HC Deb 23 April 1863 vol 170 cc614-51

Like my hon. Friend, I have no objection to the Budget as a whole. I believe it is a very good one for the country; but as I want to have the opinion of the House upon a general proposition. I must submit it before you, Sir, leave the Chair. The principle which I wish this House to affirm is this—that on a renewal of the income tax a lower charge should be imposed on precarious than that placed on permanent incomes. The whole thing lies in so narrow a space that I shall not occupy the time of the House for many minutes. I assume the general proposition that taxation ought to be levied on every man according to his ability to pay it. That, I know, is a general proposition which is subject to several exceptions. The Chancellor of the Exchequer may, however, say, ''Your proposition is a fair one; but there are so many anomalies in the imposition of the income tax, that if you remove only one of them, you do very little good, and therefore I think you had better leave the matter as it is." Now, I am not prepared to acquiesce in that conclusion. Let me illustrate the argument. I will suppose a roundabout road to a particular spot, and that a person proposes an alteration which will not make it perfectly straight or the shortest road possible. If it is said to him, "Why do you seek to alter the road? You cannot make it straight." His answer ought to be, "I cannot make it straight, but I can approximate to some straightness, and pray permit me to effect the alteration." I want to direct the at- tention of the House to the class of persons on whom the Chancellor of the Exchequer places the great burden of his taxes. That class is composed of persons of small income. The great mass of the taxation of the country is not derived from your millionaires or men of thousands, but from your men of hundreds. For the present, I will direct my consideration to your men of £200 a year. A man of this class has to maintain appearances, he has to bring up and educate his family, and to provide for them in case of his death. If he derives his £200 a year from a permanent source, it remains; but I come to a case on which I speak with feelings arising from personal experience. I ask you to consider the case of a man earning an income by the labour either of his intellect or his hands. All at once the intelligent mind or the cunning hand of that man may be rendered powerless. He can then do nothing; and from being a bread-winner he becomes merely a bread-eater. The man with a permanent income has no thought on his mind that there is a probability or a possibility of his family being reduced to want; but that is a thought which, from morning to night and night to morning, works on the mind of a man with an income of £200 a year from precarious sources. There are thousands of our countrymen in that position. To meet such cases, I ask the Chancellor of the Exchequer to do what a Colleague of his now dead, Mr. James Wilson, proposed—namely, to divide incomes into three classes:—First, income derived from capital; secondly, income derived from trade in which both capital and ability are used; and thirdly, income derived from mere labour either of the intellect or the hand. It is not just to tax those three classes alike. Suppose the case of a lawyer. He goes through a laborious education for a great period of his life—say up to the age of fifty. That man fights against the world for his very existence; and has he arrives at the age when fortune may smile upon him, he comes on a high tide of business. But, after a few years of prosperity, he is suddenly stricken down; and then he is a burden to himself, and his children are unprovided for. It may be said that the alteration I propose would do away with the surplus. I dare say it would; but I have such confidence in the financial ability of the right hon. Gentleman, that I feel certain he could raise an equal amount of money in a much less unjust manner. I ask him to do but justice, which is in his power, and take away one of the many miseries of the man who by his labour, intelligence, honour, and integrity earns from a precarious source an income for the support of his family. With those few words I beg to move "That in the opinion of this House the Tax imposed on precarious Incomes should be lower than that imposed on permanent Incomes."

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "in the opinion of this House, the Tax imposed on precarious Incomes should be lower than that imposed on permanent incomes, —instead thereof.

