HC Deb 19 March 1861 vol 162 cc20-37

rose, to call the attention of the House to the levy of income tax in England upon incomes and profits arising in India, which were already subject to an income tax in that country, and to move that certain petitions in reference thereto be referred to the Select Committee on income and property tax. Several petitions had been presented to that House complaining of this double income tax, and they bore the signatures of the Rothschilds, the Barings, and of many of the great commercial establishments in the City of London, both of a public and private character, connected with the commerce of India. The petitioners started with the admission that they were at the present moment liable by the legislation of this country and of India to the payment of the income tax on profits and income derived in either country; but they represented that there were great inequality and injustice in the manner in which the tax was levied, and, likewise, that it was inexpedient and impolitic, in reference to the interests of India, in connection with the public credit of that country, and other considerations, that persons engaged in trade or connected in other ways with India should be subject to this double charge. It would be his duty to make some observations in respect to these points, but it would form no part of his task to discuss the particular merits of an income tax, to consider whether an income tax was a fitting tax for the people of India at the present time, or to lead that House into the expression of any opinion as to whether that House was bound to adopt any of the responsibilities of India in respect to its debt. The petitioners who had addressed the House might be divided into three classes:—First, those who in this country were termed fundholders—the holders of the public acknowledgments of the debt of India; secondly, those engaged in industrial pursuits, such as merchants and planters, and cultivators of tea, coffee, indigo, &c.; and, lastly, the class of annuitants, being those who had performed long service to the State and who received a portion of their annuities in India. Adverting to the first of the classes, he needed not to remind the House that India was not so fortunate as to have escaped from the fate, which seemed to await all civilized communities, of being burdened with a heavy public debt. According to a return laid on the table not many days ago it appeared that the amount of the negotiable public debt of India might be stated at the sum of £61,227,826. Tin's debt was not a debt such as people were accustomed to deal with in this country. It was not a funded debt, or a book debt; but it was a debt held by the public, in the form of promissory notes of the Government of India, and the Government were not bound to pay them at any particular time, but were bound to pay them within one year from the period at which they declared their intention of paying them. The interest of these notes was paid in India for a long period of time, until the end of 1858. In the month of November of that year the Government of India, seeing that the markets of this country were practically closed in respect to their public securities in India, by the regulation that persons residing in this country and holding these promissory notes could only receive the interest through an agency at Calcutta, hit upon the expedient of enabling holders to receive their interest here instead of at Calcutta if they so chose. They published a notification according to which the holders of these notes were permitted to send the notes in for registration in this country with a memorandum "enfaced," as the term was upon them to the following effect:—"Interest payable in London by draught on Calcutta." Thus, the holders of these notes, complying with the form prescribed, were enabled to receive their interest in London. If the note bore an amount of interest due on a certain day in Calcutta, the holder in this country was allowed the privilege of receiving in London a bill of the Secretary of State for the amount payable in India, and by selling that Bill in the market he obtained his interest. The policy of the Government in making this concession was obvious, their object being to make a concession which was a matter of great convenience to the public creditor, and also to open the market in London for the sale of these securities. The effect was almost instantaneous, for in a short time no less than £6,000,000 worth of the public debt of India was forwarded to this country, relieving the market in India, already over-burdened to that extent. In the month of February, 1860, Mr. Wilson made his financial statement in the Legislative Council at Calcutta, and, foreseeing that some difficulty might arise in reference to the income tax he was about to propose, he shielded the Government against any difficulties in respect to the action of the income tax, in consequence of these notes being transferred to this country, by altering the "enfacement," and by the insertion of the words "subject to the deduction of the Indian income tax." By the means of these notes there had been altogether remitted to this country £8,000,000 of the public debt of India; and of these £6,000,000 bore the simple enfacement "interest payable in London by draught in Calcutta." The other £2,000,000 of public debt bore the special enfacement "subject to the deduction of the income tax payable in India." In the course of last year the issue of these Bills in