HC Deb 20 April 1871 vol 205 cc1391-455

WAYS AND MEANS considered in Committee.

(In the Committee.)


Mr. Dodson—Sir, since we last met in this place to discuss the finances of the country, stupendous events have occurred in Europe, events which, having wrought many other changes, may not unreasonably be expected to exert considerable influence over our finances. The attention of two mighty nations has been absorbed by war. Industry and commerce have been greatly interrupted by these events. At the period when this war broke out we were only just beginning to recover from a long period of depression, and it might have been very reasonably expected that the result of this war would have been to fling us back into the state we were in a year or two ago, but I think the finances of this country never gave stronger evidence of vitality, soundness, and elasticity, than has been shown by what has happened since the war commenced. In proof of this assertion I will just read to the House these figures:—The estimated Receipts for the year 1870–1 were £67,634,000; these Estimates were made up at a time when nobody had the slightest idea of the tremendous future that was before us; but, notwithstanding the war, the Revenue has exceeded these Estimates by £2,311,000. If they be sought for, the causes of this wonderful elasticity are not difficult to find. In the first place, I do not doubt that the war in which those two great nations have been engaged has transferred to us a quantity of business that could not well be done during the war in those countries. The war has also transferred a considerable quantity of capital which has sought refuge here. I think we may see very plainly how wide, as well as how solid, is the foundation on which our commercial prosperity rests when we have been so little affected by the state of affairs in Europe involving the two countries nearest to us, and with which we have so many relations; and that we have been so little influenced shows that our commerce is derived from every quarter of the world, and that though there may be something going on wrong in one place, and perturbation may be everywhere apparent, it does not affect us in anything like the degree that might be expected. If I were to enlarge my view of the subject, and take into consideration the two years which have elapsed from 1868 to the present time, I find that the Revenue receipts in 1868 were £72,600,000, and that for the year that has just expired—that is, for 1870–1—they were, in round numbers, £70,000,000, showing a decrease of £2,600,000. But during that period of two years have elapsed between then and now—there has been a remission of taxation to no less an amount than £8,600,000; and these remissions have been as follows:—On assessed taxes, licences, stamps, and sundries, £1,000,000; on fire insurance, £1,000,000; on corn, £900,000; on sugar, £2,700,000; and on the income tax, 2d. in the pound, or £3,000,000—making altogether, as stated, £8,600,000. Deducting from the total amount of remissions the diminution of Revenue of £2,600,000, it appears that there has been recovered by the increase in the productiveness of Revenue upon a reduced system of taxation no less a sum than £6,000,000 during the period referred to. The recovery has been at the rate of a little more than two-thirds of a million for every million of reduced taxation.

I will now state to the Committee the estimated Receipts for 1870–1 under the several heads, comparing them with the actual produce. The estimated receipts from Customs were £19,300,000; the actual receipts were £20,191,000, so that the receipts exceeded the Estimate by £891,000. In Excise, the estimated receipts were £21,660,000, and the actual receipts £22,788,000, showing that the receipts exceeded the Estimate by £1,128,000. In Stamps, the estimated revenue was £8,589,000; the actual receipts were £9,007,000; so that the revenue exceeded the Estimate by £418,000. In Taxes, the estimated revenue was £2,850,000; the actual receipts were £2,725,000, so that there was a falling off of £125,000. In Property Tax, the estimated revenue was £6,350,000, and this was exactly balanced by the actual receipts. In the Post Office, the estimated revenue was £4,775,000; the actual receipts were £4,770,000; so that there was a deficit of £5,000. The estimated receipts for the Telegraph Service were £675,000, and the actual receipts £500,000, so that there was a deficit of £175,000. For Crown Lands the estimated revenue was £385,000, and this was exactly balanced by the receipts. Under the head Miscellaneous the estimated revenue was £3,050,000, and the actual receipts were £3,229,220, so that the excess of receipts was £179,220. The general result is, that the estimated revenue was £67,634,000, the actual receipts were £69,945,220; and the receipts exceeded the Estimate by £2,311,220. The Committee will observe that there is a most remarkable increase on the Estimate in Customs and Excise; indeed, with regard to Customs, there is hardly an item in which there is not a notable increase. There is an increase in coffee and chicory of £80,000; in foreign fruits of £50,000; in foreign spirits of £233,000; there is a remarkable increase in tea of £592,000; in tobacco and snuff there is an increase of £5,000; and in wine of £108,000. Against this increase is to be set off £105,000, loss on the abolition of the 1s. duty on corn, a small balance of the duty having been collected in the previous year. Upon sugar there is a loss, owing to the reduction of the duty by one half, of £2,162,000. A loss of half the duty would have amounted to £2,708,000; but we had reckoned upon a recovery of £358,000; and the actual recovery has been £546,000, or not far from £200,000 more than we had estimated. The Excise has also proved equally prosperous. Malt has produced the extraordinary sum of £431,000 more than last year, and spirits £481,000 more. The Revenue derived from these two articles is larger in amount than it has ever been before. This is the more remarkable in the case of malt, because the Committee is aware that in 1865 the duty was reduced from 4s. to 2s. 7d. per bushel. Licences, sugar, and railways have also been more productive than was anticipated; but the repeal of the duties on stage and hackney carriages has involved a loss of £108,000. Under the head of Stamps we have lost, by the abolition of the duty on fire insurances, £440,000, and on newspapers £50,000, which is £10,000 less than we estimated. Stamps on Deeds and Legacy and Succession Duties show a reduction of from £40,000 to £30,000, while probate shows an increase of £100,000, and receipts, draughts, and bills of exchange an increase of £65,000. Bankruptcy and Chancery fees, in place of being applied to the payment of salaries, have since the 1st of October, 1869, been levied by means of stamps, and hence there arises an increase under this head of £70,000; but this is only a matter of account, as the salaries are put upon the Estimates, and this increase under the head of stamps is, therefore, apparent rather than real. Thus, although there is a decrease as compared with the previous year of the Revenue derived from Stamps of £241,000, the actual receipts have exceeded the Estimates by £418,000. The head of Taxes has been affected by the substitution of licences for the assessed taxes, and the exceptional receipts of the former year vitiate a comparison. We estimated the reduction at £1,650,000; but it appears the actual reduction was £1,755,000, or £105,000 more than we anticipated. That does not arise from any diminution of the land tax and house duty, but is owing to a temporary delay in the collection of the taxes. The Income Tax exactly corresponded with our expectations; and the Post Office and Miscellaneous receipts about realized the estimates we submitted. The Telegraph Service has fallen short by £175,000; but we are informed that there is really no loss there, but simply that the receipts have not yet reached the Exchequer. The net result of the whole Revenue is, as I have already stated, an increase beyond the Estimate of £2,311,220. The decrease of income compared with 1869–70 is £5,489,000, arising from a reduction of taxation and from the exceptional receipts of 1869–70 owing to the change in the mode of collection.

I will now proceed to compare the estimated with the actual Expenditure for 1870–1, the year which has just expired. The estimated Expenditure for the interest of Debt was £26,840,000; the actual expenditure was £26,826,437, or £13,563 less than the Estimate. The expenditure in respect of the other Consolidated Fund services was estimated at £1,820,000; the actual expenditure was £2,113,196, or £293,196 more than the Estimate. The expenditure for the Army was estimated at £12,965,000; the actual expenditure was £13,430,400; but this does not include the expenditure under the Vote of Credit of £2,000,000 granted in August last in reference to the war in Europe. The expenditure for the Navy was estimated at £9,370,000, and the actual expenditure was £9,456,641; that is to say, the expenditure exceeded the Estimate by £86,641. As I have stated, the Vote of Credit for the war in Europe was £2,000,000. Of that the actual expenditure has been £1,350,000; and no more can be expended than what has been authorized under that Vote of Credit. The expenditure falls short, therefore, of the grant by £650,000. The Civil Services were estimated at £10,064,000; and the actual expenditure was £9,849,315, showing a reduction of £214,685. For the Customs and Inland Revenue Departments the Estimate was £2,583,000, while the Expenditure was £2,573,128. Therefore, the expenditure was less than the Estimate by £9,872. The Post Office Estimate was £2,377,000; and the actual expenditure was £2,373,000—that is, the expenditure is less than the Estimate by the sum of £4,000. For the Telegraph Service the Estimate was £360,000, and the actual expenditure £362,274, showing an excess of expenditure over the Estimate of £2,274. The Packet Service Estimate was £1,107,000, and the actual expenditure £1,214,148, showing an excess of expenditure over the Estimate of £107,148. The result is that the total estimated Expenditure for the service of the year 1870–1 was £69,486,000, and the actual Expenditure £69,548,539, so that there was an excess of Expenditure above the Estimates of £62,539. That includes, of course, the expenditure under the Vote of Credit. The estimated Expenditure as given in the Financial Statement of last April for the year 1870–1 was £67,303,000; but during the Session, in the month of August, a special Vote of Credit of £2,000,000 was taken, in consequence of the breaking out of the war in Europe, and to that was added the sum of £183,000 mainly due to an arrangement for paying the half-pay and the retired pay of the Navy monthly instead of quarterly, and to some additional charges upon the Civil Service Estimates, principally connected with public works. These two sums raised the estimated Expenditure to £69,486,000, and converted the surplus, which was reckoned in April last at £331,000, into an anticipated deficiency of £1,852,000. Independently of these extra charges, we had an unexpected claim. Under the "Courts of Justice Salaries and Funds Act" of last Session certain funds of the Courts of Chancery and Bankruptcy were transferred to the Commissioners for the Reduction of the National Debt, the Government giving, as security for the purposes to which the funds are being applied, a sort of guarantee in the shape of a book debt, bearing no interest. The sums reserved for the discharge of ordinary payments proved inadequate during one part of the year, when the demands are exceptionally heavy, so £472,957 had to be paid in order to replenish the balances, which amount forms part of the expenditure of last year. That amount, of course, went really to relieve the Commissioners for the Reduction of the National Debt from repaying the sum which they had received and were employing in the reduction of the Debt; and, therefore, it is equivalent to spending that sum in the reduction of the National Debt, although we cannot take any great credit for this, as the payment is entirely involuntary on our part. It does, however, raise a question which I shall consider carefully. Qui sentit commodum, sentire debet et onus. It might have been better if the Act threw the responsibility of making up the deficiency on the National Debt Commissioners instead of upon the Consolidated Fund. Should this turn out to be a sound view, we will endeavour to remedy the case for the future.

The result, therefore, of a comparison between the Revenue and the Estimates for the past year is as follows:—The surplus estimated at £331,000 in April last has been increased by an excess of receipts above the estimated Revenue of £2,311,220, making altogether an increase of £2,642,220. But, on the other hand, there has been an increase over the originally-estimated expenditure of £2,245,539, owing to the war in Europe and other causes. Now, subtracting one of these sums from the other, there is left a surplus of £396,681, or, to put the case more simply, the actual Revenue for the year just concluded is £69,945,220, and the actual Expenditure is £69,548,539. Subtracting one from the other, the result is a balance of £396,681, which is the balance that remains to us this year after having discharged the £1,350,000 spent under the Vote of Credit, which has been the cause of no new taxation to the country at all. The increase of expenditure in the year 1870–1 as compared with the year 1869–70 is £683,787. The expenditure on account of the war in Europe takes the place of an almost similar sum expended the year before in finishing up the account of the Abyssinian Expedition—namely, £1,300,000. The Consolidated Fund charges, from the cause already explained, show an increase of £383,000; the Civil Services of £546,000; and the Telegraph Service of £302,000; while the charges for the Debt are less by £227,000, the Army by £135,000, and the Navy by £300,000.

I now pass to the consideration of the balances and the state of the National Debt. The Exchequer balances on the 1st of April, 1870, stood at £8,606,648; there has been a surplus of Revenue over expenditure of £396,681; there has been an excess of re-payments over new advances for public works, and other matters, of £574,402, making altogether £9,577,731, out of which there has been applied in reduction of Debt £2,554,296, leaving a balance, on the 31st of March, 1871, of £7,023,435. The state of the Debt on the 31st of March, 1871, was as follows:—Funded Debt, £732,043,270; capital value of Terminable Annuities in Three per Cent stock, £57,969,885; Unfunded Debt, £6,091,000—total, £796,104,155. The total of the Debt during the last four years has been as follows:—The total Debt was £806,572,883 in 1868, £805,480,164 in 1869, £801,406,563 in 1870, and £796,104,155 in 1871. There has thus been since March, 1868, a re- duction in the amount of Debt of £10,468,728, while during this period we have spent £7,000,000 on the purchase of telegraphs, which sum we borrowed, thereby increasing the Debt so much, £875,000 on fortifications, and paid £6,300,000 on account of the Abyssinian Expedition. The Fee Funds of the Courts of Chancery and Bankruptcy, amounting to £5,517,232 in stock and £334,838 in cash, have formed part of the funds applied to the reduction of Funded Debt, a liability of equal amount having been raised in the books of the National Debt Commissioners, but as no interest is payable upon it, the liability incurred is a book debt in the nature of a guarantee rather than of actual Debt. While on the subject of the Debt, I may be allowed to make a statement with reference to a measure we are taking which I hope may have considerable effect in enabling us to reduce the public Debt. The Bill designed to carry out our object is now before the House, and as it is germane to the subject before the Committee, perhaps I may be allowed to allude to it. The Committee are aware that the funds of the Court of Chancery are managed by the department of the Accountant General, and although I am not prepared to find any fault with the administration of these funds, I may say it is certainly conducted on rather antiquated principles as compared with modern finance. For instance, I find it is characterized by a system of double accounts, one set being carried on in the department of the Accountant General and the other in the Bank of England, but this trouble of keeping double accounts is compensated by there being no audit of the accounts at all. I cannot blame anyone for this extraordinary state of things; it has come down to us from the earliest days of the Court of Chancery. But besides this there is considerable delay in getting money out of the hands of the Court of Chancery, not only as a consequence of the forms and proceedings of that august tribunal, but even when the suitor has come to an end of the formalities prescribed by the Court, he has to exercise patience for another fortnight before he can get possession of the moneys to which he is entitled. Being a legal office, too, it has its vacation; and for two months, from the end of August to the beginning of November, it is impossible to draw any money out of the Court of Chancery. Consequently there is a great rush at times upon the funds, and as much as £300,000 was drawn out in one day last year. These are considerable inconveniences to the suitor; but he has others also to contend with. If he has money in Court, he has a choice of two modes of dealing with it; either he can leave it in the hands of the Accountant General entirely unproductive, or of having it invested in the funds, taking upon himself the risk of loss which may arise if at the time of subsequent sale there should have been a fall in the value of the securities. It has occurred to us, and the Lord Chancellor has consented to the proposition, that it would be more beneficial to the suitors and to the country, if the Government were to place the Accountant General's Department under that of the Paymaster General, by which means we shall get rid of the system of double accounts, secure an efficient audit, and allow the money to be obtained at any time, whether in the vacation or not, and the suitors would have what they have not now exactly got—the security of the Government for their stock. We propose, in addition, that the Court shall be allowed, unless the suitor object, to lend the money to Government as a deposit at £2 per cent, that is that the suitor shall receive interest at 2 per cent, and at the end of the suit obtain his money in solido, without being subjected to any fluctuations at all. We hope in this way to consult the convenience of the suitor, which will of course be necessary to the success of the scheme, and to form a powerful engine in the hands of the Government to reduce the Debt. The fund formed by the deposits of suitors, unlike the fund obtained from Savings Banks depositors, would not be run upon in bad times; the money would be paid out only when the decree of the Court had been issued; there would therefore be a stability about the fund which, does not belong to ordinary deposits. We propose to invest this money in the purchase of stock, and to convert that stock into Terminable Annuities of exactly the same value. The surplus of the yearly annuities, after payment of the interest due to suitors, will be reinvested in fresh stock, which will again be converted into Terminable Annuities. By this means we hope to convert at the exact value a large portion of stock into Terminable Annuities, and thus in time make a sensible impression upon the National Debt.

