HC Deb 02 March 1863 vol 169 cc980-1001

Order read, for resuming Adjourned Debate on Amendment proposed to Question [23d February], "That the Bill be now read a second time;" and which Amendment was, To leave out from the word "That" to the end of the Question, in order to add the words "a Select Committee be appointed to inquire into the expediency of altering the Laws for raising a Revenue on Tobacco,"—(Mr. Ayrton), —instead thereof.

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

Debate resumed.

COLONEL DUNNE

said, he thought it only respectful to the House, that having moved the adjournment, he should state in a few words why he took part in the proceedings. He should only refer to that part of the question which concerned his own country. He received daily remonstrances against the course which the Government were taking in this Bill. His constituents were in no way affected, but the subject created great interest in Ireland, and it was the duty of every Irish Member to press on the Government an inquiry into the allegations made by the tobacco manufacturers. The question had not, as had been asserted, any reference whatever to free trade; the prohibition of the culture of the tobacco plant in Ireland was decisive upon that point. There was not merely a differential duty on the cultivation of this plant, but an absolute prohibition to the Irishman, as indeed in this country. An hon. Gentleman, who seemed better acquainted with the statistics of the antipodes than of Ireland, had asserted that Ireland could not grow tobacco. If so, the prohibition was useless; but the reverse was the fact, for several years since it had been grown so successfully that the Government passed an Act to prohibit its growth and to purchase; the crop at a sum of £300,000. It was absurd, therefore, to talk of free trade when actual prohibition was given to protect the foreigners against the home growers. He believed, from the statements which had been made to him, that the Bill would seriously affect the trade of Ireland. Irish snuff was made from the stalks of tobacco. The manufacturer had to pay for these stalks 1s. per pound; and as it required a pound and a half of them to make one pound of snuff, the cost to the manufacturer was 1s. 6d Add to that 2d., the cost of the manufacture, and 3s. 2d for duty, and the cost was 4s. 10d. Now, in foreign countries the stalks were of no value whatever, and therefore there was a difference of the value of the stalks to the English manufacturer in favour of the foreigner. The consequence was, that the measure, instead of being a measure of free trade, was a measure of protection to the foreign manufacturer against the Irish. The consumer would not be benefited, for the foreign manufacturer would raise the price, and they would find that their home trade would be transferred to the foreigner, as they had found in many other cases. And so with regard to roll tobacco, which was the sort principally smoked in Ireland. In Ireland they prepared this rolled tobacco, as well as a manufactured tobacco, made up with molasses, rum, and other materials, requiring some manipulation; while in England they smoked a tobacco called bird's-eye, with others which, unless adulterated, required no further manufacture than the cutting of the leaf. The proposal to admit cavendish on the terms of the Bill would drive our article out of the trade in Ireland, and transfer the trade to the foreigner, without any corresponding advantage to the consumer, for the price would be raised as the result of the monopoly. The Chancellor of the Exchequer talked of giving the home manufacturer a boon by providing that he might manufacture cavendish tobacco in bond; but the many arrangements made for fiscal purposes prevented the Irish tradesman from manufacturing in bond at all. Besides, many of the Irish manufacturers were in the interior of the country. There was one inland one which paid duty, it was said, to the amount of £150,000. There was one which also paid a considerable duty, and employed many persons; and the proprietor had assured him, that if the Bill passed in its present form, he would be obliged to relinquish the manufacture; and there were many others similarly placed far from the Custom-house establishments, which were generally in the larger cities and at the ports. Now, did the Chancellor of the Exchequer intend to deal with these manufacturers, situated as he had described? Were they all to be destroyed for the sake of the theoretical advantages which the hon. Gentleman styled free competition, or was he about to form Customs establishments in every small town where there there was a tobacco manufactory? These establishments must cause expense, and he saw no provision for them in the Bill. He wished to add, that he made these statements on that serious subject, not upon his own authority, but on that of the Irish manufacturers themselves.

