HC Deb 04 May 1863 vol 170 cc1067-136

Bill considered in Committee.

(In the Committee.)

Clause 1 agreed to.

Clause 2 (Provisions of former Acts to apply to this Act).


rose to call the attention of the Committee to the appointment of Assessors of the Income Tax under Schedules (A) (B) and (D). In the Income Tax Act of last year several changes were made, and the Chancellor of the Exchequer, not expecting any large increase of revenue under those Schedules, proposed to take the assessment of the year previous as sufficient for the current year. It was pointed out that by that arrangement the revenue would lose, and the representations that were made induced the right hon. Gentleman to make new assessments, by which £467,000 was added to the revenue Now, for the present year the Chancellor of the Exchequer proposed to have a new assessment under Schedule (D), notwithstanding that be had repeatedly stated in that House that no change in the assessment was intended by him. It was proposed that the assessment should be made by the Surveyors of Taxes under the Board of Inland Revenue. He (Sir James Fergusson) thought that the local assessments had worked well, and he saw no reason why they should be placed in the hands of the Government officials. When the income tax was re-imposed by the late Sir Robert Peel in 1842, that right hon. Baronet laid great stress upon the fact that the tax was to be administered by local authorities, and not by Government officials; and he (Sir James Fergusson) must say that the local Commissioners had ad ministered the income tax in a manner which relieved it from its offensive character as regarded the public on the one hand, and saved the Government from being robbed under it on the other. A Return, which had been laid before the House with respect to the Kettering, Northampton, and Peterborough districts, showed distinctly the difference which existed in the working of the tax in the case of local Commissioners and in that of the Surveyors. Out of the number of charges made by the local assessors, there had been only seven appeals; while out of 148 appeals in the case of the Government Surveyors, their assessment had been sustained in only four instances. Under the circumstances, he trusted the Committee would not sanction the system of centralization which had been set on foot, and would support him in moving that the following words be added to Clause 2, "or the forty-fourth section of the said Act, directing that no assessors shall be appointed for Duties under Schedules (A) and (B)."


said, he was at a loss to know the object of the hon. Baronet, or whether he spoke on behalf of the public or on behalf of the assessors. The paper to which the hon. Gentleman referred related to new assessments under Schedule (A), and had nothing to do with the matter in question. It involved a case of shameful and scandalous neglect on the part of the assessors. When new assessments were spoken of under the Act, they referred to Schedule (A.) New assessments under Schedule (B) were a totally different matter, entailing very little trouble. That being so, he proposed last year, and Parliament agreed, that as there was no new assessment, the assessors should not be paid for making the new assessment. But it was stated at the same time that the very limited amount of labour that would arise under Schedule (B) might be discharged by the officers of Inland Revenue, who might call in the local authorities to their aid, and pay them for what they did. That was exactly what had been done. The hon. Baronet did not deny that, as regarded the principal business, there was no new assessment last year; but, as regarded this altogether secondary business of assessment, which went on from year to year, the assessors were, in certain cases, employed and paid for it. The hon. Baronet made a proposal to the House, under the plea of objecting to centralization, that the Government should give them the full payment, just as if they had performed a great mass of business, which they had not done. He did not think the Committee would accede to any such proposition as that. The pledge he (the Chancellor of the Exchequer) had given the House as regarded centralization in respect to the income tax was, that if any proposal should be made by the Government as regarded the mode of assessment or collection, it should not be done without due notice and general assent.


said, that the right hon. Gentleman misunderstood his position. What he stated was, that last year the right hon. Gentleman proposed to have no new assessment under Schedule (D); but on its being represented that great loss would accrue to the revenue from there being no new assessment, he did have such an assessment made; but having in the Act taken powers not to employ local assessors, as usual, to make such assessments. Government officers and surveyors under the Income Tax Act were employed, and they, not having sufficient local knowledge, were obliged to employ local assessors, who received certain payments according to a scale fixed by the Board of Inland Revenue; but this did not amount to the value of the poundage they would have received had they been employed in the first instance. He (Sir J. Fergusson) now proposed, not that the local assessors should be paid for work they did not perform, but that they should be intrusted with the work they had done well in times past—namely, the assessment under all the schedules of the income tax, and that they should receive their usual poundage of l½d. in the pound.


said, that was exactly the point; but there being no new assessment under the principal schedule, and that under Sche- dule (D) being a secondary matter, the hon. Baronet proposed that the assessors should be paid as if there were a new assessment; and to that proposal he (the Chancellor of the Exchequer) decidedly objected; but the best way to bring the I matter before the House was to move for a Return of what had been paid, and what would have been paid if the hon. Baronet's plan had been adopted.


said, he should continue to consider his position a good one, unless the right hon. Gentleman could give a good reason why no new assessment should take place this year under Schedules (A) and (D).


said, it was quite a mistake to suppose that there had been a new assessment annually under Schedule (A). The practice had been to make a new assessment only at intervals—perhaps every third year. A new assessment under Schedule (A) was a very serious matter, giving rise to a great deal of trouble and expense. That was the reason why there would be no new assessment under Schedule (A).


said, that reference had been made to a Return for which he had moved, which showed that taxpayers in his part of the country had a great grievance to complain of, which arose from the system of appointing assessors. He believed it would be much better for the Government surveyor to make his assessment in the first instance; and the right hon. Gentleman had said that he should have been glad to propose that to the House, but that there was a strong feeling in the country against it. A great many of the grievances of the taxpayers arose from the slovenliness of the local assessors, who made faulty returns, which compelled the Government surveyors to surcharge, and thus put the taxpayers to the trouble of appealing. If the Government surveyor made the assessments in the first instance, the taxpayers would have sufficient security in having an independent local commission to appeal to: and in his opinion the assessment would be so much more correct that four-fifths of the appeals that were now made would be avoided.


said, he was glad to hear the right hon. Gentleman say that he was not a friend to the annual assessment of Schedules (A) and (B), on account of the inconvenience the process occasioned. When a holding, however small, was assessed under Schedule (A), the person assessed could not be discharged from that assessment until the Government officer had the means of examining him, generally before a Commissioner, as to whether he had any other property; and that led to such a vast number of appeals that he was sure no possible gain from repeated assessments could compensate for the trouble and vexation which they would occasion to many very humble people. It was absolutely impossible that a Government officer could tell whether a man had property elsewhere, and therefore the person assessed must go up and be questioned on that point. As a Commissioner he had seen a great deal of this, and it was a very disagreeable business; but he was bound to say that the Government officers, so far as he had seen, had always done all in their power to lessen the disagreeableness, both to the Commissioners and to the parties brought up. They struck off a vast number of persons from previous information, and did all they could to lessen trouble; but still there were many doubtful cases, the parties must come face to face, and there was a good deal of trouble and vexation. He was glad, therefore, to hear the Chancellor of the Exchequer say he had no intention to make the assessment yearly; and he hoped that the course pursued would not be affected by the question of the poundage payable to the assessors.


asked the right hon. Gentleman whether, since the second clause of this -Bill re-enacted the provisions of former Acts, he intended to cause further assessments to be made under Schedules (A) and (D).


asked the right hon. Gentleman if he meant to say that no new assessments took place under Schedule (A) last year. He had a letter from Manchester which stated, that in the case of property built and tenanted during the year the assessment had been made by the Government surveyor, who obtained the aid of the local assessor. That illustrated his position and complaint that Government surveyors were appointed instead of the usual assessors.


said, that when he spoke of a new assessment he spoke of it in the usual and established sense. Surely, the hon. Baronet did not suppose that the taxes of the country were levied on so lax a system that new property erected after a general assessment would escape in the intermediate years. He believed that the last new assessment was in 1861; and it was not his intention to depart from the practice of triennial assessment. No Government ought to depart from it without the fullest notice. In that sense, undoubtedly, there would be no new assessment this year; and consequently poundage would not be paid to assessors for work they did not perform.

Amendment negatived.

Clause agreed to.

Clause 3 (Certain Exemptions not continued except as herein mentioned).


Sir, in proceeding to redeem the pledge I have given to the Committee, I shall address myself exclusively to the main question. It is one of quite sufficient difficulty, magnitude, and importance to justify a separate discussion. I shall altogether decline to embarrass myself, and I think also the Committee, by entering upon peculiar cases, which may be urged upon peculiar grounds. The question which, on the part of the Government, I wish to raise is this:—Whether the law shall be modified which at the present moment extends to bequests for charitable uses an immunity, as I shall show, from all direct taxation whatever, while, at the same time, very heavy charges have been undertaken on behalf of those charities by the State. The question of dealing with these endowments I shall not perplex by asking myself whether one or two cases, such as the Patriotic Fund, where we have to deal with temporary and expiring arrangements, ought to be included in the scope of this proposition or not. I shall not even discuss whether the provisions we have made for saving what is termed the "vested interests" of actual holders of the fruits of charities are sufficient or not. The discussions that have taken place, and the information that has reached me, lead me to believe that those provisions will require little modification. It is, however, my intention to propose in the fourth clause of the Bill to insert a certain qualification of that enactment which obliges trustees to draw from any other funds in their possession rather than to make deduction or abatement in respect of the income tax from the recipients of small doles; it is my intention to propose to insert words to prevent that enactment from falling on the residue in cases where that residue has been either under deed or customarily disposed of in salaries, be- cause there are certain classes of cases which require provisions of that kind. In the same manner an important question has been raised as to limited amounts which are held by way of reserve by funds dependent upon voluntary contributions—that is a question wholly distinct in principle from the very large, and as I think, very important question upon which I am about to invite the attention of the Committee.

Now, Sir, as to the proposal itself, it would be absurd in me to affect ignorance of the amount of opposition that has been excited in the country, and which, by a process that is perfectly legitimate, has found, and is likely to find, abundant expression in this House. The conviction of the Government is, that the proposal they make is a wise one—that they are offering a mild and temperate compromise, equitable, and even lenient in a high degree, as respects the mass of charitable property; and, moreover, that they are offering a compromise upon a matter which, is quite certain to grow to such urgency before any very great length of time as almost by compulsion to invite the attention of Parliament, probably for purposes, in many respects, much more stringent than any to which the assent of Parliament is now invited. Having that opinion, I at once, on the other hand, make the admission to the Committee that this is not a proposal which either can be or ought to be carried—if, indeed, it could be carried—unless with the free and deliberate, sanction of this House. It is not a proposal in respect to which the influence of an Administration to any greater or lesser degree ought to be brought to bear. This, which is obvious to all in regard to this subject, is freely admitted by the Government; but they are under the belief that this is a new question, and that the facts, which it contains, and the reasons which can be brought to bear upon it, ought to be brought out into the light of day; and I have that confidence in the fairness and justice of the House which induces me fearlessly to appeal to them for a candid hearing of the statement which I am about to submit to them.