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


Sir, I was desirous to know whether any hon. Member wished to speak on the Motion of my hon. and learned Friend, as I was anxious to answer any observations that might be addressed to the House in support of the proposition with which the hon. and learned Gentleman concluded. I have listened with attention and respect to the speech of my hon. and learned Friend, who has become the organ of expression of a feeling that has long prevailed in this country, that prevails at the present moment, and that I believe will continue to prevail as long as the income tax remains in existence. The question whether that tax will always remain is not now the question; but I think, from its nature, a certain amount of discontent is not only to be recognised as a matter of fact, but is so natural, so excusable, and is supported by so many indications which, on the surface at least, appear to give foundation to it, that we may look upon it as practically inseparable from the nature of the tax itself. With respect to myself, I feel that I am personally disabled from acceding to the Motion of the hon. and learned Gentleman. I could not honestly be a party to such a Motion; I could not undertake to give it effect. Partly from the nature of the office which I now fill, and partly from other circumstances, it has been my lot to give more time and attention to the objections against the present mode of levying the income tax than, perhaps, any other Member of this House. Immediately before the time I assumed the office which I now fill, a proposition, such as the one made by the hon. and learned Gentleman, had been made under such high authority, and under circumstances of such peculiar advantage, that the Government of which I was a Member felt it their duty not to decline such a proposition till they had convinced themselves by a process of exhaustion that no such method was practicable. Therefore, I am not prepared to be the instrument to give effect to such a proposition as that now before the House, or as that which has been made by my hon. Friend the Member for Buckingham (Mr. Hubbard); but that is not a reason why such Motions should not be brought under the consideration of the House. My hon. and learned Friend has anticipated what he supposes to be my answer —namely, that there are so many anomalies in the imposition of the income tax, it would not be worth while to remove one or two of them. That is a most ingenious way of stating my case, but it is not my objection. My objection is, that by removing one or two anomalies we should be introducing three or four, and that these three or four anomalies would leave us in a worse position after our trouble than we were in before. To use a somewhat pedantic expression, I never held the views of an optimist in reference to the income tax. I have never shut my eyes to the difficulties which attend its collection, or to the objections to which it is open. The income tax is objectionable because it is direct; it is objectionable because it is inquisitorial, and it always must be inquisitorial, though we sacrifice a great deal of income in order to render it as little inquisitorial as possible; and it is objectionable because it is unequal, but this disadvantage it has in common with indirect taxes and all other taxes which men with precarious incomes have to pay. If a man is not able to pay his income tax, neither can he afford the duty on tea and sugar. The two stand exactly on the same footing, and the same argument applies to each. The tax is objectionable because it leads to fraud—a charge which, I am sorry to say, experience convinces me cannot be exaggerated in its gravity and extent. But, with all these disadvantages, it is after all a tax as the country feels which is founded on principle. The equality of the rate of taxation is n principle, and the fact that it has existed so long with equal rates is of itself a great advantage. When I said lately that the back suited itself to the burden, I did not mean to say that the burden ceased to be a burden, but that in matters of taxation usage and tradition are of great practical importance, and that novelty in a subject of difficulty is of itself, though not a conclusive, a serious objection. This equality of the tax on equal incomes is a principle for the purpose of taxation; and if we depart from it, we must try to find some other. On what ether principle can we take a stand? I cannot subscribe to the doctrine of the hon. and learned Gentleman that this matter lies within a nutshell. On the contrary, I do not think there is a more complex organism in any kingdom of nature or civilization than that organism which represents the diversity of proprietary or possessorial interests in this country; and the machinery by which we get at the income of each man must be of the most delicate and difficult character. If we get rid of the principle of equality, I know of but one other principle which has primâ facie sufficient plausibility to recommend itself to the judgment of reasonable men. My hon. and learned Friend's principle I understand to be this — that people should pay in proportion as they could afford, and that after having paid the tax their circumstances should remain relative to each other just the same as before. A consistent attempt was made some ten or twelve years ago by bold and resolute men, who did not flinch from any difficulties, to reduce this principle into practice by a careful calculation of the real value of each man's income. Different kinds of property were to be compared; different kinds of income, and, as I suppose, different degrees of health, different ages were to be compared. A comparison was to be drawn between different landlords, between merchants, between farmers and shopkeepers, and between professions — nay, perhaps, between one lawyer and another, between one clergyman and another, and one military man and another. All were to be reduced by an ingenious calculation to something in the nature of an absolute standard. The fate of that plan, however, was an unhappy one. It did not succeed before the Committee before which it was fully considered and discussed, though it was started under very favourable auspices. When the Committee of 1851 was appointed, the public mind was disposed to fasten on something of the kind, and it was only on the condition of granting the Committee that my right hon. Friend who was Chancellor of the Exchequer at the time then obtained a renewal of the in- come tax. The plan failed, and it has never been taken up by any of the later income tax reformers. The plan of the hon. and learned Gentleman assimilates in some degree to the plan of the hon. Member for Buckingham, though the first has the advantage for the relief of precarious incomes, and certainly goes more home to the feelings than the relief of industrial incomes, when we consider what many industrial incomes are. We were all touched, I am sure, by the illustration which my hon. and learned Friend used. Though we must feel comparatively satisfied that my hon. and learned Friend still retains his place with a remarkable return of his former vigour, we must still deeply regret that talents such as his should have met with any obstacle in the course of their full and bright development. If we are to proceed to the relief of precarious incomes, we must take first the case of professional men. It is the strongest, because, generally speaking, persons in professions, not so much when they are on the top of the wave of success as in their first struggles, are obliged to live close up to their incomes, and even beyond them. I have heard gentlemen, in the medical profession for instance, now of great eminence, mention the number of years through which they have had to struggle on some independent resources of their own before they obtained a subsistence from their profession, and the same thing is true of the law. Though there are exceptions, on the whole the class of professional men are obliged to live near the limits of their incomes, and of the vast process of accumulation going on in the country but a small portion of the result is in the hands of, or invested for, professional men. It often happens, however, that phrases which are good for a popular purpose are of no value for the purposes of legislation. Let us suppose that my hon. and learned Friend, in striving to relieve precarious incomes, commences by professional men and confines himself first entirely to that class. But, as soon as ever he began to apply his principle, it would break down; for how would he define "professional" men? Is a clerk a professional man? Is a bookkeeper or a curate a professional man? If they are not professional men, then you have done nothing by this change but introduce a new anomaly. Suppose you settle that they are, then you get into another difficulty on the other side, because the incomes of these classes are not precarious. For instance, the income of a Government; clerk is not precarious; and if the plan be adopted, you must furnish us with new definitions of the term "precarious" and "professional," and I say that that task is not only difficult, but impossible. Let us take another case. I deny that precarious income of itself gives a title to be taxed at a lower rate. For the purposes of this argument the landed proprietors may be divided into two classes. There is one class of them whose estates lie in districts where there are no mineral treasures, and where, consequently, they inherit an agricultural income. The property of the other class is situated in the mining districts, and valuable seams of coal and ironstone run under their estates. Although their income is large, it is precarious, because it fluctuates exceedingly, according to the state of trade and a variety of circumstances which it is unnecessary to enumerate. Is a landed proprietor with rich mines on his estate better entitled to be taxed at a less rate on his aggregate income than the man who has simply an agricultural property and has found no minerals beneath his estate? To legislate in that sense would be to introduce a new inequality, and one rather worse than those which at present exist. But let us compare two much larger classes of cases—the class of landed proprietors and the class of merchants and traders. Let us say that A has £1,000 a year from land, and B £1,000 a year from trade. I am told that B has got a precarious income—an income which may diminish or disappear altogether; but that A rejoices in a permanent income. The argument is that I should therefore give a remission of taxation to B; which means, to use plain language, that in order to relieve B, I should put an additional weight upon A. What, however, is the average condition of a man with £1,000 a year in land as compared with that of a man with £1,000 a year from trade? Every man in this highly-wrought state of society must live according to what I may call his social expectations. It is useless to speak of the naked figure of his income; you must look at it with reference to his place in society, to the claims of his friends, neighbours, and family, to the social expectations which constitute the law he is obliged to conform to in the expenditure of his money. I have no hesitation in saying, then, that the station in life of a man with £1,000 a year from trade, is in three cases out of every four, totally different from that of a man with £1,000 a year in land. The trader is not compelled to spend as much money; he is not expected to do so; he belongs to a different class of society altogether. If you want to find a parallel in the trading or commercial community to a man who has £1,000 a year in land, you will find it only among the men who have £2,000, £3,000, or £4.000 a year from trade. I contend, therefore, that it is not allowable to compare the positions with equal incomes, when, as a general rule, the social position is entirely different. Remember, also, that a land income as a general rule, is unprogressive, while an income derived from trade is exactly the reverse. Whence come those £60,000,000 a year we have recently added to the income of the country? They do not come from the professions, from the officers of the army and navy, from clergymen, or from the increased wealth of our landed proprietors. The greater part of them — and I rejoice to think it—consists of the accumulations of English industry and intelligence applied to trade. Let us examine another case, What do you say to the owners of house property? They are a large class, many of them wholly dependent upon house property—small houses, cottages, hack streets in towns—and at present they pay the whole income tax. Is their income precarious or not? I have a high opinion of the ability and ingenuity of the hon. and learned Member for Sheffield, but I think he would find it extremely difficult to deal with the question in what category he should place house property. Any change must involve that inquisitorial investigation which has hitherto formed one of the principal objections to the tax. The proposition of my hon. and learned Friend would oblige us to give a large remission to the owners of house property, who are at present taxed in a proportion extremely burdensome, and that remission would he arrived at through an almost intolerable inquiry. The investigation in the case of trade is bad enough, though it usually works in favour of the taxpayer; but in the case of house property there could absolutely be no escape whatever. After all, when we go to the root of the matter, we find that propositions like the one before us really mean graduated taxes. That is their true development. The whole strength of the argument, when you pursue it to its first elements, depends upon this: there is a relative poverty among men which you are bound to consider, and to which you must adjust the incidence of your taxes. There is nothing at all that is wicked in the principle as an abstract principle. If it can be shown that a scale of taxation can he established, which within moderate bounds shall make the rich pay a larger rate than the poor, I should see nothing unjust in such a proposition. But I should ask two questions regarding it: First, whether it was practicable; and secondly, whether it was safe. I believe it would not only be impracticable, but generally destructive in its operation to the whole principle of property, to the principle of accumulation, and through that principle, to industry itself, and therefore to the interests of both poor and rich. The objections to graduated taxation are sometimes called theoretical, but they are altogether practical. In Mr. Pitt's time, and down till quite recently, the house tax was graduated. There was no danger in that; confiscation could not be practised under the form of a house tax. But when you apply the principle of graduation to a tax on incomes, except in the limited case in which we are able to do it fortified by tradition—as in regard to incomes below £200 or £150, where, by the force of tradition, it can be kept within safe bounds — when, I say, you adopt it as the general rule of your legislation, it means merely universal war, a universal scramble among all classes, every one endeavouring to relieve himself at the expense of his neighbour, and an end being put to all social peace, and to any common principle on which the burdens of the State can be adjusted. It is in these mischiefs that the apparently innocent proposition of my hon. and learned Friend would land us. His plan would lead us along a road which has that, and nothing else than that, for its termination. He may fairly disclaim that as his intention; but never has his plan, or any of these plans, assumed the form of a scheme of taxation propounded by the executive Government, or a responsible Minister. It is all very well for Gentlemen to exercise their ingenuity by drawing out schemes on a sheet of paper, showing how easily difficulties may be overcome. They are but fighting the air. It is only when a Minister undertakes to propose such a plan standing at this box, and when every mind is directed to sifting the matter thoroughly, "bolting it to the bran," and working it out to all its conclusions, that the difficulties and dangers of such a project are fully developed. At the same time, I do not say that other Gentlemen may not see their I way through these difficulties with which I am wholly unable to grapple. I entirely allow that this is a question which the hon. and learned Gentleman is entitled to raise and the House to deal with. I can only express strongly the deliberate conviction at which I have arrived, and from which I do not feel justified in departing; and as a person officially responsible for the finances of the country, I cannot admit what I conceive to be a dangerous popular delusion.


