§ Order for Committee read.
§ THE CHANCELLOR OF THE EXCHEQUER, in moving that Mr. Speaker do now leave the Chair, appealed to the hon. and learned Member for the Tower Hamlets (Mr. Ayrton) to allow the Motion to pass in lieu of raising the preliminary question of referring the Bill to a Select Committee. He made the appeal first, be- 1609 cause he believed that it was wholly without precedent, when a proposal affecting the revenue as well as the trade of the country had been submitted to the House by the executive Government on their own responsibility, that the House should decline to pronounce judgment on the proposal and refer it to a Committee upstairs. He would not, however, rely upon that precedent if he did not believe that it was founded in wisdom, and that much inconvenience would arise from the departure from it in the present instance. He believed there was no more searching examination than that which a responsible Minister of the Crown underwent in a Committee of the Whole House. The effect of sending a financial proposal to a Select Committee was entirely to shift the responsibility from the Finance Minister to his permanent advisors, the officers of the Customs and Inland Revenue Departments. The Finance Minister, if he were indolently disposed, might sit with folded arms, and allow those officers to fight it out as well as they could. But who was to be responsible for the Bill afterwards? The House had uniformly acted upon the principle that the Minister alone was to be held responsible for Bills of this description. If, on the other hand, matters of the kind were to be bandied about in a Committee, the only effect would be to relax the rules upon which public business was conducted, and to weaken the hold of the House over the executive Government. Wishing to avoid this, he deprecated the Motion of which the hon. and learned Gentleman (Mr. Ayrton) had given notice. But great inconvenience would also arise from dealing with the proposal in the manner suggested. The hon. and learned Gentleman had held communications with his constituents and with others in the trade; but he (the Chancellor of the Exchequer) might venture to say that the communications which the Government had had the opportunity of holding were much more comprehensive and varied than it was possible for the hon. and learned Gentleman to have held. It was the duty of the Government to make as good an investigation as they could into a subject before they made any proposal to the House. Then, after the proposal had been submitted, it was their further duty to avail themselves of every opportunity for improving the details of the measure. And in an experience of twenty years he had uniformly seen mea- 1610 sures thus brought in and discussed by all parties, either directly or by their representatives in a Committee of the Whole House. He felt entitled to say that the hon. and learned Gentleman, in the Motion which he was to make, was not acting in conformity with the wishes of those who were interested in the matter. He (the Chancellor of the Exchequer) had seen parties interested in the trade who came from Scotland and Ireland, and the Bill, with the further Amendments which it was proposed to introduce, was satisfactory to them. He was afraid it was not satisfactory to the constituents of the hon. and learned Gentleman (Mr. Ayrton); but the difference mainly was upon the duty upon segars, and he (the Chancellor of the Exchequer) contended that that was a question which ought to be dealt with in a Committee of the Whole House. A statement had been circulated that the dilatory proposal of the hon. and learned Gentleman need not, in carrying out, occupy more than a fortnight. He did not know who drew up that statement, but it must have been some one unacquainted with Parliamentary business, and especially with that relating to the Tobacco Duties. A Select Committee was appointed to sit on the Tobacco Duties in 1844. It was appointed on the 14th March, and it reported on the 1st August in that year. If the hon. and learned Gentleman's proposal was carried, his Committee would be appointed about the same time as that of 1844; it would begin to sit just when the Finance Minister had to submit to the House the financial measures for the year; it would report somewhere towards the close of the Session; and the object of certain parties would be gained, by all legislation being put off for the year. He ventured to say that that was not what was desired by those who were most interested in the subject. He had received a letter from one of the largest importing houses in London—a house than which there was none, he believed, better entitled to speak on behalf of the trade—he meant Grant, Hodgson, & Co., of Fenchurch Street—and the purport of that letter was to state the apprehension with which they viewed the Motion of the hon. and learned Gentleman, and the inconvenience to which long delays in the settlement of commercial questions necessarily gave rise. They further expressed a hope that the hon. and learned Gentleman's Motion would not be adopted. It was really for the interests 1611 of the trade that this question should be settled without delay, and that the decision of the House should not be postponed to meet the views of those whose object, like that of all traders in every branch who were apprehensive of a change, was to defeat effective legislation. On these grounds he appealed to the hon. and learned Member to withdraw his Motion.
§ Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."