SIR STAFFORD NORTHCOTE

said, he could not help thinking that the Chancellor of the Exchequer had been rather unfortunate, if not ill-advised, in the course which he had pursued in regard to the Bill. While the right hon. Gentleman had brought it, or rather the Resolutions upon which it was founded, before the House at a period so very early in the Session that it had created some surprise at his dealing at that time with a matter of some importance to the financial statement, yet certainly the course he had taken did give ample time for fully considering the matter. At the same time, he had brought forward a measure the importance of which appeared to have been somewhat exaggerated. Upon the principle of the Bill he believed the majority of the House were agreed; but, unfortunately, the discussion had been brought on at such inconvenient hours that two discussions had been provoked and two adjournments had taken place upon a very simple question. That he thought was to he regretted. The debate, however, had thus been spread over three nights, the hon. Member for the Tower Hamlets having made his speech upon one occasion and the Chancellor of the Exchequer upon another; and now the discussion was renewed in the presence of many Members who had heard neither of those speeches. However, as the matter now stood, they had only to consider in what manner they should deal with the Amendment. He had not the advantage of having heard the speech of the Chancellor of the Exchequer on Friday last, but from the published reports he believed that his objections to the Motion of the hon. Member were two.— First, that the course proposed was unprecedented; and, secondly, that it would only have the effect of wasting the time of the House, and of putting off the discussion upon the Bill. With regard to the course being unprecedented, he (Sir Stafford Northcote) did not know whether there was any exact precedent for it; but the House ought to bear in mind that they were about to deal with a most important and at the same time peculiar branch of the revenue, realizing between £5,000,000 and £6,000,000 annually, or one-fourth of the total Customs revenue of the country, and that the tax in fact amounted to a duty of 1,200 per cent upon the article upon which it was imposed. In order to secure those duties being raised, it was necessary to subject the manufacturers of the article to a number of complicated Excise restrictions. In consequence, there were many delicate questions raised, all of which ought to be considered before deciding to touch the tobacco duties. There was no saying to what consequences it might lead if they proceeded hastily and inconsiderately to deal with one portion of the subject. In 1840 an alteration was made in the mode of securing the tobacco duties and in less than three years it was found necessary to retrace that step, showing how careful the House should be in dealing with these duties. Therefore, he did not consider the fact of there being no exact precedent decisive against the proposal of the hon. Member for the Tower Hamlets. The next question was, whether that proposal, if agreed to, would only lead to waste of time, and the virtual defeat of the measure. If that were its object, he certainly was not prepared to support it, as he was of opinion the measure was good in principle. But, although it was a step in the right direction, great caution was required in taking it, and he thought they would rather be losing time by recklessly discussing the measure in a Committee of the Whole House, without any authentic information to guide them. It was not true that a whole Session need be lost if the Bill were referred to a Select Committee. A case in point occurred in the previous year, when the sugar duties were referred to a Select Committee; and he apprehended that the questions which were raised in reference to the sugar duties were at least as great in importance and in complication as those raised by the Bill before them, but that Committee upon the sugar duties occupied very little more than two months, and then they presented a very good Report. Now, if they were to send this Bill to a Committee for discussion, and the Committee were animated by a like spirit to that which animated the Committee upon the sugar duties, they would get through their work in very good time. The Session had only just begun, and the Bill need not be lost if sent to a Select Committee. [The CHANCELLOR of the EXCHEQUER: That is not the Motion.] His right hon. Friend reminded him that that was not the Motion, and he entirely agreed with him; but he was about to add, when he was interrupted, that he thought that the Motion of the hon. Member for the Tower Hamlets was not the one best adapted to meet the circumstances of the case. He himself would very much prefer to see the Bill read a second time, and that then the Chancellor of the Exchequer should agree to refer it to a Select Committee in order that they might affirm the principle of the Bill and afterwards discuss its details. He quite felt with the hon. and gallant Member (Colonel Dunne) that they would be utterly at sea if they were to discuss the question in a Committee of the Whole House, in which most of the Members must necessarily know nothing of the details. He himself had had communications with several persons engaged in the tobacco business, but he did not know whether to take their statements as correct or not. He had had no opportunity of sifting them, and he did not know that he could do so in a Committee of the Whole House. The same would no doubt be the case with other hon. Members. Again, if they discussed the matter in a Committee of the Whole House, many hon. Members would come in on a division and vote with the Government or