said, that as he belonged to the class of men who possessed precarious incomes, it was natural to suppose that on the first view of the subject he would support the proposition of his hon. and learned Friend the Member for Sheffield, but he felt that that Resolution involved the general question of graduated taxation, and he did not consider it possible to devise a mode of graduating the income tax. He belonged to a profession whose income was of all others the most precarious, and he had pointed out to an hon. Friend, a Member of the House, and of the same profession, though of a different branch of it, how dissimilar were their respective positions. In the case of a solicitor, if he was sick, his business went on without interruption by means of his clerks, and his income suffered little or nothing; whereas in the case of a gentleman practising at the bar, if he were unable to attend to his business through ill-health, every farthing of his income stopped for the time being. That was also the case with a numerous class of professional men—such as physicians, and so on. But if the principle of graduation were once admitted, there was no reason why it should not be applied to all the other direct and indirect taxes. Why, for example, should a man with a precarious income pay the same rate of duty on his tea as the man with a permanent income? The income tax produced, say, £10,000,000 sterling, and the other sources of revenue £60,000,000. If the principle of graduation was just and good, why were they not to extend it to the £60,000,000 as well as the £10,000,000? The fact was, the whole thing was impracticable, and the more they investigated the subject the more they would see the impossibility of carrying out that notion of perfect justice in matters of taxation as between different classes which some people had in their minds. If A obtained £5,000 a year from his trade or pro- fession, and B only £500 a year from land, where would he the justice of relieving A, and not also relieving B from a higher scale of income tax? No human ingenuity could devise a scheme which should meet all cases, and there were many precarious incomes, such for instance as the incomes of bankers, solicitors, and others, which, although precarious in their nature, were almost as certain as the fixed income derivable from land, and the owners of which, if they died the next day, would transmit to their posterity their incomes with almost as much certainty as the landowner. He rejoiced to find the Chancellor of the Exchequer entering upon the path of reduction of the income tax, and he hoped that next year he would be able to continue in that course, for be believed, that if it were reduced to the rate of 6d. in the pound, the people would submit to it with cheerfulness, and continue to bear it as long as the exigencies of the State required. If they could not adapt the income tax to the means of every man, attempts to adapt it to a small section of the community would not bear the test of examination.


said, that no one contended that it was possible to make the income tax absolutely just in geometrical proportions; but it was contended that they could get rid of palpable injustice, such as taxing property worth £1,000 at the same amount as property worth £30,000, or thirty years' purchase. He had heard, for the first time, the argument that they were bound to favour the landed interest on account of the social position which they had to maintain; and if it were a good argument, it should be carried further, and a less amount of tea and wine duty exacted from that class of the community. He thought, that by some such proposition as that of the hon. and learned Gentleman they could arrive at an approximation to justice in levying the income tax, which at present was absolutely unjust. As to the objection to discrimination, the right hon. Gentleman the Chancellor of the Exchequer already discriminated in favour of the lower class of incomes; and when it was said that the discrimination was founded upon tradition, he hardly thought the income tax had existed long enough to be entitled to claim a traditional solidity which forbad all change. He saw no difficulty as to mines on account of the uncertain value of mineral property, because in the rating of houses and lands a difference was every day made in favour of the former for that very reason. If they were willing to do justice in the matter of the income tax, nothing could be more easy. He would engage to give a scale of assessment of not more than two or three steps, which would he more satisfactory to the ratepayers, and produce more revenue to the Exchequer.

Amendment, by leave, withdrawn.


said, the House had on so many occasions granted him its indulgence, that however strong the provocation to join in the discussion raised by the hon. and learned Member for Sheffield, he had abstained from trespassing on their kindness. Having heard every possible plea against the adjustment of the income tax, and having offered, as he believed, a sufficient rejoinder to those pleas, he had nothing more to say upon the subject, save to express his belief that the time would come when his views would find acceptance in the House. The Motion of the hon. and learned Member for Sheffield being withdrawn, he might, without impropriety, now offer some remarks upon the financial statement of the Chancellor of the Exchequer. In presenting that statement to the House, the right hon. Gentleman confessed, with great frankness, that the main features of his plan, did not claim the merit of originality, and were only the reflex of public expectation. Those words, far from detracting, enhanced the merit of the right hon. Gentleman; for if anything could be satisfactory to the House, it must be to feel that they could place confidence in the discernment of the Minister of the Crown to fulfil anticipations which the public strongly desired, he heard without astonishment, and with great satisfaction, the announcement of those concessions which the right hon. Gentleman proposed to make. The concession of 2d. in the pound on the income tax was a gift which had been generally expected, and for which the right hon. Gentleman would be generally thanked. The reduction of 5d. in the duty on tea would afford a tangible relief on the cost of an essential commodity. Those imposts on trade, under which merchants had been suffering not without complaint, had been gracefully conceded, and thus ended those features of the Budget which were the subject of general expectation. Passing to those which were not expected, he must express his regret, that having relinquished a commercial grievance, the right hon. Gentleman had thought it worth while to invent a social annoyance in so small a matter as a tax for licences to sell wines and spirits in clubs. He understood the right hon. Gentleman to propose that tax in order to put clubs on an equality with taverns, ale-houses, and hotels, with which, as he said, they came into competition. He took a different view of the purpose and nature of clubs. They were not places where spirits and wines were sold as a matter of business for profit, and it was only by sales for profit that they could be deemed to come in competition with taverns and hotels. A club was the aggregate social establishment of those who were its members. The wine drunk at a club was drunk there instead of at home. It was wine which had been paid for by the members, and the bill was merely an accurate mode of distributing the charge for the future replenishment of the stock. He ventured to think that there was no affinity between a club and a public house, and he trusted the Chancellor of the Exchequer would re consider that portion of his plan, remembering that the interest on the money paid into the Exchequer by clubs as duty upon their wines far exceeded the amount of the imposts proposed to be placed upon them. The most important feature of the Budget was the re-adjustment of the tax on incomes between £60 and £200. If he had ever had any clients in the efforts which he had made to remove some of the inequalities of the income tax, they were certainly among those who would be relieved by the arrangement which the Chancellor of the Exchequer now proposed, and it was on record that he had proposed a plan of relief literally in matter and in mode the same as the right hon. Gentleman now asked the House to adopt. But, however gratified he might be to find his own wishes carried out in that respect, he was far from venturing to assume that the right hon. Gentleman, in taking that step, accepted the principle upon which he advocated it. The right hon. Gentleman, while abating £60 from the assessable incomes of small traders and small stipends, proposed the same abatement for incomes derived from permanent sources; and while thus escaping any complicity with the principle of concession to industrial earnings as such, the right hon. Gentleman had committed himself to some extent to the principle of a graduated income tax, against which he had hitherto always contended. Taking the proposed concession, however, in its effect upon industrial incomes, he felt most grateful for it, because it conferred on 280,000 out of 400,000 taxed under Schedule D and E the precise measure of relief he sought to obtain for them. The Chancellor of the Exchequer had now removed from those who were taxed up to £200 a year in Schedule D and E all pretence of complaint and all pretext for fraud; but what would be said for those with incomes above £200? A new point of temptation had been created, and at that point the inducement to falsify would be felt with redoubled force. Small incomes were not those in which fraud had been most flagrant. The cases in which fraud and misrepresentation existed in the most aggravated degree had reference to incomes considerably higher. In the last Report of the Commissioners of Inland Revenue a state-was made which would raise the most melancholy feelings, showing the discrepancy between the sums at which certain persons had returned their own profits, and the sums at which they were ultimately charged with income tax by the Inland Revenue officers. He would read to the House some of the most marked of these. Under Schedule D, one person who returned £400 was charged and paid on £1,500 without appeal; another who returned £750 paid on £1,600; another returned £800, and paid on £2,000; another returned £1,000, and paid on £3,000; another returned £2,200, and paid on £5,000; another returned £6,000, and paid on £10,000 without appeal. That was a melancholy exhibition of the fraud and misrepresentation which prevailed with reference to the higher incomes; yet with reference to incomes such as these no inducement was proposed, no measure taken which might lead to more truthful returns. He objected to that part of the financial scheme which related to the conversion of the savings bank monies into terminable annuities. When the question of the Post Office savings banks was under discussion, he had several times endeavoured to seize an opportunity of expressing his opinions on that point; but the Bill came on for discussion at half past twelve o'clock, when no one would be either heard or reported. But the right hon. Gentleman now proposed to take larger powers with regard to the funds of the savings banks in general.


said, he rose to order. The Savings Banks Bill was among the Orders of the Day, and could not then be regularly discussed.