I have now completed the retrospective part of my task, which has been a singularly agreeable one; I have had to tell the Committee of nothing but large excess of Revenue over expenditure. I am sorry to say that in turning my back on the past, I turn my back also on prosperity, for the prospects of the year before us by no means correspond with the results of its predecessor. We cannot expect to realize in the coming year the unprecedented receipts we have hitherto obtained. We cannot frame our Estimate for the future on the basis of those receipts, simply because they were unprecedented, and because our custom is not to take a single year to guide us, but an average of years. It may be that the receipt of the coming year will be equal to those of the past; but no sound financier who valued his reputation would make the unprecedented receipts of last year his basis of calculation for the future. To do so might have the effect of making things pleasant for the moment, but it would be only deceiving the House. The day of retribution would surely come, and I should be most justly reprehended for having been over-sanguine. Nor can we hope, I am sorry to say, that our expenditure for the coming year will be limited to the sums which have been found sufficient for the year just expired.

I will now compare the estimated Expenditure of the year 1871–2 under the several heads of services with the total grants of the previous year, as shown in the Appropriation Act. This is the fairest way, because the Appropriation Act includes the Supplementary Estimates, and if these were omitted from the calculation the Committee would be led into error. I will therefore compare the estimated expenditure of this year with the expenditure which was actually sanctioned in the year previous. The estimated interest on Debt for the year 1871–2 is £26,910,000; the total grant during the year just concluded for that purpose was £26,840,000, showing an increased Estimate for this year over the total grant of last year of £70,000. The other Consolidated Fund charges are estimated for the coming year at precisely the same sum as was authorized last year—namely, £1,820,000. The Army, including the abolition of purchase, is estimated to cost us during the present year £16,452,000. The total grant for the past year for the Army was £12,965,000, so that there is an increase of Estimates for this year over the total grant of last year of £3,487,000. The Navy for the present year is estimated at £9,756,000; the actual grant last year was £9,370,000, showing an excess this year of £386,000. In the grants of last year there was a Vote of Credit of £2,000,000; there is, however, no corresponding Estimate this year, because the Vote of Credit ceased with the war in Europe. The Civil Service, it is estimated, will cost us £10,726,000; the total grant last year was £10,306,000; thus the Estimate for the present year shows an increase of £420,000 under this head. The Estimates for the Revenue Departments is £5,076,000; the cost last year £4,990,000, showing an increase of £86,000. The Packet Service we estimate at £1,148,000; the total grant last year was £1,225,000; thus the Estimate is less than last year's grant by £77,000. The Telegraph Service we estimate at £420,000; last year £360,000 was granted, so that we have an increase this year of £60,000. The totals show that we this year have an estimated Expenditure of £72,308,000, while the total grants last year amounted to £69,876,000; the increase of Estimates for this year, therefore, over the grants of last year is £2,432,000. The increased Estimates for the Army and Navy have been already discussed; I will not therefore dwell upon them. The Civil Service increase of £420,000 may be very well accounted for; indeed, it is more than accounted for. In the first place, £561,000 is due to National Education, the fruits of the Act passed last year. Of course, it was quite manifest that carrying out the Education Act would involve expenditure, and the Committee will remember that, not only has the area of education greatly extended, but the proportionate amount required has increased from one-third to one-half. The cost of the Census, too, falls upon this year, as if its misfortunes were not numerous enough, and the increased charge on this account of £131,000, coupled with an increased charge for police and prisons, which cannot be avoided, of £50,000, makes a sum of £742,000, to account for an increased demand of £420,000. If we compare these Civil Service Estimates with those of 1868, we shall find an increase of no less than £1,609,000. But that increase is easily accounted for; £745,500 arises from transfers from the Consolidated Fund, Fee Funds, Army Estimates, and other heads, implying an alteration in the mode of account, but no increase of expenditure. Then, again, the amount required for education has increased since that period by £715,631; Census, £134,201; automatic services, like the increase of salaries by increments pensions and other matters which are not under the control of the Treasury, but take care of themselves, £181,000; and £16,000 has been placed upon the expenditure by Act of Parliament. These figures give an increase of £1,792,332, a great increase since 1868–9; but as far as any discretion has been allowed, it is only fair to my right hon. Friend the late Secretary of the Treasury (Mr. Stansfeld) to state that it is impossible that Estimates could have been examined with greater care and attention. Then, in dealing with the Revenue Departments we have had to contend with the great discontent exhibited in the Customs, Inland Revenue, and the Post Office. Some improvement of pay has been granted in certain Departments. But the matter is a difficult one to deal with, because if you give a small increase you probably do not allay the discontent, while anything beyond will cause a very appreciable increase in the Estimates. On entering office we found that the late Government had decided in favour of an increase being made to the salaries of the officers of the Customs; but it occurred to my right hon. Friend the President of the Poor Law Board, before adopting the decision of our predecessors, to ascertain whether it would not be possible, by a review of the Department, to save the money required for this purpose out of the expenses of the Department itself. The matter was inquired into by a Treasury Committee, and the result is that my right hon. Friend has been signally successful, for from this source alone my right hon. Friend has been able to make a rather more liberal provision than that which was recommended by the late Government, and we thought it right to grant the increase from the time that it was originally intended to take effect. Hon. Members, too, may be surprised to learn that so efficient has been the action of this Committee that, while it has simplified the administration of the Department, it has already retrenched in the London Customs alone 130 clerks, and will, before the retrenchment is finished, effect a reduction in the number of the clerks of probably not less than 200, without, in the least degree, impairing the efficiency of the establishment. This change has been effected in London alone. It remains still to extend the inquiry to the outports, and though I am not in a position to state what the effect will be, hon. Members will be in a position, from what I have mentioned, to judge of its probable results for themselves. The Reports relating to that subject will be laid before Parliament.

