, which we have great reason to hope will develop itself in a thousand directions, and add to the demand for labour, and through the demand for labour to the prosperity of the country, in a degree out of all proportion to even the considerable amount of revenue which the duty now represents

SIR JOHN PAKINGTON

Sir, I hope even at this late hour I may appeal to the House for a very few moments to listen to one of that small and enraptured body to which the right hon. Gentleman alluded, and of which I avow myself to be one. I understood the Chancellor of the Exchequer to insinuate, and the President of the Board of Trade more distinctly to affirm, that the House had entered into some engagement upon the falling in of the Long Annuities to apply that amount to the repeal of the indirect taxation of the country. I utterly deny that any such understanding or engagement was ever come to by this House. On the contrary, if there was any understanding more clear than another, it was that that amount was to be applied to the reduction of the income tax. The Chancellor of the Exchequer was a party to that arrangement, and in my opinion there never was a Minister more pledged to any point of policy than the right hon. Gentleman to the repeal of the income tax in the present year. I implore the House not to proceed to a division without considering the condition of that class to which the Chancellor of the Exchequer has just adverted, but for which his Budget does nothing, or worse than nothing—I mean the working classes of the country, and the holders of small fixed incomes. The Budget deals liberally with the holders of coals and iron, with the large manufacturers of Lancashire, with the rich generally in reducing the duty on the wine they drink; but what does it do for the working classes? It maintains a high duty on tea and sugar, and on the holders of small incomes, it inflicts the grievous hardship of increasing the income tax. I should like further to know from the Chancellor of the Exchequer what is the amount of duty we are now going to abandon. The right hon. Gentleman has not been quite candid in the matter. He has more than once spoken of the receipts from the paper duty as about £1,000,000; but I believe that in 1861 it will amount to £2,000,000, the repeal, of course, not commencing till July. The repeal will be permanent, and therefore we ought to deal with the gross amount of the duty. Last year it yielded nearly £1,300,000, and there is a rumour that in the current year that ends at the close of this month it will be about £1,500,000. I want to know whether that is true or not; and if not, whether there is any advance on the £1,300,000 of last year? That is a most important question when we are about to abandon so large an amount of revenue in the face of a deficit of £9,000,000, and under the necessity of imposing an increased income tax on the country. Most of us on both sides of the House were supporters of the Resolution of 1858, and we are not disposed to recede from that Resolution; but the question we have now to decide is, not whether the paper duty shall come off, but whether this is the proper moment for abandoning it. As to the corrugated paper which the right hon. Gentleman produced, I may remind him that the soldiers in the Crimea had a preparation of felt which was quite as light and valuable. The ground upon which we are going to divide is not that the duty is a good impost, but that the Budget bears hardly on the poor and industrious classes. Is there any man in this House who believes that Mr. Pitt or Sir Robert Peel would have sacrificed £1,500,000 of revenue in the face of a deficit of £9,000,000. At this moment it is unwise and improvident to make such a sacrifice, and I shall oppose it by giving my support to the Motion of my hon. Friend.

THE CHANCELLOR OF THE EXCHEQUER

said, the right hon. Baronet had asked him to explain his reference to the amount of revenue to be lost by the repeal of the paper duty. He had not stated the details that night, but on the first night, when he made his financial statement, he spoke of a million, because that was precisely the sum which he found, by the estimates of the Board of Inland Revenue, would be lost by the repeal of the duty during the next financial year, supposing that repeal to take place on the 1st of July; of course, if the repeal were postponed, it would be somewhat less; but the further amount which would take place in the next financial year would be £230,000 more, in addition to the £1,000,000, making for the next financial year, according to the estimates with which he had been furnished, £1,230,000. Against that, there were three direct sets-off to be made—one being for the savings in the Inland Revenue establishments, a second for the savings on the whole of the paper used for Government purposes and in the Government establishments, and the third being the saving by the abolition of the impressed stamp and by the changes in the regulations, the amount of which would be altogether, he supposed, £ 100,000 or £ 150,000 a year. He knew nothing whatever of the rumour which the right hon. Gentleman had mentioned about the million and a half.