§ MR. AYRTONsaid, nothing would afford him greater pleasure personally than to accede to the request of the Chancellor of the Exchequer. If, however, any new argument were wanting to confirm him in the intention which he had formed, it would be the speech which the right hon. Gentleman had just made. It now appeared that the Bill before them was to be subjected to further Amendments in order to propitiate the Scotch and Irish trade, while a less influential interest was to be left with its grievances unredressed. He denied that his Motion was in substance a novelty. He had not searched the Journals of the House for precedents; but as long as the proposal was not inconsistent with their forms, it was perfectly competent to adopt it, if the novel circumstances created by the Chancellor of the Exchequer necessitated it. It was certainly something new in the history of legislation that a measure of this kind, affecting both trade and finance, and contradicting the deliberate opinion of a Select Committee, should be pressed through the House without any fresh examination of the subject and without a fraction of unprejudiced and authentic evidence to support it. The right hon. Gentleman had not always been so averse to Committees. He was very fond of representing himself as solicited by two ladies in opposite directions, and last Session two rival charmers appealed to him in regard to the sugar duties. The free-trade party demanded equal duties, and the manufacturers a scale of duties. Under those circumstances, the right hon. Gentleman agreed to a Committee. Again, when those imposts which were called the "vexatious trade duties," and of which the right hon. Gentleman was the author, came before the House, his parental fondness for them inclined him one way and the menace of the City merchants another way. In order to solve 1612 the difficulty, a Committee was appointed, with the right hon. Gentleman's consent. What ground, then, had the right hon. Gentleman for saying that the proposal now made was a dangerous novelty? The Chancellor of the Exchequer's argument was based on the gratuitous assumption that the appointment of a Committee would diminish his official responsibility. It would do no such thing. It would merely collect all the information that could be got, make a Report, and leave the right hon. Gentleman to form his own conclusions It was idle to say that the proposal to refer the Bill to Select a Committee would have the effect of removing responsibility from the Government. The Chancellor of the Exchequer, when he made such a statement, must have forgotten that the Bill would come back from the Select Committee, and would then be considered in a Committee of the Whole House. Let him remind the House of what was done only a few years ago. No subject was more invested with the sacred attribute of responsibility than the patronage involved in the promotion and retirement of officers of the Crown; yet, when that matter was brought forward, the Government were quite prepared to divest themselves of responsibility, and to send the question to a Committee upstairs, where the Members chosen for the purpose were proceeding as if they were executors disposing of an estate. He hoped the Chancellor of the Exchequer would recognise the precedent thus set by the noble Lord at the head of the Government. Surely they were not going to be told that one Minister might have a policy of his own, making a reputation at the expense of another, for that was a kind of political morality which the Chancellor of the Exchequer would be the first to disclaim. If, then, the right hon. Gentleman was bound by the precedent of his own Colleague, he could not set up the bugbear of responsibility in opposition to the proposal for an investigation by a Select Committee. No doubt, when the Bill first came before the House, it had the weight of the previous knowledge and the acquired certainty of judgment of the Government; but it had since undergone very extensive alterations, and, in point of fact, none of its original propositions remained. Upon what ground could the Government now ask the House to rely on their judgment? What guarantee had the House that their present judgment was better than the one which they sub- 1613 mitted on the introduction of the Bill? If there had been so much acknowledged error—if the House had got rid of those pretensions to infallibility which free-trade enthusiasts too frequently set up—surely he had a right to imagine that something still remained requiring careful and deliberate investigation. He accepted the principle that there was to be a duty equivalent to that imposed upon the imported article, and that there was to be a surcharge by way of compensation for the increased expense put upon the English manufacturer by reason of his working a highly-taxed commodity under a most oppressive system of combined Customs and Excise; but be denied that the application of that principle in the present instance was either just or honest towards the English manufacturer and English workmen. How could the contradictory statements upon that point be examined in anything like a satisfactory manner in a Committee of the Whole House? The elements of the difference between the Chancellor of the Exchequer and himself were of a most complex and confused character, and embraced many facts requiring minute investigation. One of them was the loss in weight of tobacco by reason of the diminution of moisture; and the result of the whole was, that the English manufacturer, not desiring to prevent or delay a change, but wishing to meet the question fairly, declared that the equivalent of all the difficulties he had to encounter was a duty of 6s. per pound. But there were other and greater difficulties which required to be examined in a Committee. When the English manufacturer had to make cigars, he must make them as he could out of whole bales of tobacco; and the consequence