with the hon. Member for the Tower Hamlets, without having heard the discussion. It was quite impossible that they could satisfactorily dispose of a complicated matter of this kind in such a way as that. As he had said, his wish was that the Government should consent to send the Bill to a Select Committee; and if he received an assurance that they would pursue that course, he would vote against the Motion of the hon. Member for the Tower Hamlets; but if he failed to obtain such an assurance, he should feel obliged to vote for the Motion of the hon. Member, because he thought it impossible to go properly into the question without that minute and perfect information which could only be got through the medium of a Select Committee. The Chancellor of the Exchequer had told the House that he wished them to examine the matter for themselves; and when they said that they wished to examine it by means of a Committee, he said, "I do not wish that, and you must examine it in my way." That was not quite fair. It was like a conjuror who asks you to examine his cards but will not let you take them into your own hands for the purpose. Unless the House were allowed to inquire by means of a Select Committee, the invitation to them to examine into the subject was a mockery. He differed to some extent from the hon. Member for the Tower Hamlets, who seemed to be taking a line not quite in accordance with the received opinions of the majority of the House. He (Sir S. Northcote) was quite prepared to admit that in principle the measure was good and a step in the right direction. The details, however, had not been discussed. As matters stood, manufactured tobacco was practically excluded by a duty of a prohibitory character, and it would be for the interest of the consumer and of the revenue that that duty should be reduced so as to allow of foreign cigars entering into competition with English; but if the reduction went too far, they might be injuring the English manufacturer without benefiting, but rather injuring, the revenue. There were two evils to be guarded against—smuggling and adulteration. A reduction of duty might diminish smuggling; but if foreign cigars were allowed to be imported at too low a duty, a temptation would be offered to the English manufacturer to have recourse to adulteration. The Chancellor of the Exchequer had told them that it was necessary to make a distinction between the manufactured and the unmanufactured article in order to place the British producers on a fair footing with foreigners; but the question whether the protection given was adequate could not be discussed properly in a Committee of the Whole House without further inquiry. There was also to be considered the question whether the arrangements proposed by the Chancellor of the Exchequer for manufacturing cavendish tobacco in bond were satisfactory. They were told by the manufacturers that they were not satisfactory, and he wanted to know how that was, and to hear the statements of the manufacturers on one side and those of the Custom-house officers upon the other. Then came the question whether they ought to give the cigar makers power to manufacture in bond? That was one of the questions upon which he should like to hear the opinions of the manufacturers and of the Custom-house officers. The Chancellor of the Exchequer, on being asked the question, answered that he would take the matter into consideration; but afterwards he said, without giving any reasons, that he thought that it would not do. The House surely ought to know what his reasons were, and how far they would bear examination; and he must himself confess that the only reason which he had heard the Chancellor of the Exchequer give was not a satisfactory one. He said that he could not allow the manufacture in bond because such permission would only be applicable to large manufacturers; in other words, that it would give the larger manufacturers an advantage which they ought not to have over the small ones; but as the effect of giving the privilege of manufacturing in bond was simply to place those who availed themselves of it on a level with the foreigner, the question would arise, did not the right hon. Gentleman, in refusing this privilege, propose to put the large manufacturers upon the same footing of disadvantage with regard to the foreigner that he had refused to put the small manufacturers upon in reference to the large manufacturers? That seemed to lead to the conclusion that the privileges given to the foreigner were too great. Another point was as to the question of the drawback. The Treasury and the Customs had fallen into an error respecting the drawback, and had fixed it at so low a point, that exportation was impossible. The Chancellor of the Exchequer now promised a better one; but when a mistake in the calculations of the departments on one point was thus admitted, he thought that the conclusions of the Treasury and of the Customs authorities might be fairly challenged on other points. The House was told that the right hon. Gentleman only wished to give fair play to the home manufacturers; but with every wish to do that, he might have made some mistake in the figures, as had been done in the instance he had just mentioned. For these reasons he thought it desirable that the question should be considered in a Select Committee, where it might be disposed of in a comparatively short time; and such a course, indeed, would probably be attended with a saving of time, because nothing was worse than to press legislation upon matters of such serious importance, and then afterwards have to undo it. If, therefore, it was not understood that the Bill would be referred to a Select Committee after being read a second time, he should vote for the Amendment.