I have said, that this is a question upon which, up to the present time, no verdict of Parliament has been taken. I may be told, and I have been told here and elsewhere, that the authority of Mr. Pitt and of Sir Robert Peel can be quoted against me. I demur to that assertion. The in- come tax of Mr. Pitt was a personal income tax, and it was hardly possible, by its machinery, for him to have got at the revenues of corporations. The first endeavour, and the endeavour most consistent with the principle of an Income Tax Act, was an endeavour to obtain a return from individuals in respect of real property just as of personal property. It was by Lord Sidmonth, and not by Mr. Pitt, as I consider, that authority was first given for the exemption of charitable institutions from taxation. But I am bound to point out, that upon the point of charitable institutions little or nothing was known, except one thing indeed, and that is that their state was one shameful to their administration. That point has been placed upon record from no reforming or radical authority, for Lord Eldon, in a case before the Court of Chancery in 1807, says— It is necessary to be perfectly understood that the charity estates all over the kingdom are dealt with in a manner most grossly improvident and of a most direct breach of trust. And Here I must advert to another point for a moment. It is very difficult to assert a negative as to the voluminous records of Parliament, and therefore I should be slow to say that the matter never has been discussed; but the only discovery that I have made of any discussion upon the subject is one of a very short debate in 1812, when Sir. John Newport proposed to repeal a tax which is sometimes quoted as a tax upon charities, which has, in certain cases, a limited bearing upon them, but which, as a general rule, is not felt to be a tax upon charities, for it is a tax upon estates namely, the 10 per cent paid upon, legacies bequeathed to charities. On the 23rd of January 1812, Sir John Newport moved for leave, to introduce a Bill to exempt all bequests for charitable purposes from that duty. He was opposed by Mr. Perceval, who said it was not advisable to recognise the policy of encouraging bequests of the description alluded to—that is, deathbed bequests—because a person on his deathbed might give to a charity that portion of his property to which his immediate relations were entitled, and the Legislature was not called upon to administer to the wishes of such persons. That is the only declaration I have been able to find, although others may possibly have been more fortunate in their researches. Then we are told that Sir Robert Peel is to be quoted as an authority for this exemption because he did not remove it. Sir Robert Peel re- moved from the income tax—and I can well concede, but I might venture to say, more than that—Sir Robert Peel refrained from mooting that of which he disapproved in his heart, because he did not think it wise to undertake what was entirely beyond his force to perform—he removed from the income tax a multitude of exemptions that would appear strange indeed in our eyes. There was the exemption of foreigners, and the opposition which he had to encounter in carrying his Income Tax Bill through the House showed that he had undertaken as much as it was possible for him to carry into legislative effect. But I am told that Sir Robert Peel was against' the extension of income tax to charities. Why, Sir Robert Peel proposed by one of his Bills relating to charities—by a Bill introduced by Lord Lyndhurst on behalf of Sir Robert Peel's Government in the Session of 1845—he proposed a tax of 6d. in the pound upon charities—within one penny of the sum that would have to be paid at the present rate of income tax. The same objections were made then as now. The objection, in point of fact, is not so much the paying much or little as to paying anything. It is to the principle, in working, of that exemption, and to the nature in general of exemptions, that I wish to call the attention of the Committee. In the first place, it is hardly possible to overrate the consequences of the misuse of words; and I must venture, with the greatest respect, to suggest that there can hardly be an instance more marked of the truth of that proposition than the magic charm carried by the term "charities" as exempted from income tax. What are these charities? I will venture to say that nineteen-twentieths of them at least—and I believe that to be an under-statement—consist of deathbed bequests. Now, deathbed bequests in most countries are, I believe, to a considerable extent, restrained by the law. In our own country they are restrained by law when they take a particular diction. It is generally, and I think justly, considered a remarkable illustration of the mode in which freedom is left to the will and even to the caprice of individuals in this country that no attempt has been made to limit the amount of choice, of discretion, or of indiscretion, with which individuals may bequeath property to what is termed charitable uses. ["Hear, hear!"] But, notwithstanding a cheer that proceeded from an hon. Friend of mine opposite, I confess I am sanguine enough to anticipate an assent to my proposition when I say, that what a man wills on his deathbed, when he can no longer keep it in his own hands, is not charity in the same high fixed sense, nor, I will venture to say, in the only legitimate sense which it is when he gives what is his own to give or to enjoy. Upon, a deathbed I do not deny that a man may have laudable motives; but, on the other hand, I am sorry to say that sometimes he has motives which are not at all laudable. But let the motive be what it may, a man is giving in a particular manner that which it does not rest with him to retain. There is not a quarter of the charities of the country properly so called that is not taxed. Every voluntary gift of the living, everything saved by every man, everything recovered or gained by the severest self-denial, it may be out of an income which the giver might have enjoyed—all is taxed, and taxed without the smallest favour or regard. The charities of England are taxed, and bequests in England for charitable uses are relieved from taxation. Those two things are totally different. For charity, properly so called, you must have a giver as well as a receiver; and where there is a giver as well as a receiver taxation is imposed without mercy or remission; but where there has been a deathbed bequest, in the overwhelming majority of instances, whatever may be the testamentary disposition, the law steps in and accords a preference that would more naturally be due to the alms of the living. I have said already that I do not admit that the 10 per cent charged upon legacies is a tax upon charities. I conceive that in every case (except where the whole estate is bequeathed for charitable purposes) it is a tax upon the estate itself. If a man desires to give a particular sum to a particular charity, he gives it free of legacy duty; or if he gives it without any such condition, he knows well that it is subject to the 10 per cent deduction, and therefore it is his intention to give 10 per cent less than the sum he names. I must say I do not think it is very wise for the State to give these temptations to making deathbed bequests. I proceed all along upon the assumption—nay, more than the assumption, upon the assertion—that an exemption is a gift. If that is contested, we differ on first principles; but I think it is not a bold, or, at all events, an audacious demand to make upon the reasoning faculties of the Committee, when I say that what the State remits to a man it gives to him. If a gentleman has carriages and horses, he is liable to pay a guinea for each horse, and two guineas or so for every carriage; and if those sums be levied from his neighbour, and not from him, it is the same thing as if they had not been levied on him, or had been given back to him. I dispute the general wisdom of giving these temptations to men, by gifts of public money, to endeavour to immortalize themselves as founders. ["Oh, oh!"] I may be wrong, but I state that opinion in accordance with the liberty of debate which exists in the House. And what do we do in that way? We tell a man that he may gather wealth, and enjoy the accumulation till his death; and that with that enjoyment he may also enjoy the merit of almsgiving by making a will which will not operate until after his death, and that he may achieve the fame of being the founder of this or that institution; when, if he had gone through the commonplace process of providing for others while he was living, his name after his death might have been consigned to obscurity. ["Oh!"] I quite admit that there are many laudable motives which may actuate a man to leave bequests of that nature, but these men will have perfectly free scope if you leave them to act without a premium in the shape of an addition from the public money. It is to the addition of public money I object, and to which I desire to direct the attention of the Committee. I am free to confess that this is a point which admits of a difference of opinion; but a payment of public money for the purpose I have stated, which payment can only be obtained by levying it off the rest of the community, appears to me and to my Colleagues to be wrong in principle and dangerous in its consequences. I observed a sneer when I spoke of some of those bequests taking a direction that was not satisfactory, and the views I have stated seem to some to be remote and visionary. Sir, I am cognizant within my limited sphere of a case in which a sum of £150,000 was left for a charitable use for no other cause whatever than the aversion of the testator from his immediate relatives—for no other cause whatever. The real property of the testator was left to a stranger for the same reason. The relatives endeavoured to impeach the will on the ground of insanity, and naturally enough they failed. Here is another case:—I hold in my hand a letter which I received, a few days ago, from a gentleman who pays income tax on a professional income. He states that J. D., by the peculiar construction of a will, obtained a fortune intended for his elder brother. This elder brother died and left a child; J. D. died, and by a codicil executed a few days before his death gives the whole of his property to a public charity. I put it to the House that such charities as these are objects which it is neither politic nor just for the Legislature to encourage with gifts of the public money. I deny the justice of such a proceeding. I do not say the State ought to interfere with individual liberty so far as to intercept such bequests; but I say not only that it ought not to add to those bequests by gifts of public money, but that when it does so, it commits an offence against the interests of the public and against the laws of justice with regard to the entire community. The case, then, of the "charities" of England as they are called, that is to say, of endowments for charitable uses, is that they are generally untaxed. There is an enormous exception, however, to this, in the case of the bequests for religious uses, which are taxed. On what principle of consistency such a difference is justified I do not know. Perhaps you think those charitable bequests are untaxed because what are called "charities" are generally distributed in sums under £100 a year. But the law is, that if the charity is distributed in sums over £100 a year it is exempt from taxation. There are eases of men having much more than £100 a year; and those incomes being paid out of charities, according to the legal construction of charitable uses these men are exempt from taxation. The State has, however, long thought that with respect to religious endowments it was desirable, owing to their nature, to pass laws with a view to limit their growth—such laws, for instance, as those for the emancipation of leaseholds and for the commutation of tithe. There have been no such enactments with regard to charitable bequests, and what some of these are we shall presently see. I will not speak of the minor inequalities in the law, such as its unequal distribution in the three countries. My hon. Friend the Member for Clonmel (Mr. Bagwell) rose the other night and told me that this proposal of mine would be resented in Ireland. Certainly, I am at a loss to see why a proposal to change the existing system should be resisted in Ireland—it can only be on some peculiar view; for while that country pays 7 per cent of the income tax, she only receives, as far as I can learn, 3 per cent of the exemptions. A consequence of this system is that inequalities exist as to the distribution of the charges between the two countries. I do not wish, however, to dwell upon matters of that kind, which are not of great magnitude. I do dwell upon what I consider this great anomaly and inequality—namely, that no proof whatever of monies expended in charity by the living is admitted as a ground of exemption from income tax, while proof of monies so expended, if under the disposition made in a will by the dead, is received as ground of exemption, It is to be observed, that in the vast majority of cases, the testators who make these bequests are in reality only making an addition to voluntary subscriptions and donations, and, that instead of remaining in the nature of an endowment, the sums, which they bequeath pass away with the annual expenditure of the institutions in whose favour they have been made. The charities of which I speak, almost the whole of which have come down from times remote, are now comparatively insignificant. They are charities in the nature of deathbed bequests, and; as such they have enjoyed an entire immunity from taxation. The next question was, what was the cost to the state of these exemptions? He asked whether the Legislature was to accord to these posthumous bequests a pecuniary premium at the expense of the rest of the community; and he stated distinctly; that by according it that premium, the Legislature became responsible for all these bequests. It became a party to every one of them; and if there were among them those which were useless—those which were questionable—those which were mischievous—those which were scandalous—every one of those was endowed with a portion of public money. Perhaps it will be said that the operation of the present system is insignificant in its effects on the finances of the country. It will be well, at all events, to see what it does. The income of the United Kingdom from property may be estimated with considerable accuracy from the Returns for Income Tax. Of course, deductions must be made for those schedules which do not represent independent property. There must also be deducted from schedule "D" an allowance for whatever is derived from manufacturing or professional skill and enterprise as apart from capital. With these deductions, the income of the United Kingdom may be stated at from £180,000,000 or £190,000,000 a year. Of that about a sixtieth part, or £3,000,000 a year, is possessed by charities, so called in the legal sense. The taxation imposed by our fiscal system on property, with the income tax at 7d. in the pound, amounts to about £13,000,000 a year. Of that the principal item is the income tax, yielding somewhat more than one-half. The next is that cluster of duties which, for convenience, may be called death duties—succession, probate, and legacy duties. The remainder is the house tax. From all these, charities are entirely exempt. The value of that exemption from the taxation laid upon other property, taking the proportion between the income of charities and the total income of the United Kingdom, is about £216,000 a year. Besides that, there is a large and a growing charge imposed upon the public for the sake of charities. I will not now enter into the minute details of the charge. As far as regards the sum of £18,000 a year voted upon the Estimates, it is obvious to the House. That sum is an increasing one; and there are several items of annual charge which it does not comprehend. For example, it does not include superannuations and offices; it does not include £500,000 which the State has been compelled to lay out within the last fifty years in order to examine into the state of things described by Lord Eldon as "a gross and general breach of trust," and, if possible, to bring about an improved condition of affairs. To reimburse the State for its outlay upon them would require an annual charge upon them of from £40,000 to £45,000 a year. The £216,000 which I have mentioned as the amount of their exemption from direct taxation amounts to about 7 per cent upon their income. The reimbursement of the pecuniary charge laid upon the State would amount to 1½ per cent more. The total amount of the exemption which they enjoy is therefore 8½ per cent, and the cost of the total amount to the State is fully £250,000 per annum. That amount is, in fact, part of the State expenditure. But if it is part of the State expenditure, I ask the Committee to consider why it is to be kept up in such a form? For many years we have been passing Bills and adopting administrative provisions, with a view to bringing the whole expenditure of the State, from time to time, within the control and under the eye of the House of Commons. If this money is to be laid out upon what are called charities, why is that portion of the State expenditure to be altogether withdrawn From view, to be shrouded within the folds of the most complicated sections of our Acts of Parliament, and to be so contrived that we shall know nothing of it and have no control over it; so that, while to every other object recognised by the State as fit to be provided for out of the public funds, we apply every year a vigilant eye with a view to modification or retrenchment, here we continue an exemption, and, pluming ourselves upon our liberality, we leave this great expenditure entirely in the dark, and waive in favour of these institutions, not only the receipt of a certain sum of money, but the application of all those principles of philosophical administration and constitutional control which we consider necessary for the general government of the country and the management of our finances? This an important question, I should like to happened if, in 1842, when Sir Robert Peel proposed the income tax, he had proceeded thus:—"For convenience' sake, and for the sake of knowledge and supervision, we think it wise that the eye of the State should be kept upon the administration of charitable bequests. The income tax, therefore, will be levied upon all their property irrespective of their charitable character. But we think the fund a sacred one, and are not disposed to interfere with it. The estimated amount of the income tax leviable from these sources would be £100,000. A levy will be made upon the property of the respective institutions, but we shall propose, as part of our miscellaneous expenditure, to vote annually £100,000 on behalf of these charities." Suppose Sir Robert Peel had made that announcement, and, instead of mentioning £100,000 as the total amount of the exemption, had told us the whole state of the case. Suppose that at this moment we were to say, "We will levy the tax upon the property of charities as upon all other property; but because you think that deathbed bequests ought to have accorded to them a premium which you do not accord to the alms of the living, therefore, from year to year, £250,000"—which I am certain is within rather than beyond the actual amount of the charge—"shall be distributed among these charities." Why, every man knows that such a Vote would not stand the scrutiny of a single year. It would be pulled to pieces more relentlessly and more mercilessly than the present proposal of Her Majesty's Government has been. You would have had it alleged that a multitude of these charities are bad, injurious, demoralizing, poisoning and sapping the principles and the independence of the poor—not one jot better, in many cases, than those old Poor Law doles which, at an epoch of courage and wisdom, the House of Commons swept away in 1834 under the guidance of Lord Grey's Government. The second point made would be the capricious, doubtful, and questionable nature of many more of these charities. The third would be, that even were these charities unobjectionable, and likely to do some good, unless they could show very extraordinary claims for public endowment, they should not be exempt; and the residue, with respect to which you would be disposed to vote grants of public money, would not come near one-fourth part of the charities that are now in the enjoyment of this exemption of £250,000 per annum. I must say I have been struck by the skilful manner in which the charitable army, so to call it, has been marshalled. On all these occasions there is a great deal in the homely proverb of putting your best foot foremost. I have hardly heard a word since this proposal was made, except about the very best charities. The poor men that are to be dismissed from St. Bartholomew's, the orphans of the clergy who are to be sent away from their institution, the wives of Dissenting; ministers who will lose their grants of £30 or £40 a year—all these sounds have rung in my ears. I do not complain of that; but it is on account of these institutions that we are asked quietly to continue this promiscuous gift of a quarter of a million annually. I think it has been told of some Generals, who have been most skilful tacticians, that they have done much by a judicious distribution of their army. Sometimes you go to a review, and find the tall and the strong men in the front rank, and behind them are persons of very inferior material and dimensions. Sometimes, I believe, battles have been won by having old women and boys judiciously dressed up with the proper colours and at the proper distance, and the moral effect has been what it was intended to be. So, in this case, what may be called the shameful or the doubtful charities have been kept in the shade and in judicious reserve. Therefore, it is necessary that we should have some analysis of these charities; for it is quite impossible that the Committee can attain to any clear idea of what we are about without such an analysis; and I think that when I have made that analysis, whatever the Committee may think of the proposal of the Government, they will say that we are not now inviting them to adopt any extreme proposition in the lenient compromise we are about to propose.