I now come to the estimated Revenue for the year 1871–2, as compared with the Revenue actually received for 1870–1. In the Customs the Estimate for 1871–2 is £20,100,000; the actual Revenue for 1870–1 was £20,191,000; so that we have placed our Estimate at £91,000 below the receipts of the present year. The Estimate for the Excise for 1871–2 is £22,420,000; the receipts for the past year were £22,788,000, showing a decrease in the Estimate of £368,000. The Stamps we estimate at £8,750,000; the actual Revenue last year was £9,007,000, showing a decrease of £257,000, owing to the reductions in some of the duties sanctioned by the Stamp Act of last Session. Then we estimate the Revenue from Taxes at £2,330,000; our actual receipts from this source for 1870–1 were £2,725,000, showing a decrease of £395,000. The Income Tax we estimate at £6,100,000, and our actual receipts last year were £6,350,000, showing a reduction of £250,000. But the Estimate is obviously right, because this £6,100,000 is the full amount that would accrue from an Income Tax of 4d. in the pound, and therefore the larger sum must have been made up of the arrears of former years. The Post Office we estimate at £4,670,000; last year the actual Revenue was £4,770,000, showing a decrease in our present Estimate of £100,000. We estimate the Telegraphs at £750,000; last year they yielded £500,000, so that there is an anticipated increase of £250,000. Crown Lands we estimate at £375,000; last year they yielded £385,000; we therefore esti- mate less than our receipts of last year by £10,000. We estimate our Revenue for 1871–2 from miscellaneous sources at £4,100,000; last year the actual Revenue was £3,229,000, so that in the ensuing year we anticipate an increase of £871,000. The result is that the total Estimate for the year 1871–2 is £69,595,000; the actual receipts for the past year amounted to £69,945,000; so that, on the whole, we anticipate a decrease of £350,000. In the Estimates for the present year we cannot safely reckon upon the recurrence of some of the exceptional receipts which helped to swell last year's Revenue. We cannot, for instance, expect to receive probate duty upon colossal fortunes every year. We are not justified in calculating upon the same receipts from the malt duty which yielded an altogether exceptional return last year. Last year, too, there were arrears of certain duties which the Legislature has repealed, and these arrears went to swell last year's receipts. We cannot, however, count upon them in the present year. We have now pretty well finished with all the different reductions of taxation effected in 1869–70, and they will disturb our calculations no more. There are two items in the Estimates which I have mentioned on which we expect an increase. One is the Telegraphs, which we believe capable of yielding an increase as soon as the system becomes better organized and is more appreciated by the public. I do not, however, go into this matter, because a very excellent Report upon the subject has been laid upon the Table of the House. The other item is that of the Miscellaneous Receipts, upon which the Committee will observe that there is an anticipated increase of £871,000. The meaning of that is this—There have been very great savings effected in the Army and Navy during the past two years, and these savings have been applied towards meeting the expenses of the Abyssinian Expedition; large advances which had been issued to the Treasury chest will, in consequence of these savings having been applied to meet the cost of the expedition, be repaid into the Exchequer. Though the sum derivable from this source comes in very opportunely to swell the Revenue of the present year, it cannot, unfortunately, be looked, upon as permanent Revenue. The effect of the figures I have laid before the Committee is this—The estimated Expenditure for the year 1871–2, is £72,308,000, and the estimated Revenue £69,595,000; deducting the one Estimate from the other we find a deficiency of £2,713,000. Before, however, I depart from the matters I have just been dealing with I must remind the Committee that, while in 1872–3 we cannot expect to receive from the miscellaneous receipts any repetition of this sum of £871,000, it has been announced by my right hon. Friend the First Lord of the Admiralty that it may be necessary in that year to hand over the house tax for the purposes of local taxation. While, moreover, we have taken in the Estimates for this year the first instalment for the extinction of Purchase at £600,000, the sum required for that purpose next year will be at least double that amount. We are now, then, confronted with the realities of the case. It will not, I am sure, be expected of me to go at any length into that question, which has been so fully discussed by persons abler than myself—I mean the question which really rules finance—namely, the policy of which these figures are only the symbols. In what we are now doing Her Majesty's Government believe themselves to be carrying out the wishes of this House and of the country. Finance is the handmaid of public policy, and my duty is only to give expression to what I understand to be the wishes of this House, and the objects that the Government have undertaken to carry out. I can imagine few positions more agreeable than that of the Chancellor of the Exchequer in prosperous times, particularly when he has the good fortune to be surrounded by very economical Colleagues. They rise early, they sit up late, and know no rest, in order to save money for the public, and the Chancellor of the Exchequer, who has had only a very small share in their labour, comes down once a year like a benignant fairy to scatter blessings o'er the land, for which he frequently gets very undeserved credit and applause. But, on the other hand, I think justice is pretty well done. The Duke of Cumberland always said he had been most unjustly praised for his victory at Culloden, and most unjustly depreciated for his capitulation at Closterseven; so that, upon the whole, he considered that justice had been done to him. In the same way I am only one among a number who are concerned in this matter. Of course, the whole weight of this increased expenditure falls upon me, and I must accept the perhaps undeserved censure, because I have received for two years the most undeserved credit for the labours of my colleagues. I wish, however, to point out to the House one view of the case which, as it is peculiarly financial, may not be irrelevant for me to state. I will leave it to others to comment on the inconvenience of being invaded, and the desirability of preventing invasion if possible; what I now desire to point out to the Committee is that whatever may be the power of any State on the Continent of Europe, of even Prussia herself, crowned as she is with victory, and standing in a position of unexampled strength and predominance, it is not in the power of that State to prove to any man's satisfaction that she cannot be invaded. She may show that she is strong enough to repel invasion; but she has not the power of drawing a line around her territory and saying with regard to all within that line, as was once said with regard to France—"This is sacred soil; no enemy shall tread upon it." That is an advantage which, in the nature of things, cannot be given to any Continental State; but I maintain that it can be given to England. I do not mean to enter into the question of the probability of invasion; but the point I wish to make is, that it is in the power of this House and of the country, if they are so minded, to take such measures as shall, I will not say prevent England from being invaded, but shall satisfy all who can judge that she cannot be invaded successfully. If that can be done, I can hardly imagine any sacrifice that it would not be worth while to make upon purely financial considerations, because if we can satisfy people that this is the one spot in the world that is safe, and that will in all probability be free from the ravages of war, think how our credit will rise, how the value of our property will increase, what a predominance it gives us over other nations. That is no particular merit of our own; but it is our good fortune to have such a result placed within our reach. Is this so or not? I do not speak of our fleet, because, although England is at present mistress of the seas, she may not always be so, and we know, moreover, from the events that preceded the Battle of Trafalgar, that a fleet may be decoyed a long way from its station at the particular moment when it is most required, as the fleet of Nelson was when it sailed for the West Indies. But suppose that line of defence failed us, is there any other within our reach? I maintain that it is in the power of this nation, if we are so minded, to take such measures as will enable us to have on foot a force sufficient—demonstrably sufficient, considering the conditions of the problem of landing a force in an enemy's country—to crush any enemy before he could possibly accumulate sufficient strength to invade us. With a certain amount of sacrifice I believe that can be done, and I maintain that in a purely financial point of view it ought to be done, and that in order to effect that result no sacrifice would be too great. I will make no further remark upon this subject, and indeed I am not sure whether I have not gone beyond the record in saying so much. It may, however, be said to me "If you now find, yourself in this difficulty, why have you been taking off all these taxes?" That would be a very fair remark. My answer, of course, is that when we took off those taxes we did not know what was going to happen. Everything in this world is very uncertain; we are very blind, and no one feels this more strongly than I when I remember how matters stood this time last year and consider how they are now. It is obvious that when you have surplus taxes which are a considerable injury to the country, it is the part of a wise man to use his surplus at once, and not to be tempted to hang back on account of something which may never happen. If you follow a policy of apprehending danger and that danger does not come, the public have been defrauded of the benefit of that remission of taxation to which, under the circumstances of the country, they were fairly entitled. The real difficulty that we have to deal with, and it is as well to state it at once, is this: what we are doing now is to virtually impose taxes in the nature of war taxes at a time when we are not going to war, and there is no probability of our doing so. We are acting prospectively, and I hope with a large and judicious view. But, of course, when we impose taxation on this country in this way, in time of peace, we miss all that "storm-pressure," as the Germans call it, which exists in time of war—all that anger, animosity, and excited patriotic feeling which enables War Ministers to put on any taxes they please. We are now confronted with this difficulty—"What shall we do?" I have had a great deal of good advice from many quarters. I have not answered all my correspondents yet; but I will take the opportunity of doing so now. The first suggestion that I will notice is, that I should apply my surplus to meeting our expenditure, and so tide over the difficulty. That was, perhaps, an excellent piece of advice; but I will not now stop to consider it, because the misfortune of the case is that the surplus which my critic assumed to exist vanished almost as soon as he had offered his suggestion. He was not aware that during the last few days of the financial year there is a kind of race among the various Public Departments for the public money, and he supposed that because there was a surplus at the beginning of the week in which he wrote there would also be that surplus at the end of it. I will not now stop to consider that suggestion, because it is like the dinner of the Barmecide. The next suggestion was, that we should meet the case by borrowing money, and in that way tide over the difficulty; but I must remind the Committee of what has happened since I have held my present office. On two occasions Motions have been made in this House in favour of reducing the National Debt. To one—that of the hon. Member for Buckinghamshire (Mr. Lambert)—I assented on behalf of the Government; the other the hon. Member for Sunderland (Mr. Candlish) was good enough to withdraw, on my assurance that the subject should not be overlooked or forgotten—an assurance which I mean to keep. Every year a large sum of money appears under the head of "Public Debt" in the national accounts, and towards the reduction of that Debt we annually pay a large sum. When we have pledged ourselves to reduce that Debt, and are burdening the public with-heavy taxes in order to extinguish it, what sort of a figure should we present to the country if, with our exceedingly flourishing and elastic Revenue, we were unable to meet without borrowing the truly national purpose we have in view? As far as our Revenue is concerned we were never in a higher state of prosperity, and, under these circumstances, should we shrink from meeting this £2,713,000, and betake ourselves to borrowing? I can imagine no popularity so cheaply or more discreditably gained than by adopting that course. Individually, I should be most happy to do so, and make a little popularity for myself by saving the pockets of the public now by borrowing the amount of our present deficit, and then two or three years afterwards coming forward in a more flourishing time to pay off this debt. But you may depend on this—if it is important to reduce a National Debt, one thing still more important comes before it, and that is, not to contract it. It is much better not to have a debt than to have a debt and pay it off; and therefore I hope the country will go with the Government in thinking that it is our duty in this matter not to increase the National Debt. I have one further remark to make with regard to this. I could certainly show to the Committee a way in which, without imposing any further taxes on any class of Her Majesty's subjects, we could raise something like £2,100,000 of the sum that we want. I allude to the subject of exemptions. We abolished protection, among other reasons, for this—that we could not endure that the whole nation at large should be tributary to a single class of any kind whatever—a protected class; but at this moment we are violating that principle in the most flagrant manner, because in our taxation there are the strongest and most sweeping exemptions which deprive the public of a great deal of money merely for the benefit of a particular class. For myself, I say boldly that I know of no proper exemptions from taxes except in those cases where the taxes are not worth collecting. All persons should be taxed, each according to his ability, and no exemptions ought to be allowed unless the public would be losers by the taxation. I venture to submit that as a sound principle of finance. Let me read to the Committee a list of some of the exemptions which are now in force and what they cost the country, because it must be remembered that every one of these exemptions from taxes has to be made up by the rest of the community, who are really tributary to these persons. Let me mention a few of these exemptions— Agricultural horses, £900,000; agricultural and trade carts and waggons, say £1,000,000; establishment licences in Ireland, £80,000; charitable and collegiate funds, £50,000; and dividends belonging to foreigners residing abroad, £70,000; making altogether £2,100,000. There are a good many others; but I mention only these as specimens of the exemptions of which I am speaking. Nor do I propose to go at all minutely into the case, because I do not suppose the Committee would assist me in doing away with these exemptions. When a right hon. Member makes a proposal in favour of an exemption, the feeling is generally on his side. I merely wish to point out that when we have to make provision for this sum of £2,100,000 we are paying not only for the expenses of war, but for the exemption of certain of our fellow-subjects from taxation.

Well, Sir, I think it would be unwise to touch the Customs duties. I could not do so without causing some disturbance to trade, and I do not think the case sufficiently pressing to interfere with them.

It now remains to me to find something on which I can lay hold, and I can assure the Committee the matter is one of no little difficulty. I wish, however, to submit to their notice a tax which has, I think, at any rate the recommendation that it will in no degree disturb industry, and that it will not place a burden on those who will have to pay it beyond what they may be fairly called upon to bear—I allude to the subject of the Probate, Legacy, and Succession Duties. I will, in the first place, speak of the Probate Duty. The Probate Duty at the present time has many faults. In the first place, Probate Duty is paid on personal property bequeathed by will, and a duty is also paid on the property of intestates. But, strangely enough, the amount paid in the case of intestacy is in the ratio of 3 to 2 as compared with the case of persons who have made a will. I presume that the law was made by lawyers, and I suppose they thought it necessary to punish the enormity of going out of the world without providing oneself with that legal intrument. I, however, hold that it is no business of the Chancellor of the Exchequer, or of Parliament, to interfere with a man whether he likes to make a will or to take the will which the law has already made for him by the Statute of Distributions, and I therefore propose to sweep away the distinction to which I have referred. The scale on which the Probate Duty is now paid is exceedingly troublesome and objectionable. It is founded on no comprehensive principle, and contains some extraordinary jumps and divergences. A great deal may, in my opinion, be done to simplify it with great advantage to the public. The subject is a technical one, and I will not dwell on it. What we propose is to place all personal property, whether testate or intestate, upon the same scale—on the principle of a 2 per cent Probate Duty. It is a scale very much like that of the existing Probate Duty, rising at intervals by £50 up to £500, by £100 up to £2,000, by £200 up to £3,000, by £500 up to £5,000, by £1,000 up to £10,000, by £2,000 up to £20,000, by £5,000 up to £50,000, and by £10,000 to any sum whatever. At present the scale is capricious when it gets above £1,000,000, and jumps by £100,000. The change which I propose will practically, I believe, be one of considerable value; but it will not make much difference so far as the Revenue is concerned. But there is an alteration in the law of Probate Duty which I am about to propose which will, I think, make some difference to the Revenue. At present many estates pay Legacy Duty and not Probate Duty, and vice versâ. The rule of law is highly technical. Probate Duty depends on the situs, or the place where the property is situated. The Legacy Duty is levied on the principle of mobilia sequuntur personam. The law is this—If an Englishman dies in France, being domiciled there, and has property in England, that property will pay Probate Duty; but the legacies which he may leave would not pay Legacy Duty because they are considered to follow his person, and the law looks upon his property for that purpose, though situated in England, as being situated in France. Again, if an Englishman, domiciled in England, happens to have property in France, that property will pay Legacy but not Probate Duty, because the situs is not in this country. Now, I propose to deal with the matter by sweeping away all those cobwebs and laying down the simple rule that where you can get at property for the one purpose you can get at it for the other, so that whenever it pays Legacy Duty it shall pay Probate Duty, and whenever it pays Probate Duty it shall pay Legacy Duty.

I now come to a more important subject—I allude to the Succession and Legacy Duties. The Committee are aware that those duties are paid according to a scale, and that scale is of this nature—The lineal descendant or ascendant, the son inheriting from the father or the father from the son—successiones luctuosœ, as they are termed by civilians, which would lead one to suppose that there was nothing luctuosum about other successions at all—pays 1 per cent. In the case of succession between brothers the duty is 3 per cent; between descendants of the same grandfather, 5 per cent; between descendants of the same great-grandfather, 6 per cent; all other persons in a more remote degree of consanguinity, or having no claims of consanguinity at all, paying 10 per cent. Now, I am not myself a great admirer of this scale in the abstract. The true basis of taxation is equality, because it in the first place renders its incidence more just, and in the second place lighter—whereas under this scale you have persons who receive the same benefit, but who pay very differently for it. I am, however, well aware that the feeling in favour of this scale is so thoroughly ingrained in the minds of the people of this country, that it would be in vain to seek to make any great alteration in it. I think, at the same time, almost everyone will admit that it is a very extreme scale, and that it works out the principle on which it is based almost ad absurdum. I am further of opinion that there is a fair case for increasing certain of the Succession Duties by means of some alterations in the scale. I am of this opinion because I recollect that in 1853 my right hon. Friend at the head of the Government, who was then Chancellor of the Exchequer, making what at the time was considered a very moderate estimate—indeed, he was blamed by many hon. Members for its moderation—stated that he thought this duty would, in a few years, reach the sum of £2,000,000. The Parliament of 1853, however, having heard the estimate of my right hon. Friend, gave its assent to the proposal, and legalized a duty which was estimated to yield £2,000,000, and which, I believe, Lord Cairns, who was then a Member of the House of Commons, estimated at £4,000,000, it being the opinion of another hon. and learned gentleman, the present Vice Chancellor Malins, that it would reach the large sum of £8,000,000. All this occurred 18 years ago, and the Succession Duty now amounts to only £732,000. A moderate increase of that duty can hardly, therefore, be regarded as an unreasonable proposal when accompanied with exactly the same increase in the case of personal property. I do not propose to make any difference in this respect between personalty and realty. Realty has the disadvantage, which it appears to me it must always have, of paying local rates, because I do not believe in the possibility of rating personal property in any effective shape; but it has some compensation in the freedom from Probate Duty, and in the circumstance that the Succession Duty is calculated not on the value of the property, but on the capitalized value of the annuity for the life of the successor. I am of opinion, therefore, that we need not shrink when we really want money for a great national purpose—a purpose, too, which recommends itself strongly to the minds of those very Gentlemen who are most interested in this question—from making a moderate increase in the Succession Duty. What I propose to do, therefore, is to raise the 1 per cent paid by the lineal descendants to 2 per cent, the effect of which will be, so far as personalty is concerned, to increase the tax by £496,000, and in the case of realty and settled personalty, which, being the object of settlement, comes under the head of real estate, by £250,000. I also propose to raise the second head of the scale—that is, as between brothers—from 3 per cent to 3½ per cent, so that the scale will rise symmetrically from 2 per cent to 3½ per cent for brothers, and from 3½ per cent to 5 percent for first cousins, or children of the same grandfather. The effect of these changes will be to give an increased Revenue from personal property of £630,000, and from real estate and settled personalty of £290,000, making a total of £920,000. I estimate that the alteration with regard to the incidence of the Probate and Legacy Duties will produce altogether about £100,000, and this gives a total of £1,020,000 from those sources, of which we calculate that £300,000 will fall within the present year. There is no attempt whatever to put any particular tax on Realty. Legacy and succession are subject exactly to the same rule. It being necessary to find some money, I have placed them pari passu with each other. I hope hon. Gentlemen opposite will not think that in doing this I am making any attack on the land, or doing anything unfair towards them, since personal property will, in truth, contribute twice as much as real.