Question put,

The House divided:—Ayes 245; Noes 192:—Majority 53.

List of the AYES.
Acton, Sir J. D.	Arnott, Sir J.
Adam, W. P.	Ashley, Lord
Agnew, Sir A.	Atherton, Sir W.
Alcock, T.	Atherton, A. S.
Andover, Visct.	Bagwell, J.
Angerstein, W.	Bailey, C.
Antrobus, E.	Baines, E.

Baring, T. G.	Gifford, Earl of
Baxter, W. E.	Gilpin, C.
Bazley, T.	Gladstone, rt. hon. W.
Beale, S.	Glyn, G. C.
Bellew, R. M.	Glyn, G. G.
Berkeley, hon. H. F.	Goldsmid, Sir F. H.
Berkeley, Col. F. W. F.	Gordon, C. W.
Biggs, J.	Gower, hon. F. L.
Black, A.	Graham, rt. hon. Sir J.
Blake, J.	Greenall, G.
Blencowe, J. G.	Greene, J.
Bonham-Carter, J.	Gregson, S.
Bouverie, rt. hon. E. P.	Greville, Col. F.
Bouverie, hon. P. P.	Gray, Capt.
Bright, J.	Grey, rt. hon. Sir G.
Briscoe, J. I.	Grosvenor, Earl
Bristow, A. R.	Gurney, S.
Bruce, Lord E.	Hadfield, G.
Buchanan, W.	Hanbury, R.
Buller, J. W.	Handley, J.
Buller, Sir A. W.	Hankey, T.
Butt, I.	Harcourt, G. G.
Buxton, C.	Hardcastle, J. A.
Byng, hon. G.	Headlam, rt. hon. T. E.
Caird, J.	Heneage, G. F.
Calthorpe, hon. F. H. G.	Henley, Lord
Cardwell, rt. hon. E.	Herbert, rt. hon. S.
Castlerosse, Visct.	Hervey, Lord A
Cavendish, hon. W.	Hodgkinson, G.
Childers, H. C. E.	Hodgson, K. D.
Cholmeley, Sir M. J.	Holland, E.
Clay, J.	Howard, hon. C. W. G.
Clifford, C. C.	Howard, Lord E.
Clifford, Col.	Humberstone, P. S.
Clinton, Lord R.	Hutt, rt. hon. W.
Clive, G.	Ingham, R.
Coningham, W,	Ingram, H.
Cowper, rt. hon. W. F.	Jackson, W.
Craufurd, E. H. J.	Jervoise, Sir J. C.
Crawford, H. W.	Johnstone, J. J. H.
Crook, J.	Johnstone, Sir J.
Cross, R. A.	Kershaw, J.
Crossley, F.	King, hon. P. J. L.
Dalglish, R.	Kinglake, A. W.
Davey, R.	Kinglake, J. A.
Davie, Sir H. R. F.	Kingscote, Col.
Davie, Col. F.	Kinnaird, hon. A. F.
Deasy, rt. hon. R.	Knatchbull-Hugessen, E.
Dent, J. D.
Dodson, J. G.	Laing, S.
Douglas, Sir C.	Langston, J. H.
Duff, M. E. G.	Lanigan, J.
Duke, Sir J.	Lawson, W.
Dundas, F.	Lee, W.
Dunlop, A. M.	Lennox, Lord H. G.
Ennis, J.	Lever, J. O.
Evans, T. W.	Lewis, rt. hon. Sir G. C.
Ewart, W.	Locke, Joseph
Ewart, J. C.	Locke, John
Ewing, H. E. C.	Lowe, rt. hon. R.
Fenwick, H	Lysley, W. J.
Fermoy, Lord	Lytton, rt. hon. Sir G. E. L. B.
Finlay, A. S.
Fitzwilliam, hn. C. W. W.	M'Cann, J.
Foley, J. H.	Mackie, J.
Foley, H. W.	Mackinnon, Wm. Alex. (Lymington)
Forster, C.
Fortescue, hon. F. D.	Mackinnon, Wm. Alex. (Rye)
Fortescue, C. S.
Freehand, H. W.	Maguire, J. F.
Gaskell, J. M.	Mainwaring, T.
Gavin, Major	Marjoribanks, D. C.
Gibson, rt. hon. T. M.	Marshall, W.