said, he was in the hands of the House; but in one of the most interesting portions of his Budget the right hon. Gentleman had pointed to that measure as a means of disposing of a certain portion of the revenue of the country, and he could not well discuss the Budget without touching on this question. It might safely he assumed that the savings hanks deposits would increase with the increasing population and wealth of the country, and that the banks would require a constant accession of fresh investments. Terminable annuities were therefore most unsuitable investments for the savings banks, seeing that they every year restored a portion of the capital to be re-invested. Every one who was acquainted with business knew that nothing could be more costly than the constant buying and selling of funded securities, and especially for the Government, which never went into the money market except at a disadvantage. The right hon. Gentleman declared that terminable annuities were a most desirable security for the savings bank to hold with a view to the benefit of the public. He disputed that proposition, and he would give the House some idea of the history of terminable annuities, for they were not an institution of yesterday. Up to the introduction of the income tax terminable annuities were securities in considerable demand, but from 1842 the disposal of these annuities for terms of years became almost nominal. It was true that annuities for life were still disposed of to a small extent, old women always requiring annuities for life without much regard for the tax upon their capital, and about fifty or sixty thousand pounds' worth were still disposed of yearly; but annuities for terms of years, which formerly were sold to the extent of millions, were now almost entirely neglected. In 1857 they were sold to the extent of £400; in 1858, £1,800; in 1859. £1,200; in 1860, £2,506; in 1861, £500; and in 1862, £537. The creation of annuities terminable with years was practically annihilated by the operation of the income tax on the capital repaid. So much for the beneficial dealings in terminable annuities through the public market. Then, as to the loans for fortifications. The noble Lord at the head of the Government proposed to raise £10,000,000 by way of terminable anuu- ities. [The CHANCELLOR of the EXCHEQUER: £2,000,000.] Ten million was the sum to be ultimately raised; and when a Bill was introduced to sanction the borrowing of two millions on terminable annuities, he (Mr. Hubbard) had assured the Government they would never effect such a loan. He now held in his hand a Return of monies (£2,070,000) raised under the Fortifications Loan Act at an interest of 3¾ per cent upon an issue of terminable annuities; but to whom were these annuities issued? They were disposed of, truly, but not in the open market, not on the Stock Exchange. The Chancellor of the Exchequer, for the Treasury, had sold them to the Chancellor of the Exchequer, for the savings banks, upon terms agreed between them. he had been much struck with the appeal of the Chancellor of the Exchequer to tradition in support of his attempt at graduation, and he had observed that in that as in other cases the right hon. Gentleman was willing to refer to tradition when it happened to be favourable to the proposal he was making, and he had on former occasions invoked the shade of Mr. Pitt to stand between him and some threatening assailant of his scheme of taxation. But is tradition always to be trusted? What was Mr. Pitt's authority upon the subject of a sinking fund? In 1786 Mr. Pitt introduced his Bill for establishing a sinking fund, and entreated that the "House would solemnly pledge itself not to listen to a proposal for the repeal of the law on any pretence whatever." No appeal could be more impressive than that which Mr. Pitt made for the maintenance of the Kinking fund, which two years afterwards was found to be a delusion. That delusion, however, kept its hold upon the public mind for years, and as late as 1823 the House of Commons voted £5,000,000 for the sinking fund of that year. In 1828 the amount voted was reduced to £3,000,000; but in the following year the Vote was swept away altogether, and it was determined to apply only the actual surplus of revenue to the reduction of the National Debt. In 1855, when the Government proposed a loan of £16,000,000, one feature of the plan was a sinking fund of £1,000,000. That part of the project was met by a direct negative by the hon. and learned Member for Suffolk (Sir FitzRoy Kelly), and in the course of the debate Mr. Ricardo denounced the principle of finance which established a forced sinking fund in "the shape of terminable annuities." The present Chancellor of the Exchequer himself opposed the sinking fund clause upon the ground of the in expediency of provisions of this nature: for if peace occurred, and there were a surplus, the clause would be unnecessary; if there were no surplus, the clause would be injurious. Under these circumstances, he hoped the Chancellor of the Exchequer would not persist in seeking the power of converting £5,000,000 of savings hank money into terminable annuities.

There was subject for congratulation in the right hon. Gentleman's expectation of a surplus, and he could not help remarking the earnestness of the appeal the right hon. Gentleman made that the House would not diminish that surplus. Seeing, however, the notice of the hon. Member for Dudley (Mr. Sheridan) on the paper for a reduction of the insurance duty, he thought that the appeal was made with a view to bind the House to a determination not to part with any portion of the surplus and so defeat the Motion he had referred to, but be had himself so strong a conviction of the justice, propriety, and expediency of a diminution of that tax that he confessed he was disappointed that its reduction had not been proposed in the Budget. He next came to the proposed tax on charities, which bad been exempt from taxation hitherto. When he heard the description given by the right hon. Gentlemen of the charities which were no longer to be exempt from taxation, he could not but feel sensible, that although he elicited a cheer, he was not fairly depicting the origin and nature of these charitable endowments. The description which the right hon. Gentleman had given of the vanity of those who made charitable bequests, desiring to have their names painted up in big letters, and the selfishness of the administrators who feasted in the name of charity, was not at all true of either class. No doubt, there were some who were actuated by such motives, but he thought they were the smaller and less important portion, and that in a great and overwhelming proportion the charities of the country were the result of the gifts of liberal and Christian men determined to do good in their lifetime for their poorer fellow-creatures. he hoped the House would join in his request that the right hon. Gentleman would reconsider the subject, for such a tax must lead to serious distress and suffering. Which was to be the result of the imposition of this tax? Were the participators in the charity to be deprived of a portion of its benefits, or were the generous men who felt how important was the continuance of the charities to provide from their own resources the necessary additional funds? As an illustration of the effect of the tax he might refer to the Patriotic Fund, of which, at the desire of its President, the illustrious and lamented Prince Consort, he had been from the beginning one of the auditors. That fund amounted to £1,500,000, and was devoted to the maintenance of the widows and the education of the orphans of the brave soldiers and sailors who fell in the Crimea. The revenue of the Patriotic Fund was £75,000 per annum, derived from various securities, and the expenditure came to the same amount. The whole of the prospective obligations of the Commissioners had been arranged so that they should be exactly met by the funds. If, however, the proposal of the Chancellor of the Exchequer were agreed to, it would entail a loss of £1,500 a year upon the annual interest of its property. But an important portion of its securities consisted of terminable annuities bought in the market or created for its convenience by the Chancellor of the Exchequer, and upon the capital annually realized in these annuities a further tax of £800 would be levied. From the entire property of the Patriotic Fund no less a sum than £50,000 would be taken, prospectively, by the repeal of this exemption, supposing the income tax to endure for a certain number of years. How was such a disastrous result to be remedied? How wore the gentlemen, some of the highest in the country, who were appointed by that most excellent man the late Prince Consort to the management of the charity—how were they to frame their report? They must state to the Queen that the institution, in the formation of which she took so great an interest, and over which her Royal Consort presided with unwearied care and assiduity and unflinching solicitude for many years, had been mulcted by her Chancellor of the Exchequer to the extent of £50,000, and that they must consequently dismiss children from the schools, deprive widows of their pensions, or ask the Queen to allow subscriptions to be recommenced under her patronage for the purpose of restoring the amount so abstracted from the fund. He really must submit that charities were not fitting subjects for taxation, and that the operation of the proposed change, as illus- trated in the case of the Patriotic Fund, could not be satisfactory to this House or to the country. He had now noticed most of the points in the financial statement of the Chancellor of the Exchequer; and if he were to draw a moral from this review, he should say, that with respect to the finances of the country, they had been too ready to yield their admiration and assent to measures remarkable chiefly for the startling novelty of their construction and for the intricacy of their operation, as to the practical working of which it would he difficult for the most experienced to draw anything like a certain conclusion. Now, his impression was, that the science of financial and fiscal legislation was the science which, of all others, needed a simple treatment. Truthfulness of expression and simplicity of action should be the essential requisites of the system of a Finance Minister. However able, ingenious, and eloquent a Chancellor of the Exchequer might be in the formation of a budget full of intricacy, and contrived upon a complicated system, he was sure he would find that in carrying out his schemes he had to deal with persons who, on this subject, were more knowing than himself, and that in the end, no matter what his ability might be, he would be the loser. In the concession of £60 from the taxation of the minor incomes the right hon. Gentleman had admitted an adjustment satisfactory to those who earned such incomes, and forming an admirable substratum for the further adjustment of the higher industrial incomes. He trusted, that until the period of that further adjustment arrived, the House would refrain from depriving the present unequal law of any of its few palliatives, and would not countenance the imposition of a tax upon the charities of the country.