payment of interest by the Secretary of State appeared to have attracted the notice of the authorities at Somerset House, and he was informed that a demand was made on the Secretary of Stale to the effect that he should make a claim on behalf of the Exchequer of this country for the deduction of the imperial income tax on account of the bills drawn on Calcutta, the amount of which was received by the holders in this country. The public resisted this claim, and the case was taken up by the Oriental Bank, Representations were made in the month of May last year to the Secretary of State, on the ground that the deduction of the income tax for Imperial purposes from bills so drawn was illegal. No heed was taken of this remonstrance until the month of September, when it was agreed that a case should be submitted to the Court of Exchequer. But the matter met with unexpected delays on the part of the legal advisers of Somerset House. The opportunity was lost, and the following term would have been lost too, but that the Oriental Bank sent a letter to the Secretary of State for India stating that they would be compelled to lay aside the reference of a special case, and commence a hostile action. This brought the authorities to their bearings; the question was laid before the legal advisers of the Crown, and the Attorney and Solicitor General advised, as everybody knew they would, that the retention of the income tax was illegal, and that the amount kept back must be repaid. The sum of £16,500 had accordingly to be repaid to the owners. To show the absurdity of the whole proceeding he might state that the money that had been taxed was all the while in Calcutta, and never had been in England. The House, however, must not suppose that the claim to double income tax was given up. It was only the claim to levy it in an illegal manner that was abandoned; but every holder of these Indian dividends was liable to make a return of them to the Commissioners of Income Tax under Schedule D, and in that form to submit to taxation. There was also that other anomaly connected with this debt which he had already referred to. The amount of Indian debt transferred to England was £8,000,000; of that sum £6,000,000 was not liable to the income tax on account of a special provision in the enfacement; but the other £2,000,000, though an integral portion of the same debt, was made liable on account of a clause in the enfacement which provided that the dividend should be subject to whatever deductions might be made on it. But, then, it was never intended that those deductions should be other than legal deductions. The same deductions were made on the profits of industry, the proceeds of which were received in this country. He need not remind the House that there were few persons who went to India, either to engage in industrial pursuits or in the public service, with the intention of spending their lives there. Take the case of a person who went to India and reclaimed waste lands for the cultivation of coffee, or sugar, or tea, or any of those occupations in which, the Natives did not engage, but which required the employment of British industry, capital, and skill—he returned as soon as he could to this country, but he could not sell his property, and he must, therefore, carry on the cultivation by deputy and receive the proceeds at home. But those proceeds would be subjected in India to an income tax of 4 per cent. and in this country to 10d. in the pound, or 4 per cent more. This was literally burning the candle at both ends, for there was no industry that could bear a charge of 8 per cent on its profits. That was the charge now; but he need not remind the House that it was in the breast of the Chancellor of the Exchequer, whether the tax of 10d. in the pound might not be raised to 15d. It had been so once, and it might be so again. Still, further, a person who in this country held landed property on lease was only charged on the half of his rent; but in the case of India the charge was made on the whole. Take, again, the case of annuitants: The civil servants of the East India Company who were entitled to a retiring pension had the option allowed them either of receiving a retiring pension in this country in pounds sterling, or in India in rupees. That option, for various reasons, was frequently exercised in favour of receiving the annuity in India. Many of the annuitants were persons who had no other income whatever, and the result was that their sole incomes, say of £1,000 each, were subjected to a reduction of £40 in India, and then to a similar reduction in this country. It was said by some, indeed, that there was no more injustice in Indian property being subjected to taxation, both there and here, than there was in property in a foreign country, or in our colonies, being subjected to taxation both in these and when it came into England. It was held that persons deriving incomes from the French funds, or from Canadian or other colonial securities, were bound to return in this country the net sums they received, whatever might be the taxation to which they were subjected abroad. He maintained, however, not only that there was no analogy between the case of India and the case of a foreign country or of a colony, but that, on the contrary, there existed a marked and decided contrast. It was unnecessary to discuss the case of a foreign country, for there the difference was obvious to everybody; but he might just state that the colonies, with few and insignificant