I am going to divide charities, for the purpose of this inquiry, into three classes—the small charities, the middle charities, and the great charities—assuring my hon. Friend that I do this, not for the sake of symmetry, but for practical convenience, and because it will be found that the subject not unnaturally falls into those divisions. In small charities I include the funds of the large charities distributed in very minute amounts, for these fall within the scope of the observations I am now making. The middle charities generally administer relief in money, dealing with stipends of £20, £30, £40, or £50 a year—distributed, for the most part, to decayed gentlefolk, widows and orphans of clergy and Dissenting ministers, and persons generally within these middle regions. The larger charities require separate consideration. But what are we to say of the small charities? Sir, I say without hesitation, that there is scarcely one among them—a few there may be, but they are totally insignificant and infinitesimal—which, if we proposed in their favour a vote of 5s. in this House, would have that 5s. granted. Do not let me be pressed with the exception. I want to speak of the bulk of these charities; and I say, without hesitation, that if, as a mass, they deserve the toleration of this House, it is the very utmost they do deserve, and that to bestow upon them a public endowment is as gross an act of injustice as could well be committed by the Legislature. I ask again, what are these small charities? They are, for the most part, charities for local poor and for local education, and it is with respect to these charities that I say, that if they deserve the toleration of the House—that is to say, if they deserve that perfect freedom shall be given to a man to leave his money to them under whatever circumstances—it is the utmost that they do deserve. That is not my individual opinion alone. Three times have these charities been the subject of inquiry; and the Charity Commissioners of Lord Brougham, the Poor Law Commissioners of 1834, and the Education Commissioners of two or three years ago, all condemned them, and spoke of them as doing a greater amount of evil than of good, in the form in which they are established. I received to-day a deputation—if, indeed, that word is not inadequate to describe it, whether I consider its numbers, or the materials of which it was composed; I leave it to others to say what it was—but the Bishop of London was a member of that deputation, and its demand was that the exemption which now exists should be continued as it is at present. The predecessor, however, of the Bishop of London was a Poor Law Commissioner in 1834, and in that capacity dealt with the question of these local charities for the poor. As a Commissioner, in 1834, he signed the Report of the Commissioners, and in it these words— In some cases charitable foundations have a quality of evil peculiar to themselves. The majority of them are distributed among the poor inhabitants of particular parishes or towns. The places intended to be favoured by large charities attract, therefore, an undue proportion of the poorer classes, who, in the hope of trifling benefits to be obtained without labour, often linger on in spots most unfavourable to the exercise of their industry. Poverty is thus not only collected, but created in the very neighbourhood whence the benevolent founders have manifestly expected to make it disappear. That was the Report of the Commissioners in 1834. I need hardly go back to the Report of the Commissioners of 1818; and I do not suppose it will be thought necessary that I should bring before you the Report of the Commissioners in 1861. But, considering the astonishment that seems to be manifested on the other side at my stating that the existence of these minor charities was a doubtful matter, I trust the Committee will excuse my fortifying myself with authorities to show that in what I say, whether right or wrong, it is not the offspring of mere individual ipse dixi. In page 519 of the Report the Commissioners say— The hand of living charity is held out only to present need; it promises no periodical alms to indolence and importunity; and if it necessarily somewhat impairs the spirit of independence, it produces goodwill and gratitude. The 'dead hand' of the founder of an annual dole does not distinguish between the year of prosperity among the labouring classes and years of distress; in prosperous years it leads those who are not in need to represent themselves to be so; it holds out annual hopes to improvidence; it more frequently excites jealousy and ill-feeling than goodwill, both on the part of the recipients towards the distributors of the charity and among the recipients themselves. For one person who receives substantial benefit from these doles many feel their demoralizing effect. At Salisbury, for five vacancies in the list of pensioners on one charity there were sixty-two applicants, all of whom had probably nursed expectations more or less subversive of their industry, and used importunities more or less subversive of their self-respect, I want to put to the Committee the real state of this case. You have a variety of towns particularly, and also certain country parishes, with so-called charities for their poor; and I wish to know upon what ground of justice the parishes which leave no such charities for their poor—and in England those parishes are numerous, while almost all the parishes in Scotland and Ireland are in that position.—I wish, I say, to know upon what ground all these parishes which have no such charities for their poor are to be called upon to add money out of their own pockets to enlarge the endowments of those favoured parishes in England? A more extraordinary and clear injustice than that, in my mind, cannot be conceived. I will take another case. An hon. Friend of mine the other night, using language which I confess provoked a smile more than anything else, said that I betrayed my duty as a Member for the University of Oxford because I proposed a tax upon charities, by far the greater portion of which belong to the Church of England—thus propounding the doctrine that I, as Chancellor of the Exchequer, am under an obligation, before proposing a financial measure, to ascertain whether the fiscal incidence of that measure would be favourable or otherwise to the communion to which I belong, and to adopt or reject it accordingly. However, accepting the challenge of the hon. Gentleman, I will take a class of charities which exist more or less all over the country—I mean charities to be dispensed upon the condition of attendance at church. I have seen the working of these charities. I do not hesitate to say that they form the subject of great grief to many of the best men who have to administer them. They approximate to what I must call a sort of spiritual bribery, operating as an inducement to men to go to church for the sake of receiving temporal alms. It is a fact, of which there is abundant evidence in this book, that most of those who go to church for these purposes are not usually seen there at any time but on the occasions when the spiritual food is to be supplemented, as the Scotch say, by something which finds a shorter way to their perceptions and appetencies. I take the effect of these charities upon the tone of the population, because I feel that this justifies me in the assertion I have made, that these small charities, considered in the mass, have no claim whatever to any indulgence or endowment beyond the toleration and protection which are afforded to property in general. I believe there is no city in this country which is richer in these charities than Coventry. Well, was there ever a case of a city where, upon the first arrival of distress, the labouring class were so immediately laid prostrate? Compare the case of Coventry, where these charities abound, with the case of the towns of Lancashire, in most of which they are comparatively few. Distress goes to Coventry, and before it has been there a month the whole country is solicited, and solicited with too good cause, to subscribe for its relief. Distress goes to Lancashire, and remains there for six, nine, or twelve months before any appeal whatever is made to the public at large. Again, an application was made to me from Bristol on behalf of the "valuable charities" of that city; but according to evidence before us those charities are not "valuable." Instead of being valuable the Report of the Commissioners shows that they are pernicious. Mr. Cousins, vestryman of St. Paul's, Bristol, after forty years' experience of these matters, says— Small charities of from £1 to £6 pauperize the people; they destroy the sense of shame, and the deserving do not get them. The poor people (he adds) spend more time in looking after such gifts than would suffice to gain the same sums by industry. And the very same evidence you may bear from the most judicious clergymen and administrators of alms in other parts of the country. The Education Commissioners of 1861 very naturally say— These charities, then, by their operation are teaching indolence, mendicancy, servility, and falsehood to the poor of Bristol, almost as effectually as industry, the love of independence, and veracity can be taught by means of the funds which the State supplies in aid of the Bristol schools. I will trouble the Committee with one more case. I am not about to state that these small charities are generally scandalous. My statement is limited to this:—That they have no claim whatever upon the public purse, and that at the present moment, constituting as they do, as far as I am able to judge, not far short of one-half the annual so-called charities of this country, they are saddled on the public purse, if that calculation is correct, to the extent of £125,000 a year. I now take one of the cases which really deserves to be made known, however modest those who are connected with it may be. I refer to Jarvis's charity. The founder, poor man, could hardly have expected to obtain notoriety through the discussion of this House. Mr. Jarvis died in 1793, and left about £100,000 for the poor of three parishes in Herefordshire, to be given in various ways—for physic, clothing, food, and so forth; but there was one thing to which he had a particular aversion—he absolutely forbade building. That was expressly precluded by the terms of his gift. I suppose his idea was to supply the current wants of the poor. The population of these three parishes, at the first census after Jarvis's death, taken in 1801 was 1860, and in 1851 it was 1,222. What was the reason of this increase of population? Had employment increased there? No. Had trade come there? No. Had manufactures been established? No. Were wages higher in these parishes? No; they were lower by 2s. a week. Were the dwellings good? No; they were the most miserable and scandalous that disgraced any part of the country. The people went into them naturally enough to wait for the doles; for the gifts which by Jarvis's mistake and misguided benevolence were distributed to them pretty nearly doubled the income of the agricultural population of those parishes. And, last of all, have the morals of these poor people improved? The statement of the authorities who have investigated the case is this—that the morals of those parishes were such as they are forbidden to describe. And then, Sir, every £11 of Mr. Jarvis is to have a twelfth pound added to it by the State, which is to be taken out of the pockets of the taxpaying community! A more gross injustice, in my opinion, cannot be imagined. Well, this went on till it became perfectly intolerable, and the public nuisance could no longer be borne, fostered as it was by Parliament, and aggravated by the money taken from the contributions of the public. In 1852 an Act of Parliament was procured to place this particular charity on a better footing; but a great portion of the evil is still left in full force and vigour. The funds are still limited to the same three parishes; but what do the Committee imagine was the great remedy which the wisdom of the promoters of the measure devised? They desired to have power to lay out £30,000, or nearly one-third of the whole sum, in the very thing and the only thing which old Jarvis forbade—namely, in building. Those are the preposterous conclusions at which we arrive if we refuse to listen to the dictates of sound sense and moderation in these matters. £30,000 is a large sum, and a great deal might be done with it. They might almost build a university for the West of England; and, if not a university, at any rate a great college. But what they are going to build is a boarding school for the children of the labouring population of these three parishes. The real meaning of this is, that the money of old Jarvis, supplemented by the money of the State, which we improvidently and unjustly take from the pockets of the taxpayers for the purpose, has grown to such a height that the trustees are driven to their wit's end to know what to do with it; and just as was the case with the Donaldson Hospital at Edinburgh, they have entered into an immense deal of unnecessary building, because, like sensible men, they felt that in that way, if it did no good, it would be doing little harm. I could very easily entertain the Committee with more cases of this kind—striking and amusing, but, at the same time, on reflection, very painful cases. The Commissioners reported on the Canterbury charities, and among them is one called Lovejoy's charity, part of which is to be applied to poor, ancient, and sick people not receiving parochial relief. There were 500 persons receiving relief from this charity, and as to 113 of these the Commissioners could obtain no information; but of the remainder there are 145, of whom they give the following account:—There are 51 persons in good employment, not needing relief, 36 paupers, who by the foundation are excluded from any such aid, 18 occasional paupers, 18 drunkards, 17 bad characters, four brothel-keepers, and one convicted felon. And yet to every £11 distributed by these charities £1 is added by Parliament, taken from the honest and laborious community. These small charities, I say, are not fit subjects for public endowment, and I am convinced, that if they were brought before Parliament in a proper and constitutional way, no one would venture to ask £1 per cent, nor even 1s. per cent, for a single one of them.

Let us come now to the middle charities, which may be said to be distributed in money—the smaller charities being distributed sometimes in money and sometimes in kind. I wish the Committee to see what have been the proceedings of the Government on this point, because it has been said that there is great inconsistency in removing the exemption from charities awhile, at the same time, we give exemption to persons of less than £200 a year income. I draw a broad distinction between exemptions which are partial and are made in favour of particular persons, places, or classes, and exemptions which relate to the entire mass of the community, and preserve a perfect equality between one man and another. Let us take the Clergy Orphan Association. It has an income of £5,000 from endowments, the income tax on which at 7d. in the pound would be £145 16s. 8d. That is the sum which we propose to take from this association. Who is it, I want to know, who make the "clergy orphans." I apprehend it is the poorer clergy—the clergy with incomes of from £100 to £200 a year. We take £145 from the funds applicable for the Clergy Orphans—not applicable as a matter of right, but as a matter of favour, of patronage, and of canvassing, which often costs a large percentage of the benefit gained—but what do we do for the poorer clergy? We have some means of getting at the incomes of the clergy. Perhaps the right hon. Member for Oxfordshire (Mr. Henley), in his mild language, will say that we have robbed them; but let us see what we are actually doing for them. I reckon that there are 5,000 of the clergy of the Church of England with incomes between £100 and £150 a year, and 2,000 with incomes between £150 and £200; altogether 7,000 with incomes over £100 a year and under £200. If we take 5,000 at an average income of £125, and 2,000 at an average income of £175, the amount of remission of income tax to this class, by the proposition of Her Majesty's Government, will be £7,000. We take £145 from this institution of the Clergy Orphans, but we leave to the poorer clergy £7,000 additional income, which would previously have come into the possession of the State. Again, the objection is taken that these charities are distributed—not uniformly, but usually in incomes under £100 a year; and the other possessors of incomes under £100 a year it is said, do not pay income tax. With regard to the private and personal rights of the present possessors of these incomes the objection does not obtain, because with respect to them we propose to leave them in the position they now occupy and that they shall not be subject to any deduction. It has been said that that would be troublesome, but, on the contrary, it would be very easily worked by communication between the Charity Board and the Inland Revenue Office. Then, with respect to the future, how are we to consider the case of those who have now no right to the benefit of these charities, but may enter upon them at some future time? I want to make the comparison as fairly as possible, and I will therefore consider these future entrants as persons coming into incomes derived from property in succession to one another. I do not wish to strain my argument, and will not dwell therefore on the fact that they are strangers to one another, but will take them simply as persons succeeding to one another upon death, and I will compare their position with that of those who have corresponding incomes not derived from charity, and who are exempt from the income tax. We are accused of inconsistency in taxing charitable incomes; but if you want logical consistency—if you want to deal equally—you must make people in the enjoyment of these incomes from charities pay not single, but double income tax. Suppose we take £2,000 private property, which, in the funds, would produce £65 per annum. A man succeeds to £2,000, and the succession passes from him to his child by death. Succession is calculated to come by death once in thirty years. The amount of succession and probate duty, with the charges necessarily incident, has been ascertained, on inspection of a number of wills by a most able and accurate authority, to be 12 per cent upon the capital of the property. That would take from the possessors of the non-charitable income of £65, 12 per cent on the capital sum of £2,000, or £240 once in thirty years— that is £8 5s. a year, which is equal to an income tax of 2s 6d. in the pound. On the other hand, it is now proposed to take from the charitable income of £65 a tax of 7d. in the pound, which amounts to 455 pence, or £1 17s. 11d. in the year, in lieu of the £8 paid by the non-charitable income of the same amount in the form of death duties. If I were competent to deal with this subject legally, I should be justified in saying that we have no right to look at future recipients at all; but the result is that upon these small properties is levied a tax, not all coming into the coffers of the State, but all inevitably and practically incidental to bringing into the coffers of the State what comes there, more than four times as much as we now propose to levy upon corresponding amounts derived from charitable funds.