said, he thought that the Chancellor of the Exchequer was extremely fortunate in being able to announce a considerable surplus, notwithstanding the distress existing in the country, the consecutive occurrence of three bad harvests, and the stop put to the profitable trade with the Southern States of America. As to the complaints which bad been made of the proposals in the Budget, nothing was so easy as to find fault with taxation. They could not please everybody with taxes; and the right hon. Gentleman the Chancellor of the Exchequer laboured under very great difficulty. On the one side were those who wished to spend money, and on the other those who never wished to pay it. For his own part, he thought hon. Members would do far better if on nights of Committee of Supply they would allow the House to go at once into Supply, instead of bringing forward a number of small Motions, all tending to extravagance. With respect to taxation, however, what the Chancellor of the Exchequer had to consider was, how to get the most money into the Treasury with the least burden to the people. That would seem the simplest operation in the world; but the fact was that people liked to be taxed insidiously, and would rather pay eighteen pence without knowing it than one shilling knowing it. The change made in regard to the tobacco duties he conceived to be a most decided benefit; for the old duty of 9s. on manufactured tobacco operated altogether as a prohibitory duty in respect to the working classes. With regard to the remission in the tea duties, he somewhat lamented that his right hon. Friend should have sacrificed so large a sum as £1,600,000 a year without what he considered to be a corresponding benefit. The Journal of the Statistical Society showed that a Yorkshire labourer with five children would spend in tea about 17s. 4½d. in the year, buying about 3½ lbs, In that case he would save from the reduced duty of 5d. a pound, just 1s. 5½d, a year, and yet for that small saving to the labouring man the Chancellor of the Exchequer proposed to sacrifice a revenue of £1,600,000. The same labourer consumed during the year 1,085 lbs. of flour; and if the 1s. duty per quarter on corn were abolished, he would save 2s. 9d. in the year, though by the latter remission the Chancellor of the Exchequer would only sacrifice £600,000. Thus, for the interests of the poor man, the abolition of the duty still remaining on corn, small as it was, would be more important than the reduction proposed in the tea duty. As to the income tax, they were, of course, all grateful for the 2d. in the pound which was to be taken off; but he wished that his right hon. Friend had tried to make an adjustment, establishing a distinction between cases in which income was produced with or without risk to the capital producing it. He was glad to see the abolition of the trumpery tax on bills of lading; for that impost, though email, was troublesome, and trouble meant time and money. With regard to charities, he was sorry to differ from his hon. Friend opposite (Mr. Hubbard). It was right that they should be taxed. Some of them were founded many years ago by men, who, at that time, were in advance of their age; but in process of time these charities became behind the age, and in many instances they were not only useless but positively hurtful. He wished his right hon. Friend had let the carriers go free Much would not be got from them; and sometimes in the country they kept up a wholesome competition with those great monopolies—the railways—in the conveyance of poor persons. On the whole, they might well congratulate themselves upon their financial prosperity when comparing it with that of foreign countries. Thus, the hard-headed men who operated on the Stock Exchange, and upon the foreign Bourses, placed this country at 93, while France was at 69, many other nations were nowhere, and America was not even upon their books. Whence, then, that great prosperity? Australia and gold had been alluded to the other evening, but they would not account for it. Their exports to the Australian colonies were rather more than £10,000,000 a year, showing an increase of £7,000,000 within the last ten years; but that was but a small part of the increase of the export trade as a whole. In 1847 the exports were only £58,000,000; they were at the present time £140,000,000: so that the increase of the export trade to Australia was only about one-twelfth of the increased export trade taken together. But then gold was said to have something to do with their prosperity. He maintained that gold hitherto had had no appreciable effect on prices, and he believed that M. Chevallier, with whom he was well acquainted, had become a convert to that opinion, the real cause of all their prosperity was to be found in order and industry, both of which had been created and fostered by free trade.


said, with regard to the remarks which had been made in the course of the debate upon some minor proposals, he believed it would be better to put off making any reply to them until the questions themselves came on for discussion in Committee. But with respect to what had been said on the subject of terminable annuities, he thought it would be in his power to show at the proper time that they involved the objectionable operation of the original sinking fund, which was open to this objection, that at one and the same time you bought stock and sold it. With regard to the subject of charities, the proposal of the Government was not as yet before the House; and when it was, he would venture to say that it could be shown that the case of the Patriotic Fund was totally beside the general question; nor was there any parallel to it in the whole range of the charities of the country.


said, he wished to call the attention of the right hon. Gentleman to the case of captains and of the army and navy lieutenants, whose incomes rarely exceeded £200 or £300 a year, and who were brought within the full operation of the income tax. The case of those gentlemen was entitled to the most favourable consideration of the Chancellor of the Exchequer. He regretted that-the right hon. Gentleman proposed to tax the charities of the country.


inquired whether the charitable clauses would be included in the one tax Bill?


said, they all belong to the Income Tax Act.

Main Question put, and agreed to.

WAYS AND MEANS considered in Committee.

(In the Committee.)

(3.) That, towards raising the Supply granted to Her Majesty, in lieu of the Duties of Customs now charged on Tea, the following Duties of Customs shall, on and after the 25th day of April 1863, until the 1st day of August 1864, be charged thereon on importation into Great Britain and Ireland, viz.—

Tea the lb. 1s. 0d.


said, he thought that probably it would not be thought necessary to discuss the Resolution further on that occasion, and therefore he should reserve any remarks to see whether he was right in his expectation.


said, he wished to know whether the attention of the Chancellor of the Exchequer had been called to the complaint of certain tea dealers, who alleged that the right hon. Gentleman had in some former speech distinctly laid down the principle that it would he convenient for the tea duties to run from July to July? They alleged that sufficient notice had not been given to them of the proposed change; that they had supposed from that statement of the right hon. Gentleman that there was no occasion to di- minish their stocks, and that they were taken by surprise by his present rapid proceeding. He did not express any opinion on the subject himself, but he wished to know whether the right hon. Gentleman admitted there had been any breach of faith on his part in the matter?


said, that his attention had been called to the subject by a variety of letters which he had received from tea-dealers, who claimed the right to receive a drawback or to have some time allowed before the change came into operation. He could only say that the course he proposed to take was the usual one. Indeed, for many years there had been one uniform course, and he was not aware that they had ever postponed the reduction beyond the time when the Resolution was reported to the House. Certainly, for the last ten years there was nothing which formed a precedent for the claim now made. For himself, he entirely repudiated all intention of having given anything like the pledge supposed. In point of fact, when he made the speech referred to be was engaged in proposing a great number of reductions in Customs duties which he wished should take immediate effect. Formerly the duties used to be reserved from April to April, but the inconvenience of legislation to which that gave rise had led to the change. However cheerful a hope he might entertain that the benefit of the reduction in the tea duty would go to the consumer, it was absurd to suppose that in every country village and town the consumer would find the full reduction the day after the change took place. The dealer would get the best price he could, and the Government would be acting unjustly to the consumer if they yielded to any complaint such as this.


said, that the stocks of the dealers in tea were never so low as at that moment. In fact, the dealers had prepared themselves for the proposed change.


said, he was sorry to see, by the Resolution, that the 1s. duty would cease in August, 1864. He did not suppose that any Chancellor of the Exchequer would propose to go back to the high duty, but why limit the term? It would leave the door open so as to allow the Chancellor of the Exchequer to be tempted, if some emergency occurred, to re-impose the high duty.


said, the 1s. duty was proposed as a defined settlement, so to speak, of the question. The term of August, 1864, had been fixed as the period for considering whether that amount should be kept as an annual duty. The House might then consider the duty on tea in connection with that on sugar.