MR. CRAWFORD

said, it appeared to him that the proposition of the hon. Member for the Tower Hamlets seriously invaded those principles of free trade upon which the commercial legislation of this country had been for some time past founded. When he heard the speech of the Chancellor of the Exchequer the other night, he was in some doubt as to the vote he ought to give; but having given to the right hon. Gentleman's statement his full consideration, and having carefully weighed the representations made to him by his constituents upon the subject, he had arrived at the conclusion that there was nothing in the particular article of tobacco that should exempt it from the principles to which he had referred. The correct principle was that every consumer should have the commodity he required free from increase of cost by reason of Custom-house duties of any kind except those which were necessary for purposes of revenue. The proposition of the Government rested upon three points. They said that the alterations they proposed would be for the advantage of the revenue, that they would prevent smuggling, and would be for the benefit of the consumer; and the Chancellor of the Exchequer had also stated negatively that the measure would not in the long run affect injuriously the manufacturer. Upon all these points his hon. Friend was at variance with the Government, but he (Mr. Crawford) was inclined to think that the views expressed by the Chancellor of the Exchequer were the correct ones. With regard to the revenue, they were not in a position to express any opinion as to what the extent of the advantage might be. But the question was intimately connected with the question of smuggling. It had been stated the other night in the House that smuggling was not now carried on to the extent that was supposed. But if that were not the case, how was it they had not seen an increase in the consumption of tobacco with the increased population, as they had in the case of every other article of consumption. Their own senses told them that tobacco was used as largely by every class of the community as it ever had been; and, consequently, if there had not been the increase of consumption that there had been with regard to other articles some other cause must have been in operation to prevent it. For his own part, having examined the evidence taken before the Committee of 1844, and having seen to what an extent smuggling was carried on, and the ingenious methods by which tobacco was surreptitiously introduced, he had arrived at the conclusion that smuggling was still practised to a considerable extent, and that it behoved that House, therefore, to sanction the proposition of the Government, if it would have no other effect than to remove that evil. With regard to the interest of the consumer, he held, as he had before remarked, that the consumer of tobacco had a right to have access to the tobacco which he used without the cost being increased to him by any Custom-house or other exaction than that which the revenue required, and that if they protected the home manufacturer of tobacco against the foreign manufacturer, they were introducing again that system of protection against which that House had so often declared its opinion. The Committee to which he had already referred had, he thought, disposed of all the great principles which were involved in the present discussion; and considering the numerous opportunities which a Committee of the Whole House afforded for the consideration of the details of the measure, he saw no reason for resorting to the tedious process of sending the subject before a Select Committee. Reference had been made to the Committee of 1830 upon the growth of tobacco; and if hon. Members would refer to the Report of that Committee, they would find ample evidence with regard to the growth and manufacture of tobacco in Ireland. The permission to grow tobacco in Ireland for home consumption was not availed of in that country from 1799 to 1824; and though during the succeeding five years 500 acres were brought under tobacco cultivation, the evidence before the Committee showed, that owing to the inferiority of quality, a duty of 1s. 8d. as against 3s. on foreign tobacco would not be a compensating protection. Another thing which struck him in the course of the discussion was, that three prominent Members of the House, the hon. Members for the Tower Hamlets Southwark, and Sheffield, particularly, were all of them abandoning the great principles of free trade in the interests of a particular manufacture. Speaking for himself, he should not feel disposed to throw over the interests of ninety-nine out of every hundred of his constituents for the sake of the one who might be engaged in this manufacture. From the Report of the Committee which sat on the growth of tobacco in Ireland, in 1830, it appeared that Irish tobacco was in a great degree inferior to that grown in America. He would therefore ask whether it would be possible to expect that in Ireland or elsewhere tobacco could be grown profitably unless its cultivation were supported by a protective duty, and whether any man would now get up and affirm that any article of domestic consumption ought to be protected by a duty? He was prepared to assent to the proposition of the Chancellor of the Exchequer.

SIR EDWARD GROGAN

said, he was anxious to have the question as to the rates of duty decided by a Committee, who had fully considered it, and heard all the evidence that it might be thought necessary to adduce on the subject, That could only be done by a Select Committee. The Chancellor of the Exchequer was at present unable to state distinctly the rates of duty which ought to be laid down; and if that question were left to a Committee of the Whole House, they would have it decided by hon. Members many of whom would know nothing about the details, but would rush in to vote after the Question was put. They all knew that Ireland was suffering from a want of labour, and the tobacco manufacture was one of its most important industries, as hon. Gentlemen well knew that Ireland was remarkable for its excellent snuff. But there were other considerations. He had always understood that objects of luxury were, as compared with those of prime necessity, fit subjects for taxation, and tobacco was certainly a luxury compared with many other taxed articles. Moreover, the revenue from the tobacco duties was increasing. In 1860 it was £5,600,000; in 1862, £5,714,000 —showing that the trade was growing. The Army and Navy Estimates were before them, and there was a reduction of £2,000,000, and they heard that the revenue was in a very flourishing state: if they adopted the proposition of the right hon. Gentleman, and endangered a portion of the revenue de- rived from tobacco, they might prevent a reduction in articles of prime necessity, such as sugar and tea, and the income tax. For these reasons he thought it desirable that they should hear the financial statement, and consider whether there were not other duties which might be diminished with advantage before giving up perhaps £2,000,000 of the tobacco revenue.

MR. CHILDERS

said, the real question at issue between the Chancellor of the Exchequer and the hon. Member (Mr. Ayrton) was not whether the duty should be 5s.2d. or 5s. 6d. It was this:—The hon. Member asserted, that whereas under the law which had been in existence for many years a valuable manufacture had been raised, in which it was decided by the Committee which sat in 1844 that no alterations could be made with advantage, the Chancellor of the Exchequer, on the other hand, said that the state of trade was not satisfactory, and that smuggled cigars were very largely imported. The hon. Member for the Tower Hamlets denied that any change was required—

MR. AYRTON

explained, that what he said was, that if one change were introduced, a great many would be necessary,