was, that when he had made good cigars at a profit, be had to make up his waste material and sell it at a loss. Thus cigars were actually sold in this country at 6s. 3d. per pound, duty and all. The foreign manufacturer laboured under no such disadvantage. Moreover, the English manufacturer was not allowed a drawback, so as to enable him, when his market was glutted with a particular quality, to relieve himself by exportation. The circumstances of a trade so hampered as that could not he properly dealt with by a Committee of the Whole House. The English manufacturer ought to have an equivalent for the prohibitions to which be was subject, and to be put upon a par with the foreigner by being 1614 released from vexatious restrictions. The trade had not slighted the Chancellor of the Exchequer in this matter, but the right hon. Gentlemen had declined to accept their statements. How, then, was the House to decide between the two? The ground on which he asked that this whole question as regarded the makers of cigars should be investigated was, that when all the evidence had been obtained, the Government might be able advisedly to come down with a proposition doing justice to this branch of manufacture. He was glad that he had not to enter into the other branches of the trade, because the Chancellor of the Exchequer had assented to what was necessary for the protection of their interests. But there still remained other points demanding consideration. One manufacturer might say he was satisfied with an assurance from the Chancellor of the Exchequer that this Bill would not be worked to his prejudice; but another man might prefer to have the security of an Act of Parliament to a letter from that right hon. Gentleman. The provisions of the Bill, as they stood, were perfectly illusory; because they proposed a system of charging the duties according to the quantity of moisture in tobacco, without defining what moisture was, or stating the principle on which it was to be calculated. The amount of alcohol in wine could be told by any chemist; but no chemist could tell bow much moisture there was in tobacco, so as to bring it within one scale of duty or another. Instead of its being left absolutely to the discretion of the officers of Excise in cases of dispute, the principle on which the duty was to be computed should be contained within the four corners of the Act, so that the trader might easily calculate it for himself. He would not enter into further details, lest the Chancellor of the Exchequer should charge him with wishing to envelope the question in a cloud of mystification. The petition presented to that House by the working men, and endorsed by their masters, was based on the circumstances under which that manufacture was carried on in this country and on the Continent respectively. These persons said, the result of this Bill would be to reduce them to destitution. The Chancellor of the Exchequer might say, "Oh! these are phantoms which you have raised up on the side of protection." Now, it might be very pleasant for a man to indulge in the dreams of his own imagination, 1615 and to fancy that all the prosperity of the country sprang from his measures. But death from starvation was no phantom, but a stern reality; and that stern reality he wished to avert from the borough he had the honour to represent. It had been the fashion to gloss over the sufferings of other branches of trade by vague talk about the prosperity of Lancashire, and to say that the giant industry of that county would absorb all the unemployed operatives in other districts. But what had now become of the boasted prosperity of Lancashire? Five hundred thousand of her working people were now the pauperized recipients of the public bounty. Was this a time, then, for even running the risk of creating further distress? The Chancellor of the Exchequer might rely upon the classical maxim, "Divide et impera;" and having got rid of those who were most troublesome by their numbers, he might think he could easily deal with some 2,000 persons who had only one or two representatives in that House. But was it right to consign them to the condition which they said would be the inevitable result of this legislation? History abounded in instances where very small circumstances had seemed to produce very great results; but that had only happened in countries which had fallen into such a condition that, it needed but a spark to produce a conflagration. Was there no fire now smouldering? There was not a Lancashire manufacturer who dared to stand up in that House and speak upon the condition of that county at this moment; and when a notice was given by an hon. Gentleman (Mr. Ferrand) to call attention to that subject, it had struck all the manufacturers with terror, and they were quaking in their shoes at the possible consequences which might ensue. He knew that the curtain raised the other day by a leading public journal, just to give nice, fashionable people a glimpse of what was going on in Lancashire, was only lifted up in part, and that what was thereby revealed was as nothing compared with what still remained undisclosed. If they chose to send these people to starve, they had the power to do so, and the Chancellor of the Exchequer had the eloquence to excite them to do it; but he, at least, would have the satisfaction of knowing that he had made an appeal to the justice and generosity of the House of Commons. He begged to move the Amendment of which he had given notice.
§ COLONEL FRENCHseconded the Amendment.
§ Amendment proposed, to leave out from the word "That" to the end of the Question, in order to add the words "the Bill be committed to a Select Committee,"—instead thereof.
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The Mouse divided:—Ayes 170; Noes 87: Majority 83.
§ Main Question put, and agreed to.
§ Bill considered in Committee.
§ (In the Committee.)
§ Clause 1 (Duties on Manufactured Tobacco).