I now come to the larger charities, which may be considered as falling under two classes, one represented by Christ's Hospital, a great charity of education, and the other consisting of what I frankly admit to be the best of all these charities—namely, the great endowed hospitals. I hope the Committee will grant me its indulgence while I deal with the case of Christ's Hospital, because that institution is under the most illustrious patronage, and I have no doubt that those connected with it exercise their powers upon enlightened principles and with the best intentions. My proposition is, that while the public contribute about £2,000 a year to the funds of the charity, Christ's Hospital is not entitled, upon any ground of right or public policy, to receive a single shilling. Christ's Hospital was founded for the very poorest of the poor. Our Sovereign Lord the King, of his mere mercy, has pity and compassion on the miserable; state of the poor fatherless and motherless children, the sick, the sore, and impotent;" and so on. Such are the terms of the original charter of Christ's Hospital. Where are these sick and sore and impotent people? They have gradually improved in their circumstances and worked upwards in society with the increasing wealth of the institution, and now they are the children of people with £200 a year, with £300 a year, with £400 a year, and in some cases with £500 a year. I deny that such people are for one moment entitled to call upon Parliament for a vote of public money in aid of the education of their children; and if we could but get at the truth, if we could but get rid of these exemptions, if we had to consider the matter as a portion of our annual expenditure, no man would dare to stand at this table and ask the House to vote £5,000, or £500, or even £5 a year for such an institution as Christ's Hospital. But what is the nature of Christ's Hospital? It is an institution with an income of nearly £70,000 a year. I have no means of ascertaining the precise amount; but, as I was told to-day upon the highest authority, that if we imposed this tax, we should get about £2,000 per annum from Christ's Hospital, I infer that the income of the institution must he something like £70,000 a year. It must be more, indeed, because we already get income tax from the recipients of salaries, if they do duty for their money;—for it is essential to the definition of a charity, so as to exempt it from the income tax, that the recipients should do nothing whatever in return for what is given to them. It is a charity where a man receives money because he is the descendant of somebody else, or because he is a poor Knight of Windsor—a man cannot be called upon to pay income tax if he shows that he does nothing for his income. Christ's Hospital, I believe, has 500 Governors, who come into their offices upon the payment of £500 each. What splendid benevolence! Is it not a noble and spirit-stirring reflection that yon can find in this country ten or a dozen men every year to pay £500 each for the benefit of this institution? What is the real truth? Are these sums of £500 each given out of pure charity? Do the Governors get nothing in return? No, Sir, not exactly. They get a vested right in 1,600 presentations—presentations to some £70,000 a year of endowed property. I am not proposing a revolutionary measure; I am not seeking to take money from the hospital; I am simply asking that we should not have to give another £2,000 a year out of the public purse. I am told that the Governors will have to dismiss a number of the boys. I am sceptical upon that point. The same cry has been raised over and over again. During the last twenty years, since I began to hold office, every beneficial financial change has been met with a threat that somebody would be dismissed. The statement that some boys will be dismissed does not command my belief; but if they were to be dismissed, I deny that it is the business of Parliament to give public money in order to educate the children of rich people, and to extend at the public charge the patronage enjoyed by the Governors of Christ's Hospital. Take the case of the Charter House. It is customary to make Prime Ministers Governors of that institution. My noble Friend near me is a Governor of the Charter House, and [Viscount PALMERSTON nodded assent] he admits it. I know I have his assent when I say that his patronage should not be augmented by a public grant. The remission of the income tax in such cases is a gross abuse—an abuse which would not survive a single Session, if instead of compelling us to deal in the dark by way of exemptions, you were to come honestly forward and make your appeal to Parliament for a grant to these charities as a legitimate portion of the public expenditure. But so much has been said about the excellent nature of these institutions that I must return for a moment to Christ's Hospital. I am utterly sceptical as to the unmixed and unbounded benefits conferred by such schools. Here are vast masses of 1,200 or 1,500 small boys gathered together for the purposes of education—no doubt the younger boys are sent down to Hertford—they are not subject to any of those great beneficial influences that are necessary to maintain a pure atmosphere and a healthy tone in every school—first, the press; secondly, the public; and thirdly, the parents. I distrust the usefulness of such schools—parents ought to have more influence over them. But though I think these schools are to be condemned, it is not my business to bring an indictment against them—it is the menace of the dismissal of forty boys which compels us to examine into these things, and to see whether there is a claim on the part of such a foundation as Christ's Hospital to be improved to the extent of one-twelfth of its income by a grant taken out of the pockets of the taxpaying community. Here I am bound to say that those connected with the Hospital have not exhibited any desire to keep back anything; and I find it stated by the Education Commissioners that the Treasurer gave his evidence before them in a frank, open, ingenuous manner. The faults of the institution are chargeable, not to them, but to causes and circumstances over which they had no control. But the Committee must hear the real state of the case. I have said that the presentations are the patronage of the Governors, almost approaching to the character of private property. The Education Commissioners say— They are so absolute that it is doubtful whether the Hospital has legal power to refuse any child presented by a Governor, however unqualified for admission in point of knowledge the child may be. Mr. Gilpin, the Treasurer, says— We have been inundated with children who did not know their letters; the result of which has been that it has been very detrimental to the school. He adds— We have had children who, after they have been at Hertford for two years, have hardly been able to spell. We positively were met on one occasion, when a child carne for admission, with the fact that he really did not know his letters. I asked the mother what she could be about, she being the mistress of a national school, and I said, 'What can be the reason of this?' The reply was, 'We knew he was to have this presentation, and therefore we did not take the trouble to educate him at all.' Mr. Gilpin also states that the gift boys from different parishes were better educated than those who have been put in by the donation Governors. The Governors kicked at this state of things, and passed a resolution that no child should be admitted unless he could read fluently the four Gospels. One Governor argued against the resolution in this way—"I have made myself a Governor; and if I choose to send my boy to this large charitable school, it is your duty to educate him." The solicitor was consulted as to whether a Governor could insist on sending a boy who could not read at all, and the answer which he returned was that he thought the matter doubtful. I do not think it is doubtful whether it is just and fair that the taxpaying community should be required to pay £2,000 a year towards the maintenance of Christ's Hospital. I will compare Christ's Hospital, for the sake of illustration, with another charity in London. There seemed to be very great hesitation on the other side when I asserted what seemed to me a very simple proposition, that the alms of the living stand on a higher footing than the bequests of the dead. But I presume no one will assert that the alms of the living ought not to be treated worse than the bequests of the dead. Let us take the case of King's College. No person connected with King's College has ever exercised an act of patronage, or any act which can be so called. King's College was founded thirty years ago. The funds include £90,000 from donations, £50,000 from shares, and £15,000 from endowments. There is no competition between the interests of the shareholders and the interests of the institution but it is provided that when all the purposes of the College are fulfilled the shareholders may receive a profit of 4 per cent. They have never received a shilling. They have created an excellent college, with an excellent school, occupying a high position among schools. King's College has taken its place among the permanent educational establishments of the country. It is not disputed that every shilling has gone to a charitable purpose, but they have never received one shilling return of income tax on anything which they possess, and by a recent decision the buildings are to be charged as upon a rental of £1,370, on which income tax will be payable. That is the consistency—that is, I would almost say, the decency which fattens bloated institutions at the expense of the public, and leaves struggling ones to make their way in the world as best they can. The cage of the hospitals, properly so called, is by far the best—and in hospitals I include everything which embraces the relief of involuntary ailments—dispensaries, infirmaries, and lunatic asylums. Hospitals probably amount to nearly one-fourth of the whole of the charities, and they give the best case, because they involve so little of the vicious and corrupting element of patronage. When we speak of a charity, as a general rule, we speak of some administrator or dispenser of charity who derives consequence and importance from managing that charity which he would not otherwise possess. But in the case of hospitals, within the limits of certain distances, their doors are open to all who suffer from poverty, misery, and disease, and patronage does not exist. There is no fear of stimulating disease by a multiplication of hospitals, and there is no waste in canvassing. It is perfectly true that in the case of many charities the candidates spend more in the canvass than the presentation is worth. But in the case of hospitals there is no canvassing, there is no expectancy, there is no fraudulent pretence, there is no ill-will. Dr. Chalmers, the man perhaps of all others in this country who most happily united a high character for benevolence with the character of a sound political economist, was not ashamed to say, that while he proscribed most of the foundations termed charitable, he admitted that great benefits were derived from hospitals. For this very reason the want of hospitals is more easily supplied by voluntary contributions, and I believe, that if any calamity swept from the surface of the earth the great and wealthy endowed hospitals, the liberality of the public would immediately supply accommodation for all who require it. I will take the instance of St. Bartholomew's, in respect of which this proposal to impose the income tax is thought to be very cruel. The income is £36,000 a year. The income tax paid should be £1,050. The sum paid upon salaries is about £200 a year. The benefit which St. Bartholomew's has had, at the expense of those especially who pay income tax, has been about £850 a year. During the last twenty years, after allowing for the investment of fresh capital, landed income has improved eight per cent. About £150,000,000 have been contributed in the form of income tax, by the community in order to bring about those changes which have been—I do not say the sole—but the most important agents in bringing about that improvement. In 1841 the income of St. Bartholomew's was £31,335. In 1862 it is £36,030, being an increase of £4,695. It is an increase of 15 per cent, or about double the increased rate of improvement of land generally. It is due partly to the sale of property to railways in choice situations, and partly to improved administration, brought about by legislation. But it is fair to assume, that independent of those causes, the increase has been 8 per cent. I also assume that one half of the increase of the value of landed property is owing to the increased activity of trade and commerce, through commercial legislation and the increased value of the most important products of land. Therefore, I say that St. Bartholomew's is debtor to the income tax 4 per cent, or £1,440. What, on the other hand, are the benefits which St. Bartholomew's has received? It consumes 2,246 lb. of tea a year, and the reduction in the duty on tea is equal to a fresh endowment of £192 14s. 7d. The reduction on sugar and treacle is equal to a fresh endowment of £82 15s.; on soap, to £26 2s. 6d.; on butter and eggs, to £141 2s. 3d; on spirits, to £98 15s 10d.; and on wine, to no less than £288 13s. The drugs and medicines are valued at £4,150 a year; and although I have been unable to ascertain the amount of which these articles have been relieved, I think 10 per cent is a moderate estimate, and that gives an additional endowment of £415. That makes a relief of £1,245 a year to St. Bartholomew's on those seven articles alone. If you add 50 per cent, or £622, which is a most moderate estimate, for the saving on all the other articles of food, clothing, building materials, and so on, you will find that St. Bartholomew's is a debtor to the income tax to the amount of £1,867 a year on account of duties reduced on articles of consumption, and £1,440 on account of enhanced value of property. Altogether, therefore, £3,307 of direct pecuniary benefit is received by St. Bartholomew's from the income tax; while £850 is all that the proposal of the Government would require it to contribute to the general purposes of the State. I really know but one answer to that proposal. It is that St. Bartholomew's, being an establishment for the relief of the most miserable class of the community, ought to receive a public subvention. The income tax, as I have shown, has given the institution £3,300, and now we ask for £850—leaving a balance of £2,450 still to the credit of the income tax. I repeat, the only argument against taking that £850 is that the Hospital deserves a grant. It was not my intention to make any remarks on the management of hospitals of this kind, which we must all regard with so much favour and respect; but when at every turn the threat is flung in my face, that if this measure is carried out, the number of patients must be diminished, then I am obliged to give some attention to this part of the subject. I do not believe that the number of patients will be reduced, and I do not see any evidence that such a step will be necessary. Those who, in the case of the protected trades, declared that if protection were withdrawn, they must dismiss so many of their workmen, were not men who told lies. They really believed what they said—they were merely not aware that more economical arrangements would enable them to keep their workmen, pursue their trade, and make larger profits than before. One of the great evils of the present system is, that while you bestow public money on these establishments, you dispense with all public control over them, and thus annul all effective motives for economical management. Endowed institutions laugh at public opinion. There is no public opinion brought to bear upon them. The press knows nothing of their expenditure; Parliament knows nothing of it. It is too much to say that hospitals are managed by angels and archangels, and do not, like the rest of humanity, stand in need of supervision, criticism, and rebuke. Therefore, even in the case of St. Bartholomew's, I object to an exemption, which, by its very nature, at once removes the principal motives for economical management. When the managers tell me that the exaction of £820 will compel them to dismiss 500 patients, I am entitled to ask, "Why, then, do you spend £220 in a feast; what right have you to eat up in an hour 150 cases?" I confess I am amazed at the skill with which my opponents have put their best foot foremost. Their tactics and strategy have been admirable; but their case will not bear close scrutiny. What are the circumstances of Guy's, of St. Thomas's, and similar establishments? Every year they are able to place put £3,000 or £4,000 each in reproductive investments in land. They are thinking not merely of the sick, but of their own future aggrandisement and extension. My hon. Friend the Member for Bath (Mr. Tite) informed me the other day that St. Thomas's spends 15 per cent of its income in improvements on its land. Well, then, it is a matter for the State to consider whether the indefinite enrichment of such corporations—even of those instituted for the best of purposes— when entirely removed from the control of public opinion, the press, or Parliament, is to go on without limit, and is to be augmented by contributions from the public purse. I do not believe that a single patient will be dismissed from one of the hospitals of London if this proposal is agreed to; but if there were the slightest apprehension of such an occurrence, private charity would at once supply the void. I am willing to make a greater admission. A public grant might be given to replace the loss. Why not? It has never been thought that the relief of the sick, desirable as it is, was a proper subject for a grant from the exchequer of the country; but it might be thought otherwise. I do not give any opinion on the matter; I express no forgone conclusion. All I say, and I challenge contradiction, is that a public grant to such an establishment as St. Bartholomew's would be ten times better than an exemption like the present. When there is a public grant we know what we are about—we let in the light of day. The public becomes a party to the management; it has something to say and has a right to be heard, and arbitrary will is dethroned. There is another matter much more important. Are the sick poor of London exclusively maintained by endowed hospitals? Are there no unendowed hospitals? What is King's College Hospital, University College Hospital, Charing Cross Hospital, or St. George's Hospital? [Lord ROBERT CECIL: St. George's is endowed.] St. George's is, I believe, in the main supported by voluntary contributions, but it may have a handful of endowment. Let it be granted, for the sake of argument—what has never yet been suggested—that Parliament ought to make a present of some thousands a year to- wards the care of the sick poor of London. Then, I ask, is it just, is it politic, is it rational, that the grant should be confined to institutions which possess £20,000, £25,000, £30,000, and £35,000 a year, and which are in no degree influenced by opinion from without? Or is it not more just and rational that the money, instead of being given to great and wealthy establishments, should go in part, if not altogether, to the smaller and struggling in Stitutions, some of which cannot always keep their beds open to the sick? The effect of the present exemption is, that to those who have, more is given, while from those who have not, something is taken away. For instance, King's College Hospital is taxed, for it depends on voluntary subscriptions, and its management is subject to the opinion of the subscribers and of the public. We, as a constitutional Parliament, are bound, I think, if the hospitals are to receive a grant, to bring them within our control. In these cases the tax takes away from a fluctuating income. Subscribers may drop away, the income may fall off; and I say, that if it be right to give money for the support of the sick poor, it is wrong to the great mass of the people that you should give it to richly-endowed institutions in the form of a blind exemption. It may, perhaps, be said in answer, that what the Government proposes to do is very insufficient. It is not, perhaps, an effectual mode of dealing with such a case as Jarvis's Charity. In fact, it is a very modest proposal. We ask to withdraw only so much of the public subvention as can be withdrawn without involving ourselves in hopeless practical difficulties. The application of the death duties to these charities would be more consistent; but these would eat into the corpus of the charity.

Before I sit down I must call attention to the rapid growth of charity estates. Strange to say, it appears to me that the property of the charities is increasing in value more rapidly than the property of the community at large. The income of charities, as returned by the original Commission, between 1818 and 1837, was £1,209,000. In 1862 it had risen to £3,000,000. By our remissions we can trace and verify the estimate to£2,666,000; but there is other property which brings the value up to the amount I have named. Consequently, if the charity property has increased in value 250 per cent, it has increased in an exceptionally rapid manner. How is this to be accounted for? I believe it may be accounted for in this way. The chief donors of charities have been citizens, and the great bulk of the land which they have bestowed, being in the neighbourhood of towns, has shared in a pre-eminent degree in the general rise in value of landed property. I will not go hack to Jarvis'a Charity; but there is in Monmouth a charity called Jones's Charity, which educates 100 boys. It has 320 acres of land at Deptford, and its income will be, I am told, after no large number of years, enormous. There is at Tunbridge a school which educates, at an expense of £4,000 a year I believe, 200 young gentlemen—how these young gentlemen can be objects of charity I do not know—and it is estimated that before the lapse of any very long time the lands of the charity will be worth £80,000 per annum. There is also Smith's Charity at Kensington—and I may here observe that I asked particularly the magnificent assemblage which I had the honour of receiving in Downing Street to-day whether their request related solely to the London hospitals, or to the whole mass of miscellaneous charities, and was answered by a loud buzz from all parts of the room, conveying the unequivocal affirmation that it was their wish that all those charities should be held sacred from a tax which I am every day compelled to wring from poor and destitute people who are not so fortunate as to be connected with such endowments. When the working man appeals to me on behalf of wife and children, and because of empty purses, fever, and sickness of all sorts, I am obliged to turn a deaf ear—I may not pity him—because I can make no deduction to them in the payment of money required for the purposes of the State. But to return to Smith's Charity. Smith, like other men, went the way of all flesh, having bequeathed his property for all time to his poor relations. Now what, let me ask, is the consequence of bequeathing property to poor relations? Not unfrequently to hold out to them an inducement to adopt a mode of life which makes them poor. Is it, let me ask, in the interest of morality that a young man, who has the world before him, and who has tastes and appetites which render him disinclined to work, should know that if be exerts himself, and that if his honourable industry be crowned with success, then he passes beyond the care of his progenitor; while, if he is only idle, profligate, and dissipated enough to become poor, he will come in for a portion of Smith's Charity? [Sir JOHN PAKINGTON intimated dissent.] The right hon. Baronet sneers; but what are the facts of the case? Can he deny the truth of that which I have just stated? [Sir JOHN PAKINGTON: Dissipation is not a condition of the Charity.] No; but poverty is a condition, and dissipation but too often leads to poverty. I ask the House, then, with confidence whether it is in accordance with sound policy and the principles of morality that a charity like that of Smith, should, for a given number of pounds to be disposed of according to the founder's caprice, receive an additional pound from the coffers of the State? I am informed, that when the leases of the charity property fall in, in some limited number of years before the close of the century, the income will be £150,000 a year; and taking this with the increase of other charities, the exemption, which now amounts to a quarter of a million, will reach to half-a-million a year.