MR. CHILDERS

But still he insisted that unless the duty on unmanufactured tobacco were reduced, no change could be made in the higher rates. For his part, he agreed with the hon. Member for Stamford that it was not the case of a reduction of duty with a view to recuperation afterwards; it was simply whether that difference of duty between manufactured and unmanufactured tobacco, which was fixed at a time when questions of political economy were not so fairly raised as they were now, was a fair difference. The Chancellor of the Exchequer's opinion was that the present state of the tobacco question, quite irrespective of the inquiry whether the duty on manufactured tobacco should be greatly reduced, was eminently unsatisfactory. He would test the question by a simple canon. Whenever a trade and the fiscal laws affecting it are in a satisfactory condition, either the article would be manufactured better abroad; and, if so, the import would steadily increase; or if this country were able to carry on its manufacture skilfully, there would be a steady increase from year to year in the export. If that was a proper axiom to be laid down in all instances, it was easily applicable to the case of tobacco. The import trade in cigars had not increased, except to a very small extent. On the other hand, there was no increase in the export trade from this country; and nothing could be more miserably bad than the home trade in manufactured cigars. If that were so, the House was clearly justified in passing the second reading of a Bill which would bring about a change. The consumption of cigars in this country, as compared with other tobacco, was probably much less than in any foreign country at the present time, or in any British colony, where the law stood in a better position than it did here. The consumption of cigars in England, though it was somewhat difficult to ascertain the facts accurately since the abolition of the old Excise survey, was between 2 and 2½per cent of the whole consumption. In foreign countries the amount of consumption was also somewhat difficult to get at, but in no foreign country probably was it less than 5 or 6 per cent. When they came to the colonies, where the habits of the people were in a great degree similar to those of England in other respects, the consumption of cigars amounted to 10, 12, and 14 per cent of the entire consumption. Therefore the law was favourable neither to the revenue nor to the wishes of the people, and should be put upon another footing. There was another question, of less importance, connected with this. In the consumption of snuff there was a great falling off at the present time. In no respect had national manners changed more completely in the last hundred years than with regard to the relative use of snuff and tobacco. In order to illustrate the utter impossibility of some event taking place the Poet Gay had written— Sooner shall Britain's youth from snuff be freed, And fops' apartments smoke with India's weed. However, he would leave the snuff question in other hands. But as to cigars, he thought that the evidence before the Committee of 1844 disclosed the facts without further inquiry. It was true that the witnesses who were manufacturers were anxious to retain protection. But almost all admitted that it was too high, and they justified it by arguments derived from the comparative rates of wages in England and abroad, of no value to free traders. Several admitted that a difference of 50 per cent was ample, and this was more than covered by 5s. as against 3s. 2d There was no system of statistics in this country to show the loss in the original weight incurred in changing tobacco into cigars, but in France, for example, where statistics were kept, it appeared that the loss was only eight per cent; that is to say, there was a loss of about 1,500,000 kilogrammes on 17,500,000 kilogrammes of leaf. Such being the facts, he thought the Chancellor of the Exchequer had put forward good grounds for giving a second reading to the Bill, and in Committee the exact amount of duty could afterwards be fixed. He hoped, therefore, that the House would not be induced to take a course which would be inconsistent with the principle of free trade. The question before them was a consumers' question, and as he was opposed to every attempt at bolstering up a manufacture to the injury of the revenue and the consumer, he should cordially support the second reading of the Bill.

MR. HORSFALL

said, he rose to protest against the view taken by the hon. Member for the City (Mr. Crawford) that the matter before the House was a question between protection and free trade. The question before the House was simply this, whether they should proceed at once to legislate, or wait till the whole subject had been fully considered by a Committee. He had voted for the adjournment of the debate on the first night, not from any opposition to the Bill, but because he thought there was a want of information, and they ought to have some time to receive communications from their constituents. When he saw the notice on the subject which the Chancellor of the Exchequer had put upon the paper, he could not help asking why it was ncessary to bring in a Bill before the financial statement was made. They were told there were precedents for doing so, but there might be bad precedents as well as good ones. When a Motion was made last year to pledge the House to a reduction of the duty on fire insurances, he opposed the Motion, not that he did not think that the duty ought to be reduced, but, because it would be unjust to the Chancellor of the Exchequer to demand the remission of a duty which, upon making his financial statement, he might not be in a position to concede. He had received many communications upon the subject of the Bill, several of them approving its principle, but saying that great injustice had been done to the Chancellor of the Exchequer by those who drew the Bill, because it would be found inoperative. All the com- munications which he had received, however, concurred in begging him to support the Motion of the hon. Member for the Tower Hamlets for further inquiry. He trusted, however, that the Chancellor of the Exchequer would render a division unnecessary, by consenting to take the second reading on the understanding that the Bill should afterwards be referred to a Select Committee.