The next tax which I have to propose is one which I commend to the favour of the Committee on account of its Trans-Atlantic origin. We are just, I hope, going to make up our quarrel with America, and I present this tax to America as an instance of my humble admiration of her finance, and of my good will towards her. The tax is one which was invented by that acute nation just at the end of the war, and I have no doubt the Committee will anticipate me when I mention that it is a tax from matches. I do not mean matrimonial engagements. The matches which I mean have sprung up within the remembrance of many of us, and are among the most splendid boons—though it sounds an humble thing in itself—which science has given to man in my time. They have enabled us to dispense with the flint and steel. We get them almost for nothing, and yet they are among the greatest advantages we enjoy—one which nobody can fully appreciate who has not been in backwoods and remote regions. The cost of matches is almost nominal—it is hardly possible to put a value upon them; and they are consequently used in the most reckless and dangerous manner. Any Gentleman in this House who happens to be a director or shareholder in a fire insurance company knows that nothing could be more beneficial to those companies than slightly to restrict the traffic in matches by putting a little check upon the abuse of them. There are a number of young gentlemen who amuse themselves with going about and throwing matches down into the areas; and very often while wine and beer are unpacked, and the straw is lying about, something takes fire, and very serious consequences follow. Then they are thrown on floors, and we tread on them. I think just a little regulation in the trade, without seriously impeding it, would, in itself, be a great advantage. The American tax upon matches is one cent for every bundle of 100, and by it they have realized £400,000. [An hon. MEMBER: Dollars?] Not dollars, but pounds, by a duty of one cent on each 100 matches. Well, we have gone very carefully into the calculation of what is likely to be realized by this tax here, and I shall astonish the Committee when I tell them what I expect to get. At the same time, I cannot honestly put it at less, because the figures are absolutely overpowering, and it would be a mistake if I were to do so. What we propose is to put a halfpenny stamp upon every box of matches containing 100. [An hon. MEMBER: Not more than 100?] Not more than 100, and as few as you like. We also propose to put a penny stamp on a box containing 100 wax lights, as we consider them more aristocratic. And as the duty on tobacco has risen £5,000 this year, we propose to put a penny stamp also on every box of 100 fusees, which are very instrumental in the consumption of tobacco. I speak seriously to the Committee when I say that I believe we may calculate upon receiving from these sources of Revenue, in the present year, £550,000. The figures are absolutely incredible. Of common matches—those entirely made of wood—I am informed that 560,000,000 boxes are manufactured in the course of the year, and of wax lights and fusees about 45,000,000 boxes. We, therefore, have come to the conclusion that we cannot honestly put the result to be obtained at less than I have stated. But then we must ask for the co-operation of the House in the matter, because the American Government suffered very grievously by the delay which intervened between the proposal of the tax and its actual imposition. A number of persons set to work and manufactured to such a tune that for the first year or two the duty was very little. I hope, therefore, if the Committee should think fit to adopt my proposal we shall receive the greatest assistance in passing the Bill through the House, so that there may be as little delay as possible. There is only one thing further that I have to say on this subject. We have thought it necessary to devise a motto for this novel species of taxation. On the match boxes which are sold at present we usually see a very odd and inappropriate device, one which suggests a rather watery idea—namely, Noah's Ark. But I propose to put this motto on our new match boxes—Ex luce lucellum. Most of our matches are manufactured in this country; but on all that may be imported an equal tax will be imposed. There is one great protection connected with this tax. I made the best inquiries possible respecting it in America—though not all that I could wish, for to say the truth it is rather a combustible affair; but in America I find that the tax is particularly easy to collect, because everybody is, in a sort of way, a detective in the matter; the penalty being considerable for selling without the stamp, and the profit on each individual quantity being extremely small, it is not worth while to run the risk for the sake of the gain that could be made by cheating the Revenue.

As I have already stated, we calculate upon a receipt in the present year from these matches of £550,000. From the Probate, Succession, and Legacy Duties we expect to receive £300,000. These two sums together will make £850,000 this year.

The Committee will observe that the deficit with which we shall have to deal is £2,713,000; but I cannot be content to take that sum merely to supply it. I must dress myself out with the borrowed plumes of a surplus, which I cannot do without getting atleast £2,800,000, which would yield a very moderate surplus indeed. I have got £2,800,000 to find, and I have got £850,000 towards it. Deducting that £850,000 from £2,800,000, there remains £1,950,000 to be provided, and the Committee will not be surprised to hear that it is my intention to raise that sum by means of the income tax. I regret very much to be obliged to have recourse to this measure; but the money must be had. The dinner has been eaten; the wine has been drunk; and nothing remains, as Sydney Smith said of the men of Pennsylvania, but to "Book up and pay," and I know no other means by which that can be done, with so little disturbance to trade. I sincerely hope the increased income tax may not be of long continuance.

And here I am encountered by a difficulty. I want £1,950,000 from the income tax. How am I to get it? The Committee is aware that, when the income tax was first imposed by Sir Robert Peel, it yielded, for every penny in the pound, £700,000. Now, I ask the attention of my hon. Friend the Member for West Norfolk (Mr. G. Bentinck), who is always dreading the poverty to which the country will be reduced, to the fact that one penny in the pound 29 years after the tax was first imposed yields, not merely £700,000, but £1,525,000. I have got £1,950,000 to find. How am I to do it? I can get £1,525,000 easily enough by an additional 1d. income tax; but then there is £425,000 more, and how am I to get it? Formerly there was a plan sometimes resorted to by which a penny was put on for half a-year; but I severed myself from that resource effectually by collecting the income tax for the whole year at once. On this matter I seem to be in the difficulty of being obliged to do one of two things—either to take a sum of £1,100,000, which I do not want, or to go without £425,000, which I do want. After reflecting deeply on the manner of charging the income tax, and after much meditation, this is the conclusion at which I have arrived. I have made this profound discovery, that a penny in the pound is the same thing as a hundred pence in a hundred pounds, and, having got so far, it appeared to me quite easy to change the present mode of assessing the income tax into a percentage. That seems to me to be the way of meeting the difficulty. We are familiar with the calculation of interest. It is not a very difficult rule that to ascertain the amount of interest you should multiply the sum on which you have to pay interest by the amount of the interest, and divide it by 100. Substitute for the word interest the words income tax, for the purpose of ascertaining the amount of income tax you have to pay. There are numerous interest tables which will inform you of the amount of your income tax. I certainly would not want only incur the difficulty of changing a well-established custom of the people, but the Committee will observe that a percentage affords the same facilities for taking off the tax as for putting it on. It has also this incidental advantage that those of us who are familiar with decimals will find that a percentage gives great facilities in calculating our income tax.

The question, then, is this—we have an income tax of 4d. in the pound, or £1 13s. 4d. per £100. That produces £6,100,000. We want £1,950,000; and by increasing the income tax from £1 13s. 4d. to £2 4s. per £100, the additional sum of £1,950,000 will be obtained, and, therefore, the total produce of the income tax next year will be £8,050,000. I hope the Committee will think I have not wandered into this new path out of any mere caprice of my own; the arrangement has been suggested by me for no other reason than to do what is convenient to the taxpayer, and to avoid the imposition of other burdens I should have otherwise had to lay upon him. The effect, then, of what I propose is this:—The Legacy, Succession, and Probate Duties will amount to £1,020,000, of which £300,000 will fall in the present year. The Matches Duty will amount to £550,000, and the addition to the Income Tax will amount to £1,950,000, making altogether £2,800,000—the sum that is required. The account then will stand in this manner—Customs, £20,100,000; Excise, £22,970,000; Stamps, £9,050,000 (I should observe that the Probate, Succession, and Legacy Duties come under the head of Stamps, and the Duty on Matches under that of Excise); Taxes, £2,330,000; Income Tax, £8,050,000; Post Office, £4,670,000; Telegraphs, £750,000; Crown Lands, £375,000; Miscellaneous, £4,100,000—total, £72,395,000. The expenditure amounts to £72,308,000, leaving a surplus of £87,000. I thank the Committee for the attention which they have given to me. I beg to hand in the Resolution with respect to the duty on Matches.

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, there shall be charged and paid for and upon every box or other enclosure of Lucifer Matches, Fusees, or other Matches prepared so as to be capable of being ignited by friction or otherwise than by the application of actual fire or heat (hereinafter called 'Matches'), whether manufactured in or imported into the United Kingdom, which shall be sold, or exposed to sale, or be offered or kept ready for sale, in the United Kingdom, on or after the 10th day of May 1871, a Duty of Excise as follows (that is to say):

Where the box or other enclosure contains Matches which, independently of the substance for ignition, are composed wholly of wood— £ s. d.
If the number of Matches therein contained does not exceed 100 0 0
£ s. d.
If the number of Matches therein contained exceeds 100, then for every 100, and also for any fractional part of 100, of such number 0 0
Where the box or other enclosure contains Matches which, independently of the substance for ignition, are composed wholly or partially of a material other than wood—
If the number of Matches therein contained does not exceed 50 0 0
If the number of Matches therein contained exceeds 50, then for every 50, and also for any fractional part of 50, of such number 0 0
And the Duties upon boxes or other enclosures of Matches shall be denoted by, and collected by means of, Labels to be affixed upon such boxes or other enclosures.


said, the right hon. Gentleman (Mr. Lowe), when making his Financial Statement last Session, characteristically expressed his own notion of the functions of a British Minister of Finance. He then told them that the Chancellor of the Exchequer is a man whose duties make him more or less a taxing machine. And he further said that, as Chancellor of the Exchequer, he is intrusted with a certain amount of misery, which it is his duty to distribute as fairly as he can. Whether the right hon. Gentleman then had, or had not, strikingly illustrated his own ideal, he would leave it to the Committee to judge. He (Mr. White) would only remark that it was astonishing with what equanimity one can bear the miseries of other people. He believed the right hon. Gentleman would find that he had taken a far too gloomy view of the future. Last year he took the opportunity of telling the right hon. Gentleman that he had under-estimated his incoming Revenue by £2,000,000, and that prediction was verified, by the statement just made by the right hon. Gentleman. He believed the Chancellor of the Exchequer at the end of the next financial year would have a surplus exceeding by £1,500,000 that which he had now estimated. As to the proposed increase of £3,500,000 in the Army expenditure, he had not yet discovered a single individual who believed that it would secure the object which the Government and the people had at heart. The public believed that without a change in the régime at the Horse Guards no effective Army reform would be produced by any amount of increased military expenditure. To secure efficiency in our Army, they must strike higher than the Government had yet dared to do. With new measures, they should have new men. The Government scheme of "Army Regulation," what was it—if enacted—but putting new wine into old bottles? And surely the result must be, what might be naturally expected. As to the new scale for probate duty, he was dissatisfied. He thought the right hon. Gentleman ought to have re-adjusted it by making real property subject to the same duty as personalty. He thanked the First Lord of the Admiralty for his recent most valuable Report on local and Imperial taxation. That document showed that of our Imperial taxation only 12½ per cent was derived from real property, while the remaining 87½ per cent was derived from other sources. With regard to the Chancellor of the Exchequer's estimate of his receipts from Customs, so far from expecting that they would yield less in the coming year than they did last year, he should himself have been disposed to put them at fully £500,000 more. Again, as to the Excise duties, he did not see why the right hon. Gentleman should estimate them at a lower amount than last year. It was to be hoped that the disturbed state of France would not long continue, and that from the low price of money, and also of cotton and wool—the raw materials of our two great staple manufactures—an impulse would be given to our productive industry, which would greatly add to the prosperity of this country, and thereby tend to much increase the incoming Revenue. With respect to Stamps and Taxes, the changes made in them might, perhaps, justify the right hon. Gentleman's estimate of their receipts. With reference to the income tax, he had yet to learn that there were not still some arrears of that tax which might accrue in the coming year as well as in the last. The estimated expenditure, £72,380,000, was of startling magnitude; and when to that was added the £36,000,000, of existing local taxation, as stated in the First Lord of the Admiralty's Report, the total amount extracted from the people for local and Imperial purposes amounted to £108,000,000 per annum. As to taxing an article of general con- sumption like matches, it might be expedient to resort to that source of Revenue if the accruing amount were really required; but to his mind it seemed a step almost from the sublime to the ridiculous to now establish such an impost. Again, he objected to the mode in which the income tax was proposed to be assessed. The country had grown quite accustomed to that tax; and, for himself, he should have preferred if the right hon. Gentleman had boldly taken an additional 2d. ["No!"]—raising the tax from 4d. to 6d. in the pound. He only so said, in the hope that such an unwarrantable increase would have a good moral influence on the people, who, perhaps, would have then recognized in the augmentation of 2d. the unavoidable consequence of the excessive expenditure on the Army, which, he thought, was wholly unjustifide by the necessities of the case, or by the requirements of the vast majority of the taxpayers of this country.


said, he had last year called the attention of the Chancellor of the Exchequer to the sugar duties, and now desired to do so again. The sugar duty was the only duty now existing in this country which operated as a protection on the manufacture of any article. Twelve months ago he moved for some Papers relating to the sugar duties; but though those Returns had been promised they had not yet been produced. When a Member of that House wished to expose such abuses as existed in connection with these duties, instead of meeting with opposition, he ought to receive every encouragement from those in office. In the Committee on the Sugar Duties in 1862, over which the present Secretary of State for War presided, it was proposed that there should be one uniform rate of duty levied on sugar instead of classified duties; but the Committee, by a majority of 1, rejected that proposal, which it was thought would yield a smaller Revenue than the proposed classified duties. It had been shown, however, by an official Return from the Treasury, that in 1848 a uniform rate of duty on sugar would have yielded more by £77,300, and in 1869 more by £149,885 than was received in those years under the classified rates; so that the Revenue was robbed in those two years of £223,000, which was the amount of bounty given to the sugar-makers. Did the Chancellor of the Exchequer intend to continue that system? It was true that last year the right hon. Gentleman reduced the sugar duties by one-half, and the effect of that had already been to induce a much larger consumption of good sugar. The imports of good sugar this year were about 10½ per cent greater than they were last year, yet a bounty was still given to the sugar manufacturers. He wished to know whether the Chancellor of the Exchequer intended to continue this protective duty on sugar, which was a disgrace to a Government pretending to be a free-trade administration. The Chancellor of the Exchequer made great pretensions to being a political economist; but he should bear in mind what the present Prime Minister said in reference to the paper duties, when our paper-makers wanted a little bit of protection. The Prime Minister said—"The claims of the consumers were paramount; they had a right to buy their paper in the cheapest market." Well, that was just what he now claimed for the consumers of sugar in this country.