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he thought it would be for the convenience of the Committee that he should state, in a very few words, some of the changes or adjustments which he proposed in the Bill. He had hoped that the Bill would pass through its remaining stages very speedily; but as those changes, though simple, would be numerous, he should propose to reprint it after it had gone through Committee. The first change was with regard to the duty on high-dried snuff. That was a very peculiar question—it was highly improbable there would ever be a large trade in this commodity. He proposed then, first, to raise the duty upon high-dried snuff, or rather to lessen the diminution of duty, so as to leave it at 4s. 6d. instead of 4s. 2d.; and secondly, to alter the standard of what should be called high-dried snuff from 10 to 13 per cent. The next change which he proposed to make related to foreign cavendish in bond, the duty on which he proposed to fix at 4s. 6d. instead of 4s.; and to fix the duty upon British cavendish in bond at 4s. instead of 3s. 8d. The third change he proposed was to make a very small addition to the drawback. At present the drawback was fixed by the Bill upon the assumption of a certain average amount of moisture, and that drawback as now fixed was an exact measure of the amount of duty. But wishing to make the measure as liberal towards the trade as he could consistently with the interests of the revenue, he had thought it fair and right to propose to the Committee to take into view the fact that upon all descriptions of tobacco manufactured there was a certain amount of inevitable waste, from absolute loss in the manipulation, the cutting, grinding, &c., amounting 1617 perhaps to 1 or 2 per cent. In the particular case of high-dried snuff it amounted to much more. Persons engaged in the manufacture were aware of the difficulty, and that it was found impossible to arrange the drawback upon this material differently. He therefore proposed, with regard to all kinds of drawback, to raise the standard—or rather the pivot, if he might so speak—of drawback from 3s. to 3s. 3d. a pound all round. This would be a considerable advantage to the export trade in general. The fourth proposed change related to the provisions contained in the Bill, according to which 3s. 6d, would be chargeable upon the importation of all tobacco which contained less moisture than 10 per cent. There had been a very justifiable anxiety on the part of the importers that the bearings of this question should be carefully explained. One gentleman, named Lloyd, to his great astonishment, had sent in a statement which he thought would make the hair on the head of his hon. Friend the Member for the City (Mr. Crawford) stand on end. It was the desire of this gentleman, and of the trade which he represented, that all tobacco, on its importation, should be tested in order to ascertain what quantity of moisture it contained. The hon. and learned Member (Mr. Ayrton) would probably take up the cudgels for Mr. Lloyd, who was one of his constituents; but this view was so diametrically opposed to anything that had been stated by any person acquainted with the sentiments of importers and manufacturers that he (the Chancellor of the Exchequer) could only condole with the hon. and learned Member for the Tower Hamlets with regard to the errors of those whose organ—a most able zealous one, he admitted—he was. The hon. Member for the City had expressed a hope that nothing of the sort would take place, inasmuch as the proposition would have the effect of barring a trade that was special and indirect, and had for its aim a sort of evasion of duty. He (the Chancellor of the Exchequer), acting upon the representations of some gentlemen from Liverpool, represented by the Members for that town, had inserted in the Bill a few words, in the first clause, making provision that no tobacco which, when imported into this country, was packed in the usual manner, should be subject to testing for moisture, unless by the special order of the Board of Customs. There was a reservation, however, 1618 that the test should be applied if the Board considered it necessary. These were the only changes, beyond mere verbal alterations, which he proposed to make in the Bill.
§ SIR STAFFORD NORTHCOTEwished to ask, with reference to the first clause, whether there was to be a limit to the drawback on stalks? He understood it was to be limited to those stalks only which were used in the manufacture of snuff.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that there was no change whatever on the point referred to. The intention had never been to allow a drawback upon stalks, for reasons connected with the revenue laws. But by the Bill a drawback was to be allowed on snuffs, of which stalks were the raw material, and on the stalks when cut up in the regular process, along with the leaf, as "bird's-eye tobacco."
§ MR. AYRTONsaid, he wished to correct one error into which the right hon. Gentleman had fallen. The right hon. Gentleman had said that the trade was in favour of discriminating duties the fact was, that the trade did not wish for discriminating duties at all; but they said, that if they were to have them, they preferred to have them more reasonable than they were in the Bill; they desired that they should not proceed by jumps of 10 per cent, but by steps of 5 per cent.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he read a letter from Mr. Charles Lloyd, who, he believed, was the feeder of the hon. and learned Gentleman of all the information he possessed on the subject, in which he stated that it was perfectly necessary for the establishment of fair competition between the home producer and the foreigner that there should be paid on moist tobacco a proportionate rate of duty with that levied on dry tobacco. Why, this was the very thing to which the hon. and learned Member was opposed; but Mr. Lloyd said it was one of the three things that were essentially necessary.