MR. CARDWELL

said, that the hon. Member for Stamford (Sir Stafford Northcote) began his speech by complaining that the Chancellor of the Exchequer had not anticipated the discussion upon the principle of the Bill; and in the very next sentence he stated that he supposed upon the principle of the Bill they were all unanimous. The hon. Gentleman also spoke of the Motion of the hon. Member for the Tower Hamlets as inopportune, and regretted, that unless he got a certain assurance, he should be compelled to support it. But what, then, became of the complaint against the Chancellor of the Exchequer, if they were all agreed upon the principle of the Bill? His hon. Friend appealed to the Chancellor of the Exchequer to appoint a Committee on the Tobacco Duties at a further stage of the measure; but the question then before the House was this, whether the Bill should be read a second time or not. The hon. Member for Stamford did not appear to stand well to his guns. Would the hon. Gentleman look to the terms of the Amendment, which were "that a Select Committee be appointed to inquire into the expediency of altering the laws for raising a revenue on tobacco"? Would the House let it go forth that it was a question in doubt whether it was expedient to alter those laws or not? The hon. Member for Stamford did not doubt the expediency of altering those laws, and the hon. Member for the Tower Hamlets himself said he did not doubt, but he only wanted to promote more changes. Now, Her Majesty's Government stood upon the principle of the Bill, and that was the reason why they asked the House to assent to the second reading. Their object was to apply the same wholesome principle to tobacco which had been applied to almost every other article. His right hon. Friend had brought in the Bill to accomplish three purposes—First, to increase the revenue; secondly, to benefit the consumer by cheapening the article; and, thirdly, to deprive the smuggler of part of the unlawful profits of his business. Was it necessary to argue the question at length after the speeches of the hon. Member for the City (Mr. Crawford) and the hon. Member for Pontefract (Mr. Childers), and after the admissions of the hon. Member for Stamford? Was it necessary to argue, when a single fact contained the germ of the whole question—when there was raised upon that article nearly £5,600,000? [Mr. AYRTON: Not from manufactured tobacco.] That only made the case all the stronger. If £5,600,000 was raised from unmanufactured tobacco and less than £200,000 from the manufactured article, what was the necessary inference? Was it not that, so far as our Customs regulations were concerned, there was a complete monopoly somewhere as against the consumer in the production of that tobacco? It was the destruction of that monopoly which was demanded. If it were a monopoly in the hands of the home manufacturer, it was a wrong against the consumer, who had a right to free trade in that as in other articles. But a worse monopoly was that given by the effect of the existing legislation to the foreign manufacturers, through the intervention of the smuggler. He understood that with regard to cavendish tobacco, the foreign manufacturers obtained a monopoly in the markets of this country through the intervention of the smuggler, and it was to destroy that monopoly that the passing of the present Bill was required. The hon. Member for the Tower Hamlets asked the House to do in respect of tobacco what had never been proposed in respect of any other articles— namely, to interpose by a dilatory inquiry as to the expediency of making the reduction at all. His hon. Friend said that tobacco was a peculiar article of manufacture; but the same observation had been made with respect to every single article on which reductions had been proposed in former times. The sugar duties, said the hon. Member for Stamford, constituted a more complicated case, and were well dealt with by a Select Committee in the last Session; and the hon. Member thought that that might form a precedent for a similar course of proceeding with regard to the tobacco duties. Now, it ought to be borne in mind that the duties on refined sugar had been from time to time considered in that House, and settled without being referred to a Select Committee, in consequence of the adoption of a Motion like that before them on the second reading of the Bill; and the Chancellor of the Exchequer only asked the House of Commons to deal with the tobacco duties in the mode in which the sugar duties had heretofore been dealt with. It was said that the measure was favourable to the rich and not to the poor; but the reduction on Havannah and Manilla cigars was the repeal of a direct impost, whereas on the great mass of manufactured tobacco the repeal was from a prohibitory duty—from a duty which did not go to the Treasury, whilst it added to the price of the article consumed by the great mass of the people. The hon. Member for Huntingdon (Mr. T. Baring) said they ought to begin by taking the duty off the raw material. That was a plausible argument. But he contended that the first thing to be done was to remove the protective duty, and then, when they saw what the increase of revenue was, the House would be in a better condition to determine what they would do with regard to the raw material. He therefore confidently appealed to the House not now to adopt an evasive Resolution, but to pursue with respect to tobacco the course heretofore pursued with respect to all the great articles of consumption, and to affirm the principle of the measure by passing the second reading.