said, he thought the dealings of the right hon. Gentleman with the succession and probate duties would give general satisfaction; but he should have dealt with an anomaly which had been often commented on, and should have applied the succession duty to the property of corporations and companies. He believed that they had no conception of the vast amount of property which was held by these bodies, and it passed down through a succession of individuals, for long periods of time, without any break of continuity. It was said that companies had no souls, nor did they die; but their liability to succession duty might be commuted for an annual payment. The existing exemption in their case should be done away with. Probate duty should also apply to these corporations and companies which had a large amount of personal property. It was a great hardship that people should have to pay probate duty upon very small estates, and he was told that they had to pay the lawyers 10 or 15 times the amount that the Government received for duty. He thought that something might be done to remedy this evil. Another still greater hardship was inflicted by charging income tax upon small incomes, say up to £100. A deduction of £2 or £3 from a total income of £100 was felt to be immeasurably greater than deductions from a man's superfluities. There was a large class of persons struggling to maintain their social position who contributed largely to the Revenue in the form of indirect taxation, and he hoped the right hon. Gentleman would give effect to a general wish that in the matter of direct taxation these persons should be liberally dealt with. He congratulated the right hon. Gentleman upon his evident intention to persevere in reducing the National Debt by means of Terminable Annuities. Such annuities, now representing about £50,000,000, supplied the most reliable, effective, and steady means of reducing Debt, and if it were not for Terminable Annuities, which ought to be increased, he feared the Debt would not be in course of liquidation at all.


said, he did not wish it should go forth uncontradicted that agricultural horses and carts were improperly exempt from taxation. They were as much a part of the stock-in-trade of the farmer as the expenses which a tradesman or manufacturer might deduct under Schedule D. Then, as to licences in Ireland, alluded to by the right hon. Gentleman as another exemption, the amount at stake was very small. There was no exemption except from the house tax and the duty on railways [The CHANCELLOR of the EXCHEQUER: There is no duty on servants or horses.] But in a poor country there were few servants liable to the tax, and at a time when they were trying to raise the character of the poorer dwellings in Ireland, it would be an extraordinary measure to tax them. He did not at all like the complicated plan of calculating income tax by a percentage instead of a poundage. The easier and better plan would have been to increase the income tax by 2d. in the pound. The people would willingly pay it if they were assured that it was necessary to make up a deficiency, and to provide for the proper security of the country.


said, that he should be prepared to give the propo- sals of the Chancellor of the Exchequer the best consideration that the time would allow; but, having heard a great many Budgets, he must say that there had been none which he looked on with so little favour as the present. As the right hon. Gentleman had crossed the Atlantic to find a tax on matches, he should have borrowed another American notion and imposed a tax on photographs, which would have proved a source of considerable Revenue. He (Mr. Crawford) agreed with the hon. Member for Brighton (Mr. White) in what he said as to the low tone taken by the Chancellor of the Exchequer in reference to the prospects of the coming year. These prospects were understated, and the right hon. Gentleman might have contented himself with placing an additional 2d. on the income tax, instead of tinkering with the mode of assessment, and changing it from a poundage to a percentage. If they were dealing with it for the first time, he could understand that a percentage should be adopted; but the present mode of assessment was so ingrained in the minds of the people that the change would create a great deal of trouble. Reference had been made by the Chancellor of the Exchequer to the Chancery Funds Bill which was before the House. It stood for second reading on Monday next, and he hoped that the House would have an opportunity of discussing it; and that it would not be brought on at such an hour that it would be impossible to give it proper consideration. He looked with the utmost jealousy upon this Bill, and he would venture almost to express the hope that the House would not sanction it.


observed that, if the proposal for the abolition of purchase were carried out, the £16,000,000 would be nothing like sufficient for the expense of the Army if the Government dealt justly with the officers. The right hon. Gentleman had expressed some surprise at the results exhibited by the malt tax; but these were only in accordance with universal experience, that the consumption increased wherever the amount of the taxation was reduced, and vice versâ. During the Crimean War, when the right hon. Gentleman now at the head of the Government increased the malt tax, he ventured to tell him that his anticipations would not be realized, and he lived to hear him say that his expectations had not been fulfilled. Upon the principle which had been enunciated that evening by the Chancellor of the Exchequer, he hoped he would be encouraged to proceed still further, and to reduce, as he had already suggested at a deputation to the right hon. Gentleman, the amount of the tax to 10s. The reply made by the right hon. Gentleman was that he should be a loser of £2,000,000 in the first instance; but in the long run he believed the Exchequer would gain largely by the reduction. There was another suggestion he would like to make, but he was afraid the right hon. Gentleman would not take it. The right hon. Gentleman had said that taxes in advance was an extremely unpopular measure; but if he would take the income tax in advance in July—six months and six months—it would be much more popular in the country. And the great injustice at present done to the growers of malt in refusing them the drawback which was allowed to great brewers who exported their beer ought also, if possible, to be redressed. As to finance generally, the right hon. Gentleman had given the House a glowing picture of the past, and rather a gloomy picture of the future. He had not been surprised at this, for it was a result which more than once had been brought about by a very economical Government. In connection, however, with this statement that £72,000,000 would be required to meet the expenses of the coming year, he must remind the right hon. Gentleman of a saying of one of his late Colleagues, the Member for Birmingham (Mr. Bright), whose intellect and eloquence they all admired, and whose absence they all regretted, though they might differ from many of his political opinions, that "no Government deserves the confidence of the country which is unable to govern the country at a less cost than £70,000,000 a-year."


appealed to the Chancellor of the Exchequer for the reconsideration of one clause of last year's Budget, abolishing hawkers' licences, which was no doubt done with the best intentions, but under an entire misapprehension of how his sympathy with that class would be abused. The right hon. Gentleman stated that it was a hard tax on a trade which was only taken up by those who had tried and failed in others, and that a licence costing £2 was a dreadful obstacle to place in such a man's way. The police in his district had recently informed him, that with the facility of procuring a certificate, which could be given by any householder, the increase of what might be called "legalized vagrancy" was quite remarkable, and that, as the summer approached, when the number of vagrants were further increased, they feared that without additional force, they could not be responsible for the depredations and mischief caused by them. That they had a short time ago paid a midnight visit to a cottage occupied by a woman and her daughter in a parish near to his property, and that they found 16 men and women connected with the hawking profession huddled together, where there were only four beds—a state of things disgraceful to any county, and particularly where only a few miles distant from Her Majesty's Highland residence. He had made inquiries of the chief of the constabulary force in Aberdeenshire on this subject, who informed him that since 1st January he had issued 579, and countersigned 347 pedlars' certificates, and that he continued to sign one or two daily; and as the Act did not authorize him to make any inquiry as to the description of goods that are to be hawked, or whether or not the hawker travelled alone, or in company with his family or others, he did not consider that he had a right to do so. He added that the Act was most mischievous, as it practically prevented any punishment for breaches of it, as there was no imprisonment as an alternative if the fine be not paid, so that when there was no money to pay—and there never was among such a class—the accused escaped. The chief constable of the county he represented (Kincardine) informed him, in like manner, that during the last three months he had issued 51 certificates and endorsed 195, and he spoke of the wretched, squalid, appearance of those hawkers. Last year the late President of the Poor Law Board (Mr. Goschen) admitted that vagrancy was a subject which ought, and he hoped would, be dealt with by Government, and that he was in communication with the Home Office, with the view of devising some scheme by which the evils complained of might be remedied. He (Mr. Nicol) trusted that the Chancellor of the Exchequer would also lend his aid either by re-imposition of the hawkers' licence tax, or by some system of registration which would check this really alarming state of things in our rural districts. With regard to that, he might almost say, unconstitutional tax on guns, imposed last year by the right hon. Gentleman on the peaceable, inoffensive agriculturalists of the country, the opinion he had expressed last year had been confirmed by experience, that it was most objectionable. He was aware that it was with some persons very popular, and he admitted that in mining districts and large towns the careless and offensive use of fire-arms should be checked, but with such exceptions as were now allowed, nothing could be more unjust and demoralizing than this tax. Quite recently an official letter had been, written by the Board of Inland Revenue, that they would not require licences to be taken out in the cases of shooting matches at a target, when a moderate number of guns were used, and where those were conveyed to the spot under the directions of the person who conducted the match, and who held a gun licence. And a noble Lord, in inviting his tenants to a battue, was reported to have said that he intended to have presented each of them with a gun licence, but on looking into the Act he found this was unnecessary. Being himself possessed of a gun licence he invited them to join in the sport, and to consider themselves exempt from duty. Surely an Act affording such facility for evasion ought not to be allowed to remain on the Statute Book.


said, he could not help thinking that the right hon. Gentleman the Chancellor of the Exchequer had under-estimated the income and over-estimated the expenditure. Taking one item, which occurred only once in 10 years—he meant the Census—the Chancellor of the Exchequer estimated the expenses at £134,000. In 1851, the Estimate was £111,000, and the actual expenses £130,000. In 1861 the Estimate was £127,000, and the expenses had then fallen down to £126,000. He hoped, therefore, that £134,000 would prove to be more than was absolutely necessary. He would not follow the able remarks of the hon. Member for the City of London (Mr. Crawford) about the disadvantages of the change in the income tax to a percentage, because the remarks came with very much greater weight from that Gentleman than they would come from himself. But matches had been proposed to be taxed for the first time by the present Budget, and he hoped that the Chancellor of the Exchequer had taken into consideration the fact that the people who were employed in the manufacture of matches were the very poorest people possible in this country, and in taxing the produce of their work, he hoped the House would consider whether the tax would be any detriment to these poor people. Not only the manufacture, but the sale of matches was confined to the poorest of the community, who even now had no representatives in that House. He believed that if photographs had been selected for taxation instead, the burden would not have fallen upon an impoverished class. As to the gun tax, he did not agree with the hon. Member opposite (Mr. Dyce Nicol) for he had not found any complaints of it in the part of the country from which he came (Mid-Somersetshire).


desired to enter his protest, in the strongest language, against the extravagant, perilous, and wicked expenditure which had been proposed that evening, for which all the Members of the Cabinet were responsible. With regard to the probate, legacy, and succession duty, he ventured to suggest that the estimate of the increase of Revenue was much too large. The present Prime Minister, though a most skilled financier, had wrongly supposed, when it was imposed, that the succession duty would produce £2,000,000, whereas, it had only yielded £750,000 a-year up to the present time. The reason was that it was a tax which could be easily evaded, for a father, before his death, could hand over his property to a son, whom he trusted, and if the duty were doubled, the inducement to evade the tax would also be doubled. The proposed tax on matches was a bad tax for two reasons. It would interfere with a trade in which labour was poorly remunerated, and it would be felt in every house throughout the country—even the poor creature who lived on an out-door relief of 3s. a-week having to pay the tax. Nothing could justify such, a tax but the most absolute necessity, and that did not at present exist. As to the proposition regarding the income tax, the argument of the hon. Member for the City of London (Mr. Crawford) seemed conclusive, for nothing was more worrying to a commercial community than constant changes in the mode of collecting a tax. He thought that the Chancellor of the Exchequer would find, that when his proposal was considered, there would be an almost unanimous protest against any change in the mode of levying. The House ought to be grateful to the Chancellor of the Exchequer for resisting any increase in the funded or unfunded Debt. The expenditure of the country was now £72,250,000, and next year it would be £73,000,000, and as the income of the whole country, including the income of every man who lived on daily wages, and every child employed in industry, was probably not more than £750,000,000, an expenditure of £72,000,000 therefore took about 10 per cent from the income of every man, woman, and child in this country. It took from the agricultural labourer, earning 10s. a-week, 1s. from his weekly wages; from a clerk struggling to live on a salary of £100 a-year it took £10; and from a literary man earning £300 it took £30, which he wanted for the education of his children, or for the purpose of making a provision for his widow. They had a Liberal Government pledged to economy, and but for that pledge the Government would not have been sitting on those benches, yet the Chancellor of the Exchequer of this Government was proposing the most extravagant scale of expenditure ever proposed in that House. This was said to be necessary in order to prevent danger to the country; but that was the old cry which had been raised over and over again. Looking back for 15 years, he recollected that Lord Palmerston proposed Estimates £16,000,000 or £17,000,000 less than the present, and he well remembered sitting in the Strangers' Gallery, and listening with delight to the denunciations of the present Prime Minister against that profligate expenditure. He (Mr. Fawcett) had hoped to follow the right hon. Gentleman in his onslaught on this expenditure, but never had hopes been more rudely shaken. We were entering on a wicked rivalry of armaments. All the great European Powers were spending far more money than they could afford. The consequence was that they had to come to this country to borrow; but, perhaps, we should one day find out our mistake. France had a Debt of £1,100,000,000, and could not borrow money under 7 or 8 per cent. The credit of Spain had gone, and she could not borrow at less than 10 per cent. Italy had a Debt of £300,000,000, and, with a population of 22,500,000 was supporting an Army of 300,000 men, and could not borrow money under 10 per cent. Turkey could not borrow money under 12 or 14 per cent, and Austria could not borrow under 7 or 8 per cent. Our Colonies were proceeding in the same course of profligate expenditure. Australia, with a population of 1,500,000, had a Debt of £28,000,000; while New Zealand, with a population of 250,000 men, had a Debt of £7,000,000. He wished to know where all this was to end? They had heard something about the policy of guarding our shores against invasion. Surely it could not be supposed that the sums demanded by the Chancellor of the Exchequer could effect that object. It would take something like £20,000,000 to effectually guard our shores. But that was not what the country required. It was not money that was wanted in order to save the country from its enemies. It was a Ministry of efficiency—it was a Government capable of dealing boldly and courageously with the great evils that pressed with undue severity upon the industrious classes of society. In fact, no Minister should be allowed to remain at the head of the Government who was not prepared to deal effectually with the great abuses which existed in the principal Departments of the Government. For example, the man who was placed at the head of the Army should either be a most skilful soldier or one of the best administrators in the kingdom. We were spending this year on the Army and Navy something like £27,000,000, yet what was our Army compared with the Prussian Army? Prussia could afford to have a great standing Army because Prussia could secure administrative efficiency. Notwithstanding the late war the whole of Germany had a Debt of only £170,000,000, and their finances were in such a condition that in a few years that Debt would be paid off altogether. It might be said that our Debt and expenditure were not greater than they were years ago, considering the increase of our national wealth. We had been peculiarly fortunate during the last few years, which were years of peace and great commercial prosperity. But he contended that in our prosperous times our Government should have better husbanded their means so as to have afforded them the opportunity of vastly diminishing our Debt. America had reduced her Debt since the war by £95,000,000. Our Government, on the contrary, when we had really reached a time of peace and prosperity, had chosen to present to the House the most extravagant Estimates that had ever been brought before it. The Government came into office pledged to economy; but he must say, in all sincerity, what to them at the last General Election was a great source of strength, and gave them their majority, would, if they now went to the country, prove to them a great source of weakness. He would tell them that they could not carry out their principle of economy unless they dealt boldly with the great subject of administrative reform. The country had been rudely disappointed in their expectations of the policy of the Government. The people did not believe in that kind of economy which began at the bottom of the ladder, and when approaching upwards spared sinecurists because they found them to be in the position of influential men. The only economy the country would approve of was that which began at the top of the ladder and passed down to the bottom with the most strict impartiality. He entrely agreed with what had been said by the hon. and gallant Gentleman opposite (Colonel Gilpin) in reference to an opinion formerly expressed by the right hon. Member for Birmingham (Mr. Bright)—whose absence they all greatly deplored—that no Government was worthy of the confidence of that House which could not manage its affairs for less than £70,000,000. But they were told that these Estimates were transition Estimates. No one would believe that. It was his conviction that they would be permanent and stereo- typed unless the people made a strong and a bold resistance to them. The Liberal party in that House would not represent the great majority of the nation out-of-doors, unless immediately, or, at all events long before the close of this Session, they gave the House an opportunity of expressing their opinion by affirming the brief, simple, and intelligible proposition of the most distinguished Member for Birmingham, which he had just quoted.