Resolution agreed to (4.) That, towards raising the Supply granted to Her Majesty, the Duties and Drawbacks of Customs now charged and allowed on the articles undermentioned shall continue to be levied, charged, and allowed, on and after the 1st day of July 1863, until the 1st day of August 1864, on Importation into Great Britain and Ireland, or on Exportation thereof to Foreign parts, or on removal thereof to the Isle of Man for consumption therein, or on deposit thereof in any approved warehouse, upon such terms and subject to such regulations as the Commissioners of Customs may direct, for delivery therefrom as Ships' Stores only, or for the purpose of sweetening British Spirits in Bond, viz:—


said, he wished to offer some observations on the mode of charging the sugar duties. It was exceedingly complicated and troublesome, and led to incessant alteration. Moreover, so long as a high differential duty was placed on the best description of sugar it was the interest of the sugar-grower to produce, not that description of sugar, but one of an inferior kind, on which a lower duty was paid. If these differential duties were levied at all, they ought to be levied in such a manner as to encourage the grower to produce the best quality of sugar. At that moment there was a conference sitting at Paris on this subject, endeavouring to arrange some more equitable mode of levying such duties. The duty received last year from the two higher classes of sugars was £291,000. But from that was to be deducted £184,000, the draw-back for exportation; so that out of the. £6,000,000 Customs duties received last year, only £107,000 was from the two higher classes of sugars. It was his conviction, that if there was a uniform duty on all sugars, the effect would be to enormously increase the supply, while the sugar-producers in all parts of the world would endeavour to produce the best article. There would be a waste in refining of about 10 per cent, so that, supposing the duty was 15s. per cwt., the loss under that head would amount to 1s. 6d. per cwt. The foreigner, who was allowed to refine in bond, would therefore have an advantage of 1s. 6d. per cwt. over the refiner of this country; but the refiner, say in Hamburg, would be subjected to freight and other charges, which would amount to a sum that would something like balance the loss of 1s. 6d. sustained by the Englishman. Again, the sugar came over in hogsheads, casks, and bags; every one of which (sometimes as many as 20,000 in a single ship) were examined with the standards kept in the Secretary's office. That practice occasioned great delay and expense to the revenue. He asked, then, why were these differential duties retained? Serious objections to equalization of the duty were no doubt made by Sir Thomas Fremantle and others before the Committee of last year—such as the frauds upon the revenue, the interruption to trade, and so forth. But it was not worth the while of the established firms to defraud the revenue; and as to the injury that would he occasioned to trade, he (Mr. Lindsay) did not see why the home refiner should not be able to refine at the same cost as the refiner abroad. And why should not sugar be refined in bond? There was no doubt that the consumption of sugar was enormously on the increase; and the loss on the equalization of the duties would he more than compensated for by the increased demand. If it was once for all known that protection was withdrawn, he had no doubt that the sugar-refiners in the country would find out the means of refining sugar in bond without risk to the revenue.


said, he had hoped, that for that Session at least, they would have been spared a debate upon the sugar duties. As Chairman of the West India Committee, and therefore representing a very large number of those who were interested in the question, he should, of course, have been better pleased if the right hon. Gentleman the Chancellor of the Exchequer could have reduced the duties on sugar. It seemed hard, that after illuminating for the peace seven years ago, they should still be paying the war duty. It seemed to them that the very large stocks now in bond, the unreasonable amount of the tax in proportion to the present value of the article, and the great variety of uses to which sugar might be applied, constituted a fair claim to consideration; but he felt that the Conference now being held on the Continent was too good an excuse for a Chancellor of the Exchequer naturally anxious to retain so productive a duty. And he was by no means jealous of his hon. Friends the Members for Lancaster and Brighton, though he thought they hardly deserved their success, after having on a previous occasion thrown over tea in favour of paper. But as his hon. Friend the Member for Sunderland (Mr. Lindsay) had thought proper to bring up the subject, and attack the Report of the Select Committee of last year, it might be deemed excusable in him, who took an active part in that inquiry and cordially concurred in that Report, to say a few words in reply, though he could not hope to do justice to so wide a subject, and one so little fit for debate. The House would remember that last Session his hon. Friend the Member for the City (Mr. Crawford), who represented the interests which were dissatisfied with the present classification of the sugar duties, moved for a Committee to inquire into the whole subject. On the part of the West Indians he offered no opposition. The Committee was granted; and as his hon. Friend had naturally the chief voice in its selection, he presumed it might be taken to have been not unfavourably constituted in regard to his case. He had also a Chairman who might be said to have been committed to his view of the question. The Committee sat more than two months, asked more than 6,000 questions, and, after an inquiry which, he was sure his hon. Friend would be the first to acknowledge, was carried on with the greatest fairness and patience by Chairman and Committee, they reported, by a large majority at least, in favour of an extension of the classification. The question, however, had not been suffered to rest there. One of the witnesses, who happened, he understood, to have peculiar facilities for circulating his opinions through the press and in other ways, occupied the whole winter with great perseverance in attacking the Report; and, by putting forward the evidence on his own side and withholding that on the other, he probably made some impression. Hence the crop of Petitions which had been plentifully garnered into the bags at the table, the value of which had been somewhat impaired by the significant asterisk attached to them by the Committee of Petitions' showing, that though from remote corners of the kingdom, they were all suspiciously alike. That agitation naturally provoked retort, and the usual amount of pamphlets on both sides followed, some showing great ability, arguments drawn from which he had recognised in his hon. Friend's speech, for he had not the same practical acquaintance with sugar which he undoubtedly had with shipping questions. What was it his hon. Friend complained of? He said that the present mode of levying duties was contrary to the principles of free trade, that it gave a premium to bad sugar, and therefore obliged the consumer to put up with a worse article than he would otherwise have; that it protected one producer agaist another, and so on. A great deal of that error, for such he believed it to be, arose from confusion of terms. To those who objected to ad valorem duties, it seemed at first sight wrong to tax good sugar higher than bad sugar. But good and bad sugar were really misnomers. The writer of one pamphlet called it sugar "more or less highly manufactured;" that was a better description, but still it did not convey the actual fact, which was that a great deal which was commonly called sugar was not sugar at all, that real sugar was nearly of one quality and value, and was, or was intended to be, taxed alike. The only sugar properly so called was pure white sugar. Everything else was sugar and something besides; and though it might be—which he did not admit—contrary to free trade to tax two sorts of sugar differently, it could not be so to tax sugar differently from sugar in combination with something which was not sugar. That principle was adopted without any such objections in the case of the wine and spirit duties, in which a certain strength of alcohol was the standard, and the article was less and less taxed as it was more and more mixed. So again cocoa in husk was more lightly taxed than cocoa without the husk; and the stalks, water, and sand in tobacco were the other day, in a Bill to which he understood the hon. Gentleman the Member for the City to assent, deemed entitled to a remission of the duty charged on the dry leaf. Tea and coffee differed in quality; they were not combined with foreign substances. Difference of duty in such case would be ad valorem, which that on sugar was not; convertibility or inconvertibility would be the test. His hon. Friend complained of protection. There was protection, but it was to the higher qualities of sugar. The Committee found that the lower qualities paid a heavier duty in proportion to the real sugar contained in them than the higher, and that, in consequence, a great deal of what is called "concrete" and "melado," the simplest preparations of the cane, was excluded from the markets of this country by the duty. They therefore recommended that the duly should be more fairly assessed, in order to bring in every kind of produce. The true principle of a duty, as he imagined, was to place all producers in the same relation to each other as if there was no duty at all. Surely that would not be done by taxing the jaggery of India, which contained about 45 per cent of sugar, with the best produce of the slave labour of Cuba, which contained, perhaps, 90 per cent. The native agriculturist (the ryot) of India and the free negro of Jamaica, who cleared a few acres of jungle or forest and planted his sugar-canes, was it not mockery to talk to him about animal charcoal and vacuum pans? If there was no duty on sugar, he would increase our supply to a great extent with the rude produce which his hon. Friend would prohibit altogether. The average price of sugar paying higher duties amply compensated for the difference of duty. Those who tried to gain every advantage by going as near the line as possible sometimes made a mistake and suffered heavily. The weather, the voyage, and other causes might throw them out in their calculations. Again, the complaints of those who said that refining abroad—in India, for instance — did not pay, might be correct; but the; reason was not in the duty, but in their inability to compete with the skilled labour, machinery, fuel, &c., of the English refiner. Besides, the voyage spoiled their sugar, and made it suffer in appearance in comparison with refiners'produce—which went immediately into consumption. The beautiful appearance of different qualities of sugar sent out by the refiner, who could imitate any colour or quality preferred, had changed people's taste, and thrown a large quantity of what was formerly grocery sugar out of direct consumption, and given rise to the erroneous impression that there was less good grocery sugar than formerly, the fact being that what used to be sold to grocers was now sold to refiners. There was no argument in favour of two duties—that is, on refined and unrefined sugar—that was not equally strong in favour of one only, the effect of which would be that none but refined sugar would be imported, the trade of the English refiner would be destroyed, the price of sugar increased, the enormous consumption of 37 lb. a head fall off, and the revenue suffer. If the classification were not retained, the only fair alternatives would be no duty at all, or refining in bond. He had that evening presented a petition from importers and workers of 54,000 tons of sugar in favour of classification. He believed it to be the fairest method; it worked well, and the complaints of difficulty and inconvenience were very inconsiderable. The fact that the authors of the system were Sir Robert Peel, Mr. Wilson, and the present Chancellor of the Exchequer, and the date of its origin in 1845, precluded the possibility of any protection being intended, and he could not do better than close with the words of the present Chancellor of the Exchequer, spoken by him in 1854, when repelling a similar attack to the present— There were difficulties to be encountered, but they were as nothing compared with the enormous inequality and injustice which would be done by refusing to admit classification.