SIR HUGH CAIRNS

said, he trusted that the House might be allowed to discuss the small question which arose on that occasion without any appeal to the large and general principles of free trade. The right hon. Gentleman (Mr. Cardwell) had told them that every article which had been legislated upon in the way of reduction of duty for the last thirty years had been regarded as a peculiar one. But there was one peculiarity in regard to tobacco which did not attach to any other—namely, that all the manufacturers of tobacco, as far as he could ascertain, would not object to Excise regulations being imposed upon them, if they were only allowed to choose their material and their mode of manufacture, with a drawback on exportation. The Chancellor of the Exchequer himself admitted that a difference must be made in the amount of duty to be paid by the person who had manufactured tobacco in bond, and by the foreigner who paid at the Custom House. The question was how the amount of that difference was to be obtained, and how the evidence was to be taken which could satisfy them that the proper amount of difference was arrived at. He therefore thought that some investigation was necessary, either before the Bill was read a second time, or, as he should prefer, after it was read a second time. Take, for instance, the article snuff, one of the principal forms of tobacco manufacture in Ireland. The manufacturers stated that for every pound of snuff made a pound and a half of tobacco was consumed. [The CHANCELLOR of the EXCHEQUER: Not tobacco, but stalks.] They said tobacco. The Chancellor of the Exchequer originally framed his Resolutions and his Bill entirely overlooking that fact, and fixing such a rate of duty as would have placed the Irish manufacturers at a great disadvantage. Since then he had proposed to amend his figures by a difference of some 5d. per pound. The manufacturers said that that sum was not sufficient; the Chancellor of the Exchequer said that it was. It was impossible that a Committee of the Whole House could decide where the truth lay; and this was therefore pre-eminently one of those subjects into which a Select Committee, before which the interested parties could appear and be heard, might advantageously inquire. Again, the Bill provided for the manufacture in bond in this country of cavendish and negro-head, the object being to enable the manufacturer to do what bad hitherto been prohibited, to mix with the tobacco sugar or saccharine matter. The Irish manufacturers said that cavendish or negro-head was not made in Ireland, and was not required there; but there was a sort of tobacco which was made there, roll tobacco, and they asked why that also should not be made in bond. With regard to cigars, too, although that was a manufacture which did not so nearly concern Ireland, hon. Members had asked why they also should not be allowed to be made with an admixture of saccharine matter, in which form the foreigner could import them. [The CHANCELLOR of the EXCHEQUER: No, he cannot.] He saw in this Bill no clause which prescribed the form in which cigars should be imported, so as to prevent the foreigner from bringing in those which contained saccharine matter. Under these circumstances was it anything short of mockery to say that the home manufacturers were about to enter into a free competition with foreigners? It seemed to him to be a proposal to engage the home manufacturer to compete with the foreigner with his hands tied behind his back. There might be good reasons why it was impossible to allow roll tobacco and cigars to be manufactured in bond in the same way as ca- vendish and negro-head; but that was a matter for inquiry, and one which neither the House nor a Committee of the Whole House could decide merely by the assertions of Members on one side and on the other. But the reasons for inquiry did not stop there. The Bill professed, as the great foundation for the admission of foreign manufactured tobacco, to permit the manufacture of tobacco in bond; but the Chancellor of the Exchequer had not explained how he meant to carry out that part of the scheme. With regard to that part of the question, there were two different classes of towns to be considered, seaports and inland towns. In seaports he supposed that it was intended that the manufacture should take place in the Custom House or in bonded stores equivalent thereto. Was not the House to receive any information as to the existing accommodation for such manufacture? In Belfast there were twenty or thirty very extensive tobacco manufacturers, and it was impossible that they could be supplied with accommodation for their manufacture within the Custom House. Were they, then, to be called upon to provide, in addition to their existing manufactories, others in which, under a separate surveillance and with a separate staff of workmen, they should carry on the manufacture? And how were the inland towns to be dealt with? In Cavan £150,000 was paid annually in tobacco duties; in Lurgan one manufacturer paid £20,000 a year, and in Tullamore another manufacturer paid upwards of £70,000 a year. All these enormous sums were now paid at the nearest seaport without a shilling of expense to the Government, there being no collectors at the towns mentioned. Were the Government prepared to send a staff of officers to superintend bonded warehouses in these towns? If they were, ought not the House to be informed what additional expense would be caused by that arrangement; and if they were not, what would become of these manufacturers? Those were matters as to which either the Government ought to give some information, or there ought to be an inquiry before a Select Committee of that House. The manufacturers only desired that they should be left at liberty to manufacture tobacco without bonded warehouses, but subject to any proper control in the shape of Excise regulations. If the Chancellor of the Exchequer would concede that, he would relieve the measure from a great deal of the odium which attached to it. The Bill did not provide for such a system of manufacture, but no one with whom he had conversed upon the subject was able to see why it should not be carried out. With reference to the exportation of tobacco, the House had only a few minutes before had presented to it a most excellent argument in favour of inquiry. The hon. Member for Pontefract (Mr. Childers) said, that he had been looking at the statistical Returns of the Board of Trade, and he found that there was hardly any tobacco exported from this country. Did not he know that, according to the present law, and by reason of the arrangements regarding drawback, the exportation of tobacco was almost an impassibility? And was there one word in the Bill with regard to exportation? The hon. Gentleman was under the delusion that by voting for the second reading of the Bill he was going to promote the exportation of tobacco, and the Chancellor of the Exchequer had told the House that he had either in his mind or on paper some provisions which would facilitate that exportation. But surely the trade ought to see those provisions before the second reading of a Bill which had this for its foundation, that while on the one hand the manufacturers of this country were to be exposed to the competition of foreigners, on the other they were to be enabled to compete with those foreigners in the matter of exportation. That was a matter which might also be very properly inquired into by a Select Committee; and while it appeared to him that the present high rate of duty on foreign manufactured tobacco was extremely inconsistent with the whole progress of our legislation, he at the same time must say, that the question assumed an entirely different aspect when it was admitted that the home manufacturer could not be placed on the same footing with the foreigner, and when the point for decision came to be what should be the measure of the difference in the case of the two. The question at issue was not, in short, one of free trade, and for the reasons which he had adduced he trusted the House would see the expediency of adopting the course which he had indicated.