exceptions, bad their own representative institutions, were the Custodians of their own finances, and regulated their own expenditure and taxation. But how stood the case with regard to India? India was under the direct control of the British Crown. She stood in the relation of a subjugated country. Her people had no power of governing themselves. The Imperial Parliament, through the Secretary of State, had the complete control and regulation of her finances. He contended, therefore, that the proposal to limit the liability to payment of income tax upon Indian incomes and profits to one country or the other was fair and reasonable in every respect, and was not at all affected by the argument drawn from a fancied analogy between India and a foreign country, or between India and one of our own colonies. It was not his intention to ask the House to express any opinion upon the question whether or not this country should assume the liabilities of the debts of India. He should, indeed, oppose the step, and for this, among other reasons, that he believed that India would prove herself capable, in course of time, of righting herself by a judicious curtailment of expenditure and by the proper regulation of her taxation; but he thought this country might be reasonably expected, not only not by its financial legislation to place undue burdens upon the credit and resources of India, but even to step a little out of its way to mitigate the pressure of Indian taxation. In 1842, when making his financial statement, the late Sir Robert Peel expressed the opinion that in case of emergency the credit of England might fairly be used to support that of India. The request he now preferred was not that Parliament should interfere to support the credit of India, but that it should not be a party to proceedings which should injuriously affect that credit. If he were asked to state what remedy he would propose for the grievances of which he complained, he should say that a Bill should be introduced to amend the Income Tax Act by exempting from payment of the tax in Great Britain or in India all incomes or profits which were already subjected to the tax in the other country. Another fair settlement of the question would be to tax real property at the place of its existence, and personal property at the domicile of its owner. By either course a loss of revenue would be sustained. Let them consider what the amount of that loss would be If the whole of the public debt of India were brought to this country he believed the sum that would be relinquished would not exceed £120,000 a year; but it was absurd to think that half, or a fourth, or even a much less proportion of that debt would come here, and, therefore, the sum which this country would give up would be infinitesimal, although in particular cases it would be a very great deal. He maintained that this country had such an interest in India that if we did not assume any responsibility from our connection we should at least consent to that small remission of taxation which would very much relieve the finances of India and sustain her credit. Sure he was that any sum which might immediately be lost would be more than amply recouped when we came to raise or borrow money in India. He would quote a statement which appeared in The Times of yesterday to show the effect which had been produced in Calcutta on Indian securities by the imposition of double income tax. Their "commercial intelligence from India" said— The transactions in Government securities have been limited to small amounts on local account, and rates are almost nominal. The double income tax in England and the want of confidence in the result of the financial measures of the Government have put a stop to all important transactions in these securities. He thought he had now shown that the petitioners had good grounds for the statement of grievances they had put forth in their petition, and it was of no use that Lord Canning should hold out, as he had lately done on opening one of the Indian railways, invitations to capitalists to embark their money or employ their time in the cultivation of the wastes of India, if when they did so they found that they had to pay a direct tax at both ends. He asked the House to agree that these petitions should be referred to the Select Committee on the Property Tax Acts. There was no fairer subject for that Committee to inquire into, and he was sure if the petition were referred to them they would bestow their best attention upon it, and afford the petitioners an opportunity for further explaining the grounds on which they considered they had just grounds of complaint.

Motion made, and Question proposed, That the Petitions from Merchants and others of London and other parts of the United Kingdom, against the levy of an Income Tax upon incomes and profits arising in India, which are already subject to an Income Tax in that country, presented to this House upon the 7th day of this instant March, be referred to the Select Committee on Income and Property Tax.


seconded the Motion which had been brought forward most ably, clearly, mid comprehensively by his hon. Friend, who, as an eminent merchant in the City of London, connected especially with India, thoroughly understood the subject. His hon. Friend had exhausted the subject, and he would not repeat his arguments, contenting himself with saying that he concurred in every word of his statement, and cordially supported the reference of the petition to the income-tax Committee.