Sir, I have delayed the House long. Although I may have felt that it was on the present occasion my lot to address an adverse assembly, yet I have deemed it to be my duty as a Minister of the Crown not to shrink from the discharge of the obligation which was imposed upon me, to show that neither my Colleagues nor myself took up this proposition lightly, or without due consideration. I am convinced, moreover, that in inviting public attention to ground hitherto almost untrodden, although particular interests may produce a momentary pressure, this discussion will not be without its fruits. I have stated that it is only by a licence of speech that the name of charities can be extended to deathbed bequests, even when applied to useful purposes. I have stated that the charities of England are not at this moment exempt, the exemption being confined to particular institutions. I have stated that the growth of those charities is more rapid than the wealth of the rest of the country; that many of them have been declared on good authority to be indifferent, and many bad. I have shown that the plan of the Government would subject the middle charities—which I admit to be generally good—to less than half taxation as compared with private property under certain circumstances; and that in the case even of the smaller charities, if they had any claim for a public grant, it was monstrous to make such a grant by way of an exemption, which selects for favour institutions which do not want, and leaves to struggle those which stand most in need of assistance. The proposition which I have made we do not submit to the House as a matter of financial necessity; we offer it to your notice as a just measure. I will say nothing now of the hard words which have been applied to it; but of this I am sure, that no one would hare given to it a more cordial or conscientious support than he whoso lately sat upon this bench, and whose loss we so deeply lament— Justissimus unus Qui fuit in Teucris, et servantissimus æqui. We propose this, then, as a measure of justice. We do not presume as a Government, by the means which a Government may exert, to press it upon an adverse House. The House must be responsible for its rejection. We desire to defer to the opinion of the House. We do not wish to show any undue obduracy. We will reserve to ourselves the right to consider in what way the subject ought hereafter to be dealt with if the House should not now wish to accept this proposal at our hands. But we at the same time urge its adoption on the House as a measure sound in principle—as a measure in conformity with the spirit which has guided the proceedings of Parliament for the last twenty years—as a measure just to the taxpaying community, and, above all, the labouring poor, to elevate whose character and to improve whose condition is one of the main objects of legislative action. In proposing such a measure we feel ourselves to be impregnable against all petty arts and reproaches, and we commend it with confidence to the justice, the equity, the courage, and the wisdom of the House of Commons.


said, that since the Speaker left the chair they had been considering two clauses of the financial scheme proposed by the Chancellor of the Exchequer—clauses relating strictly to finance; but now, on reaching the third clause, they found themselves suddenly engaged in the consideration of an entirely distinct question, one which, in his judgment, had nothing to do with the question of taxation at all. For the right hon. Gentleman had just delivered an address, which, if it went to prove anything, went to show that the charitable endowments of this country, time-honoured and almost immemorial as were some of them, were utterly bad, and ought to be put an end to; and, that in assenting to the exemption of these endowments from income tax, the House was making itself a party to the iniquities which he had described in that eloquent speech of his. But if it was really desirable, on the ground of public policy, that they should put some check upon the tendency of persons possessed of property to leave that property to charitable uses; and should put a check upon the misappropriation of charitable funds bequeathed in times past, and which had grown to so large an extent; surely it was a most miserable and insufficient consequence to be told that they were to effect all this by taxing the incomes derived from these properties. A very different mode of dealing with these charities was required if the matter was to be treated as one of conscience and necessity. It seemed to him, however, that one or two fallacies pervaded the whole of the right hon. Gentleman's speech. The right hon. Gentleman, if he took £5 out of the pocket of a man with £100, put the case as if he gave the man £95; and not only that, but as if he thereby made himself responsible for the man's moral character also, and for the mode in which he had acquired his money and the use to which he intended to put it. That was the whole effect of the right hon. Gentleman's argument with respect to these charities. He (Sir Stafford Northcote) could not believe that his right hon. Friend could have been serious in his illustration that he put with reference to Sir Robert Peel. The imaginary illustration which his right hon. Friend put was this:—Suppose Sir Robert Peel, when he first imposed the income tax, had said that he would tax all charitable property; but, in order that the charitable property might not suffer, he would put a Vote in the Miscellaneous Estimates to give them back the amount. Why, was it at all fair to use such an illustration? He (Sir Stafford Northcote) might just as fairly say, Suppose, when the right hon. Gentleman proposed to repeal the paper duty, he had said that he would retain the duty; but in order that the readers of books and the consumers of paper should not suffer, he would put a Vote in the Miscellaneous Estimates of a million and a half to be given to the paper makers. Why such an illustration would have been just as fair as that of his right hon. Friend in this case. But such an arrangement would not have effected the objects with which the paper duty was repealed; nor would the imaginary arrangement suggested by his right hon. Friend have effected the objects with which charities were exempted from income tax. The truth was, that there existed the authority of all previous Finance Ministers against the extension of the income tax to charities. If the principles on which the income tax was first imposed were not lost sight of, it would be seen that they would be arguing on a mistake if they treated the matter in the way in which the Chancellor of the Exchequer had treated it. The principle upon which Mr. Pitt, or Lord Lansdowne, or Lord Sidmouth, or whoever altered the form of the income tax, went, was that of exempting all charities, and the same principle was followed by Sir Robert Peel when he renewed the tax; and the course which his right hon. Friend proposed to adopt was altogether founded on a fallacy. The right hon. Gentleman implied that the income tax was a tax laid on all the property of the country, and that whenever any property was exempted from it a present was given to the persons interested in that property. That, however, was not the true account of the income tax as it was first laid on by Mr. Pitt, or as it was restored by Sir Robert Peel. The true account was that it constituted a tax laid, not on property, but on persons—not on income, but on the recipients of income—the tax being measured in each case by the amount of the income. That was not a distinction without a difference, but was a substantial distinction, and one in point at the present moment. He would give the case of an opposite condition of affairs. The land tax was a tax on property, and the person holding the property must pay the tax, though he might not receive the whole income of the property. An estate might be burdened with annuities and mortgages, but the person holding it must not deduct any portion of the land tax on that account. But in the case of an estate charged to the income tax the case was different, and the person paying the income tax was allowed to deduct from the annuitants and mortgagees, to whom a portion of the income of the property was paid, the income tax chargeable on that portion; and in case the incomes of such annuitants and mortgagees, or any of them, were less than £100, they could get the amount of the tax back again, and no one would pay it. The law laid the income tax on all owners of incomes of a certain amount, because they were thought able to bear it. That was the principle of Mr. Pitt's income tax, and it was also the principle on which Sir Robert Peel laid on the tax; and it never occurred to them that they should lay the tax on the recipients of charities, when they were making an appeal to persons whom they thought best able to bear the burdens of the country. If the House chose to change the income tax into a tax on property, it must not exempt any income from taxation; but if it was intended, as the Government proposed, to maintain the principle of an income tax, and to relieve from the tax incomes under a certain amount, then he wished to know how could that example be reconciled with the present proposal to tax the recipients of charities? If a man left a small annuity to an old servant, that annuity would not be charged with the income tax; but if be left his property to trustees to pay annuities to nil his old servants, then all these old servants would, according to the proposal of the Chancellor of the Exchequer, have to pay the tax. Such were some of the anomalies arising trom this extension of the tax to charities, and they proved that the Chancellor of the Exchequer was now departing from the principle of equality which a few nights ago he laid down in reference to the income tax. How could he claim equality for the tax when he was proposing to tax one class of small incomes for the benefit of another class of equally small incomes? Not only was this so, but the right hon. Gentleman was actually going to tax incomes derived from charities at a higher rate than many other incomes, because to a great extent the incomes of charities were derived from land; and on a former occasion the right hon. Gentleman had stated that the income tax laid on property derived from land fell as an impost in a heavier ratio than the tax on incomes derived from the funds, or from property in trade. Land in reality paid 9d. instead of 7d. to the income tax, taking into account the charges for repairs, insurance, management, &c. The consequence would be, that recipients of annuities of £15 or £20 from charities would pay a tax from which the recipient of an annuity of £80 or £90 in his own right would be exempt, and would pay at the rate of 9d., while annuitants of £200 or £300 a year paid only at the rate of 7d. Nor was this all. When they came to the details of this plan, it would be found that in many cases the burden would fall far heavier upon some recipients of the cha- rity than upon others. They were told that annuitants were to be treated with some favour, and that the tax was not to be deducted from their incomes, provided there were other funds from which it could be paid. But would not such a plan as that bear hard upon the salaried officers, or other persons beneficially interested in the charity, but not as annuitants? The exemption of one class meant the exemption of another; and if the annuitants wore to be exempted, and perhaps, to some extent, the salaried officers also, of course the burden would fall upon those who were neither annuitants nor salaried officers. By way of illustration, he would take an educational charity in the borough which he represented, and with the circumstances of which he was personally acquainted. There was a certain charity established at Stamford for the purpose of maintaining n school. The revenues of the charity were derived from land, and the conditions upon which they were administered were these:—The whole income was to be paid to the schoolmaster in the first instance; he was bound to make certain payments to his assistant masters, and to provide board for one of them; the residue he took for himself. The gross income of the charity was, in round numbers, £680, the charges which the master had to meet were £180, leaving a net income of £500. He had to pay income tax upon the net proceeds of £500 at 7d. in the pound. But what would be the effect of this proposal? It would be that the income tax would be charged, not upon the net £500, but upon the whole £680, and the result would be, that instead of paying 7d, in the pound, he would have to pay 9½d. upon the net income. Instead, therefore, of this schoolmaster having a remission of his income tax, as he expected when he heard that the income tax was reduced, he would next year, when the tax was to be 7d., have to pay £1 1s. 8d. more than he paid last year, when the tax was 9d. The noble Lord at the head of the Government must allow himself to be called as witness on this occasion. In the borough of Tiverton was a charity called the Blundell School Charity. The school was established under an old foundation by one Peter Blundell, a native of Tiverton. And, in passing, he (Sir Stafford Northcote) would say a word on behalf of those old founders. In his opinion, it was impossible to say anything more harsh of many of those old donors than to confound all of them together, and to treat them as selfish and vainglorious, instead of benefactors of the public. In the case of ninety-nine out of a hundred of them he believed it was not true that while living they spent their money upon themselves, and, when dying, robbed their relations by giving it to charities. The truth generally was, that during their lives they spent their money by bestowing it upon the various charities which were around them—they were no bad stewards of what had been given them; and at the last moment, many of them having no families, and many others having made provision for theirs, they made the best disposition of their properties that they could for posterity, by leaving them in trust in the best manner they were able. His hon. and learned Friend the Solicitor General was a man to whom he would appeal on that occasion, as one who took an interest in those matters, as one who would not rudely throw overboard the endowments of their ancestors. He knew he might appeal to his hon. and learned Friend to give good counsel to the right hon. Gentleman by his side, for they all were aware how the hon. and learned Gentleman had shown his zeal for endowments, how he had voted for them in that House, and he hoped they might now reckon upon his good word when the time for it came. But to return to the Blundell School: it was not administered purely according to the provisions of Peter Blundell's will, but according to a comparatively recent decree of the Court of Chancery. This decree was, that the master was to instruct gratuitously a certain number of boys; that he was in no case to take boarders; that the trustees were to provide certain stipends for the scholars, and certain other expenses on behalf of the school; and finally, that the master's salary was to be £400 a year, and the usher's £100; but it was provided, that if it should be found, when repairs and insurances were provided for, when the stipends of scholars were paid in full, and all other expenses met, that the funds were not sufficient to defray the salaries of the masters, the whole loss was to fall upon them. Now, the entire income of Blundell's School from endowments was £896 17s. 6d., the necessary amount of annual outgoings, including stipends to scholars, but not masters' salaries was, £437 11s. 10d., and therefore the balance available for masters' salaries was £459 5s.8d. The income tax upon the gross income, at 7d. in the pound, was £26 3s. 2d., which would be a tax of no less than 1s. 1½d. in the pound upon £459 5s. 8d., the sum available for masters' salaries. Now, such a consequence as that could hardly be in the contemplation of the House, or of the Chancellor of the Exchequer himself. A great many claims had been made in favour of precarious incomes, and the Chancellor of the Exchequer had been forward to acknowledge, that if there was any class of incomes to which some tenderness ought to be shown, it was that of professional incomes. Well, here was a professional income, here was the case of a man who must have received an expensive education, who had no means of making provision for the future, and it was proposed to levy on his small income a tax nearly double of that which they were going to lay upon other people. And, at the same time, they were taking steps to relieve persons of £200 a year from a great portion of the burden of the tax. Did the Chancellor of the Exchequer really contemplate laying such a tax as that upon a school of that kind? That was what he wanted to know. Or did the right hon. Gentleman mean to say, that by-and-by, when the Committee should have passed this clause, he was going to being in a number of clauses which would deal with that particular class of cases, or that he would contrive that that with other classes of the like kind should be taken into consideration? But that should be done by means of general legislation, and the right hon. Gentleman had no right to come down to the House and throw a Bill in the midst of them, and tell them they must pass that clause in order to establish a principle, without letting them know in the least how they were to deal with the cases of hardship which would arise under it from one end of the country to the other. He had no doubt he could find a hundred cases to which those remarks were more or less applicable if he were to ferret them out through the country. The Committee ought to know, then, before passing this clause, that there was some plan which would remove those inequalities and prevent such cases of injustice as he had referred to. The Chancellor of the Exchequer had rested part of his case upon the injustice done to one class of charities and incomes as against another. Would his right hon. Friend say that the proposal which he had made would not inflict infinite injustice upon one class as against another? Or would he say that he would so consider it as to rectify all injustice? They were now in Committee to settle the details, and the Chancellor of the Exchequer had no right to ask them to pass that clause as an affirmation of the principle, unless he was prepared to lay upon the table such other remedial clauses as he was resolved to stand by and to ask them to legislate upon. When the question came before the House upon the second reading of the Bill, he asked his right hon. Friend fur some explanation which would show the real nature of his proposal; and when no explanation was given at the time, he expected that in Committee some would be given by way of modification of the proposal of his right hon. Friend. But his right hon. Friend had given none. Perhaps he had somewhere or other a plan—possibly in his mind, perhaps in his desk—for dealing with the case. Nothing could be more convenient for a Chancellor of the Exchequer than to decline to tell the House what his plan was until they had passed his Bill. But it was the duty of the House of Commons first to see how the Bill would operate, and then to say whether such crude and ill-framed legislation should be adopted, with the certainty of having afterwards to amend it over and over again. The right hon. Gentleman talked of equality in taxation—but if he taxed charities at all, he was mistaken in supposing that he was carrying out the principle of equality, unless he extended a uniform rate to all charitable foundations alike. Now, the right hon. Gentleman proposed not to revive certain exemptions of the Income Tax Act, but in regard to certain other exemptions he was silent. He (Sir S. Northcote) therefore presumed that the latter class of exemptions would still be continued. Among these exemptions were the stocks of friendly societies. Was it intended to leave them the same exemption as at present?—because, if so, he should like to give the right hon. Gentleman a little information about some of these friendly societies. He did not perceive that either the hon. Member for Rochdale or the hon Member for Birmingham was in his place. He regretted the absence of the latter hon. Member (Mr. Bright), because he would be able to give the House some information about the Rochdale Equitable Pioneers' Society. It appeared by the report of the society that it carried on the following trades:—Grocery and provisions, drapery, butchering, shoemaking, and clogging. It was, in fact, a co-operative society registered as a friendly society, and raising great complaints on the part of the trades with which it came into competition. All the other grocers, drapers, butchers, shoemakers, &c., in Rochdale paid an income tax of 7d. in the pound. This co-operative society at present paid no income tax; and, so far as he could make out, the right hon. Gentleman did not propose to bring the profits of this society within the provisions of his tax on charities. He could not admit the justice of such an exemption. The right hon. Gentleman argued that when the State did not tax charities it made them a present of the money. He did not admit the accuracy of this statement, but he was entitled to use it against the right hon. Gentleman, and he therefore asked whether he thought there was any ground for making a present of public money to the Rochdale Equitable Pioneers' Society. The number of members of this Rochdale Society was 3,501; the amount of their share capital was £33,961. Their profits last year were £17,434, which were applied as follows t—Depreciation of fixed stock account at 2½ per cent quarterly; interest on paid-up shares at 5 per cent per annum; educational purposes 2½ percent; remaining profits divided among the members in proportion to their trade with the society. Was it fair, when the right hon. Gentleman was going to tax all the charities of the country, and the recipients of these charities, to continue these exemptions, and to make the members of this society a present of income tax on a profit of £17,000? Such legislation could not stand. Depend upon it, it would only be the beginning of the end—the opening up of a very large and awkward question, of which neither the right hon. Gentleman nor the House could at present see the solution. Such a principle was at all events too extensive to be discussed upon a clause in a Bill. He trusted that the House would not accept this clause or commit itself to such crude legislation. The right hon. Gentleman had opened an indictment against the charitable endowments of the country, and against persons who made deathbed bequests. Now, he (Sir S. Northcote) was not there to maintain that such bequests ought to be encouraged; but what he failed to see was how the proposal of the right hon. Gentleman was calculated to cure the mischiefs attributed to these bequests. The House had heard a great deal to-night of the bequests of Jarvis and Smith, who had, it appeared, both sinned, bat in an opposite manner. One had committed a terrible sin, because he had left money to his poor relations; and the other, according to the right hon. Gentleman, had equally sinned, because he did riot leave his money to his poor relations. The right hon. Gentleman contended that all those testators who, from the beginning of time, either had or had not left money to their poor relations ought to be operated upon by the Bill. But how would the House correct the practices or rectify the mistakes of testators like Jarvis and Smith by now taxing the recipients of their charities? The right hon. Gentleman did not seem to realize the truth that these persons were animated by good intentions, and that under the circumstances of the times in which they lived they had not made such a very bad disposition of their money as the right hon. Gentleman would have the House suppose. But the right hon. Gentleman said that times were altered. There he agreed with him—much that was good then was now injudicious or improper. The Commission that sat on the charities of the kingdom had made many suggestions for the improvement of charities, but had they recommended that they should be, made to pay income tax? Nothing of the kind. What they recommended was that Parliament should deal with certain charities, and that where it was found that certain funds had failed to do good, or were doing positive harm, the State should interfere so as to set matters right and make the directions originally given by founders more applicable to present circumstances. Though he (Sir S. Northcote) admitted that that would be a very delicate operation, he was not one of those who would advise the State to shrink from the task—indeed, so far from doing so, he thought that it was the duty of the State to look from time to time into those endowments, with a view to adapt them more and more to the altered circumstances of the day. He had come across a passage in a book he had been lately reading, which he would venture to quote. Lord Brougham, in defining the sentiments which ought to actuate the Charity Commissioners, had, he thought, supplied a rule for the legislation of the House much more suitable for its guidance than the proposal of the Chancellor of the Exchequer. Lord Brougham, writing to Sir Samuel Romilly in 1818, said— No violation of property could be committed by using any fund given to the poor in a manner different from its original destination, provided the result were infallibly to lessen their numbers and still to employ it in works of charity. We both accurately and conveniently speak of the poor as a body having rights, when we complain of those who have misapplied their property by converting it to their own use. What was the House now asked to do? To take £250,000—by the way, the sum had grown considerably under the right hon. Gentleman's calculations since he first submitted his proposition to the consideration of the House—to take £250,000 from the charitable property of the country, in order that it might be applied to the reduction of the income tax for the benefit of those who were now liable. The right hon. Gentleman told the House, that if these charities were made to contribute to the general burdens of the country, we should be enabled to reduce other taxes, our own income tax or our own tea duties. But would not that be, in the language of Lord Brougham, misapplying the property of the poor by converting it to other uses, and contravening the original designs of the founders of these charities? He could refer to this subject with a clear conscience, because he was a Member of the Public Schools Commission, which was engaged in an inquiry into educational institutions possessing a large amount of trust property. The Commissioners would probably recommend that certain funds which were now dealt with in one wav should be in future dealt with in another, in order more entirely to accomplish the purposes of the founders. This would be no infringement of the property of those for whose benefit the schools were founded. When the right hon. Gentleman, however, came forward with his figures relating to Christ's Hospital, he was really eluding the point, and proving quite a different thing; because if his case against Christ's Hospital were true and just—upon which he expressed no opinion—the right hon. Gentleman ought not to propose to take 7d. in the pound out of the revenues of the foundation, and carry it to the public treasure, but to consider how to cure all the evils of which he had complained, and to subject the present constitution of Christ's Hospital to a proper examination such as that recently instituted into the schools of Eton and Westminster. Let them reform these abuses, if they really exist, by some sound and appropriate legislation. That was the way the Legislature dealt with the universities. He did not propose either to defend or to find fault with the details of the course pursued towards the universities, but he approved of its principle. If the same principle were applied to charities generally, they could discuss and agree upon that principle, and afterwards consider the details. But the present proposal—this rough, rude, and undistinguishing method of confiscating to the use of the State a certain proportion of the property of charities—left the evils untouched, exactly as they now existed. Not one particle of good, but, on the contrary, a great deal of mischief, would result from the course proposed. His right hon. Friend, with all his ingenuity, entirely failed in making out his case. He brought an indictment against the charities of the country, and arraigned the House of Commons as parties to the iniquities which he described. But what his right hon. Friend called giving those charities "a present" only meant that the same exemption they had enjoyed from the days of Pitt had been continued to the present time. His right hon. Friend admitted that some of these charities were doing a great deal of good, that others proved in a moderate degree beneficial, while some—and this he was not prepared to dispute—were actually doing harm. Well, let him deal with those he regarded as injurious; but let him not come upon the other charities and withdraw from their funds a material amount by way of income tax. It was very possible, as suggested, that means might be found of making good the loss of the abstraction of the income tax by great corporations like Guy's or St. Bartholomew's Hospital; but there were other charities scattered over the kingdom in the case of which the means of replacement would not be so readily forthcoming. Stamford had been already alluded to. At Exeter the amount of the tax leviable upon the hospital would support thirty patients, and that upon the dispensary would be equivalent to the cost of thirty-six patients. Throughout all the small towns and country districts the tax would be severely felt, and would fall heavily upon persons struggling to maintain themselves, and to meet the increasing demands made upon them by the poor in their neighbourhoods. His right hon. Friend referred to the great increase in the value of property belonging to St. Bartholomew's Hospital. It was true its property had largely increased in amount; but his right hon. Friend did not take into account the large augmentation in the demands upon it. If the property had improved since 1841, so also had the amount of good which the hospital had done. Its property was represented as increasing 4 per cent in twenty years. He need not go back more than ten years to discover that the population of London had increased 18 or nearly 19 per cent. The very growth in value which was referred to, occasioned by additional building and the establishment of manufactures, had the effect of bringing to the spot an increased number of workpeople, and consequently a large and increasing mass of poverty. How were they to deal with that mass of indigence? His right hon. Friend threw out an odd suggestion to the effect, that if the great hospitals should be crippled in their usefulness, and if it were found necessary to help them to do as much good as they had heretofore done, their means might be supplemented either by private charity or by a Parliamentary Vote. This opened a wide question, far beyond the question of the incidence of taxation. The question in reality lying at the bottom of this discussion was thereby raised—was the House prepared to condemn the policy of these great public endowments? Were they willing to rest the relief of the poor and the sick in England on the two foundations referred to by the right hon. Gentleman of private charity and State aid, the foundations on which alone they rested in foreign countries, and to abandon those noble endowments peculiar almost to England, and holding a place which he should be sorry to see left empty? The Government ought to be grateful for what private charity had accomplished. If ever there was a moment when they ought to be cautious and tender in imposing taxes on public charities, it was at this moment, when the cry of hitter distress from Lancashire had called forth noble and spontaneous efforts on the part of the entire people of the United Kingdom, whose contributions in aid of the fund for the relief of that distress had excited the admiration of the whole world. He would be told it was not proposed to tax voluntary contributions. Of course not. But when any great national call took place contributions to the ordinary charities were drained away, and what would become of them if they had not these endowments to fall back upon? The finance committee of the Society for the Propagation of the Gospel, for instance, estimated that in consequence of the contributions to Lancashire this year their ordinary revenue had fallen off to the extent of nearly £4,000. Did not that tell a tale as to what must be the case with other institutions? Would it not he so to a great extent with St. Bartholomew's and Gay's Hospitals if they swept away their endowments and left them to depend upon private charity? These great endowments once swept away, private charity might for a time supply the needs of all; but let a time of pressure arise, and the people would either be left to perish for want of help, or they would be forced to apply to the Government and the Poor Law Board. Was, then, the condition of metropolitan unions so satisfactory that the hospitals might all be swept away in their favour; or would they make good the deficiency by Votes administered by the Chancellor of the Exchequer? There was no reason why, if the deficiency of funds were supplied by Parliamentary grants, they should not go a step further, and administer the grants by public officers; they would then fall into the same condition as other funds administered by the State. Was the policy of the Government pointing in that direction? He did not ask whether the Government or whether the House were now prepared to go that length; but ought they not cautiously to scrutinize the first step having such a tendency? He ventured to say that the subject was not yet ripe for consideration; it ought to be brought forward in a manner proportioned to its magnitude. At present the House had a false issue before them. His right hon. Friend's speech was full of fallacies. It was a fallacy to suppose the State was making a present to charitable institutions when it abstained from taxing them; it was a fallacy to contend that recipients of charity were on a different and better footing than persons with small incomes derived from other sources; it was a fallacy to imagine that inequalities would be got rid of, and would not rather be created, by the proposed legislation; it was a fallacy to assert that the mischiefs, if there were mischiefs, attendant upon small charities could be cured, or in the slightest degree diminished, by laying petty taxes upon them. The charities of the country ought not to be dealt with upon statements such as they had heard that evening. They might depend upon it that to whatever belief the Government might have brought their own minds, and whether they might be able to induce the House to concur with them upon this question or not, they certainly would not be able to carry the feeling of the country with them. Nothing could be more mischievous than to pass legislative measures which did not carry with them the assent of the great mass of the people. He would not rest his appeal to the Government on the ground of mercy or of charity; he would put it on the score of expediency. If they passed this measure, there would not be a single meeting this autumn for any charitable purpose; there would not be a speech made, a collection asked for, or a circular issued, in which some reference would not be made to the tax which the Government had laid upon the charities of the country; and, worse still, there would not be the Chancellor of the Exchequer present to explain that it was no tax at all. The House might depend upon it that the measure would create a feeling of grievous soreness, irritation, and perplexity throughout the country, with this only result—that if they could contrive to maintain it in operation for a single year, they would have to devise this, that, and the other exception to meet the cases of hardship as they arose, until finally, after a longer or shorter time, depending upon the greater or less amount of tenacity of purpose exhibited by the Chancellor of the Exchequer, he would be obliged to come down to the House—as he had already done this Session—and make another offering at his country's shrine of his own mistakes in legislation. For the sake of their own good faith, the House ought to stop short and refuse to take a step in the dark; it was a step they would be forced to retrace, and of which they were hardly competent to foresee the consequences. No one could say to what extent the impost would be felt, but that it would be felt most widely was evident from the consternation excited throughout the country, and the number of petitions already beginning to pour in. Depend upon it, this was a matter in which, above all others, they ought to be slow, cautious, and tender in their dealings. He earnestly entreated the Government not to press this proposal to a vote, but to withdraw it. If they did not do so, he should feel bound to take the course he had already indicated, and in that event he hoped the hon. Member for Rochester (Mr. Wykeham Martin) would not press the slight Amendment of which he had given notice; and if a division were taken, he hoped the numbers would show unmistakably that the House were not prepared to sanction the legisla- tion which the Chancellor of the Exchequer had submitted.