§ MR. AYRTONpointed out that the letter contained some qualifying expressions.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that no doubt the hon. and learned Gentleman was entitled to the benefit of the whole of the contents of the letter. With regard to segars, he would not detain the Committee at length, 1619 but he would be prepared to answer any questions which might be put to him on that point. The case of segars must be considered as one involving various features, because segars were made from tobacco coming from many different quarters. He would illustrate the case of segars by two examples—one of average tobacco made into segars, the other an extreme ease with a view of testing the proposition of a 5s. duty. He held that it was not the duty of Parliament to undertake to cover every extreme instance in every minute ramification of trade. That, he thought, was a sound principle, and a principle on which their legislation had hitherto proceeded; but in the present instance he did not hesitate to say that his proposal covered every case that had been brought within his knowledge, and every case that he believed existed in the ordinary course of trade; and if they had known as much before his proposal was made as they knew now, he did not think he should be justified in proposing so high a discriminating duty as 5s. on the foreign article. Now, with regard to the example of segars made from tobacco of ordinary quality, including Havannah of a somewhat dry kind. Yarra, German, and Dutch tobacco, he would assume, for the purpose of calculation, an importation of 100 lbs. of tobacco. He would first calculate the duty directly paid by the manufacturer on that 100 lbs., next any indirect charges entailed upon him, and then he would put down, on the other side, any sets-off that might be made. He would take the number of pounds of segars which the manufacturer could make out of 100 lbs. of tobacco, and divide the total amount of duty paid, directly or indirectly, by the number of pounds of segars made out of the 100 lbs. of tobacco, and that would give the amount of countervailing duty. Now, 100 lbs. of Havannah leaf, of a somewhat dry quality, yielded 17 lbs. of stalks, which, though not worth anything for entering into segars, would sell for 2s. 4d. a pound in the market. There would be 14 lbs. of refuse and moisture from such an amount of this tobacco. Deducting 17 lbs of stalk and 14 lbs. of refuse, or 31 lbs., from 100 lbs., there would remain 69 lbs. of segars to be got from 100 lbs. of tobacco. Now, the duty paid, including the allowance for interest on the duty between the time when the article was imported and the time when the duty was received back from the consumer, and other contingen- 1620 cies, was,£16 1s. 9d. Deducting from that the sum of £1 19s. 8d., the value of 17 lbs. of stalks, there remained £14 2s. 1d. Dividing this by 69 lbs. of segars, it would be found to represent a payment in duty of something like 4s. 1d. per lb. He proposed to allow 5s., in order that the labourers who were employed in the manufacture, amongst whom were women and children, might be well looked after. His real difficulty, therefore, was not to defend the 5s. duty against those Gentlemen who thought it ought to be increased, but against those who, in the interest of a rigid free trade, considered it ought to be diminished. He would now take the extreme example of Havannah tobacco. This might be stated to contain about 23 per cent of moisture, and therefore a case most unfavourable for his purpose. He had heard of cases of 24 and 25 per cent of moisture, but no case of that kind had been strictly verified. The hon. and learned Member for the Tower Hamlets asked what was moisture? He did not know whether the House was capable of appreciating the process by which the moisture of any given article was ascertained; but there was, or used to be, at the Kensington Museum, a very interesting-looking vessel, the inscription on which set forth that it contained the constituent elements of the human body; and, as far as he recollected, out of 150 or 160 parts into which the whole was divided there were 110 or 112 parts of moisture. [An hon. MEMBER: Oh! more than that.] He hoped the hon. and learned Member would take up the moisture question on his behalf. It was true that many of those for whom the hon. and learned Member spoke knew little about the moisture in their tobacco. It often happened, that when a trade lived under the warm shelter of protection, and secure of monopoly, those engaged in the trade were not driven to ascertain the minute particulars of the trade they carried on. But taking the extreme case of Havannah—here at all events the amount of moisture could be ascertained by chemical analysis. Allowing, then, 23 per cent for moisture and a corresponding amount of stalks the case would stand thus:—100 lbs. of Havannah leaf of the wettest description contained 23 lbs. of moisture, 18 lbs. of stalks, and 2 lbs. of refuse, smalls, and waste. It followed that there were 43 lbs. to be deducted from the 100 lbs; which left 57 lbs. of stgars to be got out of the 1621 100 lbs. But then the 18 lbs. of stalks sold for 2s. 4d. the lb.; and making the calculation and allowances as before, the result showed that the duty which the manufacturer paid on 57 lbs. of segars was £13 19s. 9d., or 4s. 107/8d., or say in round numbers, 4s. 11d. per lb. Perhaps it would be said this was running it rather close, and that in the extreme case 5s. did not cover the manufacturer. That remark would be true but for one element in the calculation, which he had not yet presented to the House. In the calculations made it was assumed that the segars were perfectly dry; but the ordinary state of foreign segars imported into this country was that they contained 16½ per cent moisture; and British segars, made from Havannah leaf, contained 15½ per cent of moisture. The consequence was that the