said, he had listened with the greatest attention to the speech of his hon. Friend, but he could not agree with his arguments. He could not understand even the object of the conclusion to which he had arrived, or how the House could agree to refer to the Select Committee on the Income Tax, the Resolution then upon the table. If this were a question as to the particular mode in which this tax should be levied, he could well understand its being referred to the Committee which his hon. Friend the Member for Buckingham (Mr. Hubbard) had moved for. But the question raised by the petitioners appeared to him (Mr. Hankey) to be a totally irrelevant one—namely, whether profits made in one country should or should not be liable to income tax in another? His hon. Friend said he would not go into the question whether the tax-payers in this country should bear any portion of the burdens of India; but that was really the very substance of the grievance? The real question of grievance was whether the tax payer in this country was to continue paying the tax upon property in India. Now it had been agreed over and over again that India was to bear her own expenses. It had been frequently settled by the determination of the House that the revenue of this country was not to be appropriated to the debt of India. Income tax in this country was levied by law—and very properly levied—on all incomes derived from whatever sources. Suppose then a person had £10,000 to invest in this country, and he was advised to put £5,000 into English securities, and £5,000 into property upon which interest was payable in India, under what possible circumstances was he to have one part of his property subject to income tax, and another part exempt from it—that was as far as this country was concerned? Then, with regard to India, the question was not whether the income tax was right or wrong. The Indian Government clearly had a right to levy it. They had also a right to exempt any particular description of property. For instance, they had a right to exempt incomes enjoyed by non-residents if they thought proper. But they had, as a matter of fact, exempted no particular sort of property from the tax. How, then, was a man deriving £1,000 a year from house property in Calcutta, but living in England, to be liable to the tax, while the fundholder deriving the same amount of income from Indian securities, and also living in England, was to escape? If the one man was to be exempted, so in justice must the other. His hon. Friend had admitted the possibility of the income tax upon these £60,000,000 being lost to this country. That sum would also be lost to India. But why was any funded property to be exempted? He could see no distinction between India and the colonies in this respect. A double tax was, no doubt, a hardship, but it was a hardship inseparable from the state of things in which a man held property in two countries, and could not be obviated, unless the finances of England and India were made identical. In this matter India must be regarded as a foreign country. He himself was a holder of property in Pennsylvania. That property paid a tax in America, and when it came to this country in the form of income he had to pay income tax upon it. It was impossible to consider India in any other light than as a foreign country; and he thought his hon. Friend had not succeeded in making out a case of hardship. The fact was that the high rate of interest in this country had naturally drawn capital to England, and had stopped the transmission of capital elsewhere. That alone was sufficient to account for the very considerable indisposition that existed to invest money in this kind of security. His hon. Friend, consequently, no doubt felt great difficulty in raising money in this country for Indian purposes. If the Chancellor of the Exchequer were prepared to give up a certain amount of taxation it would be tantamount to making a grant of so much money to India. He fully agreed in the advantages India would obtain from such a grant. He had argued the question over and over again with Mr. Wilson before he left England, but he was always overruled, and he now believed that he had been wrong, and that Mr. Wilson was right, and that the course had been a right one in separating entirely the finances of this country from those of India. The vast sums which had been raised for Indian purposes showed that there was no such great indisposition to invest money in India, as should alarm the House with any doubts whether India would be able from her own resources to meet the consequences of the great calamity she suffered from some years since. This Committee, to which his hon. Friend proposed to refer these petitions, was sitting on a totally different question; and the result of referring this subject to such a Committee would, he thought, be an easy and effectual way of shelving it. The proposal assumed either that England ought to bear some of the burdens of India, or that we ought to interfere with the finances of that country.