expressed his disappointment at the proposal of the Chancellor of the Exchequer. In his opinion, a more unwise proposition, or one more injurious to his fame, had never been made by a great statesman. The Budget of the right hon. Gentleman was a popular Budget, but it was a pity that the Chancellor of the Exchequer should spoil it by small and niggard attacks on the charities of the country. He would give two instances of the effect of the measure on charities in the city he represented. One was for the support of aged women who once were in a respectable class of life. If this charity were taxed, two of those aged females must be sent from the doors of the institution. The other was a more important endowment still. It was for the purpose of education, founded by a benevolent physician, who thought he was seeking to add to the glory of God and the benefit of God's creatures. Dying, he left all his wealth to a religious community, who were to devote themselves to education. They accordingly established several free schools, in which they now educated 2,300 boys. Tax that establishment, and it would he deprived of the means of supporting two of the body of teachers, and the result would he that a school now educating 200 boys must be shut up. He deprecated the attack on charities of the right hon. Gentleman, and he did so on the ground of the charities themselves, but also of the right hon. Gentleman's own fame and reputation. He could conceive nothing more absurd than the Chancellor of the Exchequer saying that the State was giving those charities a boon. The Chancellor of the Exchequer was doing nothing more than taxing poverty, taxing the poor, taxing the wretched, taxing the miserable, depriving children of education, orphans of bread, the sick of hospital relief. He did not think that any amount of ingenuity on the part of the right hon. Gentleman could explain away these facts. He had listened to the Chancellor of the Exchequer with a hope that he would be able to support his scheme; but the more the right hon. Gentleman spoke the more apparent was his fallacy. As the last speaker had said, if the minor charities were bad—if they were rotten to the core, had Parliament no power to apply a remedy? Why not tax those who had the pickings, those who were the parents of the abuses, not those who were the re-recipients of the bounty that flowed from the original endowments.


said, he was also sorry to say he had not been convinced by the very able speech of the Chancellor of the Exchequer. The right hon. Gentleman had touched upon many topics which were far from relevant to the immediate subject before the Committee. He had made a vehement attack upon the minor charities. Now, he (Lord H. Vane) was not prepared to say that the minor charities were of the best possible description, but many of them were still charitable and still beneficial, though perhaps only slightly so, compared with what they might be if their constitution was different. But was it an argument, that because charities were founded a long time ago, and under a very different state of things from the present, that the recipients of these charities should be taxed, though benefited individually to an extent far below that which Parliament had fixed as the limit of taxation? He would say nothing about the middle charities, because with them he was less acquainted; but every one had some knowledge of this description of endowment from his own locality, and there seemed no reason why the efficiency of these charities should be diminished, when it was admitted that they possessed some efficiency. No doubt they were sometimes due to the vanity of their founders, and their advantages were not commensurate with their endowments; but because tin's was the case, was it desirable that they should, for the first time, be submitted to taxation? The hospitals, though their foundations were very large, had not increased in proportion to the population, and therefore to the demands made upon them. In Paris there were very large foundations, and he felt quite sure that on the opposite side of the Channel a proposition for taxing the hospitals would not be entertained for a single moment. In a capital, then, like London, teeming with wealth of every kind, was it wise, contrary to all precedent, all authority, and the practice of every other country, to submit charity to taxation? He could not believe that the right hon. Gentleman would persevere in such a plan. He (Lord H. Vane) knew that in every part of the country there existed a very vehement feeling of opposition to the measure. In many places, indeed, the greatest feeling of astonishment was expressed that such a proposition should be entertained. He hoped the Go- vernment would not put the Committee to the pain of voting on this question. He could not doubt but that the sense of the House was strongly against the proposition.