Martin, P. W.	Scholefield, W.
Martin, J.	Scott, Sir W.
Massey, W. N.	Scrope, G. P.
Matheson, A.	Seymour, Sir M.
Mellor, J.	Seymour, H. D.
Merry, J.	Shelley, Sir J. V.
Mildmay, H. F.	Sheridan, R. B.
Mills, T.	Sheridan, H. B.
Mitchell, T. A.	Slaney, R. A.
Moncreiff rt. hon. J.	Smith, J. B.
Monson, hon. W. J.	Smith, M. T.
Montgomery, Sir G.	Smith, Augustus
Morris, D.	Smith, Sir F.
Mostyn, hon. T. E. M L.	Smollett, P. B.
	Somerville, rt. hon. Sir W. M.
Napier, Sir C.
Noble, J. W.	Stacpoole, W.
Norris, J. T.	Stansfeld, J.
North, F.	Steel, J.
Ogilvy, Sir J.	Stuart, Col.
Onslow, G.	Sykes, Col. W. H.
Paget, C.	Thompson, H. S.
Paget, Lord C.	Tomline, G.
Palmerston, Visct.	Traill, G.
Paxton, Sir J.	Trelawny, Sir J. S.
Pease, H.	Turner, J. A.
Peel, rt. hon. F.	Verney, Sir H.
Peto, Sir S. M.	Villiers, rt. hon. C. P.
Pilkington, J.	Vivian, H. H.
Ponsonby, hon. A.	Waldron, L.
Portman, hon. W. H. B.	Walter, J.
Pritchard, J.	Watkins, Col. L.
Proby, Lord	Wemyss, J. H. E.
Pugh, D. (Carmarthen)	Westhead, J. P. B.
Puller, C. W. G.	Whitbread, S.
Ricardo, J. L.	White, Col. L.
Ricardo, O.	Willcox, B. M'G.
Rich, H.	Williams, W.
Ridley, G.	Winnington, Sir T. E.
Robertson, D.	Wood, rt. hon. Sir C.
Roebuck, J. A.	Woods, H.
Rothschild, Baron L. de	Wyld, J.
Roupell, W.	Wyvill, M.
Russell, H.
Russell, A.	TELLERS.
St. Aubyn, J.	Brand, hon. H.
Salomons, Mr. Ald.	Dunbar, Sir W.
Salt, Titus

List of the NOES.
Addcrley, rt. hon. C. B.	Burghley, Lord
Archdall, Capt. M.	Burrell, Sir C. M.
Astell, J. H.	Cairns, Sir H. M'C.
Baring, A. H.	Carnac, Sir J. R.
Baring, T.	Cartwright, Col.
Bass, M. T.	Cave, S.
Bathurst, A. A.	Cayley, E. S.
Beach, W. W. B.	Cecil, Lord R.
Beecroft, G. S.	Close, M. C.
Bentinck, G. W. P.	Cobbett, J. M.
Bentinck, G. C.	Cochrane, A. D. R.W.B.
Beresford, rt. hon. W.	Codrington, Sir W.
Bernard, hon. Col.	Coke, hon. Col.
Bernard, T. T.	Cole, hon. H.
Blackburn, P.	Cole, hon. J. L.
Bond, J. W. M'G.	Colebrooke, Sir T. E.
Bramston, T. W.	Corry, rt. hon. H. L.
Bridges, Sir B. W.	Cubitt, G.
Brooks, R.	Danier, S. D.
Bruce, Major C.	Dawson, R. P.
Bulkeley, Sir R.	Dickson, Col.