MR. BUTT

said, he should support the second reading of the Bill. As far as he could judge it was agreed on all hands— even by the hon. Member for the Tower Hamlets (Mr. Ayrton) — that the existing prohibitory duty should no longer be maintained, and yet the expediency of altering the law being thus admitted, the Resolution proposed by the hon. Gentleman was one for a Select Committee to inquire whether, in fact, it was expedient to alter the law at all. The House was asked by the Chancellor of the Exchequer to affirm a principle which had not been denied by any hon. Member. The details of the measure could, and no doubt would, be fully discussed in Committee of the Whole House. He (Mr. Butt) was not altogether content with the rate of duty proposed; and he believed, if the right hon. Gentleman was found not to give to the home manufacturers the full contervailing duty to which they were entitled, he would fail to carry his proposition. It did not, however, require the cumbrous machinery of a Select Committee to determine what amount of duty was payable on the tobacco that entered into the manufacture of a pound of snuff. Such a Committee could result in nothing further than the production of a ponderous blue-book containing information by no means so definite and so easily accessible as that which might, by a system of examination and cross-examination, be elicited from the Chancellor of the Exchequer in a Committee of the Whole House.

MR. NEWDEGATE

said, he felt bound to support the proposal of the hon. Member for the Tower Hamlets, who asked that the case of his constituents, in as far as they would be affected by the Bill, should be made the subject of a special inquiry. Let the House consider the position in which they stood. The whole of that £6,000,000 of revenue were based on a prohibition—a prohibition to grow tobacco in this country; and yet while they maintained that prohibition, they went on talking about protection or the abolition of protection. He believed that the prohibition was necessary for the purposes of the revenue; but it was still a prohibition, and any question of protection that could arise in the consideration of the Bill was comparatively a matter of utter insignificance. He did not like prohibition. Commercially and economically it was as absurd as unrestricted competition. He had risen, however, mainly for the purpose of protesting against the perpetual reiteration of the praises of a system of free imports which were thrust on the House in season and out of season. That was a mere waste of the time of the House. It only reminded him of the crowd which shouted, "Great is Diana of the Ephesians." The question was, whether the House would consent to alter the tobacco duties without further information than that which they then possessed. They had high commercial authorities deprecating that course, and stating that the interests of certain manufacturers were involved in the matter; and under these circumstances he should certainly support the Amendment of the hon. Member for the Tower Hamlets.

THE CHANCELLOR OF THE EXCHEQUER

Sir, I will not say anything of a controversial nature, but there are three points on which I desire to make an explanation. First, the principle on which this Bill is founded is, that in the shape of duty there should be, as against foreign manufactured tobacco, such a rate of charge as will fairly compensate both the direct impost paid by the British manufacturer on the raw material, and the indirect impost, as far as it can be fairly and liberally estimated, which a heavy duty of this sort is likely to entail in the form of trade regulations. Second, any restrictions as to the use of ingredients applied to the manufacture of tobacco at home shall be rigidly enforced in regard to the importation of corresponding descriptions of tobacco from abroad. Provisions for that purpose are in part to be found in the Bill, but there are other provisions to the same effect in the existing law which will remain untouched. Third, I do not admit that the question whether we can or cannot contrive a good system of export ought to govern our decision as to repealing the prohibitory duty. I have all along recognised the obligation and expressed the desire to examine with the utmost care every measure that may be proposed for the purpose of opening new channels of trade to the British manufacturer. I hope to be able, on the whole, to comply with the suggestion which has been made, that after the duty has been paid on tobacco when it enters the country the manufacturers shall be permitted to proceed with the manipulation of it without let or hindrance, and shall then on exporting it receive full compensation for the duty they paid in the first instance. I hope I may assume that the House will read the Bill a second time. In that event I shall fix the Committee for Thursday, in order to introduce into the Bill certain additional provisions. The measure will then be reprinted, and I shall allow an interval of a week or ten days for its consideration by Members.

MR. AYRTON

said, that after that statement of the Chancellor of the Exchequer he would wait to see the Bill in its altered form, and would not press the Amendment.

Amendment, by leave, withdrawn.

Main Question put, and agreed to.

Bill read 2°, and committed for Thursday.