said, that in putting upon the paper the Amendment of which he had given notice (to exempt from the operation of the measure rents and dividends belonging to hospitals for sick and diseased persons), he had not in his view the establishments of which the right hon. Gentleman had spoken, where they ate up 150 cases at a dinner, but a more meritorious class of endowments—the country hospitals, not long ago endowed, and supported by donations made in the lifetime of the donors, and which, if compelled to pay income tax, could only pay it by inroads upon their landed or funded property. In a country hospital, if a fever broke out, they had the support of local charities it was true, but they were liable to be reduced to a state of pauperism—that is to say, to the necessity of shutting up some of the beds. No doubt the present exemption of hospitals from taxation resembled a gift from the public purse; but this technical difficulty should be overlooked, and that it was for the interest of the taxpayer that a slightly increased tax should be paid, and these establishments exempted, in order that the poor might, in their greatest extremity, be able to receive in public buildings as much attention as the rich did in their private houses. In the case of the poorer hospitals the burden upon the taxpayer was, in point of fact, very slight. He would, however, give notice, that in the event of the clause being passed, he should move his Amendment on the bringing up of the Report.


said, he perceived that no hon. Gentleman who sat behind the Treasury bench was inclined to advance an argument in favour of the proposal of the Chancellor of the Exchequer; for although four opponents to the measure had followed in succession, there had been no appearance of a rise on the Ministerial side of the House to defend the proposition of the Government; but from the position he occupied, and his general reputation as the mainstay of the Government, in all probability they would by-and-by have the pleasure of listening to the Solicitor General; and as the hon. and learned Gentleman was the solitary barrel the right hon. Gentleman had still got loaded, they were perhaps right in reserving him for the last occasion. Probably, the hon. and learned Gentleman would be let off about eleven o'clock. In the interval he supposed the opponents of the measure would have the speaking to themselves; and, availing himself of that opportunity, he (Lord Robert Cecil) rose to show his reasons, in spite of the powerful sophistry of the Chancellor of the Exchequer, in opposition to the Bill. When he listened to the speech of the right hon. Gentleman he could not help remembering the very old story of the defendant, who, having no case, instructed his counsel to abuse the plaintiff's attorney. The only difference here was, that instead of abusing the plaintiff's attorney, the Chancellor of the Exchequer abused the plaintiff himself. The whole of the speech of the right hon. Gentleman was a long indictment against charities, the benevolent, and the poor. From the beginning to the end of his speech he threw the whole of his impassioned eloquence in an invective against those who gave and those who received. He spoke with great bitterness of many of the existing charities, Lewis's Charity, and Jones's Charity, and Smith's Charity. He (Lord Robert Cecil) had not the details of these charities at his fingers' ends; he therefore could not attempt to refute the right hon. Gentleman's assertion; he left the right hon. Gentleman in possession of these charities. The Chancellor of the Exchequer spoke with like bitterness of those who subscribed to the funds of Christ's Hospital and other charities, and who, in virtue of their donations, enjoyed the nominations; and he seemed to think that those patrons could be actuated by no other motive than the desire of the consequence that position might confer. But if the right hon. Gentleman spoke with bitterness against the living, he raved with absolute fury against the dead. He (Lord Robert Cecil) had seldom heard a denunciation in that House more vigorous and more hearty than that which the right hon. Gentleman directed against the men to whom we were indebted for all our endowments for religious or charitable purposes. He (Lord Robert Cecil) did not deny that there might have been cases such as those alluded to. There might be cases where men left money to charities because they wished to spite the heir; but he did not think it was worthy the right hon. Gentleman's position to cite such cases as if they were average examples of the whole. The Chancellor of the Exchequer, from his position as representing a great university— a university which relied to a great extent for its endowments on the bequests of the dead, ought to have been able to appreciate with justice the motives by which the donors were actuated. He was speaking no sentiment, no idle phrase, but an historical fact, when he said it was not from spite, it was not from a petty desire to have their names written on white walls, not from a desire to be toasted at public dinners, that those great men made those dispositions to our charities. It was not his part to defend the tenets of a Church to which lie did not belong; but speaking for the dead, and as a matter of historical notoriety, everybody who heard him well knew that those who left those great estates deemed that they served the glory of God and the good of their fellow-men; they were not animated by any of those mean and petty motives which had been attributed to them; they obeyed the idea of the age in which they lived, and followed the dictates of the religion in which they believed. It did seem too much, after generation on generation had enjoyed the benefits of their bequests, that a statesman should come forward in this day, and because those bequests did not suit or square with the symmetrical theories in which he believed, or the hard and material philosophy to which he had devoted himself, he should attempt to besmear the memories of the testators by ascribing to them motives that were foreign to their souls. He (Lord Robert Cecil) alluded to this, because it seemed, that coming from the representative of a great university, such allusions might have a weight to which their intrinsic value would not entitle them. But they seemed to him (Lord Robert Cecil) to be wholly irrelevant to the question before the Committee. They had nothing to do with the motives of deceased testators or donors; they were coming forward not to attack the dead, but to defend the living. He did not care what the motives for the gifts might he; they did not lay their taxes or shape their financial schemes for the purpose of regulating the motives of men who might hereafter make dispositions on their deathbeds; what they were anxious for was to protect the interests of the poor, the diseased, the miserable, and the wretched. It was idle to come to the House and propose to deprive the poor of that which had been bequeathed to them, by impugning the motives with which these bequests were made. But that was not the only irrelevant matter which the Chancellor of the Exchequer had introduced into his speech. It was not only the motives of the testators he had impugned—he had impugned also the character of those who received the gifts; he had impugned the economy of those who administered the gifts; he had impugned the motives of the patrons who presented to those gifts. But those were not the grounds on which they claimed those exemptions. He (Lord R. Cecil) did not ask fur subvention to the charity; he did not ask for an endowment from the hands of the State. All he asked for was bare and simple justice. He asked for that equality which already was given to all other classes in the State. He asked only of the Chancellor of the Exchequer that his own rules, with regard to taxation, should be fairly applied to all. He was glad that the Chancellor of the Exchequer had given up one argument—that he did not attempt to treat corporate charities as persons, and that he did not say, that because there were a large number of persons with small incomes, they were to be considered as an individual with a large income. The right hon. Gentleman had acknowledged that most of the recipients of charities were persons in the receipt of small incomes, and that therefore they ought to be dealt with as such. He (Lord R. Cecil) said, however, that a lawyer might argue the other way; and that he left the right hon. Gentleman the Solicitor General to settle with his Colleague. Accepting the concession of the Chancellor of the Exchequer, the House should bear in mind that the whole fabric of the right hon. Gentleman's declamation on the abuses of charities and the scandals which he alleged to exist, fell to the ground if the recipients of these charities were persons receiving less than£100 per annum, and therefore exempt from the income tax. There might be debauched persons with less than £100 a year who were in the receipt of charity; but there were debauched persons with less than £100 a year who were not in the receipt of charity; and did the right hon. Gentleman propose in their case to repeal their exemption from the income tax? He could take the right hon. Gentleman into places not far from the House, through which it was his sad fate to have to walk home from the House, and show him the moral condition of those who benefited by the exemption of incomes under £100 a year; and nothing could he adduced in the case of Jarvis's charity which would at all equal what he would see. But the truth was, the only question they had to consider was this—were these persons receiving less than £100 a year? If the Chancellor of the Exchequer could show that any of them were receiving more than £100 a year, let him introduce a Bill to render them liable to the tax, and he would support him; but he proposed to tax the widow in her almshouse, receiving 2s. a week—the patient in the hospital, who had no resources but the labour of his hands for his daily bread—the most miserable of mankind, and the lowest stratum of our vast community; and it was maintained that these were to be taxed because a certain number, in certain circumstances, had given evidence of immoral habits. He had been struck with the fury with which the right hon. Gentleman had attacked the hereditary possessions of the poor. In certain parishes certain pious persons and benevolent donors in past times had left sums of money to be distributed among the poor, and that fact had evoked the severest condemnation of the right hon. Gentleman. He said, that when money was given to the poor, they ceased to work; and therefore he condemned the system of giving, because it tended to pauperize the people. But did the possession of an ancestral estate pauperise the son of a duke? These charities were the heritage of the poor, secured to them by the law, and they wore as much entitled to them as the son of a peer was to inherit the property of his ancestors; and though it often happened that those who had no need to work did not work, he never heard any one propose to abolish the inheritance of the rich for fear that their sons should be pauperized. The right hon. Gentleman's indignant eloquence was all beside the question; the only question was, he repeated, do these people fall within the exemption for persons receiving less than £100 a year? If they did not, he would yield them to the mercy of the Chancellor of the Exchequer; if they did, not as a subvention or endowment from the State, not as a favour, but as a strict right, he claimed for them the exemption which they now possessed. The right hon. Gentleman was too ingenious not to have found a plausible; and specious reply to that objection—namely, that if you take the property as a whole, and subject it to the probate and succession duties, and calculate the proportion that duty would hear to the income tax proposed, you will find that the hospitals are rather mildly than severely treated But this was a fallacy; we did not levy probate and succession duty on incomes of £10 or £20 a year. The policy of our law—the true and Christian policy of our law—was to spare that class of the community who received them, from direct taxation. If the probate and succession duty, as administered, were a compensation for the income tax proposed, he asked the Chancellor of the Exchequer to administer the law logically, and to impose a probate and succession duty on persons of minute income. He would find it practically impossible, and, if it were not, Parliament would interfere. Probate duty essentially belonged to the rich; the exceptional and occasional instances in which it applied to the poor were not sufficient in number to be adduced as a counterpoise to the heavy weight now proposed to be placed on charities. The right hon. Gentleman exceeded himself in sophistry when dealing with the large hospitals, for he said they were to be taxed because they had gained so largely from the commercial legislation of the last few years. But this was not, as the right hon. Gentleman seemed to think, a universally admitted fact; for on one side of the House at least there was a general conviction that our great commercial prosperity was due far more to the increase in the means of locomotion than to those remissions of taxation which were relied on by the right hon. Gentleman. He would not, however, argue the question; he would only call attention to the absurdity of asking them to place a tax on those great hospitals on the theory of one school of opinion. The right hon. Gentleman said that whenever he had removed a protection he had always been assured that dismissals would be the consequence; but he had become sceptical, and he seemed to know more about the hospitals than the managers, and disbelieved what they said. His ground was, that commercial legislation had improved trades; and he argued, that if you imposed an income tax on corporations, they would flourish amazingly, and that hospitals would be able to take in the patients that had been hitherto excluded. But could hon. Members adduce instances in which revenue had been increased and expenditure diminished by the imposition of an income tax? The right hon. Gentleman seemed to envy the growth of the heritage of the poor, and was angry because the hospitals were becoming richer and richer. He was almost tempted to ask the right hon. Gentleman if he had seen anything of the misery of London. Did he know how many persons these hos- pitals were obliged to repel from their doors through their luck of means? If all the anticipations of the right hon. Gentleman, as to their increasing wealth were realized, the great hospitals would still be far from able to meet the wants of the miserable ' poor of London. Moreover, it was impossible that the right hon. Gentleman could have selected a more inopportune time in which to make this proposal. There was not a hospital in London whose income had not fallen below what its needs required owing to the great calamity of; Lancashire, which had this year drained the charities of London. The immediate effect of this measure, if passed, would be to aggravate the misery that already existed; to lay a tax upon those who did not know where to look for their daily bread—upon those whom this House was especially bound to protect, because they were the most helpless of our population; and he therefore had every confidence that such a proposal as this, brought forward at such a time as this, would promptly, and by a large majority, be rejected.


This debate having been brought to a close, we have no further means of ascertaining the opinion of the Committee upon the proposal submitted to them. It was certainly not the intention of the Government to press this as a merely official proposal on the part of the Executive upon the notice of the House, unless the House itself showed a disposition to receive it. Our opinions upon it are fixed and clear; but as the debate has come to a close without any independent Member having declared himself in the same sense, I am bound to say that I think the case as arisen which I contemplated earlier in the evening us not impossible, and that it would not be consistent with what I have already said if we were to take the sense of the Committee upon the clause.