duty of 5s. gave the home manufacturer the whole advantage of 15½ per cent of moisture in every 100 lb of tobacco. The hon. and learned Member for the Tower Hamlets had made himself the mouthpiece of persons who stated that one good and profitable mode of making segars was to take tobacco of a certain description, and to reduce it one-half its weight, and that such was the process pursued on the Continent. Such, said the hon. and learned Member, was the extraordinary nature of tobacco leaf that it was capable of being increased or diminished in weight 100 per cent. That statement was made on a former evening, but it had not been repeated to-night. He (the Chancellor of the Exchequer) had been given to understand, in his own room, that if you brought down 2 lb. of tobacco to 1 lb. you would get a good tobacco; but then the argument he founded upon that alleged fact was that the British manufacturer was entitled to a 6s. 4d. countervailing duty. Of course, you might reduce paper one-half or more by burning it, and so you might reduce meat more than one-half by burning it to a coal. Would the hon. and learned Member rise in his place and repeat what he said the other night on this subject? He would tell the hon. and learned Member, that if tobacco were reduced one-half in weight, there would remain nothing but a woody fibre—everything would have been taken from it that constituted tobacco, and no smoker would be induced to put it to his mouth. It was true that an insignificant trade in which reduction was adopted was carried on upon the Continent. For any reduction that could be effected 1622 by importers consistently with the making of a good merchantable article, British manufacturers would have an ample allowance in the 5s. duty upon foreign segars proposed by this Bill. That duty was proposed with the view of compensating the British manufacturer for everything that he had paid, and for all the pecuniary disadvantages he might have to incur in consequence of the law.
§ MR. AYRTONsaid, the Chancellor of the Exchequer had made certain statements which he had no doubt were in the main correct, for they were arithmetical calculations based on certain given quantities of tobacco. But he (Mr. Ayrton) had also calculations made by Cope Brothers and Co., of Liverpool, and based on very much the same quantities as the Chancellor of the Exchequer had given, from which it resulted that out of 100 lbs. of tobacco there would remain 49½ lbs. of leaf, and that consequently the duty ought to be 5s. 7d., and not 4s. 1d., as the right hon. Gentleman had calculated. But, independently of this, there were many incidental points to be brought into the account as between the manufacturer in England and the manufacturer abroad, which the Chancellor of the Exchequer had not taken into calculation. For instance, the duty on foreign segars at present was 9s. a pound. That was a prohibition, except as regarded the slave-made segars of Cuba, and the segars of the royal monopoly at Manilla. One of the great disadvantages under which the British manufacturer laboured in comparison with the foreign manufacturer was that the latter had frequently a monopoly of the market. The Havannah manufacturer, for instance, had so completely the control of the market, from the limited supply of the particular article he manufactured, that if the dealer in this country chose to purchase one box of the best, he was compelled to buy also one box of the second-best, and one box of the worst. The British dealer, on the other hand, was compelled to sell the inferior article separately and at a great loss. Now, this was an important incident, because if the English manufacturer could only sell the first quality at a profit, and the inferior qualities at a loss, the amount of duty became a large figure. Again, the longer a segar was kept the less moisture it contained, and the more valuable it became. The foreigner would be able to keep his segar in bond, and the less moisture it contained 1623 the better it would be for him, as he only paid duty upon the weight; whereas in the case of the English manufacturer, the more the loss of moisture the greater the loss to him, because he had paid duty upon the moisture. He must charge a higher price on the residue, in order to cover that loss. The more the value of the commodity rose to the foreigner, the greater was the relative loss to the English manufacturer. These were serious elements, because, when they came to close competition, they had to be taken into account. With regard to the process of steeping, what he (Mr. Ayrton) said was, that in an extreme case it could be shown that tobacco lost half its weight, and he contended that in a question of duties and equivalents they must have regard to extreme cases, and for this reason:—That if a man had a commodity, though it were a woody fibre, it was still a fibre of tobacco wood, that could be used to mix for the purpose of keeping up the bulk, and at the same time of diminishing the weight of segars. They had positive experience with regard to the steeping process in the class of segars known as Swiss or Vevay segars. These segars were imported, and could pay a duty of 9s. They were made of steeped tobacco, and when weighed against tobacco of the same sort manufactured in this country, it turned out that there were 240 segars in the pound of those imported, and only 120 in the pound of those made in this country. The Chancellor of the Exchequer said this was an extravagant case; but it was still a case of business actually going on, and such was the gain to the continental manufacturer resulting from this process of steeping, that he could actually make his segars pay a 9s. duty and yet exhibit them for sale. Nevertheless, the Chancellor of the Exchequer said that a 5s. duty was sufficient. That was an important question—for this reason, that having established a prohibitory duty except as regarded Havannah and