said, although he had been a Member of the Committee of last Session, he must confess he was one of those who felt dissatisfied with the present system of classifying sugars. He did not, however, think that that was a favourable opportunity for discussing the question. He should very much prefer to see that treated, not as a Budget question, but as a matter by itself. Moreover, it was only fair, that pending the inquiries of the Commission in Paris, the present sugar duties should remain unaltered. With respect to the constitution of the Committee, to which reference had been made, he was bound to state that he had taken the utmost pains to secure a representation of all the different interests; and as that in which he felt interested was only one of these, it was evident that it must have been in a minority on the Committee.


observed, that he had not intended to impute any unfair practice to the hon. Member.


said, that he was not less impressed than ever he had been with the truth of the principle for which he contended, or less hopeful with regard to its ultimate success. At one time he had proposed, us a sort of compromise, a scheme of two duties; but, like all compromises, it bad failed. The only true principle on which the sugar duties could be adjusted was a single duty, and to that they would ultimately come.


said, he believed that a uniform rate of duty, accompanied by a power of refining in bond, would be a great benefit to the consumer.


said, he also advocated the adoption of a uniform rate of duty, which would hare the effect of securing supplies of the best instead of the worst kinds of sugar.


said, he was glad to find that the general opinion of the Committee was that the Government had acted wisely in not entering into the discussion on the various rates of sugar duties at a time when they could not submit any actual proposal to Parliament. With regard to refining in bond, the opinion of the Committee last year, and of all sections of the witnesses, including revenue officers and persons engaged in the trade from all parts, was against refining in bond; consequently of that solution they were deprived. Of course, it was the duty of a Government to keep itself open to conviction until the time came when they could make a proposal to Parliament; but after due reflection and investigation he was not prepared to retract the opinion expressed in the quotation from a speech of his which had been read by the hon. Member opposite. As to a sole and single duty, it must include refined sugar upwards, or the principle would be interfered with. But it must also include molasses downwards, and that article would be practically prohibited at a duty equal to that on refined sugar. It had been said that the present scale of duties gave a premium on the admission of the inferior article. If that assertion were true, it was conclusive against the present system, but the hon. Member opposite (Mr. Cave) had declared that the quantity of saccharine matter contained in sugar of a given weight was more highly taxed when the quality of the sugar was low than when it was high. If that statement was correct, then it was not true that a premium was given upon the admission of inferior sugar, but rather the contrary. However that might be, the question was one that would, no doubt, be more fully and satisfactorily discussed upon another occasion.


remarked, that what both sugar-growers and sugar-consumers desired, was that the war duties imposed upon the article should be removed.


said, that having gone into the Committee with most dispassionate views, he was of opinion that the conclusion arrived at was the correct one. It was impossible to fix a single duty, because that would act as a prohibition upon low sugars, and as protection for others; and, it not being possible to adopt a graduated scale, it only remained to continue the present system of duties.

Resolution agreed to. (5.) That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the 6th day of April 1863, for and in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on Profits arising from Property, Professions, Trades, and Offices, the following Rates and Duties (that is to say): For every twenty shillings of the annual value or amount of all such Property, Profits, and Gains (except those chargeable under Schedule (B) of the said Act), the Rate or Duty of 7d. And For and in respect of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act, for every twenty shillings of the annual value thereof, In England, the Rate or Duty of 3½d., and In Scotland and Ireland respectively, the Rate or Duty of 2½d. Subject to the provisions contained in the 28th section of the said Act for the exemption of Persons whose whole Income from every source shall be less than £100 a year.


said, he hoped the Chancellor of the Exchequer would give them some information in respect to the deduction of £60 he proposed to allow to all incomes under £200. The right hon. Gentleman had never stated why he fixed upon the precise sum. He (Mr. Hunt) took it that the right hon. Gentleman regarded that sum as representing the amount requisite to purchase the bare necessaries of life for a family. He was, however, at a loss to know why the right hon. Gentleman stopped at £200 a year for that reduction. He thought that he ought to go somewhat higher in allowing the reduction. He found that the incomes under £200 a year, under Schedules D and E, amounted to 268,144, and that those receiving higher incomes amounted to 111,207, showing at once the reason why the Chancellor of the Exchequer should have the great majority of complaints from the class of smaller incomes. The allowance at 7d. upon £60 was 35s., which, upon incomes under £200 would entail a loss to the revenue of £469,252, and upon incomes above £200 the loss would be £194,613. He had no data to show him what the loss would be to the revenue, if this deduction were to be applied to incomes of £250 or £300. Perhaps the right hon. Gentleman would be able to inform the Committee.


said, he wished to know whether the occupier of a, farm exceeding £200 a year rental, supposing he had no other source of income, would be allowed to deduct from his real income £60 a year?


said, it was his intention to place the farmer precisely in the same position as any other person with respect to deductions, the peculiar assessment applying to them being only a convenient mode of ascertaining the extent of their incomes. In answer to the hon. Gentleman opposite (Mr. Hunt), he might state that all the information in his power would be laid before the House at a future stage of the proposal under discussion. In reference to the proposal which the hon. Gentleman himself seem disposed to make, he must observe that it was one which he should feel bound to resist. It was most unadvisable to encourage all persons of considerable income, who were a large number altogether, to apply at Somerset House, to have each some £2 returned to them. It would cost them some £200,000 or £300,000 a year.


said, he hoped the right hon. Gentleman would reconsider that part of his scheme in which he proposed to do away with the exemptions on charities with reference to the case of many persons who received payments under that head. In several grammar schools, for instance, the trustees of a charity paid the salary of a master to the extent of £100 or £150 a year. Now, suppose that master were to take boarders, and were thus to increase his income to an amount above £200 a year, he did not see how, under the operation of the scheme of the right hon. Gentleman, he could escape paying income tax twice over. There would be a deduction, in the first place, on the payment of the money from the land on which it was raised, while the master would again he taxed on his increased income. That was a point which, be thought, was worthy the consideration of the Government. He supposed he might add that a charity whose income was under £100 a year would be exempt from income tax altogether; and that if the income exceeded £100, but was under £200, it would be allowed the deduction of £60. If it were otherwise, a charity would be placed on a worse footing than an individual person.


said, that he did not look upon charities as persons. He did not see that a charity had any analogy whatever to a person, and therefore would not be treated as such. So far as the smaller charities, which imposed a great deal of trouble and expense on the State, were concerned, he was of opinion that it was upon them it was most fair that the tax should fall. It was not the intention of the Government, he might add, that the income tax should, under any circumstances, be paid twice over.