said, he hoped the right hon. Gentleman the Chancellor of the Exchequer would be able to tell the Committee why, when the principal of the Debt was admittedly decreasing, the interest should be increasing. He quite agreed with the right hon. Gentleman that many fires had occurred by idle boys amusing themselves by throwing matches among loose straw. He had himself lost some thousands of pounds by such accidents, and that was no amusement to him. He (Mr. Hermon) was in hopes that the right hon. Gentleman would have sought to justify this part of his propositions by showing that it would have the effect of preventing so many accidents from fire, as occurred from the careless use of those matches. In the absence of any such explanation it appeard to him that that proposal would have a most injurious effect, by its interference with the principle of free trade, of which he approved in common with many other Members on his side of the House. In respect to the accidents arising from those matches he did not believe they originated with the box itself, so much as from the practice of certain classes carrying the matches openly in their pockets. The Chancellor of the Exchequer had not stated separately the sums required by the Departments of the Customs and Inland Revenue separately; but coupled them with the Post Office service in one sum. He should be glad to hear what the sum required for each of them was. [The CHANCELLOR of the EXCHEQUER: I have done so.] He was not aware of that fact. Before concluding he wished to notice one more point. Instead of resorting to a system of percentage in connection with the income tax, he hoped the right hon. Gentleman would upon re-consideration adhere to the old practice of asking for what he wanted on a calculation of so much in the pound. If the Chancellor of the Exchequer applied for 1½d. in the pound income tax he would obtain the whole sum which he required. ["Too much!"] Well, the right hon. Gentleman would not have objected to it on that ground. It appeared to him that if the Government really intended to carry out the non-purchase system, and the retirement allowances for officers in the Army, they would require a vastly larger amount of money than they now asked for.


said, he agreed to a large extent with what had fallen from the hon. Member for Brighton (Mr. Fawcett). He regarded this as a melancholy Budget. The Chancellor of the Exchequer seemed himself so to regard it, for he said he turned his back on what was pleasant and began to consider what was unpleasant. This was a panic Budget, a Budget originating in a panic which had no cause. The right hon. Gentleman the Secretary of State for War, when he brought in his Army Regulation Bill, told the House there was no immediate danger to be apprehended in this country, yet the Chancellor of the Exchequer now proposed to the Committee the most extravagant Army Estimates they ever had before them since the Crimean War, and if they went on increasing according to the fanciful fears of hon. Members, the Army Estimates might yet amount to £30,000,000. Ever since he was a child the great cause of fear and alarm to this country was the power of France; but now that this fear had been entirely dissipated, we are obliged to conjure up some other cause of fear in order to justify our extravagant Estimates. The country had been mystified and deceived upon this question by those who ought to have guided it to a different conclusion. He did not think the Chancellor of the Exchequer had thoroughly grappled with the succession duty, in which he (Mr. Fowler) took a great interest, for he had apparently failed to observe or deal with the gross unfairness of taxing alike life interests and the estate in fee. He believed the cause of the defect in the estimate of the Prime Minister in 1863 was not that stated by he hon. Member for Brighton; but the error arose mainly from the fact that he did not sufficiently allow for this distinction. If the tax had been graduated, so that holders of the fee-simple had paid the proportion they ought to have paid, the result would, in his opinion, have been different, and would have been nearer to the expectation of the Prime Minister. As it was, the holder of the fee-simple did not pay what he ought, or else the tenant for life paid a great deal too much. He was inclined to think the tax on matches would be very unpopular, because it would tax very poor people, and he would have preferred an increase of the income tax to the imposition of a tax upon matches. He sympathized with what had been said by the hon. Member for the City of London (Mr. Crawford) as to the inconvenience of the change proposed in the mode of assessing the income tax, and it would have been better if the Chancellor of the Exchequer had avoided it, even if he had asked for a trifle more money than he wanted, so as to leave himself with a fair margin. The Chancellor of the Exchequer had been a little too hasty in coming to the conclusion that he could settle the question of local taxation offhand by this Budget. The plan of compensating one class of property by taxing it less than others, and then putting on local taxes to get rid of the distinction, was a clumsy expedient; and they had better do what they were asked to do by the hon. Member for Devonshire (Sir Massey Lopes)—grapple with the whole question of these compensations; see whether or not real property was taxed too much, and, if it were, take off taxation and put it upon some other property; but if it were the fact that landed property was taxed rather under its proper rate than above, let that be understood and let them act accordingly. He should have been glad if the Chancellor of the Exchequer had treated the matter not as a settled but as an open question; and he would then have been able to deal in a more satisfactory way with probate duty, succession duty, and legacy duty; but, as it was, he had not dealt with the exemption of real estate from probate duty. The whole question of local taxation was one waiting for consideration, and it could not be settled off-hand in the debate on the Budget. It was an ingenious Budget, but he could not regard it with much satisfaction, and he doubted if it would meet with the approval of the country. He desired to see more economy than we were exercising. After so many years of prosperity and peace, the fact that we spend a sum in the defence of the country equal, or nearly equal, to that spent during the Crimean War was a fact that ought to bring shame on all those who were engaged in the conduct of the affairs of the country. They must get rid of those senseless panics, as Mr. Cobden used to call them, or they would never commence an era of economy.


said, he regretted he could not congratulate the Chancellor of the Exchequer upon the mode in which he proposed to supply the deficiency in the income. He proposed to tax capital by increasing the probate and legacy duties, to tax income by an increase of the income tax, and lastly, to tax expenditure by imposing a tax on lucifer matches. The right hon. Gentleman seemed to pride himself upon the taxing of lucifer matches which he had borrowed from the United States; but was he prepared to carry out the principle and tax everything instead of beginning with matches? Was he prepared to tax the possession of gold watches, plate, and articles of a similar description, as was done in America? The Chancellor of the Exchequer considered that the tax would lessen the danger of fire; but the tax was more likely to increase the danger by causing matches to be carried loose in the pocket. For the right hon. Gentleman did not propose to tax matches, but the boxes in which they were inclosed; and, in that case there would be nothing to prevent matches being sold by the hundred, tied together by a string, so that matches would be carried about more loosely than ever, to the increase of that danger which it was the professed object of the tax to diminish. The taxing of match-boxes would give rise to a number of new offences. At present, the dealers in taxable articles were licensed; were the manufacturers and sellers of matches to be required to take out licences? Some of the children in the streets would be apprehended for selling boxes with false stamps upon them, and, of course, they would not know where these stamps came from. Was a Customs duty to be imposed upon matches if they were imported in boxes? If they were imported loose, there was nothing in the proposed regulation which would render them liable to taxation. One expedient which would be resorted to in order to evade the law would be to dip both ends of the matches instead of one only, which was done with some fusees at present, so that only half the usual number of matches need be put into each box. The right hon. Gentleman had exhibited an amount of courage that everybody must admire, because he proposed to remind of taxation everyone who struck a match to light a candle, or a fire, as well as a pipe or a cigar. Poor persons would naturally ask whether gold watches and silver plate were taxed here as they were in America. This was not the way in which increased expenditure ought to be met, especially when it was an object with us to get rid of Customs duties. The right hon. Gentleman had been carried away by an original idea; but it must end in smoke. A Chancellor of the Exchequer who touched the probate and legacy duties should enter upon the question as a great one, and endeavour to place those duties upon an equitable basis; and to increase these taxes without doing this would simply be to augment their unfairness and injustice. If a house were in the occupation of the freeholder at his death, it was only liable to succession duty; but if it were in the hands of a leaseholder, who paid a ground-rent to the owner of the freehold, the successor must pay both succession and probate duty. This was manifestly unjust. Again, when a professional man died, leaving to his family a little property, the Chancellor of the Exchequer immediately levied a tax upon it, which tax it was now proposed to double. If a man carried on a business separately, and not as a member of a firm, the Executor must at once pay the probate duty on the whole amount of the assets, including the debts due to the estate, without being permitted to deduct the debts due from the estate. He might, indeed, subsequently claim re-payment of the duty, but every business man knew that over the entrance to Somerset House was this inscription—"No money returned, under any circumstances, if it can possibly be avoided." Another anomaly was that the succession duty might be paid by instalments within four years; whereas the probate duty must be paid before the estate could be touched. With regard to the income tax, the right hon. Gentleman seemed imbued with percentages and decimal points. The people of this country, however, had, since 1842, when the tax was first imposed by the late Sir Robert Peel, been accustomed to regard it as so many pennies in the pound; and to them 5¼d. in the pound would be much more intelligible than 2⅕ per cent, or 2.2 per cent. He hoped that the Chancellor of the Exchequer would review and revise his Budget.


said, he thought it would have been much better if the Chancellor of the Exchequer had raised the income tax from 4d. to 6d. in the pound, instead of concocting a cumbrous scheme of taxing lucifer matches and doubling the succession duty. He thought the Government should, before making such a proposal, grapple with the whole question of the probate and succession duties, and take into consideration at the same time the burdens which fell upon real property with reference to local rating. There were certain kinds of taxes which fell most iniquitously on leasehold property and railway shares. Leasehold property had to pay, in addition to the usual charges on freehold property, probate and succession duty, because it was personal property. Railways were still more hardly treated. As they savoured of the realty, they paid their share of local rates, and being likewise personal property, they were liable to probate and succession duty. Moreover, there was a tax on locomotion, so that money invested in railways paid, in three ways which other kinds of property did not. At present the duty on personal estate was something like 2 per cent in the shape of probate duty, and 1 per cent in the event of succession from father to son; but the Chancellor of the Exchequer proposed practically to raise it to 4 per cent. Now, to take a twenty-fifth portion of a person's estate was a very near approach to confiscation. In case of succession from one brother to another something like 5 or 5½ per cent was to be levied. He objected to the compensatory system of casting burdens on real property with reference to local taxes, and then saying to the owners—"You have no probate duty to pay." Both personalty and realty ought to be fairly dealt with, both in regard to local and. Imperial purposes; but he hoped the House would not consent to double the succession duty in the arbitrary way proposed by the Chancellor of the Exchequer. To people of large means the mode of calculating the income tax was of little importance; but the poorer classes and the less intelligent, who could well understand so many pennies in the pound, would be puzzled at hearing of 2.2. The alteration of the income tax from so much in the pound to a certain percentage he thought would not be viewed with favour by the country generally, as it provided a complicated instead of a simple mode of assessment. The fact that they had increased expenditure and additional taxation to deal with was matter of no surprise to him; it was invariably the case when there was a large Liberal majority in the House, and a strong Liberal Government in office. With the Liberal party in power, extravagant expenditure must be expected; extravagant expenditure, in fact, was the price the country paid for the luxury of a Liberal Government. He hoped the time would come when the House and the country having recovered from panic, parties would be more evenly balanced in the House, and Governments would be compelled to act up to their professions.


said, the hon. Member for Boston (Mr. Collins) would have spoken with more consistency if he had voted with the minority of 90 who supported the hon. Member for Sheffield (Mr. Mundella) in his Motion and criticisms upon the Army Estimates. The Chancellor of the Exchequer had imagined some one asking him how it came to pass that, having in former years reduced warlike charges, it was now proposed to increase them. The right hon. Gentleman had left the question unanswered, and, perhaps, he would now supply the omission. Certainly, the proposals of this year condemned those of years past, or vice versâ. Either this year's Estimates for the Army and Navy were a great blunder, or else the Estimates of the last three years were totally indefensible. The expenditure on the Army alone this year was more than the amount spent on the Army and Navy together in the year immediately preceding the Crimean War. He entered his protest against such unjustifiable extravagance. The cost of abolition of purchase was admitted to be a necessary consequence of demands made from his part of the House; but he and his friends contended that this cost might have been met by reduction of extravagance elsewhere. With regard to the National Debt, he regretted that the reduction of that Debt should be left to the mere haphazard of a possible surplus The cheapest and best way of paying the National Debt was to put down boldly in the Budget a certain specific sum to be devoted to the payment of that Debt. That course, he was sure, would be favourably received by the country.