Manilla segars, it had been the interest of the manufacturer to keep up his weight, because upon his weight he had paid duty; and there being no such obligation on the foreigner, he could reduce the specific gravity as much as possible, and get the largest bulk for the smallest amount of duty; and if the foreigner could do this to an enormous extent in one class of segars—the Vevay segars—what would the industry of Germany do when it came to treat tobacco under the new regulations? Why, every 1624 class of tobacco would be subject, to a greater or less extent, to this steeping process, and the English manufacturer would be driven out of the market. The gain to the foreigner would be enormous. In the first place, he could use a coarse tobacco which the English manufacturer could not use, because it was too coarse, and thus he gained fourpence per lb. on the mere value or cost price of the tobacco. That was a subject which the Chancellor of the Exchequer ought to consider. When they dealt with revenue, they were bound to regard extreme cases, otherwise those extreme cases might be used for turning the scale of the market. Now, he asked the Chancellor of the Exchequer to put a clause in his Bill which would place the English manufacturer on exactly the same footing as the foreigner as to the steeping of tobacco in bond. If he would do that, he would admit he was dealing with his argument in a practical way. The right hon. Gentleman had not dealt with another question inseparably connected with this, for which he was bound to make provision. The English manufacturer was obliged to buy his tobacco with the stern in it, for which he paid duty; but the foreigner took out the stem before he paid any duty. On what principle could that be justified? He would ask the right hon. Gentleman to allow the tobacco to be stemmed in bond, and thus to place the English manufacturer in the same position as the foreigner. He wanted to hear upon what principle it was that the manufacturer in this country was not allowed to export his segars? Let the Chancellor of the Exchequer answer that on the principles of free trade. The English manufacturer was compelled to take in his tobacco, and make his segars, and then he was not allowed to send them out unless he paid as much duty as amounted to a positive prohibition. Facility for exporting segars would be the greatest possible relief to the English manufacturer, because he could sell very fine segars to gentlemen of fortune in England, and send out the coarser qualities to the people in the colonies, who were not so nice.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that the hon. and learned Gentleman had asked him several pointed questions, and had at the same time indulged in vague statements and been very shy of matters of fact and computation. The extreme case, as he had called it, of tobacco being reduced, by steeping, 50 per 1625 cent, did not exist, and was impossible. It was not in the nature of the tobacco plant that it should exist. A good merchantable segar could not be made in that way. As to the inquiry whether he would introduce a clause into the Bill for steeping in bond, he had to state, that having seen the hon. and learned Gentleman's constituents and other manufacturers of tobacco from Liverpool, Ireland, and Scotland, not one of them had made the slightest reference to the subject; and therefore there was no primâ facie case for such a thing. With regard to the Swiss segars, they were told that by some wonderful hocus-pocus a Swiss manufacturer could make 240 out of a pound of tobacco, and the English manufacturer could only make 120. Why, he should think that in England, if they knew how to bisect them, they might make nearly 240, though not quite. The Swiss segars had been examined, and, instead of having been reduced one-half, according to the plausible and bold statement put forward, they had only 20 per cent taken out, and 80 parts of the old plant remained. With regard to the clause suggested, if it was a matter of extensive interest, it was a fair subject for consideration; but as it had never before been raised, it was impossible for him to give a pledge at the present moment. The hon. and learned Gentleman had stated that there was no allowance for stems in bond. That was to be considered in two points of view; and when they came to the question of drawback he would give an answer upon the subject. He would not enter upon it now, because the argument was as to segars, with which it had no connection whatever. The hon. and learned Member asked why they did not permit segars to be exported. He answered that they did permit segars to be exported. The Importer brought 100lbs. of leaf Into this country. In the manufacture he took out a certain quantity of stalks, and a small amount of absolute waste. He paid 3s. and 5 per cent, and they gave him back 3s. 3d. upon every pound of segars, and upon every pound of stalks manufactured in this country. His belief was that that came as near to a fair and sufficient drawback upon the manufacture of tobacco in general as could be calculated; but, at the same time, he admitted frankly that it was not possible so to construct a system of drawback as to make it cover everything that might be quoted in the nature of an extreme case. 1626 He certainly should hope that the export of segars would be a profitable business, and that a great stride would he given to it by the new enactment as compared with the present state of the law. The quotation of the hon. and learned Gentleman from Mr. Cope was perfectly fallacious. In that statement it appeared that 49½lbs. of segars were the proceeds of 100lbs. of Havannah leaf. He wanted to ask if those 49½lbs. were dry or not—was all the moisture taken out of them? [Mr. AYRTON: They are dry.] Dry was a relative term. What was the meaning of it? Did Mr. Cope mean that the moisture had been taken out of that tobacco or that it had not?