said, he rose to say on behalf of the Government, that they had no objection to accede to the Motion of the hon. Member for the City of London. But he must assure the hon. Gentleman who had just sat down that, in his opinion, this House might allow this petition to he referred to a Select Committee on the Income Tax without sanctioning, to any extent, the principle of any grant being made from the resources of this country in aid of the finances of India. His reasons for this view he would state presently. He was extremely sorry that his right hon. Friend the Secretary of State for India, who was suffering from indisposition which confined him to his house, was unable to be present at this discussion, because, indubitably, any concern which he (the Chancellor of the Exchequr) might have in the Motion and speech of the hon. Member was very small and secondary, and the points which they raised and on which it would have been open to address the House with considerable force were questions of the utmost importance with regard to Indian finance. He would not go over the ground which his hon. Friend had occupied with arguments tending to put in the strongest light the opinion that it was a principle of policy open to much question whether the levying of an income tax upon Indian property under such circumstances as those of which he spoke was or was not conducive to the financial prosperity of India. The question was one beyond his (the Chancellor of the Exchequer's) province to attempt to discuss. The question with which Her Majesty's Chancellor of the Exchequer was concerned was a much narrower one. He felt bound to point out to his hon. Friend (Mr. Crawford) that in consenting to his Motion it was not necessary for him (the Chancellor of the Exchequer) to traverse ground as broad as that he had occupied in the course of his speech. Unquestionably, as it appeared to him, the terms of reference to the Committee would render regular the reference of these petitions to it. The Committee was appointed to inquire into the present mode of assessing and collecting the income and property tax, and whether any more equitable mode of levying the same could be adopted. Now one very important point, which could not be excluded from such an inquiry, was that principle of our law which taxed all foreigners in respect of property they held in this country, and likewise taxed all British subjects resident in this country in respect of all the property or profits they possessed, in whatever part of the world those profits might be received. That was a principle of the English income tax which would come within the purview of the Committee, and it could not be denied that, among other cases, it would include the case raised by his hon. Friend. But what the hon. Gentleman contended for was that, as between England and India, there should not be the imposition in this country of any tax similar to the tax already charged on the same property in the other country. Now that was a question which had no special concern with the English income tax. Parliament and the Government here had done nothing to levy additional burthens on the people of India, or on any persons interested in the property of India. The hon. Gentleman bad spoken in terms unwarrantably severe of acts which the Board of Inland Revenue had done, not under any special instructions, but in the ordinary execution of their duty, to administer the law precisely in the same spirit, and on the same terms, as it had been ever since 1842. The hon. Gentleman had accused the Board of Inland Revenue of an illegal course of proceeding. In a literal sense, perhaps, that phrase might be applied to any proceeding founded upon a view of the law which subsequently turned out to be erroneous; but what the hon. Gentleman implied was that something had been done without colourable form or fair warrant of law. The Revenue Department, however, did what they had done in the conscientious belief that their own legal advisers were right in the construction they put upon the law. But the hon. Member must know that even the most eminent advisers would sometimes be in error; and if the advisers of the Board of Inland Revenue were subsequently found to have construed the law erroneously, it was not with regard to the substance of the case. It was not as if the Board had asserted that somebody was liable to the tax in respect of certain profits, and the law officers of the Crown found afterwards that the party was not liable. On the contrary, it was merely with respect to the mode of levying the tax that this had occurred, and the liability to pay the tax had not been brought into question; indeed, he believed the mode of levying now prescribed would prove to be more inconvenient to those who must pay the tax than if the deduction had taken place as in the first instance. But the point which the hon. Gentleman would have the Committee consider was the question whether, as the income tax was payable in India by residents in this country, in respect of profits accruing there, it should also be levied in England in respect of those profits? On that question he (the Chancellor of the Exchequer) differed with the hon. Gentleman, who thought the case of India might be treated as an isolated and exceptional case, so as to grant to India the privilege of crippling our finance by measures adopted to replenish her own Exchequer, while at the same time he would preclude the application of that principle to other countries. Now he (the Chancellor of the Exchequer) would not object to a full examination of this question by the Committee; but he did not think his hon. Friend's argument would hold water. The hon. Gentleman contended that the case of India Stood by itself, and was not like the case of any colony, or of any foreign country; because, as he said, virtually the Government and Parliament of England had a supreme command over the finances of India. Now was that strictly true? and if it were true, would it be decisive of the case? He must answer both propositions in the negative. The hon. Gentleman knew it was not strictly true, because he had himself referred to the case of the Crown colonies, over which the Government, responsible to Parliament, had a more absolute control than over India, inasmuch as in the case of India it had been attempted to set up an independent body to check and control the Secretary of State. It would therefore follow from the hon. Gentleman's argument that whenever an income tax was levied in a Crown colony, our law should be altered, so that the English income tax should not be levied on persons