said, that many epithets had been applied to the Budget. It had been called by turns a disappointing, a melancholy, and a panic Budget. One thing it was not, it certainly was not a "matchless" Budget. The Be-venue which the Chancellor of the Exchequer expected to derive from the proposed tax on matches was £550,000; but the minimum tax of a halfpenny per 100 upon the enormous quantity stated by him to be manufactured in this country would produce £1,250,000. Either, therefore, the Chancellor of the Exchequer would get a great deal more Revenue than he anticipated from this source, or else there would be an enormous decrease in the production of the article. Considering the large number of persons of the poorer classes, especially women and children, engaged in manufacturing, and also in vending matches of various kinds, the House would do well to consider very carefully any proposal that would restrict their production and sale; and if he did not oppose to-night the adoption of the formal Resolution on the subject, it must be understood that he reserved to himself the right of taking whatever course he thought fit when the actual Bill for imposing a tax upon matches was brought before the House. With regard to the income tax, he was glad to hail anything tending in the direction of the decimal system, of which he had always been a strong advocate; but nothing would be of much service in that way until there was a change in our coinage. With our present system of coinage, the plan of the Chancellor of the Exchequer of levying a percentage, and that proposed by the hon. Member for the City of London (Mr. Alderman W. Lawrence), for charging 5¼d. in the pound, were equally bad and equally complicated. The suggestion of the hon. Member for St. Ives (Mr. Magniac) that taxes should be imposed on those bodies that had no souls—namely, upon corporations, was one which deserved the consideration of the Chancellor of the Exchequer, because corporations, however soulless, had very substantial material resources, and could well afford to contribute towards the Revenue of the country. He regretted the necessity that appeared at present to exist of largely increasing the expenditure on our Army; and he only gave the Government proposals his support, not because he approved of the system of increased expenditure which the Government had initiated, but because he believed that they were thoroughly in earnest in wishing to put this country in a proper state of defence, and because he believed that the expenditure now to be made was intended to be the maximum and not the minimum for future years. If he found that this opinion was incorrect, he should in future years withdraw that support. He might, in conclusion, remark that, although it was no doubt right to err, if it was necessary to err at all, on the side of prudence, he thought the right hon. Gentleman had not made sufficient allowance for the elasticity of the Revenue, especially with reference to the Customs and Excise, which were likely to produce much more Revenue than the Estimates would lead the country to expect. He considered the Chancellor of the Exchequer's Estimates in respect of those items to be greatly understated. At the same time he approved of the changes proposed in the succession and probate duties, and hoped that the right hon. Gentleman would take further steps in that direction in future years.


regretted that the hon. Gentleman the Member for Stockport (Mr. J. B. Smith) should have lent the sanction of his name to a misconception with regard to the classification of the sugar duties. A Select Committee had some years ago considered this subject. It arrived at the conclusion that, not only ought the strength of sugar to regulate the duty as did the strength of spirit, but the classification was necessary in justice to those interested, while our treaties with France and other foreign Powers left us no liberty to alter our system in this respect, unless, indeed, the business of refining were conducted in bond. With the abolition of this classification, we should lose a valuable branch of industry, and the products of our sugar-growing Colonies would be driven to other countries, instead of being brought, as they now were, to London, Liverpool, and Glasgow. Of course, the supplying of export articles would go to those countries much to the disadvantage and loss of British trade. With regard to the probate and legacy duties, he should like to have a more comprehensive arrangement, and would like the legacy duty with regard to charities to have been so altered that people would not be tempted because of the heavy duty to leave their property to distant relations, for whom they in all probability cared little or nothing, instead of bestowing it upon institutions where it could be made serviceable to the poorer and more deserving of our population. He thought a condition might be attached that the two nearest heirs in succession should signify in writing their approval of the legacy during the testator's life. As to the income tax, he did not quite agree with hon. Members who objected to the percentage system in place of the poundage; but he should have been better pleased had the right hon. Gentleman increased the tax to 2¼ or even 2½ per cent, as then it would have been easier of computation than 2.2–10ths. With reference to the proposal to impose a tax upon matches, the right hon. Gentleman would find considerable difficulty. There was a very large manufactory of matches in Sweden, and matches by the shipload were or might be sent into London. If there was to be a stamp, all must be stamped or none at all; and if a stamp were employed, it would be necessary to affix a stamp to each of the 1,000,000 boxes which were so imported. This objection would, he feared, prove fatal to the scheme. After the tax which had been imposed upon guns, he believed it would be very inexpedient to increase the unpopularity of taxation by venturing upon this novel impost. With, reference to the expenditure proposed for our armaments, he believed that nothing less would allay the panics which were occasionally experienced, and that we should be able to bear ourselves better before foreign nations if we were satisfied that our ports were in a proper state of security. The Chancellor of the Exchequer would not have been fit to occupy that post in the Government had he shrunk from imposing taxes when informed by the highest authorities that they were necessary to the proper defence of the country. He thanked the Government for having manfully faced this difficulty, and only regretted that their measures had not been more ample.


said, he thought the Chancellor of the Exchequer was fully justified in placing before the Committee the true state of the finances of the country, and no complaint ought to be made, because the state of affairs on the Continent rendered a large expenditure necessary, for the taxpayers would not be sorry if the result of our expenditure were such that our defences were placed in a permanently effective state; but they had a right to complain if it were mainly incurred to rectify a sentimental grievance. As regarded the reduction of the National Debt, the Chancellor of the Exchequer could not be expected to do much in a year when the expenditure was estimated to be larger than the Revenue; but his proposal with respect to the funds of the Court of Chancery would make a sensible impression. One question remained—namely, as to how the balance which would accrue was to be paid to the holders of the annuities. The Budget naturally divided itself into two parts, that which was the result of the past, and that which was proposed for the future. Last year the Chancellor of the Exchequer professed to be desirous of holding the scales equally between direct and indirect taxation; but he only reduced 1d. in the income tax which, had been imposed for the Abyssinian War, and it seemed now that, having given up £2,300,000 of sugar duty, there could be no retracing that step, except in case of great emergency, on account of interfering with the interests of trade. They ought to be grateful to the Chancellor of the Exchequer for the tax which he had improvised on matches. Some time ago he (Mr. Beach) had sat upon a Committee for inquiry into the best protection against fire, and it was then proved that a great amount of property had been sacrificed annually by the careless and indiscriminate use of lucifers. He wished the fertile genius of the right hon. Gentleman could devise some other equally innocuous tax which would secure a large sum to the Revenue without imposing a burden upon the community. When a large amount had to be collected in the present day, recourse must be had to the income tax, though such a step ought much to be regretted, while no complaint ought to be made of the proposed increase on the probate duties, which had not hitherto been levied in a perfectly fair manner, particularly with regard to property held in foreign securities. He had, however, a right to complain that the Chancellor of the Exchequer, in referring to the exemption of agricultural horses from taxation, seemed to indicate a will or an intention to tax them in a future year. He trusted, however, that such a step would not be taken, because that would be imposing a tax on the life-blood of the country, and check an important department of national industry.


protested against the opinions which had been expressed by the hon. Member for Leith (Mr. Macfie), who seemed to wish the House to give up its duty of supervising the taxation of the country. He (Mr. M'Laren) repudiated the doctrine that, as regarded Army expenditure, the House had to trust to the Executive, open their mouths, and swallow whatever was sent. Gentlemen on that side of the House had been blamed for encouraging the increased Army expenditure; but he had far more frequently heard Gentlemen of the Opposition goad on the Ministry to increase the armaments, so that the country might be adequately protected. The very small change in the succession duty on real property was hardly what could have teen expected, as, notwithstanding the increase in the wealth and population of the country since 1853, this source of Revenue did not realize one-half of what was then its estimated amount. In his opinion the Chancellor of the Exchequer had not acted with his usual discrimination, or as justice required, in putting on such a small addition to this succession duty. The change in the mode of assessing the income tax involved a troublesome fractional difference. With a tax of 5½d. in the pound everybody would have known what he had to pay; but the proposed alteration was one of those trifling and peddling arrangements which were unworthy of being acted upon. The tax upon lucifer matches would never stand the test of investigation. It would cause much annoyance, and the little boys in the streets would defy the law, and sell matches without having stamps. Therefore they would have to provide in- creased accommodation at industrial schools and prisons for the boys who evaded the law. The true principle of taxation was to make every family pay according to its ability. Was there any difference between a family with £500 a-year and £1,000 a-year, or between a family with £100 and one with £1,000, in regard to the number of matches which they consumed? ["Yes!"] He maintained that there could be no practical difference, and, therefore, this tax would apply as a poll tax equally on the poor and rich. As to the reference which had been made by an hon. and gallant Gentleman opposite (Colonel Gilpin) to the statement of a right hon. relative of his (Mr. Bright), that no Government deserved the confidence of the country which spent £70,000,000 a-year, he would only say that any Government which continued to spend that amount would gradually lose the public confidence; and Members who helped the Government to incur that expenditure would fall under the displeasure of the great body of their constituents. The present Census would doubtless show that there were 6,500,000 families in the United Kingdom, and thus every family was called upon to pay £11 for its Government. The remarks of the hon. Member for Kincardineshire (Mr. Dyce Nicol) with reference to hawkers did not accurately represent the views of the community in that part of the country; for if any blame could attach to the Chancellor of the Exchequer or Home Secretary in the matter it was because the regulations affecting hawkers' licences were already too stringent.


wished to point out that questions were likely to be very generally asked to-morrow morning in the City with reference to the proposed alteration in the mode of levying the income tax. He could understand a rate of £2 4s. per cent, and he durst say that the right hon. Gentleman might tell him that the amount per pound would be something like 5d. and a fraction. The question he wished to ask, however, was what coin of the realm would represent that fraction, and what course the Chancellor of the Exchequer intended to pursue with regard to the collection of the income tax, or the numerous small sums which were collected in the shape of a tax, upon coupons and other small pay- ments which were made in the City to a great extent. There was another point to which he also desired to call the attention of the Chancellor of the Exchequer. Extreme inconvenience was caused because of there being no income tax in existence, for the Act expired on the 5th of April. Since that time, and especially on the 15th instant, documents had been presented to bankers and foreign agents from which the income tax should have been deducted. In some cases that had not been done, and in others the tax had been supposed to be payable at the same rate as before that date. He thought a great deal of heartburning would be created by persons having to go by-and-by to the authorities at Somerset House in order to procure the deduction of the tax which may have been paid in error.


said, he should confine his remarks to the subject of the Resolution before the Committee—namely, the proposed tax on lucifer matches. The Chancellor of the Exchequer had attempted to defend his proposal on the ground that the lucifer match was a dangerous article; and that argument had been echoed from the other side of the House. The Chancellor of the Exchequer spoke of the practice of throwing matches down areas, by which fires were caused. Another common practice was that of throwing orange peel on the pavement, from which very many serious accidents resulted. If they were to introduce the now principle of taxing articles because they were dangerous, then it was high time to lay a tax on oranges. He abominated nearly everything which was sold in confectioners' shops, and on behalf of his children he would suggest that a heavy duty should be imposed upon those articles. Those articles into the composition of which gunpowder entered might be considered to be dangerous. Yet neither those things nor the gunpowder itself were taxed. He disapproved of this system of taxation, not because it formed a large part of the industry of Birmingham, but because he thought the principle involved was erroneous. He thought the proposal last year to tax guns a great mistake; and now, when another tax was to be imposed upon a very important article of industry, he feared that it might be the intention of the Government to bring about a reversal of that which had hitherto been the policy of the Liberal party and Government, by imposing a tax which would seriously interfere with our manufacturing industry. The tax on matches was a small tax, it was true; but still it amounted to 100 or 200 per cent on the value of the article. They had not received any explanation as to the manner in which the Chancellor of the Exchequer proposed to deal with matches which were exported. That trade was put down as of the value of £175,000 in the statistics of exports; and it could not be continued under this tax without a return to the obnoxious system of drawbacks. Another objection to this proposal was that the cost of the collection would be very considerable, while by increasing the income tax by 1½d. the necessity for this new tax would be avoided. Although the number of boxes now sold was large a considerable diminution might take place in the consumption of the article, and he thought the expectations of the Chancellor of the Exchequer as to the amount to be raised would be disappointed. For the reasons he had given he should divide the Committee upon this Resolution.


said, he wished to join his voice to those of the hon. Gentlemen who considered the Financial Statement they had just heard highly unsatisfactory. It was impossible for anyone who had heard the various Estimates laid before the House to have expected anything liberal from the right hon. Gentleman on this occasion; but there was one satisfaction to be derived from his statement, and that was that £600,000 of the £2,000,000 voted on credit last August on account of the war on the Continent had not been expended. He (Mr. Anderson) thought the fact of that £600,000 being left showed, in the first place, that the Vote was unnecessary, and, in the second place, that the Government had not been absolutely reckless in the use of the extraordinary powers then delegated to them. A good deal had been said about the mode of raising the income tax. He thought the change proposed by the right hon. Gentleman was not a very judicious one. The right hon. Gentleman appeared to ignore the possibility of advancing by farthings, which was very simple. He could not imagine why the Chancellor of the Exchequer had selected 2.1–5th per cent, or £2 4s. in the £100, which was a rate entirely unknown to mercantile men and bankers, and he doubted whether there were any interest tables calculated at that rate. Such tables always advanced by eighths, quarters or halves. He did not, however, see the great objection to a tax upon matches. The hon. Member for the City of London (Mr. Alderman W. Lawrence) had said that matches would be dipped at both ends, and that boxes would be used over again, but these were difficulties which he had no doubt could be got over. People also could save the tax by means of a decreased consumption, which seemed to be, indeed, anticipated by the Chancellor of the Exchequer, because at the present rate of consumption the tax would produce £1,250,000. There was no doubt that lucifer matches were recklessly used, and in many cases with disastrous results. He thought the sooner they had some disagreeable tax the better for the country, for it might arouse the people to a sense of the iniquitous scale upon which taxation was levied. Until then they had little chance of an amelioration in that direction.