§ MR. AYRTONsaid, the statement explained itself. It meant 49½ lbs. of marketable segars.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that if it was 49½ lbs. of marketable segars, his answer was that the computation was wholly fallacious, because it was made upon an extravagant supposition (the fact never having happened) that the whole of the moisture had been taken out of the segars; whereas in marketable segars from Havannah there was 15½ per cent of moisture; and thus came to grief the calculation of Mr. Cope and his hon. and learned Friend.
COLONEL DUNNEsaid, be should like to know how the sudden conversion of the Irish trade had been effected. In the afternoon they were by no means satisfied with the answers they had received from the Chancellor of the Exchequer; but as they had now disappeared from the lobby, he supposed that by some means they were appeased. He wished particularly to know what provision would be made for providing bonded warehouses in various small towns in Ireland through which tobacco manufacturers were dispersed. If small manufacturers were not to be allowed the advantage of bonded warehouses, it would, in fact, ruin their business. He also wished to know the reasons which had induced the Chancellor of the Exchequer to deal in the manner he had with cavendish tobacco.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he would explain the provisions for bonding at a future stage. It had been arranged with the Irish manufacturers that the duty on sweetened British tobacco should be 4s. instead of 3s. 8d., and on foreign tobacco of the same description 4s. 6d. instead of 4s. It was possible 1627 that the Irish part of the deputation which waited on him last night might have been dissatisfied with the tone of the discussion; but he begged to inform the hon. and gallant Gentleman that upon questions like this he had always taken care to obtain the assistance of some of the officers of the Revenue Department conversant with the matter; and having heard the statement of the deputation and advanced all the objections which struck him, it was his custom to debate the matter with the revenue officers before he came to the conclusion as to what step should betaken. That course had been pursued upon the present occasion, with what result the hon. and gallant Gentleman had seen. It would have been very wrong if, until he had an opportunity of talking the matter over, he had made the concessions there appeared to be fair ground for. The general rule in the tobacco trade at home, and, he believed, in foreign countries—certainly in France—was to allow the admixture of no foreign material excepting water. There had grown up in this country, notwithstanding this prohibition, a taste for a particular kind of sweetened tobacco. The question was whether this taste should be supplied in the irregular manner it was at present through the medium of smuggling, or by allowing the general sweetening of tobacco of all descriptions, or by distinguishing the ordinary manufactured tobacco from the sweetened cavendish. He thought the prohibition of cavendish would act as a stimulus to smuggling. Neither could he allow that the use of sweetening matter should be generally permitted. For he could not recommend the House to adopt provisions in the revenue law which he had been told by the executors of that law would be impracticable. Then came the question, what they were to do with cavendish? The anxiety of the Irish manufacturers was—if you will not permit us to use sweetening materials in the manufacture of British cavendish and of the roll tobacco, then take care you make the sweetened cavendish a great deal dearer than the roll tobacco, so that the two may stand upon tolerably fair terms. This was the demand to which he had acceded.
§ MR. AYRTONsaid, seeing that the statements made by the trade through him were denied by the Chancellor of the Exchequer, the whole matter must rest upon his responsibility. It was useless to prolong the discussion. He suggested, how- 1628 ever, that as moisture had been made an element with regard to the duty on tobacco, the same principle should be applied to segars, and that high dried segars should be subject to a duty in excess of 5s.
THE CHANCELLOR OF THE EXCHEQUHRsaid, he was not aware of the existence of a class of segars to which the principle could be applied. The importer from Havanna now paid 9s. upon segars containing 16½ per cent of moisture. He was not likely to be anxious to spoil his segars by reducing the moisture when the duty was only 5s. If a distinction were introduced, it must be by reducing segars which were not high-dried; but he did not believe there was any difference.
§ In reply to Mr. BUTT,
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that it was absolutely necessary in the working of the bonded system to hold the manufacturer responsible for the acts of his servants. At the same time, it would not be competent to any common informer to inform against a breach of the revenue laws. All informations must be laid by the revenue officers.
COLONEL DUNNEreminded the right hon. Gentleman that he had not answered his question with respect to warehouses in Ireland.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that it was not intended to confine bonded warehouses to ports or large towns, but to place them where urgently required. At the same time, he should give no pledge with respect to establishing them in any particular district.
MR. CUILDERSsuggested, that the allowance for waste, instead of being left to the discretion of officers of the Revenue Department, should be made upon fixed rules.
§ THE CHANCELLOR OF THE EXCHEQUERapproved of the suggestion, and altered the clause to the effect that such allowance should be made according to rules laid down by the Commissioners of Customs.
§ Clause amended, and agreed to; as were the remaining Clauses.
§ House resumed.
§ Bill reported; as amended, to be considered on Monday next, and to be printed. [Bill 66.]