said, that it appeared, according to the Chancellor of the Exchequer's benevolent views, that the smaller the charities the more strongly did the principle of taxation apply to them, because they occasioned so much trouble. When they had the Bill before them, he (Mr. Henley) would submit this question to the consideration of the right hon. Gentleman and the House — namely, how far it was just as the Charity Commissioners were forcing all charities to regulate their affairs, that the trustees should be brought under the obligation to pay upon the distribution of those small charities for the current year without any right to deductions. He thought that such an obligation was a great hardship. Those charities did not, like the Chancellor of the Exchequer, possess large balances in hand, and had frequently great difficulty in making both ends meet; and if the right hon. Gentleman were to put his claw into the dish, as he proposed, he would be subjecting them to a great burden.


said, the charities in question were not by any means a special object of taxation, nor had he intimated that he intended they should be so. All he had contended for was that the argument in favour of the proposal which he made was even stronger in their case than in that of other charities, he was, he might add, disposed to put his claws into their till, not their dish.


said, he would put the case of the annuitants of a charity receiving £8 or £9 a year, and would ask by what means their receipts were to be dealt with with respect to deductions?


said, that arrangements, as now frequently happened in similar instances, would be made with the charity itself.


said, he wished to ask whether small parochial charities left for the benefit of the poor would be subject to income tax?


said, that where it could be held that the charity went in aid of the ratepayers it was already liable to the tax, and the smallness of the charity would not, under the proposal he made, exempt it from the tax.


said, the proposals of the right hon. Gentleman could he more conveniently discussed when the Bill in which they were embodied came before the House. He must not, however, in assenting to the Resolution, be held as committing himself to the provisions of the Bill.


said, he would promise that ample opportunity for the discussion of those provisions at the proper stage should be afforded.


observed, that the Committee were asked to assent to a Resolution which contained no reference to the proposed exemptions. He wished to know in what form the questions of those exemptions would he raised. He wished to know what was the amount which would be derived from the non-exemption of these charities. He believed he was right in saying that nine-tenths of the charities belonged to the Church of England, and that was a signal proof of the benefit conferred on the Church of England by the right hon. Gentleman.


said, the hon. Gentleman would excuse him if he made no reply to the last observation. As to the amount to be derived from the abolition of the exemption, he estimated it at about £100,000 a year. There would be ample opportunities of discussing the question on the clauses of the Bill.


said, he understood that these charities were nothing more than trusts, for the benefit of persons among whom the funds were distributed. In ordinary cases the trustees paid the income tax, and the cestui que trusts, if their incomes were less than £100, had the amount returned to them. As he understood, that would still be done. In the case of railway companies the directors deducted the income tax from the dividends, and any shareholder whose total income was less than £100, obtained a return of the amount so deducted. Charities, like railway companies, were corporations, and their aggregate revenue did not affect individual exemptions. If that were so, the proposition to tax charities came to nothing, and would add nothing to the revenue.


said, that charities might he conveniently divided into three classes. One class had been referred to, and an illustration of that class was to be found in the Sons of the Clergy, where a large fund was distributed among a great many recipients, of £10 or £15 a year. He could scarcely imagine that it was proposed to tax them. The second class included almshouses, where part was given in goods and part in money. By the present law the income tax was first paid, and then returned, upon showing that no single person received £100 a year. The third class included hospitals, where all the benefit was in goods, and no one received anything like £100 a year. He wished to know whether the Chancellor of the Exchequer intended to include in the, withdrawal of exemption either or all of these classes?


said, he thought he had made his meaning clear, and he was reluctant to restate what he had before said on the subject. The tax would be levied in the gross, but those recipients whose incomes did not amount to £100 would be entitled to a return of the money, because otherwise they would be more harshly dealt with than other persons in a similar position. In no case would a double tax be imposed. For further explanations he hoped hon. Members would wait until the clauses had been printed.


said, he understood that trustees who received £100 a year were to pay the tax, but that the money was to be returned to the recipients. He wanted to know how ten poor people, who got £10 a year each, and who, probably, could neither read nor write, were to get the amount of the tax back again. It seemed to him that under the change proposed by the Chancellor of the Exchequer the labours of Somerset House would be largely increased.


said, the right hon. Gentleman had misunderstood him. In such a case as the one supposed the business of returning the money would be settled with the charity, and not with the individual recipients.


said, he assumed that the trustees would be taxed on the gross incomes of their charities, and that no second demand would be made upon the recipients. But there must be a deduction from the payments made to the recipients, because the trustees would have less at I their disposal; and although the recipients; would not be taxed twice, yet they would be taxed once, though their incomes might not amount to £100. The tax might he levied upon the charity as a whole, but it would really fall upon the individual recipients.


said, the hon. Member was in error. Me had already stated that no double tax would be imposed in any case, and he had now to add, that where a single tax had been levied upon a charity, the recipients whose incomes did not amount to £100, would be entitled to have the money returned. In those cases the return would be made, not to each individual recipient, but in the gross. It was also intended to provide that charities should not be entitled to deduct the amount of the tax from the doles or stipends payable to their objects when they had a residue of other funds from which the tax could be paid.

Resolution agreed to.


said, he wished to ask the Chancellor of the Exchequer whether he intended to go on with the remaining Resolutions?


replied in the affirmative. There was one of them especially on which he wished to give some explanations.


said, it was past midnight, and he would appeal to the Committee whether it would be consistent with propriety at so late an hour to enter upon the discussion of Resolutions which were opposed.


said, he did not propose to go on with Resolutions to which opposition was to be offered, but he thought it would be for the convenience of hon. Members that he should be allowed at once to explain certain auxiliary provisions which did not appear on the paper.


said, he thought no further progress should be made that night. Owing to a recent change in the mode of dealing with financial business, the effect of passing the Resolutions sub silentio would be to deprive the House of one important stage for discussion. It was most important to the large railway companies that due time should be given to point out to the right hon. Gentleman how, as they thought, their interests would be injuriously affected, and how the travelling public would suffer by the change proposed.


said, that if he offered no opposition to the Resolution affecting railways that night, he wished to be understood as not, conceding the principle of the right hon. Gentleman's proposal.


said, he wished to reserve his right to object hereafter to the principle of the resolution relating to charitable legacies in Ireland.


would remind the Committee that there was no question before it.


said, he should protest against the doctrine of passing such important Resolutions pro formâ, without any adequate advantage to the public, especially, too, at a time when the other business which the Government had to submit to the House was not of a character to demand any lengthened discussion, or a protracted Session. He would suggest that the right hon. Gentleman should postpone Resolutions 6, 7, 8, 9, and 10. The House ought not to abandon its privileges, and he would feel it his duty to move that the Chairman report Progress.

Motion made, and Question proposed, "That the Chairman do report these Resolutions to the House."


said, he would put it to the Chancellor of the Exchequer whether it was possible to go on with the Resolutions that night. They could not be passed pro formâ; and as they referred to questions which were new, they required a good deal of discussion.


said, it was a very common thing to assent to Resolutions of the kind, the House reserving its judgment on the matter until it had before it the Bill, which in that case it was desirable to introduce as soon as possible. He did not, however, propose to proceed that night with any Resolution to which real objection was taken.


said, he did not desire to delay the passing of the Resolutions, but it was absolutely necessary that the consideration of some of them should be adjourned till a future day.


said, he would not resist the reporting of progress.

Motion, by leave, withdrawn.

The following Resolutions were then agreed to: (6.) That, towards making good the Supply granted to Her Majesty, the sum of £20,000,000 be granted, out of the Consolidated Fund of the the United Kingdom of Great Britain and Ireland. (7.) That, towards making good the Supply granted to Her Majesty, the Commissioners of Her Majesty's Treasury be authorized to raise any sum of money not exceeding One Million Sterling, by an issue of Exchequer Bonds. (8.) That the principal of all Exchequer Bonds which may be so issued, shall be paid off at par, at any period not exceeding six years from the date of such Bonds. (9.) That the Interest of such Exchequer Bonds shall be payable half-yearly, and shall be charged upon and issued out of the Consolidated Fund of the United Kingdom, or the growing Produce thereof.

House resumed.

Resolutions to be reported To-morrow; Committee to sit again To-morrow.