deriving profits from that colony. Let the House consider the amount of confusion and difficulty that would be involved in such a principle. The hon. Gentleman objected to a double levy of income tax and said it should be levied in one country only. Now at this moment the income tax in England was 10d. in the pound, and in India it was four per cent. which was about the same rate. The hon. Gentleman, therefore, had treated one as equivalent to the other, and talked of levying a double income tax. But suppose, at some future time, our own income tax to be halved, or the Indian income tax doubled; or suppose in some European struggle that our own income tax were doubled, or the income tax in India reduced, would the hon. Gentleman still contend, without reference to the relative amounts of those two taxes, that a man should be exempt from one of them, because he ought not to pay a double income tax? The hon. Gentleman then argued that because we had the control of the finances of India, that, therefore, India ought to be made an exception to all other countries. But was that a sound argument? Should it depend upon the question of which country had control of the finances? or should it not rather depend upon the question of which was the party for whose use and benefit the money was supplied? If it could he alleged that the Indian finances were used to bring money into the English Exchequer, then, indeed, he would say that the income tax should not be levied in this country also. We must not look to the machinery by which a tax was levied, but to the purpose for which it was supplied. If we levied this tax in India by English machinery, it was not for the benefit of England, but for the benefit of India. That was the point to be considered in deciding whether any property should be liable to the Exchequer of the one country, and likewise of the other. The hon. Gentleman's argument, therefore, fell to the ground. What he proposed was to alter the whole basis of the English income tax, as levied since 1842, as well as before that, during the war; and then he would say to all English subjects that they should not be taxed to the British Exchequer in respect of any property or profits they had in foreign countries. This would, in fact, be to give them a positive bonus or premium to the full extent of the income tax, on making investments in colonies or in foreign countries, instead of employing their money at home. That was the consummation to which, under his guidance, we should arrive. There could, however, be no objection to having this question studied by the Committee, when it would be seen to involve such difficulties, that the class of persons for whose interests the hon. Gentleman was contending would probably be reconciled to their position by finding that the difficulties in the way of change of system were insurmountable. The financial magnitude of the question was greater than the hon. Gentleman seemed to think, for he had said that £120,000 a year would probably be the utmost extent of the sacrifice imposed on this country by its not levying income tax here on the interest of that portion of the Indian debt of £60,000,000 which would come to this country. But the principle, if applied to one case, must be extended to annuitants, to the profits of trade, and the holders of all real or movable property in India. The question, however, did involve the maintenance or the abandonment of a rule which formed part of the basis of our income tax. Nevertheless, although the Indian portion of the subject could not belong to this Committee, he had no objection to the Committee examining the general question of levying the British income tax in such a case, and the general structure of our law relating to that form of taxation.


said, he rose, as one of the Committee to whom it was proposed this question should be referred, to protest against the double tax that was sought to be imposed upon their labour. The question then at issue embraced the principle on which our income tax was based. But the Committee had been appointed for the purpose of inquiring whether or not the incidence of the tax was fairly adjusted as regarded the parties classed under its different schedules. Now that was in itself quite a sufficiently difficult and important subject for the consideration of the Committee, and he hoped that the House would not impose upon them a still more complicated labour. He believed that no good could result from such a course, either as regarded the general interests of this country and of India, or even as regarded the interests of the clients of the hon. Member for the City of London. The whole argument of the hon. Member turned upon the connection between the English and the Indian Exchequers, and it appeared to him (Sir Stafford Northcote) impossible to go into this question without raising the whole question of Indian finance. Let the House look at the facts of the case. During nearly the last twenty years we had had an income tax in this country to which the holders of Indian property had contributed without a murmur. Towards the close of that period the Indian Government had thought proper to imitate our policy, and had imposed a similar tax; and it was then suggested that the owners of Indian property residing in this country ought, therefore, to be exempted from the charge. But why should we relinquish a source of income which we had hitherto legitimately enjoyed, merely because a certain financial policy had been adopted in India? Supposing the income tax in India was to be discontinued, should that property be afterwards free from the tax? [Mr. CRAWFORD: No !] The hon. Gentleman said "No," but he (Sir Stafford Northcote) did not see on what other principle the bon. Gentleman could justify the course which he wished the House to pursue. The real point which it might be desirable for Parliament to consider was whether or not we ought to give India the benefit of our credit, and take upon ourselves the entire management of its taxation? That was a subject on which he desired to pronounce no opinion at that moment; but it was one to which inquiry might be fairly directed. The Committee, however, which was at present inquiring into the adjustment of the present income tax of this country could not be expected to consider either that question or the subject which the hon. Member for the City of London had that evening brought under the notice of the House. He hoped the petitions would not be referred to the Committee; but if they were he hoped it would be left to the discretion of the Committee to take up the question or not.