said, that the two former Budgets of the Chancellor of the Exchequer had been eminently successful, and that was a considerable guarantee for the present. With respect to the income tax it would be desirable not to make all the change proposed. Let the right hon. Gentleman content himself with 5d. in the pound, and leave the £400,000 to Providence. He made that suggestion as a friend. The Chancellor of the Exchequer had, he thought, gone on the principle of underrating our income, and, therefore, he might safely trust to 5d. in the pound as sufficient. He looked upon the Estimate of £72,000,000 for the present year as merely temporary. In his opinion, a great deal too much had been made of the matches. Small things were great to little-minded people. He had eat on the Committee to which the hon. Gentleman opposite (Mr. Beach) had referred, and a great deal of evidence from England, Ireland, Scotland, and even America was brought before them, which showed that one of the principal causes of fire was the reckless use of lucifer matches. The Committee did not recommend that a tax should be put upon them because they had not the courage to do so. He was glad, however, that the right hon. Gentleman had courage enough to propose it. His hon. Friend the Member for the City of London (Mr. Alderman W. Lawrence) talked of people carrying matches in their pockets in bundles instead of in boxes; but if they did they would be very likely to get burnt. He wanted to know whether the Chancellor of the Exchequer would give a drawback on matches that were exported. [The CHANCELLOR of the EXCHEQUER assented.] He knew the great difficulty and expense that poor people were put to in proving wills, and it would be a great boon if anything could be done to simplify the operation. They had no right to find fault with the Chancellor of the Exchequer for the large amount of expenditure, because they had themselves already voted the greater part of the large Army expenditure, and it was the duty of the Chancellor of the Exchequer to provide the money. They had already gone as far as Vote 12 in the Army Estimates, and therefore a great deal of the money required had been voted. But if Members objected so strongly to the amount, why did they not come forward at the proper time and oppose it?


said, the tax upon matches which the right hon. Gentleman the Chancellor of the Exchequer proposed to levy might have had a Trans-Atlantic origin in one respect, but it was fully considered in 1867 by the Select Committee of that House which reported on fires. On that occasion he (Dr. Lyon Playfair) was examined as a witness, and though much pressed by Members of that Committee, he hesitated to recommend the imposition of such a tax, as likely to interfere with an important branch of industry. Since then he had given more attention to the subject, and was now a convert to the tax. The amount of damage done by the careless use of lucifer matches was extraordinarily great. The secretary of the Sun Fire Office stated in evidence that that office lost £10,000 annually by fires from such matches, and the hon. Member for Norfolk (Mr. Clare Read) had given an estimate that £30,000 worth of agricultural produce was annually consumed in England and Wales by the careless use of lucifers. The percentage of all fires in London from that cause was 1½ in 1867, but had been rapidly increasing. The manufacture, was in fact, very often carelessly carried on. No matches ought to ignite under a temperature of 120 degrees; but many of the matches which were sold took fire at 100 degrees, a temperature which might readily be reached on a chimneypiece in a kitchen during a summer day. The effect of a stamp would doubtless be to improve the quality of the manufacture, because the charge of a halfpenny for a hundred would raise the price of the box to be sold to an extent that would induce manufacturers to compete in quality as well as quantity. It would no doubt give a great stimulus to the use of boxes of safety matches, in which the phosphorus was placed with the emery on the rubbing surface, and was not on the match itself. If it did so, it would serve the cause of humanity largely. The working people who made the lower kinds of matches were subject to the most frightful diseases of the jawbones, while the phosphorus used in the safety matches was not poisonous in any way. He believed, then, that the stamp, while it would bring revenue to the Exchequer, would only limit the profligate and careless use of lucifers. The hundredth part of a halfpenny was a small tax on the means of getting an instantaneous light. He was old enough to recollect when the first friction match was introduced in 1832. Before that, lights were obtained by dipping matches into oil of vitriol, which was projected, and burnt their clothes, and after that they pulled off the heads of half a boxful by the sand-paper before they got an explosive light, that sent melted matter over them in like manner. Now they had such facilities for obtaining lights that they scarcely realized the importance of the progress in that branch of applied chemistry. If he thought that the tax would be seriously injurious to the manufacture, he would oppose, not support it. But it was because he believed it would improve the quality of the manufacture by rendering less common the use of poisonous materials, and would thus promote the health of the makers of matches; and though it might lessen the careless and profligate use of lucifers, it would not sensibly raise difficulties in their use for legitimate purposes, so that he was not much grieved that the Chancellor of the Exchequer had imposed upon them this moderate duty. Undoubtedly any tax on a manufacture was objectionable in theory; but this one in practice would produce the minimum of evil. Hon. Gentlemen had objected to it because the poor as well as the rich would have to pay it. He was sure that the objection ought not to come from the working classes; while we, with better incomes, did not object to an increased income tax to secure the safety of the country, the poorer men should not grudge the mite asked from them by this increase in indirect taxation; for they, as well as ourselves, benefited by the augmented security which our larger expenditure was intended to afford.


said, he was not surprised at the discussion which had taken place. He knew what means a Chancellor of the Exchequer possessed of obtaining information for the production of Estimates, and he should be very unwilling to throw any doubt on the Estimates which the right hon. Gentleman had made. At the same time he thought he might have given some explanation of the motives which led him to make his estimate of income at a lower figure, because all the causes in operation last year, which brought out the result of a large increase of actual receipts over Estimates, were still in existence. There was still great activity in trade; there was still a great number of strangers in this country as compared with former years. Moreover, it should be recollected that the excess of receipts over Estimates arose during the last year when the agricultural prosperity of the season was interfered with by an extraordinarily dry summer. If there should be anything like an average harvest in the coming summer, the Chancellor of the Exchequer might have taken a more sanguine view, and have estimated his receipts very much higher than he had done. He thought with the hon. Alderman (Mr. Alderman Lusk) that the right hon. Gentleman might have taken an additional penny and saved himself the trouble which would be involved in the levying of the new taxes. There would be a general dislike to the increase of the succession duty, and it would be evaded to a large extent. If parents and children were on a good understanding, the parents could easily in their lifetime give their children a lump sum as an allowance. He was aware of innumerable instances of the succession duty having been evaded in that way. If the right hon. Gentleman had been content with the lower duty he had no doubt but that evasion would be obviated. Then as to the reduction of the cost of the Revenue Departments, the Civil Service Estimates had, nevertheless, greatly increased, and the Chancellor of the Exchequer had given reasons for the increase. In former years when an increase took place, it arose from the desire of the House and the country to improve the administration, and the late Government was told that if an increase was necessary on one side, economies ought to be effected on the other. That principle must be given up now when they saw the Civil Service Estimates were increasing year by year. The Chancellor of the Exchequer told the House that he had made a reduction in the cost of the Revenue Departments, and he made allusion to a matter which had excited a great deal of interest in the House and the country—namely, the complaint which had been made for many years by the clerks of the Custom House because of inadequate remuneration. The right hon. Gentleman stated that this was being inquired into by the Government, and economies had been effected which would more than countervail the increased charge of carrying the Report thereon into effect. He (Mr. Sclater-Booth) thought the right hon. Gentleman would find in the Report relating to the clerks, submitted to the late Board of Treasury, that the economies now in progress had been originally suggested, as a set-off against the charges therein recommended.


said, his object in rising was to support the statement made by his hon. Friend the Member for Finsbury (Mr. Alderman Lusk). He had the honour of being the Chairman of the Committee that inquired in 1867 into the causes of fires, and no subject was pressed more seriously on the Committee than the desirableness of putting a tax on lucifer matches, with a view of preventing a negligent use of them, and thus diminishing the number of fires. In addition to the £30,000 worth of agricultural produce yearly destroyed by the careless use of lucifer matches, as mentioned by the hon. Member (Dr. Lyon Playfair), within the last four years there had been an increase in the number of fires in London from 1½ per cent to 2½ per cent, owing entirely to the careless use of lucifer matches. A fact also stated before the Committee was that the Watch Committee in Liverpool placed two policemen to prevent the lighting of pipes and matches on the part of the men employed in the cotton warehouses, the consequence being a very material diminution in the number of fires. He (Mr. M'Lagan) was quite certain that the tax would be followed by an improvement in the quality of matches, and bring about a more careful use of them. Hon. Gentlemen who objected to the taxing of the match trade should recollect that, if a tax were laid on agricultural horses, that far more important industry, agriculture, would be severely taxed.


stated, with reference to the succession duty, that the present 3 per cent duty fell with extreme weight on real property, amounting in some cases to the whole of the first year's income derivable from the estate. He strongly objected, therefore, to the present scale of 3 per cent; and, of course, if it were raised, as now proposed, to 3½ per cent, its oppressive incidence would be proportionately aggravated.


thanked the Committee for the numerous and valuable suggestions that had been made in connection with the proposals he had had the honour of submitting to the House, and hoped they would not expect him to reply to all, or even any great part of them. He had already occupied so much of their time by his Statement that he would not be justified in detaining them more than a few moments. He would only answer the questions that had been put to him as far as he was able. The hon. Member for Kincardineshire (Mr. Dyce Nicol) had asked him whether it was his intention to impose any new tax upon hawkers. Perhaps hawkers required much keeping in order and greater police regulation; but they were poor, and made their bread by a very laborious occupation, and he did not think they were proper subjects of further taxation, and he should not be a party to any such proposition. The hon. Member for London (Mr. Crawford) had spoken of the inconvenience that would be occasioned by assessing the income tax by a percentage instead of by so much in the pound, and, as he had understood him, said people would prefer paying an extra penny to that alteration. That extra penny would mean the payment of £1,100,000. [Mr. CRAWFORD said the right hon. Gentleman had quite misunderstood him.] He would not pursue that point further; but hon. Gentlemen had made various suggestions. One hon. Member (Mr. Alderman Lusk) recommended a 5d. income tax; but a 5d income tax would only produce £7,625,000; whereas he wanted £8,050,000, so that he would be short by a good deal over £400,000. Then another hon. Gentleman (Mr. M'Laren) wished to make the tax 5½d.; but by that he should get £8,387,000, instead of the £8,050,000, or upwards of £300,000 more than he wanted. He quite admitted that any change of that kind was indefensible unless it was for the case of the taxpayer; but he could not agree with hon. Gentlemen in thinking it so very light a matter whether the people paid £300,000 more than was wanted. That way of looking at these things would justify any amount of grinding of the taxpayers. He was anxious not to put upon them a penny more than he could help; and it was only because the plan of a percentage limited the tax exactly to what was required that he had proposed it. He had been asked a question with regard to the payment of the income tax on dividends becoming due in April. He understood that by law as much of the tax as became due in the financial year must be paid in that year; but as to the rest there might be a doubt on the point. That was an objection which always arose every year, from the fact that the House had hitherto insisted on the income tax being an annual one; and he thought it would be a great improvement if the House would consent to its being made a permanent tax, and re-cast. ["No!"] If that were done, the amount could still be varied from time to time by a schedule, as the exigencies of the case required. Unless that were done he was afraid it would be impossible to remedy the inconveniences that had been mentioned. Then he had been asked how the tax could be paid according to a percentage in every case by any coin of the realm. The rule for collecting the income tax was to take it with as great precision as they could, and if there was any slight difference, to give the taxpayer the benefit of it. The same rule would be followed in levying the tax by a percentage. He hoped the House would not decide against that proposal, because if it did it would inevitably oblige the Government to put more taxation upon the people than they desired. He had consulted those who had experience in such matters, and found that there would really be no more inconvenience under that arrangement than there was at present. He hoped the Committee would allow him to take the Resolution on the question of matches that night. He had altered the date to the 10th of May instead of the 1st of June, because the latter seemed too late a day, and if the 10th of May should be found too early it would be easy to alter it again in the Bill. They intended to give a drawback, and of course the same duty would be charged on the imported as on the home manufactured article. He proposed to fix Monday next for the discussion of the other and more important Resolutions, if that would suit the convenience of the House; and they would endeavour to report the Resolution tomorrow, in order that the Bill might be brought in.


said, he thought the House ought to understand whether the Army Regulation Bill was to come on or not on Monday, the day for which it had stood fixed for a long time.


could only say, in the absence of his right hon. Friend, that he had been informed by the higher powers that he was to fix the Budget Resolutions as the first business for Monday.


reminded the right hon. Gentleman that he had omitted to say anything about the sugar Returns.


said, he was sorry if his hon. Friend had been annoyed by the non-production of those Returns; but he could assure him the fault was not his. He hoped they would soon be forthcoming.

Question put.

The Committee divided:—Ayes 201; Noes 44: Majority 157.

On Motion, that the Resolution be reported,


said, he was the last man to offer any opinion on financial matters, because they were out of his way. But there was one point in the Chancellor of the Exchequer's statement to which he wished to refer. It appeared that the Government now intended to surround the country with gunboats for the purposes of defence. For the last 14 years he had urged that policy of an inner line of defence upon the country, and he was glad to find that the Government had come to that determination. On that point he should support the Government; but beyond that he wished to remind the right hon. Gentleman that he had got the Colonies to defend.

Resolution to be reported To-morrow;

Committee to sit again To-morrow.