Sir, I must say that the announcement which the right hon. Gentleman has just made appears to me to be a very rational determination; but, at the same time, I never beard an announcement for which I was less prepared by the speech in which the proposition was introduced by the right hon. Gentleman. I should not have risen to make any remark after the last observations of the right hon. Gentleman had it not been preceded by a speech which introduced to the consideration of the House principles so dangerous—I might even say so monstrous—that I think it would hardly become the House to allow the debate to close in silence, and not to attempt to obtain some evidence that the opinions advanced by the right hon. Gentleman were at least shared in by his Colleagues, and especially by the First Minister of the Crown. The speech of the right hon. Gentleman was answered at once by my hon. Friend the Member for Stamford (Sir Stafford Northcote), who displayed a thorough knowledge of the subject, and dealt, as I think, with a master hand with those glittering fallacies which had been introduced with such confidence to the House. The debate went on. No one rose, on the part of the Government, to answer the objections which had been made to the proposition of the right hon. Gentleman. I think it was due to my hon. Friend, to the House, to the country, and to the character of the Government generally, that some answer should have been made to the objections urged to a proposition put forward with so much confidence—I will not say with so much dictation. Sir, under ordinary circumstances, when the Government had withdrawn a proposition put forward with so much parade, I should willingly have remained silent. But here occasion was taken to use the proposition as a means of circulating principles of policy to which the Government may recur on future occasions as having received from the silence of the House some sanction. The opinions, promulgated by the right hon. Gentleman to-night, appear to me such as ought not to be allowed to pass unnoticed. The right hon. Gentleman introduced a short time ago his general financial statement. When I listened to it I was anxious it should pass, as to its main features, with no organized opposition; and I contented myself that in the course of discussion that would arise the objectionable portions of it would disappear or be withdrawn without being painfully obtruded on the consideration of the House. I was anxious for this, for the honour of the House of Commons, because the Budget introduced by the right hon. Gentleman was, in its main features, the Budget of the House of Commons. Last year the House was called upon—I will not stop to inquire by whom or on what side of the House he may sit—to consider whether it was not expedient to counsel the Government that a considerable reduction was essential in the public expenditure, seeing by that means alone a reduction of taxation could be attained. We were then told that the reduction of the expenditure by any considerable amount was quite illusory; that no one could venture to touch the expenses of the army or the navy, and that the man was guilty of subserviency and servility to France who could for a moment, and in however moderate terms, insist on the wisdom, the policy, and the possibility of such a course. This Session has brought forward a different view of public affairs. Economy is possible. It is not now subserviency or servility to France to obtain by most legitimate means a reduction of the burdens of the people. And I say that for this great measure of reduction brought forward by the Government we are indebted to the House of Commons, and not to the Government. It is the House of Commons that has reduced, the tea duty and the income tax; and in these main features the Budget is the Budget of the House of Commons. Sir, I regretted to find that with those great features of the Budget the right hon. Gentleman has introduced some remarkable measures of eccentric invention, as if to vindicate the right hon. Gentleman's claim to financial originality and to the wonder of an admiring Parliament. Now, Sir, I was very much amused at the tax that was proposed to be imposed on carriers; for I could realize, as many other hon. Gentlemen, especially on this side of the House, the amount of ingenious vexation which that ingenious device would certainly have secured; but that proposition disappeared before the order of battle could be formed. Then there was the plan for taxing clubs. One hardly knows, such is the bewildering rhetoric of the right hon. Gentleman, whether that has been successful or not; but if it be a consolation to the right hon. Gentleman for his defeat on the charities that he was the conqueror of the clubs, he may cherish that consolation for this evening; but it is quite possible that before our labours cease that eccentricity may also disappear from the Budget of the House of Commons. But to-night your attention is called to an invention of the Chancellor of the Exchequer of a much more serious character than those I have mentioned—another unnecessary novelty, in itself objectionable, but still more objectionable from the manner in which it has been introduced, and from the principles which in the discussion have been associated with it by the Government. To-night the Chancellor of the Exchequer called on us to tax the charities of the country. He was perfectly justified in that appeal if be could have established a case that would have recommended itself to our consideration. I am quite sure, that if the principles on which he recommended that course had been such as would have satisfied our reason, no sentimental objection would have been offered to it by the House of Commons. But the Chancellor of the Exchequer laid down a principle which was the basis of the all-engrossing arguments with which he has treated us this evening-—that principle is, that if charities are exempted from taxation, that exemption is to be looked on as a donation from the State. That was the foundation of the right hon. Gentleman's glittering oration of two hours and a half, to which we listened with so great pleasure, but with still greater surprise. Whatever his train of reasoning, whatever his novelty of argument, whatever his illustrations, they were all traceable to the original fundamental principle of his policy—a principle which I say is utterly false in its premisses, and equally fallacious is its consequences. The Chancellor of the Exchequer assumes that the exemption from taxation is the same as a contribution from the State of an equivalent amount of money to the person exempted; but is that so? I deny it. You may have exemptions that are injudicious and unjust, as, unquestionably, you may have an injudicious and unjust tax; but an exemption founded on justice—and all your exemptions should be founded on justice—is founded on the assumption that you have established your claim. On that principle you ought not to be liable to the tax, and the exemption is a just one. Exemption, then, is not a privilege—it is a right. ["Hear, hear!"] The hon. gentleman says "Hear, hear!" as if the onus probandi were on me to show that these charities are justly exempted. But we have not got so far as that. The argument of the right hon. Gentleman the Chancellor of the Exchequer is founded on what he deems the abstract principle that exemption is a donation from the State. Well, I deny that principle. I say we have a right to assume that the exemption is founded on justice, and there is nothing in the abstract nature of an exemption that justifies the attack of the Chancellor of the Exchequer on charities. It is for the House to decide whether the claims for exemption of charities are just or not; but that is entirely different from the principle laid down by the Chancellor of the Exchequer—namely, that exemption is a contribution to person or property. What we have to decide tonight is, whether the exemption hitherto enjoyed by our charities is an exemption sound in principle or not. Having laid down this principle, the Chancellor of the Exchequer proceeded on the assumption that those charities that have been exempted from the action of income tax enjoyed a privilege and a usurpation; and then he proceeded with his argument, or rather invective, against the institutions themselves. The greater portion of his speech was directed, not against the intolerable state of affairs which allowed large portions of property to be unjustly exempted from the incidence of taxation, but it was an invective against the very nature of this property—against the conditions under which it exists, and the principles, customs, habits, and traditions of an ancient country. The right hon. Gentleman, proceeding always in this line, and weakened and embarrassed in spite of all his ingenuity by the false principles on which he started, was compelled to misdescribe the income tax itself. He argued throughout that it was a tax on property; while, if there be anything clear, anything acknowledged in finance—and this, I think, my hon. Friend the Member for Stamford put before the House in a conclusive manner—it is, that the income tax is a tax on persons and not on property. Being a tax on person, we are naturally asked, why are those persons to be liable to the tax who are not enjoying that amount of income which you exempt under the general regulation of the income tax, whilst others enjoying the same or a greater income are free? Why, the answer is, that those are to be made liable because the Chancellor of the Exchequer chooses to entertain a view of the endowments of the country different from those that have always influenced Parliament during the last century and a half, and entirely opposed to the convictions and requirements of the country. And what is the remedy of the Chancellor of the Exchequer for all the evils, for all the mismanagement, for all the anomalies in the foundation and condition of these charities, for all the impolitic state of affairs which he denounces with so much power? Why, the remedy for the numerous evils of the old charities—of the petty charities which he has called out of their obscurity, and of those magnificent endowments, whether hospitals or colleges, which have done so much for the promotion of education and the development of benevolence—his remedy is the application of the income tax. I think it questionable, if Her Majesty's Government wished to call the attention of Parliament to the endowments of the country with a view to their reformation, whether the time is apt fur that sort of inquiry. The condition of our charities has for thirty years attracted more or less the attention of the Legislature. The Crown has issued Commissions, and Parliament has appointed Committees to inquire into this subject, the labours of which have been eminently judicious and useful. I think it doubtful whether, under these circumstances, it was wise, necessary, or expedient to call the public attention of the country to these institutions with a view to a change in their management. But if the Government is of opinion that the state of our public endowments is so pernicious to the public weal—if they are really of opinion that the statement made by the Chancellor of the Exchequer is justified by facts—if the Government is of opinion that this is a grave question demanding our immediate attention (and nothing has at all appeared justifying us in believing that that is the opinion of the public at the present day), I say that they should have brought the subject forward in such a manner that we could have dealt with it satisfactorily, and remedies that bear a duo relation to so great a question should have been introduced fur our consideration. It is totally inadequate to hold out to us that sufficient means and ample remedial agencies are to be found in the application of the income tax to these institutions. I think that every point which the Chancellor of the Exchequer has raised, and which he has placed before us with all the exertions of his ingenious casuistry, has entirely failed; and they have failed because, they nil spring from one principle, the foundation of which is entirely illusory—from the false assumption that exemption from taxation is essentially unjust. But the course which on this assumption has been taken appears to me to be monstrous; and I am not surprised that the country and the House, even in so short a space of time as has elapsed since the right hon. Gentleman made: his financial statement, should have been excited and risen, as it were, in agitation against such a proposition. It offends all the feelings of tradition which have been che- rished in this country—all our local associations—all that veneration for the principle of inheritance to which we have so long adhered. We have heard arguments to-night which have been a denunciation of endowments, and almost an appeal for confiscation. That this proposition should have been introduced as part of a financial scheme is indeed amazing; that it should have been introduced for so slight a financial object is still more astonishing; but when it was in the power of the Government, not of their own happy imagining, but following the strong sense of the country as represented in the House of Commons, to effect those great reductions of taxation which our advice and public opinion had indicated—that they should have thought fit, under such circumstances, unnecessarily to introduce the discussion of principles which disturb almost the foundation of society, does appear to me to be a course of conduct which the most brilliant rhetoric cannot justify, and which I think may lead to consequences which the Government may hereafter regret. Sir, I shall only hope that this remarkable proposition, introduced with so much pomp, and withdrawn in a manner so unpretending—may be the last of the endeavours that will be made to attack the endowments of this country, which the wisdom of the times in which we live may improve by the application of the principles on which they are founded. Commissions and Committees have already produced ample suggestions for that object, but the endowments themselves are founded upon a principle that has contributed to the greatness of this country, and which I trust this country will always cherish.


I will venture, Sir, to answer the question which I understand—for I was absent when he rose to address you—the right hon. Gentleman opposite (Mr. Disraeli) asked at the commencement of his speech—namely, whether the proposal made by my right hon. Friend was his own proposal singly, or was one in which his Colleagues also concurred. Sir, I am happy to be able to assure the right hon. Gentleman that the course pursued by my right hon. Friend, and the proposal he made, were entirely concurred in by all his Colleagues; and if none of those Colleagues rose for some time to support him, it was entirely because they felt that his admirable and most convincing speech was both unanswerable and unanswered. At all events, for some period of the debate, it required no support from any of his Colleagues or my hon. Friends who sat near him. Sir, the right hon. Gentleman opposite has reduced his objections to what he called one fundamental point. He says the whole foundation of my right hon. Friend's argument was that an exemption from taxation was equivalent to a grant from the country. Well, I maintain that that is perfectly sound. As long as your expenditure is a fixed sum, it is demonstrable that if you exempt a portion of the community from contributing their share to the taxation by which that sum is to be raised, you do virtually grant them a part of the fund which comes from the rest of the public to defray your expenditure; and therefore, when the right hon. Gentleman opposite talks of a fallacy, I must say I never heard such a fallacy as he has sought to establish by denying that an exemption from taxation is equivalent to a grant of public money. The right hon. Gentleman argues, indeed, that it is not so, because he says that the fact of the exemption implies that it is just. But that is begging the whole question. No doubt, if a person is justly entitled to exemption, when you concede a right to him, you do not confer a boon. But we deny, and no man has yet proved, that these charities are justly entitled to exemption. My right hon. Friend has been accused of pouring forth invectives against these charitable institutions. Why, the most severe things which fell from my right hon. Friend were his quotations from the Reports of the Commissioners who were employed and authorized to inquire into these charities. It was the passages he read from these Reports that contained those condemnations which hon. Gentlemen opposite have endeavoured to represent as having been the simple expressions of my right hon. Friend's individual opinion. I say, then, that we entirely concurred in the proposal, and I think my right hon. Friend has demonstrated that it was founded upon justice and good sense. The right hon. Gentleman opposite has given the key to the whole secret; for he has said that "local associations" are adverse to the proposal of my right hon. Friend. Why, Sir, that is really the fact; and it was very candid in the right hon. Gentleman opposite so openly and broadly to acknowledge it. But that, Sir, is not only a motive for individual votes and opinions; it is also a ground upon which the Government are entitled to take, and ought, I think, to take their line; and if we find that a proposal however just in itself, however demonstrably true, is opposed to "local associations" of the most extensive character, not only in this House, but all over the country, why, we respect those prejudices and how to them. We do not, on that account, believe them the less to be prejudices. That being so, I think my right hon. Friend has exercised a very wise discretion in not pressing upon the House—as he had stated at the outset he did not mean to do—a proposal which, upon discussion, should appear to be adverse to its general opinion. Although we think the proposal right and just in itself, and although we believe that when the arguments of my right hon. Friend shall be read by the country, opinion out of doors on this subject will undergo a change; yet we bow to the present state of feeling and to "local associations"; and I think my right hon. Friend has exercised a sound discretion in withdrawing; the proposition.


Sir, I will not now enter into the question whether the Government have not made a blunder in this matter:—but as the noble Lord has spoken of the feeling of small associations or of local associations, I would just say that I believe they comprise the whole country; because the whole is made up of parts; and if there is one thing more true than another, it is that the entire country does not take the same view which the noble Lord and his right hon. Colleague think to be so just. The right hon. Gentleman the Chancellor of the Exchequer has done me the honour to say that I use very mild language. I suppose he alludes to the opinion I expressed the other evening that it was a queer sort of justice to rob the poor. I was informed on that occasion by a right hon. Friend of mine who sits near the right hon. Gentleman, that the Chancellor of the Exchequer was the last man in the world who could be supposed to do any such thing as that, as the financial and commercial legislation with which his name had been identified would prove. Now, I am one of those persons who, in an ordinary way, look at the measure which is before this House, and I do not trouble my head or care a halfpenny about the motives or antecedents of those who propose it. It is quite enough to do to see whether the measure itself is good or bad, according to the best light one can get upon it. But the speech of my right hon. Friend the Member for the City of Oxford naturally set one a thinking. Now, what has happened? No man is more ready to admit than I am that the species of legislation to which my right hon. Friend alluded, which has been carried on for the last fifteen or sixteen years, has been adopted for the best of motives, with the great hope and expectation and, it may be also, with the result of increasing the material wealth of all classes of the community. But what else has been going on during the same period? Material wealth, deck it out as you will with flowers of speech, means money, and money is Mammon. Well, to secure those results and carry the same principles further, the Chancellor of the Exchequer joined hand-in-hand with those who made an attack—under the name of reforming them—upon the old endowments of the university which he represents. What was the main thing that he did there? He destroyed the Christian character of the education. ["Oh! oh!"] I will say what was done, and then you may say "Oh, oh!' if you please. He compelled, and those who acted with him compelled, the university to give her education and tender her honours to Jew, Turk, Heretic, and Infidel, ["Oh!"] That fact cannot be denied, and I say it destroys the Christian character of the education. What followed? In 1860 and 1861 an attempt was made by the Government to change the character of the education of the lower classes, and to dissever the Government from the religious education of the people. This House then rejected and forced you to take back your proposition. Well, let those two schemes be viewed together. I am not going to draw the conclusion, but the speech of the right hon. Gentleman must set people thinking whether Mammon, guided by the tree of knowledge, will not bring us to this simple principle—Rem, quocunque mode rem. We could not have had a more striking instance of this than the speech of the Chancellor of the Exchequer. The principles he has laid down are nothing but "Mammon and the tree of knowledge," and they are utterly inconsistent with any other principle of any kind. I am extremely glad that this clause is withdrawn, for I think it was exceedingly objectionable in every respect.


said, this was not the first attempt to tax charities, for in 1858 the then President of the Poor Law Board, the right hon. Gentleman the Member for North Wilts (Mr. Sutheron Estcourt), proposed to rate charities to the poor and other parish rates, and that proposal was supported by hon. Gentlemen opposite. He thought, therefore, that hon. Gentlemen opposite need not express quite so much indignation against the present proposal. Charities might, he thought, he properly subject to the income tax; but there was great difficulty in distinguishing between those which ought to pay it in full and those which should only be liable to a diminished rate; and as the Chancellor of the Exchequer's present proposition did not do that, he was not disposed to support it.

Clause negatived.

Clause 4 withdrawn.

Clause 5 (Exemption of Persons whose Income is under £100, and Abatement to those whose Income is under £200 a year respectively).


drew attention to the fact that this was the first attempt to introduce a graduated scale for regulating taxation upon incomes. It was proposed to grant a certain exemption in respect of incomes between £100 and £200. He entirely agreed in the exemption so far as it affected industrial incomes.


said, he should not, under the circumstances, move the proposition of which he had given notice, but he must say that he did not understand upon what principle it was that the deduction of £60 from taxation should not be applied to incomes larger than £200 a year.


presumed that the principle upon which incomes under £100 were exempted from the income tax was that £100 was absolutely necessary to support a family; and therefore, if he should receive any support, be would move that from incomes under £200 there should be no tax upon the first £100, instead of the deduction of £60 only.


said, that the reason why they proposed to deduct £60 from the amount taxed was that there was a great advantage in standing upon tradition in taxation. Down to 1815, £60 a year was the amount at which the income tax commenced, and this was the reason why they had now fixed upon £60 as the amount to be exempted from taxation. There was another consideration—that if they allowed persons to deduct £100 from the amount taxed, they would then have to levy the tax on such small amounts that the sums received would hardly pay the cost of collection. For instance, an income of £120 would only pay upon £20. Another circumstance was, that by extending the exemption from £60 to £100 there would be an additional loss to the revenue of from £250,000 to £300,000.


said, he should withdraw his Amendment.

Amendment withdrawn.

Clause agreed to, as was Clause 6 and the Schedules.

House resumed.

Bill reported; as amended, to be considered To-morrow.