said, he believed that the proper way of dealing with all questions of that description was to pursue the course to which the hon. Baronet who had just addressed the House had referred—namely, to give India the full benefit of the credit of this country. That was a principle of which the noble Lord the late Secretary for India (Lord Stanley) expressed his approval when in office, although he thought he could not carry it into practical operation. But until they adopted this just measure towards India these complications would continually arise.


thought the question raised by the hon. Gentleman who had last spoken showed the dangerous ground they were touching upon. He hoped the House would pause before they assented to the Motion of the hon. Member for London. It raised a very proper subject for discussion in this House. It was one of the great offices of that House, when any class of Her Majesty's subjects supposed that they were suffering under a grievance to take that alleged grievance into consideration. This, too, was a subject on which the Government were perfectly able in their own Cabinet to arrive at a satisfactory conclusion. But if the question were sent to the Income Tax Committee it would not only much complicate and increase the labour of that Committee, but it would drag before it topics of a totally different character from those originally intended to be submitted to its investigation, involving questions of policy that ought to be left to the consideration of the Government, or, at least, of the House of Commons. He considered that the claim of exemption urged against England in this case had no foundation whatever. The only colourable claim of exemption was not against England but against India. There was no sort of reason when a tax had existed for twenty years in a country why any of those who paid that tax should be exempted from it because another country in which they were interested chose to adopt the same system of taxation. It must be evident that if the Motion of the hon. Member were adopted its effect would be to bring the whole question of Indian finance before a Committee appointed expressly to consider the question of how the assessment of the income tax might be made most equitable in this country. The House, therefore, would, in his opinion, take a step of great imprudence if it agreed to this Motion. It offered a most legitimate subject of discussion for the House of Commons or consideration for the Government, but it was not a question on which a decision should be obtained in an equivocal manner by referring it to the Committee. He repeated his hope that the House would not assent to the Motion, as the time might come, and that speedily, when they would find cause to regret it.


said, he entirely agreed with the observations of the right hon. Gentleman (Mr. Disraeli) with regard to this matter. If this question were referred to the Committee already appointed to consider whether a more equitable assessment of the income tax in this country might not be made, it would do all possible mischief to that Committee, while he felt certain it would not do the least good to the clients of his hon. Friend the Member for the City of London. The Chancellor of the Exchequer was very accommodating—he did not object to these petitions being sent to the Committee; but he (Mr. Bright) dared to say the right hon. Gentleman would be very glad if the House expressed its opinion so strongly against it that his hon. Friend would be induced to withdraw his Motion. The main question appeared to him (Mr. Bright) to be this—a man enjoyed the advantages of the two Governments, and had his property in one country, while he enjoyed the income arising from it in another, and he thought he ought only to pay for the support of one Government, although he enjoyed the advantages and protection of the two. He could not see for a moment that such a case could be defended by any solid or serious argument. And although his hon. Friend stated his case with remarkable clearness, and said all that could be said on the subject, yet he was bound to tell the House that the hon. Gentlemen sitting around him (Mr. Bright) entirely agreed with his hon. Friend when he got up, but entirely disagreed with him when he sat down. If it be true that they should do mischief with regard to the inquiry of the hon. Member for Buckingham (Mr. Hubbard) by referring to his Committee this subject, he would take the liberty of asking his hon. Friend not to urge this question further; by doing so he would do no good for himself or his friends, and would probably do great harm to an important Committee appointed to consider a very important subject. He (Mr. Bright) thought that the friends of the hon. Gentlemen out of doors must feel that the question had been treated in this discussion with considerable fairness by both sides of the House.


said, he should be sorry that the inquiry before the Select Committee upstairs should be prejudiced, as some hon. Members appeared to think it would be, by the introduction of the subject which he had brought before the House. He had voted for the Motion of the hon. Member for Buckingham (Mr. Hubbard), and he saw a reason, after what had been stated by the right hon. Gentleman (Mr. Disraeli), for not referring the proposed inquiry to the Income Tax Committee. He would, therefore, with the permission of the House, withdraw his Motion.

Motion, by leave, withdrawn.