Disraeli, rt. hon. B.	Legh, W. J.
Du Cane, C.	Liddell, hon. H. G.
Duncombe, hon. A.	Lindsay, hon. Col.
Duncombe, hon. W. E.	Long, R. P.
Dunn, J.	Longfield, R.
Dunne, Col.	Lopes, Sir M.
Du Pre, C. G.	Lowther, hon. Col.
East, Sir J. B.	Lowther, Capt.
Edwards, Major	Lyall, G.
Egerton, Sir P. G.	Lygon, hon. F.
Egerton, hon. A. F.	Malins, R.
Egerton, E. C.	Manners, rt. hn. Lord J.
Egerton, hon. W.	March, Earl of
Elmley, Visct.	Maxwell, hon. Col.
Elphinstone, Sir J. D.	Miller, T. J.
Euston, Earl of	Mills, A.
Farquhar, Sir M.	Milnes, R. M.
Farrer, J.	Mitford, W. T.
Fellowes, E.	Mordaunt, Sir C.
Fergusson, Sir J.	Morgan, hon. Major
Filmer, Sir E.	Mowbray, rt. hon. J. R.
Forester, rt. hon. Col.	Mure, D.
Franklyn, G. W.	Newark, Visct.
Galwey, Sir W. P.	Newdegate, C. N.
Gard, R. S.	Newport, Visct.
George, J.	Noel, hon. G. J.
Gilpin, Col.	North, Col.
Gladstone, Capt.	Northeote, Sir S. H.
Goddard, A. L.	O'Donoghue, The
Gore, J. R. O.	Packe, C. W.
Graham, Lord W.	Paoke, G. H.
Grey de Wilton, Visct.	Pakenham, Col.
Grogan, Sir E.	Pakington, right, hon. Sir J.
Gurdon, B.
Gurney, J. H.	Palmer, R. W.
Hanbury, hon. Capt.	Papillon, P. O.
Hardy, G.	Parker, Major W.
Hartopp, E. B.	Patten, Col. W.
Hassard, M.	Peacocke, G. M. W.
Hayes, Sir E.	Pevensey, Visct.
Henley, rt. hon. J. W.	Potts, G.
Hennessy, J. P.	Powys, P. L.
Henniker, Lord	Ramsden, Sir J. W.
Herbert, rt. hon. H. A.	Ridley, Sir M. W.
Herbert, Col. P.	Rogers, J. J.
Heygate, Sir F. W.	Sclater-Booth, G.
Hill, Lord E.	Selwyn, C. J.
Holford, R. S.	Seymer, H. K.
Holmesdale, Visct.	Smith, Abel
Hood, Sir A. A.	Smith, S. G.
Hornby, W. H.	Smyth, Col.
Horsfall, T. B.	Somes, J.
Horsman, rt. hon. E.	Spooner, R.
Hotham, Lord	Steuart, A.
Howes, E.	Sturt, H. G.
Hubbard, J. G.	Sturt, N.
Hunt, G. W.	Stracey, Sir H.
Jermyn, Earl	Sullivan, M.
Johnstone, hon. H. B.	Taylor, Col.
Jolliffe, rt. hon. Sir W. G. H.	Thynne, Lord E.
	Tollemache, J.
Jolliffe, H. H.	Trefusis, hon. C. H. R.
Jones, D.	Valletort, Visct.
Kekewich, S. T.	Vance, J.
Kelly, Sir F.	Vandeleur, Col.
Kendall, N.	Vansittart, W.
King, J. K.	Vernon, L. V.
Knatchbull, W. F.	Walcott, Admiral
Knightley, R.	Walker, J. R.
Knox, Col.	Walpole, rt. hon. S. H.
Lacon, Sir E.	Walsh, Sir J.
Leeke, Sir H.	Watlington, J. W. P.
Legh, Major C.	Whiteside, rt. hon. J.

Whitmore, H.	Wynne, W. W. E.
Williams, Col.
Wyndham, hon. H.	TELLERS.
Wynn, Col.	Miles, Sir W.
Wynne, C. G.	Stanhope, J. B.

Main Question put, and agreed to.

Bill read 2°, and committed for Thursday.

House adjourned at Two o'clock.